MANILA, Philippines - Lorenzo-owned casual dining restaurant chain owner Pancake House Inc. is ramping up its store expansion with total investment outlay pegged at P150 million this year as part of a strategy to spur sales and build a solid platform for growth.
On the sidelines of the company’s annual shareholders’ meeting yesterday, Pancake House chairman Martin Lorenzo said they are looking to build 25 new stores in and outside Metro Manila as well as refurbish five to seven existing branches.
Lorenzo said a large chunk of the capital budget at P100 million will go to the construction of new stores, while P30 million to P40 million will be used for the upgrading of its commissary. The balance of P10 million will be channeled to head office operations.
Pancake House is actively securing locations not only in Metro Manila, where 80 percent of its outlets are located, but also in other key cities and provinces in the country which include Bulacan, Baguio, Subic,Bacolod, Naga, Laguna, Cagayan de Oro and Cebu.
“We’re working out something that will allow us to establish stores in small hotels to be built across the country. Our goal is really to expand aggressively to the provinces where tourism is booming,” Lorenzo said.
This year’s capital budget, which will be sourced from internally-generated cash, is 50 percent higher than the P100 million spent in 2008.
The group is hoping to end the year with a total of five stores overseas. It currently has a presence in Malaysia and plans are afoot to set up shop in Thailand and Vietnam.
As of end-March 2009, the group has 160 outlets — Pancake House (77), dencio’s (24), Teriyaki Boy (34), Sizzlin Pepper Steak (9), Singkit (3), Le Coeur de France (13).
Also on the drawing board is a plan to set up a culinary school, slated to be operational in January next year. It will have 220 to 250 students and will offer three months to one-year culinary courses.
Lorenzo noted that second quarter sales have improved after a sluggish first three months and is hoping to sustain this growth as consumer spending is expected to pick up in the second half of the year.
This year, the group is looking to serve a total of 13.5 million meals compared with only 12 million in 2008. Pancake House recently penetrated untapped markets with new brands such as Singkit, its Chinese take-out and delivery service, and Sizzlin Pepper Steak.
The group reported a net profit of P10.46 million in the first quarter this year, 25 percent lower than the P13.95 million recorded the same period a year earlier as consolidated revenues fell 4.7 percent to P436.62. From 80 outlets as of December 2008, Pancake House, which is known to serve specialty pancakes and waffles, is committed to expand to 89 by the end of the year. It also plans to continue refurbishing existing stores, for both kitchen and dining space.
Dencio’s, which specializes in Filipino grilled menu items, plans to add nine new branches to bring its total store network to 35 within the next two years. It recently launched Kabisera, a higher-end, Filipino casual dining concept to serve the more discriminating market.
The group’s Japanese restaurant chain, Teriyaki Boy, plans to further grow its business with the addition of four new stores this year. From only 10 at the time of acquisition in late 2005, Teriyaki Boy is expected to end the year with 42 outlets.