Pancake House to invest P2 billion in mass-based chicken resto

MANILA, Philippines - Restaurant group Pancake House announced they will be investing up to P2 billion for the acquisition of a mass-based chicken restaurant.

In an interview, Pancake House chairman and chief executive officer Martin P. Lorenzo said they are ready to spend up to P2 billion in order to buy an existing chicken retail outlet that caters to the low end market.

“We are now focusing on chicken because it is a great way to penetrate the masses,” Lorenzo said at the sidelines of the recently concluded International CEO Conference sponsored by the Management Association of the Philippines (MAP).

With the new acquisition, Lorenzo said they expect to earn anywhere between P2 billion and P3 billion. “We are currently doing our due diligence. What I can tell you is that we are eyeing a mass-based chicken brand.”

He noted that they have narrowed their choice to two existing chicken brands and the decision will be made before the end of the year.

“The price point of the chicken is P120 per meal. This will be in direct competition with established fast food chains like Jollibee and Mc Donalds,” Lorenzo said. However, he clarified that they will be selling only chicken in the outlets.

Aside from Pancake House, the group operates Kabisera ni Dencio, Dencio’s, Teriyaki Boy, Sizzlin’ Pepper Steak, Singkit, and Le Coeur de France.

Meanwhile, in terms of sales, Lorenzo said that the weak first four months have already been recovered because of the robust sales from May to August. “Things picked up after the elections,” Lorenzo explained.

“Things were tough for the first four months,” he said. He noted that sales dropped by seven percent for January to April when compared to the same period a year ago.

Aside from the weak demand, Lorenzo said that high electricity costs have compounded the problems they encountered during the first four months of the year.

On the upside, Lorenzo said that from May to August things picked up. “The strong May to August performance have balanced things out. We expect this year to be a growth year still,” he said.

Lorenzo said that they expect sales to grow by 15 percent this year. Earnings before interest and taxes are likewise expected to increase by 15 percent.