Pancake House posts 64% profit growth

MANILA, Philippines - Strong food sales in both new and existing branches benefited the bottomline of listed restaurant chain Pancake House Inc. in the first half of the year.

In a disclosure, Pancake House said net income attributable to equity holders of the parent firm hit P82.06 million in the first semester, up 64 percent from P49.9 million last year.

Consolidated revenues of the country’s largest casual dining group picked up nearly nine percent to P1.81 billion from P1.67 billion a year ago.

“The growth was attributed to a sustained growth in same base store sales and increase in store network by nine percent,” Pancake House said. It added 24 stores to end the first half with 292 branches from 268 in the same period last year.

The homegrown restaurant chain said higher revenues were driven by store sales that gained roughly nine percent to P1.52 billion from P1.4 billion.

Commissary sales and franchise income for the continuing license fee rose seven percent and 6.94 percent to P225 million and P64.23 million, respectively.

Compared with the revenue growth, costs and expenses rose at a slower pace of 7.22 percent to P1.72 billion from P1.6 billion year-on-year.

Pancake House said it benefited from “continuing efforts to manage costs such as expanded synergies among brands, resource optimization and strategic materials management.”

As of end-June, the listed firm had 292 co-owned and franchised stores: 105 Pancake House, 14 Dencio’s Bar and Grill, 34 for Teriyaki Boy, 17 Sizzlin’ Pepper Steak, 11 Le Coeur de France, four Chicken Rice Shop and 105 Yellow Cab.

Last year, Pancake House started its five- to seven-year overseas expansion program that involves the establishment of around 300 stores mostly in the Middle East and Southeast Asia.

Pancake House plans to put up 30 new branches in the Philippines to end the year with around 330 stores nationwide, while also expanding its market reach to the Middle East and Southeast Asia.

Pancake House will spend P150 million for the establishment of new company-owned stores, accounting for 55 percent of the expansion program while the remaining 45 percent will be through franchising.

Last year, the restaurant group that serves 30 million meals annually added 25 new branches, backed by a P120-million capital spending.

The original Pancake House was opened in 1970 by Milagros Basa, Leticia Zamora and Carmen Zaragosa, producing pancakes and waffles as an alternative to the rice-based restaurant market.

A group of new investors led by current CEO Martin P. Lorenzo bought the two main shareholders, Sta. Rosa Food Services Corp. and Extrovert Holdings in February 2000.