Taste Holdings’ FY loss widens, revenue up 7%
Business franchise management group Taste Holdings, which has launched Starbucks Coffee and Domino’s Pizza outlets in South Africa, has widened its loss to R101.15-million in the financial year ended February 28, compared with a loss of R74.1-million the year before.
Its headline loss a share widened to 25c, from 19.2c the year before.
The group reported a core loss before interest, taxes, depreciation and amortisation of R20.8-million, compared with a profit of R47.2-million the year before.
The cost of launching Starbucks Coffee and Domino’s Pizza in South Africa reduced core earnings by about R13-million, excluding a noncash adjustment of R26-million.
Taste, however, posted a 7% increase in revenue for the period. Core revenue in the luxury goods division rose 9%, while revenue in the food division increased by 5% year-on-year.
Core operating costs increased 24%, or R85-million, over the prior period.
The building of new corporate stores, infrastructure and investment in human capacity saw depreciation and finance costs increase 31% and 47% respectively as borrowings increased.
“Although not reflected in our group short-term earnings, last year was a reasonably good year from a strategic perspective,” CEO Carlo Ferdinando Gonzaga said in a statement on Monday.
He noted that the Domino’s business was materially different from the prior year and that the company has a better grasp of the levers driving sales.
“We have 12 months' more experience, which is being seen in improving efficiencies, and our digital flywheel is gaining momentum with online orders set [to increase] in the next 24 months.”
He added that the launch of Starbucks has an evidence-based view of the potential of the business, both in operating metrics and as an investment case.
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