Grand Parade Investments (GPI), Burger King’s franchisee in South Africa, has reported sales of its Burger King outlets in the year to end June 2019 rose by 34.2% to R1.01bn ($68m). The sales growth also moved the company into a modest profit before exceptional items.
The growth is validation of a new more focused strategy: in February we reported that GPI was set to close its Dunkin’ Donuts and Baskin Robbins franchises in the country, citing poor performance. The move followed activist investor pressure to focus its resources on growing the Burger King franchise.
GPI has added six new Burger King outlets over the 12 month reporting period. At the end of June it had 86 outlets in South Africa. Like for like sales also increased by 10.3%. Benchmark sales per store (around $0.8m per year) compare with sales per store in Morocco of $0.76m and what McDonald’s turns over per store in Egypt ($0.79m).
GPI reported Burger King’s sales increased by 34.2% from R756.2m ($50.8m) to R1.015bn (US$68.0m) for FY2019, turning a loss of R27.1m ($1.8m) into a profit of R11.7m ($0.8m. But – accounting for the closure of the Baskin Robbins and Dunkin Donuts franchises, GPO lost R36.6m ($2.5m).
GPI has also agreed to sell a 10% stake in steak restaurant chain Spur Corporation for R260.4m ($18.5m) back to the company reducing its shareholding from 17.5%.
