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GPI interim results December 2018
Revenue for the interim period increased to R707.3 million (2017: R554.2 million ). Gross profit was higher at R335 million (2017: R265.8 million). Profit from operations decreased to R19.6 million (2017: R26.8 million). Loss for the period attributable to ordinary shareholders came to R36.4 million (2017: profit of R11.2 million). Furthermore, headline earnings per share from continuing operations grew to 8.53 cents per share (2017: 7.25 cents per share).
No dividends have been declared for the interim period.
The last year has been challenging for GPI and, in particular, its food businesses which have been affected by tough economic conditions. Despite this, the group has proved to be resilient and has managed to weather the storm. The focus over the last 6 months (and for the next 6 months) is to improve profitability of the entire group and to maximise the value of its underlying businesses. The Group has performed an investigation into all assets to understand the drivers of value. The objective is to improve the economic profit of each of the underlying assets to ensure positive contributions to the overall value of the Group.
Although Burger King had decent top line growth over the period management has been focused on improving the profitability of all poor performing restaurants. Many of these restaurants have come to an end of their rental terms and it is the Group's intention to either renegotiate better rental terms or to relocate these restaurants in order to improve performance. The growth in ARS over the period of 8.1% is evident that the efforts to improve the site selection process has resulted in better performing restaurants. The Groups objective is to grow the overall restaurant count by 15 stores a year over the next 3 years with a focus on drive thru restaurants as opposed to in-line and or food court restaurants. Grand Foods Meat Plant has performed extremely well off the growth in Burger King. The future expansion of Burger King will further improve bottom line profitability and allow volume discounts to be passed to Burger King which will improve overall gross profit margins. The change in focus over the last 6 months from growth to value creation has set a promising course for the group. GPI remains committed to executing the subsequent phases of the strategic plan which is to ultimately maximise total shareholder return.