March 27, 2017

PIZZA posts 40% hike in 2016 net income

Shakey’s Pizza Asia Ventures Inc (PIZZA) announced 2016 net income of P760m up 64% YoY. This, however, included non-recurring gains of P90m in relation to its acquisition and corporate restructuring, IPO expenses, and write-offs of advances from the previous owners. Stripping out these items, core recurring net income would have been P670m which still shows a 40% increase. This came on the back of system-wide sales growth of 14.3% to P7.34b and gross profit margin (GPM) expanding by 820bps. System-wide sales growth, in turn, was driven by a same-store sales growth (SSSG) of 3.9% and a 10.2% increase in store network to 184 stores as of end-2016. Meanwhile, margin improvement was driven by a combination of favorable input prices last year and purchasing synergies after it is consolidated into the Century Pacific Group which also owns listed Century Pacific Food Inc (CNPF).