JFC chief finance officer Ysmael V. Baysa told reporters after the company’s stockholders meeting last Friday, that bulk of the capital budget will go to new store openings and the refurbishment of existing ones.
As of end-December last year, the JFC group had a total of 988 stores worldwide: 467 Jollibee, 245 Chowking, 213 Greenwich, 30 Delifrance and 33 stores abroad.
JFC chairman and chief executive officer Tony Tan Caktiong said analysts’ profit estimate of P1.57 billion this year is "highly workable."
"The first two quarters were very good. So I guess that estimate is achievable," Tan Caktiong said.
Baysa said the company expects the same growth for the third and fourth quarters this
year. "We expect to have another strong year based on our plans," he said.
He said the company may implement a price increase on its products depending on how the hike in prices of oil and utilities will affect its operations. "We do not know to what extent it is going to be sustainable. But we are trying to keep our prices for as long as we can," Baysa said.
JFC will consolidate the ownership of its six international companies through a merger where Jollibee International (BVI) Ltd. will be the surviving entity.
Jollibee International BVI, wholly-owned by JFC, will merge with Jollibee International Co. Ltd. (Hongkong), Jollibee International Foods (BI) Corp., Jollibee International Foods, Jollibee Hongkong Ltd. and Hanover Holdings.
The merger and consolidation are expected to result in P40 million in savings in tax and costs.
The Jollibee brand is one of the most well-known and strongest consumer brands in the country, serving burgers and crispy chicken. Chowking serves Oriental food while Greenwich is one of the leading players in the pizza-pasta market.
Delifrance, on the other hand, is a significant player in the French bakery-café segment.
JFC posted a net income of P382 million in the first three months of the year or an increase of 41.6 percent from the year ago level, driven by strong sales and margin improvement.
System wide retail sales rose 16.6 percent to P7.8 billion from P6.7 billion a year earlier, fuelled by increases in flagship brand Jollibee (10.5 percent), Greenwich (14.4 percent), Chowking (43.7 percent) and the balance of business mainly international (7.9 percent).
Revenues amounted to P5.78 billion, up by 15.1 percent from P5.02 billion in 2003 while earnings per share grew 41.5 percent to P0.39.
Last Feb. 6, the JFC Group signed an agreement to acquire 85 percent of Belmont Enterprises Ventures Ltd., the holding company of the Yonghe Group, which owns and operates the Yonghe King fastfood chain of quick service restaurants in China.
Jollibee International (BVI) Ltd., a wholly-owned subsidiary of the the JFC Group, will pay $22.5 million for the acquisition of 77 Yonghe King stores.
An initial payment of $11.5 million has already been made, half of which was financed through internally-generated cash and the balance by external sources.
The Yonghe King restaurant serves Chinese food using a western fast food service system. It operates 26 stores in Shanghai, 26 in Beijing, 11 in Shenzhen, eight in Wuhan and six in Hangzhou.
Baysa said the Yonghe King fastfood business is expected to contribute five percent to the JFC Group’s system-wide sales this year.
He also expects international operations to contribute 55 percent to the JFC Group’s overall revenues by 2010. At present, overseas operations account for only five percent of the group’s total revenues.