Shakey’s Pizza bottomline swings to positive territory in 1H21; Company adds 16 outlets to store network

Shakey's Philippines

Shakey’s Pizza Asia Ventures Inc (PSE: PIZZA), the Philippines’ leading full-service restaurant chain, delivered a positive bottomline of Php14 million in the first half of 2021, an upswing from the Php290 million net loss reported in the same period last year. The first half of 2020 saw the height of strict quarantine restrictions in the country brought about by COVID-19.

Systemwide sales in the second quarter grew to Php1.63 billion, 43% higher compared to the same period in 2020.

The increase is driven by strong same-store sales growth (SSSG) of 31% notwithstanding the dine-in restrictions implemented at the end of March 2021. SSSG has sequentially improved quarter-on-quarter amidst the different phases of lockdowns since the pandemic hit at the end of first quarter 2020.

Consequently, first half 2021 systemwide sales totaled Php3.3 billion, close to the Php3.45 billion registered during the same period in 2020.
Earnings before interest, tax, depreciation, and amortization (EBITDA) for the first six months of the year stood at Php404 million. EBITDA margins reverted to a double-digit level of 15.9%, a significant improvement from last year’s 6.5%.

“The first half results are a testament to the resilience and relevance of our brands even during this most difficult period. We were able to leverage our industry-leading margins and operating capabilities to strategically pivot our growth plans and cost structures. The efforts, prudence, and discipline built amidst extreme challenges helped us weather through the past 15 months,” said Vicente Gregorio, PIZZA’s CEO and President.

PIZZA’s healthy balance sheet and cash position enabled the Company to steadily execute its store network expansion strategy that was put on hold last year. During the first six months of 2021, the Company added 16 outlets, bringing its total store network count to 295 stores. These new stores generally have smaller footprints and reduced investment requirements, ensuring that payback periods are kept short and returns on capital remain high.

PIZZA also welcomed the entry of JE Holdings, the private investment company of the Gokongwei family, as a strategic investor at the end of the first half. JE Holding’s capital infusion of Php1.25 billion further strengthened the Company’s financial position and gives PIZZA the flexibility to pursue organic and inorganic opportunities that may arise.

Gregorio continued, “We are still very much in uncertain times, thus we remain cautiously optimistic, anticipating uncertainties that may potentially delay the path to recovery.”

In late July, to curb the spread of the Delta variant, another round of strict lockdowns prohibiting dine-in was imposed upon the greater part of the country.

The Company expects the impact to be partially cushioned by the sustained growth in their off-premise business, a driver of business performance amidst recurring dine-in restrictions. PIZZA has been continuously upgrading its delivery platform and digital infrastructures to increase speed and better service.

“More importantly, we are encouraged that the vaccination rollout in the country has been ramping up in the past few months. We hope this will increase mobility and boost consumer confidence to fuel our recovery,” Gregorio added.