Lorenzo’s Pancake House to spend P150M on new restos, commissary

The Lorenzo family, which owns the Pancake House group, is setting aside up to P150 million this year for the establishment of new restaurants and a commissary in line with efforts to further strengthen its foothold in the casual fast-dining industry.

At the sidelines of Pancake House’s annual stockholders meeting yesterday, company chairman and chief executive officer Martin Lorenzo said the group is setting up 30 new restaurants this year, 16 of which are Teriyaki Boy stores, eight to 10 Pancake House branches, and the rest, Dencio’s Grill restaurants.

Half of the new stores to be put up will be company-owned and the other half franchised. The group had 90 stores as of last year.

Lorenzo said the move is part of efforts to further expand the group’s presence in the country as it prepares to venture into overseas markets.

He said the group has received offers from Singapore, Vietnam, Malaysia, Thailand and China to enter into joint ventures to establish Pancake House and Teriyaki Boy fastfood outlets. "These are tough and competitive markets. In these countries it takes them six months to find a location but here, we can assess 50 locations all at the same time. Unless something is extremely attractive, I wouldn’t move until then," Lorenzo said.

Lorenzo said the group is expected to double its net income and revenues this year on the back of the continued improved performance of its Teriyaki Boy and Pancake House units and the turnaround of Dencios.

Net profit is seen to grow to P45 million from only P27 million in 2005. Revenues are likewise expected to increase to P1.45 billion from P797 million while system-wide sales are seen to rise 24 percent to P1.78 billion from P1.44 billion.

EBITDA (earnings before interest, taxes, depreciation and amortization), on the other hand, is projected to rise 78 percent to P198 million from P112 million.

Lorenzo said the new commissary, to be located in Makati, is seen to cut costs and enhance operational efficiencies of Dencio’s and Teriyaki Boy as it will consolidate both restaurants’ commissaries which are currently located in Mandaluyong and Pasig, respectively.

On its proposed acquisition of Goldilocks Bakeshop Inc., the group said negotiations are still ongoing but would only pursue the transaction if it acquires 60 percent or more of the country’s largest bakeshop.

"I want to do the transaction and want to get majority stake. The willingness of the sellers is there but not 100 percent are willing to sell," Lorenzo said.

Should negotiations falter, Lorenzo said the group would continue to search for companies that have a "natural fit in what we are doing which could be another fastfood restaurant or bakery."

"It’s always important for us to create value for our shareholders. What’s important is this new company should create synergy to existing operations," Lorenzo said.

Pancake House has traditionally been associated with specialty pancakes and waffles and has likewise expanded to offer an array of popular international dishes such as spaghetti, tacos, and chicken.