Taste Holdings to add flavour to AltX
June 13, 2006 Edition 1
Neesa Moodley
Durban - Taste Holdings, which owns fast food chain Scooters Pizza, will list on the JSE's AltX next Wednesday with a market capitalisation of R22.5 million.
The listing will take the number of companies on the alternative exchange to more than 20.
The company has done a private placement of 25 million shares at 90c each.
In an abridged prospectus yesterday, the group said it was hoping to increase revenue to R27.7 million next year and R31.8 million by 2008.
Revenue for the year to February 2006 was R19.7 million and net profit was R2.8 million.
Taste's competitor, Famous Brands, which owns Steers, Debonairs and House of Coffees, posted revenue of R305 million for the six months to August.
It intends increasing its 1 116 franchise restaurants to 1 500 by 2010.
Kingco, which owns Bimbos and the Keg, is also on an expansion drive, with plans to open 40 new restaurants in the next 18 months.
Since opening its first outlet six years ago, Scooters Pizza has established a 75 percent market share in the areas where it operates. It doubled its share of the overall pizza market to 9 percent last year.
Last year it bought a second fast food chain, Maxi's, to expand its brands.
"Owning multiple brands allows significant economies of scale and shared best practice," Carlos Gonzaga, the chief executive, said yesterday.
He said revenue from the franchises had grown 165 percent since last year, driven by the opening of 18 new Scooters outlets and 10 new Maxi's outlets this year.
In the year ahead, Taste will use 75 percent of funding of R21.5 million from the Industrial Development Corporation (IDC) for black franchisees. The balance has been earmarked for further acquisitions.
The funding from the IDC was negotiated at prime minus 5 percent.
Gonzaga said the empowerment funding would translate into about 10 stores for each brand.
Nationally, Taste has 92 outlets, 64 of which are Scooters Pizza and 28 are Maxi's outlets. However, management intends to increase the national number to 182 by 2008.
The earnings forecast includes net profit of R7.8 million by next year and R11.7 million by 2008.
Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information.
