Shakey’s sees 2023 net profit to surpass pre-pandemic level

SHAKEY’s Pizza Asia Ventures, Inc. expects its net income in 2023 to exceed the pre-pandemic level as it describes this year as a “reopening play” after its return to profitability in 2021.

“With investments and acquisitions made even in the midst of the pandemic, barring any major disruptions, we see our 2023 bottom line exceeding pre-pandemic level,” said Shakey’s Chief Financial Officer Manuel T. Del Barrio in a statement.

The acquisitions include Potato Corner, which the restaurant operator recently disclosed. Along with its subsidiary Wow Brand Holdings, Inc. it acquired the assets and intellectual property of Potato Corner, including shares in an entity in Singapore.

“We are excited with what Potato Corner can bring to the Company, especially as the brand celebrates its 30th anniversary this year. Potato Corner fits perfectly with our vision to build and scale a portfolio of industry-leading WOW brands with strong brand equity and industry-leading margins,” said Mr. Del Barrio.

Shakey’s is allocating more than P650 million as its capital expenditure budget this year, which it plans to use mostly to accelerate its store network expansion. It is targeting to open at least 192 stores for the group, including 42 new stores for existing brands and 150 outlets for Potato Corner.

“Despite the crisis in 2020, we maintained our long-term view on sustainable growth. We made a bold decision to re-ignite our expansion plan, purposefully investing in our brands and our stores. We believe that these continuous investments amidst the pandemic will fuel our 2021 growth momentum toward a stronger 2022 reopening play,” said Vicente L. Gregorio, president and chief executive officer of Shakey’s.

In 2021, Shakey’s recorded a net profit of P121 million, reversing the net loss of P254 million the year before, on higher system-wide sales.

“The fourth quarter was quite significant for us. Quarantine restrictions were easing. The season was festive, and more guests were choosing to eat out with their families and friends to enjoy the complete dine-in experience. We took advantage of that to create momentum and were rewarded with a strong performance, a testament to the continued loyalty of our guests in our brands,” Mr. Gregorio said.

Meanwhile, fourth-quarter net income rose to P156 million, with no comparative figure given.

System-wide sales in 2021 were up 6% to P7.01 billion, of which P2.17 billion came in during the fourth quarter, or higher by 18%. Same-store sales growth was registered at 5%.

Earnings before interest, tax, depreciation, and amortization (EBITDA) amounted to P1.02 billion for the year, more than double that of 2020’s. EBITDA margins jumped to double-digit territory, improving from 8.8% to 18.6%.

The restaurant chain owner said it saw a surge in dine-in customers as the holiday season kicked in amid loosened quarantine restrictions in the fourth quarter.

Mr. Gregorio said that the company’s delivery service was a key factor in its growth during the pandemic.

“With the extensive investments in our digital infrastructure, we aim to exceed guest expectations and elevate the Shakey’s off-premise experience,” he added.

In the second half of 2021, the company launched the Shakey’s Super App and established its 31-minute delivery guarantee in Metro Manila.

In December, the company announced its acquisition of food kiosk brand Potato Corner.

At the stock exchange on Friday, Shakey’s shares were up 3.95% or 30 centavos to close at P7.90 apiece. — L.M.J.C. Jocson