| Thu 12 Oct 2006, 12:54 | | Taste - Unaudited financial results for the six mo |
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TAS
TAS
Taste - Unaudited financial results for the six months ended 31 August 2006
Taste Holdings Limited
(Previously known as "Scooters Pizza (Pty) Limited")
(Incorporated in the Republic of South Africa)
(Registration number 2000/002239/06)
(JSE code: TAS ISIN: ZAE000081162)
("Taste" or "the company")
Highlights
- Revenue up 40%
- Attributable earnings for six months up 77% to R4.2 million
- EPS up 50%
- HEPS up 29%
- Net tangible asset value per share up over 100%
Listing on ALTX on 21 June 2006
UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2006
Income statements
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2006 2005 2006
R"000 As restated R"000
under IFRS
R"000
Revenue 15 001 10 721 19 785
Gross Profit 13 858 9 371 18 769
Other income 814 249 1 577
Operating costs (8 846) (5 863) (15 536)
EBITDA 5 826 3 757 4 810
Depreciation (198) (255) (392)
Profit before interest and 5 628 3 502 4 418
taxation
Net interest received/(paid) 276 (278) (545)
Profit before taxation 5 904 3 224 3 873
Taxation (1 712) (853) (1 025)
Profit after taxation 4 192 2 371 2 848
Minority interests - 2 (1)
Earnings attributable to 4 192 2 373 2 847
ordinary shareholders
Reconciliation of headline
earnings:
Earnings attributable to 4 192 2 373 2 847
ordinary shareholders
Restructuring costs - 119 313
Profit on sale of fixed (578) (146) (190)
assets
Headline earnings 3 614 2 346 2 970
attributable to ordinary
shareholders
Weighted average shares in 117 260 100 000 100 000
issue on which earnings are
based (000) (1)
Shares in issue at period 125 000 100 000 100 000
end (000)
Earnings per share (cents) 3.6 2.4 2.8
Headline earnings per share 3.1 2.4 3.0
(cents)
Notes:
Weighted average calculation for 31 August 2005 and 28 February 2006 is based
on the conversion of 64 110 ordinary shares in issue to 100 000 000 ordinary
shares in issue.
Balance sheets
Unaudited Unaudited Audited
31 August 31 August 28 February
2006 2005 2006
R"000 As restated R"000
under IFRS
R"000
ASSETS
Non Current Assets
Property, plant and 771 1 525 1 299
equipment
Intangible assets 14 760 14 760 14 760
Deferred taxation 732 853 818
Loans receivable 297 449 241
Current assets
Inventories 67 166 78
Trade and other receivables 8 428 6 242 5 405
Bank balances 29 809 6 223 6 297
Total assets 54 864 30 218 28 898
EQUITY AND LIABILITIES
Ordinary shareholders" 30 611 777 1 341
equity
Minority interests 33 37 34
Total shareholders" funds 30 644 814 1 375
Non-current liabilities 2 075 4 504 3 070
Current liabilities
Shareholders" loans - 12 435 10 325
Taxation 2 443 677 869
Trade and other payables 17 434 9 456 10 764
Current portion of 2 268 2 332 2 495
borrowings
Total equity and liabilities 54 864 30 218 28 898
Number of shares in issue 125 000 100 000 100 000
(000)
Net asset value per share 24.5 1.0 1.4
(cents)
Net tangible asset value per 12.7 (13.9) (13.4)
share (cents)
Notes:
Weighted average calculation for 31 August 2005 and 28 February 2006 is based
on the conversion of 64 110 ordinary shares in issue to 100 000 000 ordinary
shares in issue.
Statements of changes in equity
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2006 2005 2006
R"000 As restated R"000
under IFRS
R"000
Balance at beginning of 1 341 (1 596) (1 506)
period
Total earnings after 4 192 2 373 2 847
minorities
Issue of share capital 25 078 - -
Balance at end of period 30 611 777 1 341
Cash flow statements
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2006 2005 2006
R"000 As restated R"000
under IFRS
R"000
Cash flows from operating 8 946 5 542 8 483
activities
Cash flow from investing 980 (15 313) (15 001)
activities
Cash flow from financing 13 586 12 725 9 546
activities
Net increase in cash and 23 512 2 954 3 028
cash equivalents
Cash and cash equivalents at 6 297 3 269 3 269
beginning of period
Cash and cash equivalents at 29 809 6 223 6 297
end of period
OVERVIEW
The directors of Taste have pleasure in presenting the unaudited interim
financial results for the six months ended 31 August 2006. Taste listed as the
first food franchising company, on the Alternative Exchange (ALTX) of the JSE
Limited, on 21 June 2006. The group"s primary business is the franchising of
trademarks in the Quick Service Restaurant (QSR) and fast-food sectors, through
its MAXI"S and Scooters Pizza brands.
The board is pleased to announce that Taste has delivered better than expected
results for the six months ended 31 August 2006 with a revenue increase of 40%
and a gross profit increase of 48%. The good performance can be attributed to
the growing demand for pizza and casual out of home dining, resulting in double
digit year on year growth for existing stores. Like for like sales growth is
the barometer of the strength of the franchise system and this strong
performance at store level has fuelled demand for new franchises and the group
is experiencing its highest demand to date in this area. The combination of
the robust growth in the sectors the group trades in, with the improvement in
margin, has delivered a solid foundation for both acquisitive and organic
growth.
TASTE"S BRANDS
Scooters Pizza, as one of the leading Pizza Delivery brands in South Africa
with a focused and unique offering, continues to experience exceptional year on
year growth in same store sales and its eighth consecutive quarter of positive
real growth. Demand from franchisees for new outlets is increasing which has
enabled the brand to make substantial market share gains in the last 12 months,
through penetrating new markets and share gains in existing markets.
