Scooters Pizza owner to list on AltX
April 21, 2006
By Samantha Enslin
Durban - Taste Holdings, which owns the Scooters Pizza and Maxi's brands, will use the R30 million it hopes to raise through a listing on the JSE's AltX exchange in June to make further acquisitions.
Carlo Gonzaga, the managing director of Taste Holdings, said yesterday: "We hope to raise between R20 million and R30 million to facilitate our long-term strategy, which is to grow the existing business and acquire other businesses.
"There is likely to be an acquisition within the next year, but we do not have a specific target."
The listing will also enable empowerment shareholders to be brought on board, although this will not be done initially.
Gonzaga said: "We are not doing an empowerment deal at the listing stage, but it is one of the reasons for listing. As a listed company, it will be an easier route to empowerment than as a private company."
Scooters, which was established in 2000, now has 83 franchise outlets and Maxi's, which was bought last year, has grown from 28 stores to 39.
Gonzaga said: "We learnt our lesson a long time ago about poor sites. So while we are being aggressive in opening new stores, we are being selective about the sites."
The group will open 11 new Scooters stores in the quarter March to May, bringing it close to its target of 15 new stores for the year. For the year to February 2007, a further 15 to 20 Maxi's outlets will be opened.
Gonzaga said: "The acquisition of Maxi's has delivered what we expected and we believe it has enormous potential."
In the year to February, the group generated a 55 percent increase in average store sales. On a like-on-like basis, which excludes new stores opened during the period, sales increased 22 percent.
For the year to February 2008, the group forecasts turnover from its franchise businesses to exceed R500 million from the current R290 million.
Asked whether the group was prepared for the long-term commitment of a listing, Gonzaga said: "Having scrutiny is good. We have no doubt that our business is cyclical. But our underlying business is a good one."
Scooter's performance is in line with the strong sales reported by other quick service restaurants. This has been driven by a combination of improved economic conditions, the growing black middle class and time pressures on working people, resulting in increased demand for prepared food.
In October competitor Famous Brands, which listed 12 years ago, reported a 51 percent increase in interim headline earnings to R36.7 million for the six months to August. Revenue rose 38 percent to R304.9 million.
Business Report previously reported that Famous Brands, which has more than 1 116 local franchise restaurants, planned to increase this to 1 500 by 2010.
Another listed company, Kingco, which owns the Bimbo's and Keg brands, plans to open about 40 new outlets in the next 18 months, increasing its number of stores to 200.
Kingco has not matched its competitors due to its fishing business experiencing poor catches and lower capacity. In the six months to August, it reported a loss of R989 000.
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