Pancake House sets IPO

Coming on the heels of the successful initial public offering (IPO) of its affiliate Macondray Plastics Inc., the Lorenzo-controlled Pancake House said it has high expectations it will generate the same warm response from the investing public as it launches its IPO today.

Pancake House president Ma. Isabel Del Val said the feedback on its IPO has been largely encouraging, with some pointing out that it’s about time the company opened itself up as it prepares to embark on an aggressive expansion binge to solidify its image and reputation as one of the country’s leading chains of casual dining restaurants.

The company is preparing for its scheduled listing on Dec. 15. It is offering 34 percent of its shares to the public at P1.48 each, amounting to total proceeds of P84.73 million. The IPO is being lead-managed and underwritten by Amalgamated Investment Bancorporation.

Last Nov. 23, Macondray Plastics debuted at the Philippine Stock Exchange on a high note as it defied the sluggish market to finish four percent or 20 centavos higher than its IPO price of P5.40 per share. The Davao-based manufacturing firm offered 18.74 million common shares also equivalent to a 34-percent stake in the company for a total consideration of P90.4 million.

Both Pancake House and Macondray Plastics are controlled by the Lorenzo family, whose highest interest remains with the Asia-Pacific operations of multinational food processor Del Monte.

Already considered as a local institution in the table-service, casual dining format, Pancake House plans to channel the proceeds of its IPO to the expansion of its nationwide chain by adding nine more company-owned outlets to its present network of 23.

The rest of the proceeds will be used for the construction and completion of its commissary facilities, the renovation of three existing outlets and the development and implementation of the company’s e-commerce strategy.

Pancake House has almost equal number of company-owned and franchise stores, at 11 and 12, respectively. Although the IPO proceeds will be plowed into company-owned outlets, Del Val said the firm is also actively seeking prospective investors for franchising, as they intend to keep the proportion of company-owned and franchised outlets almost equal.

The company projects its income next year to hit P35.2 million. Although in the six months from March to Aug. this year, it has earned P4.779 million but De Val said growth is expected to increase tremendously due to larger sales from the expansion program.