Particularly promising is the demand for new outlets from existing franchisees,
demonstrating the confidence in the brand and business model. In the 6 months
under review, 16 new Scooters Pizza outlets were added and total system sales
increased by 46% for the period, accelerating to 59% in August. This increase
was a result of new outlets added and an organic growth increase in like for
like sales of 17%, well ahead of the approximately 3% inflationary price
increases.
The 13 year old MAXI"S brand is undergoing an extensive process to remain
relevant to consumers within the growing demand for out of home consumption. An
aggressive new product pipeline; an improved menu offering; and a next
generation store launched in April 2006, have positioned the brand as a
contemporary casual dining destination for aspirational value conscious
families. Initial consumer reaction to the new store design has been positive
with the first revamps of existing stores to take place in the second half of
the year. Although 12 new stores have been added in the last 12 months, the
focus has been on the positioning of the brand and the strengthening of the
operations and marketing teams ahead of the drive for penetration into new
markets. The system has grown in line with expectations by 34% against the
same period last year, driven by a combination of like for like increases and
new outlets opened. The MAXI"S value focused offering is well positioned to
cater for the increasing demand for out of home consumption and has the
potential to reach over 200 outlets within South Africa.
FINANCIAL RESULTS
For the period under review, revenues increased by 40% for the six months to
R15 million. Operating margin improved from 24% in February 2006 to 39% in
August 2006. This is as a result of aggressive cost containment and the
continuing strategy to move to a pure franchising model through the sale of
company owned outlets. EBITDA increased 55% to R5.8 million (2005: R3.7
million) for the six months ended August 2006.
The nature of the group"s business model is such that trade and other payables,
which include advertising and new store development creditors, may fluctuate
depending on the number and timing of new stores opened, and the group"s
monthly commitments to advertising spend.
Headline earnings increased 54% from the previous period to R3.6 million (2005:
R2.3 million) and attributable earnings increased 77% from the previous period
to R4.2 million (2005: R2.4 million)
BASIS OF PREPARATION
These results have been prepared in accordance with International Accounting
Standard IAS 34: Interim Financial Reporting, applicable to financial
reporting, the Listings Requirements of the JSE Limited as well as the South
African Companies Act, 1973. The accounting policies of the group which comply
with International Financial Reporting Standards (IFRS) have been consistently
applied to these results and are the same as applied to the results at 28
February 2006.
PROSPECTS
Both the group"s brands are well positioned to capitalise on the macro trend of
home meal replacement, whether via the convenience offered by Scooters Pizza
delivery, or out of home consumption offered by MAXI"S. It is the view of
management that the value focused propositions of both brands will remain a
competitive advantage, especially to the growing market of value conscious
consumers. Management anticipates a strong performance in the second half of
the year due to the traditional seasonal increase in consumer spending over the
festive season. The better than expected growth year to date will have the
added benefit of increasing the marketing funds for the brands in the second
half of the year. Additionally, the group"s target of 30 new outlets for the
year will be exceeded given that 22 outlets have already been opened in the
first 6 months of the year, and that there are a further 35 prepaid and
approved franchisees awaiting sites around the country.
The move to a pure franchise model requires less capital to fund future organic
growth. Combined with the strong cash flows generated by the franchising
model, the growth prospects should translate into solid earnings growth for
shareholders.
The group"s aggressive strategy to acquire key sites in regional centers is
paying off, with the first of these scheduled to open before the festive
season, thereby capitalising on this traditionally busy period. Numerous
opportunities still exist for consolidation within the sector, as well as for
the acquisition of further brands that fall within the core competencies of
management. The groups strong cash position, a combination of the monies
raised through the listing and cash generated in the 6 months to date, position
the group favourably to acquire further brands, thereby unlocking value for the
customers and shareholders through further acquisitive and organic growth.
DIVIDEND POLICY
In line with the group"s growth strategy, no dividend was declared for the six
month period.
By order of the Board
12 October 2006
C F Gonzaga D J Crosson
Chief Executive Officer Chief Financial
Officer
CORPORATE INFORMATION
Non executive directors: R L Daly (Chairperson), T D Edwards, K Utian, J B
Currie
Executive directors: C F Gonzaga (CEO), D J Crosson (CFO), L Gonzaga, L S
Minnaar
Registration number: 2000/002239/06
Registered address: 2nd Floor, The Wanderers, The Campus, 57 Sloane Street,
Bryanston
Postal address: PO Box 7833, Sandton City, 2146
Company secretary: D J Crosson
Telephone: (011) 575 1400
Facsimile: (011) 576 1465
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Designated Adviser: Exchange Sponsors (Pty) Limited
These results and an overview of Taste are available at
www.tasteholdings.co.za.
Warning: The listing of ordinary shares in the company is on ALTx. Investors
are advised of the risks of investing in a company listed on ALTx. Investors
are advised that the JSE does not guarantee the viability or the success of a
company listed on ALTx. In terms of the Listings Requirements, the company is
obliged to appoint and retain a Designated Adviser, which is required to, inter
alia, attend all board meetings held by the company to ensure that all the
Listings Requirements and applicable regulations are complied with, approve the
Financial Director of the company and guide the company in a competent,
professional and impartial manner. If the company fails to retain a Designated
Adviser, it must make arrangements to appoint a new Designated Adviser within
10 business days, failing which the company faces suspension of trading of its
securities. If a Designated Adviser is not appointed within 30 days of its
suspension, the company faces the termination of its listing without the
prospect of an appropriate offer to minority shareholders.
Date: 12/10/2006 12:54:31 PM Produced by the JSE SENS Department
