Pancake House sets aside P130M for new stores

Restaurant chain operator Pancake House Inc. is setting aside around P130 million this year for the construction of new stores to further strengthen its foothold in the casual dining industry.

Pancake House chairman Martin P. Lorenzo said the group plans to open nine new branches, four or five of which will be company owned.

The group expects to end the year with a total of 60 branches. Each outlet, he said, would cost around P6 million.

The new branches will rise in Subic and Sta. Rosa, Laguna. The group is also set to redevelop its Tagaytay branch to make it more appealing to the public.

About P100 million of the programmed capital budget though, would be used to set up eight new Dencio’s stores, four of which will be company-owned, Lorenzo said. These new stores, upon completion, will bring to 28 the total branch network of Dencio’s – an outdoor-type bar and grill specialty restaurant – by the end of 2005.

Lorenzo said total system-wide sales are expected to hit P1 billion to P1.4 billion by yearend, up by 30 to 40 percent.

Banking on the strong performance of its grill restaurant, the group expects net income to grow by 40 to 50 percent from P18.66 million in 2004.

"We’re very encouraged by the results of Dencio’s. Dencio’s is what would drive sales growth for the year. We’re cleaning up the brand, revitalizing it to make it one of the top dining destinations in the country," Lorenzo said.

In line with efforts to further boost its cashflow and build on its brands, the group is looking to acquire Teriyaki Boy, a Japanese dining restaurant which has a total of 10 branches, Lorenzo said.

"We had discussions with five groups but only one really made a good impression. And that’s Teriyaki Boy. We’re in negotiations with them. We like it because it’s a fast-growing business," Lorenzo said.

Lorenzo said the group is eyeing to buy 70 to 100 percent of Teriyaki Boy and is hopeful that a deal will be reached within the year.

To fund new investments, Lorenzo said major shareholders of Pancake House will infuse P100 million to P200 million in new equity into the company.

Lorenzo said the group has already raised its prices by seven percent to cushion the impact of the continued rise in oil prices.

Pancake House has traditionally been associated with specialty pancakes and waffles and has likewise expanded to offer an array of popular international dishes such as spaghetti, tacos, and chicken.

The group also plans to invade overseas markets to further widen its reach. It intends to open branches in Malaysia, Thailand, Singapore, China and South Korea.