Pancake House not selling like hotcakes

MANILA, Philippines - Listed restaurant chain Pancake House Inc. trimmed its losses in the first half of the year even as higher expenses offset a slight increase in revenues.

In a report submitted to the Philippine Stock Exchange, the company said it incurred a net loss of P36.6 million in the six months ending June 30, down 145 percent from P81.9 million a year ago.

Consolidated revenues grew two percent year-on-year to P1.85 billion while store sales inched up one percent to P1.54 billion from P1.52 billion last year due “to a wider store network and larger customer base.”

Franchise income, which included franchise and royal fees, however, dropped 13 percent to P55.8 million on the back of lower number of franchise stores that opened in the same period last year.

General and administrative expenses at the same time increased 58 percent to P313.8 million in the first six months of 2014 compared to P198.5 million during the same period last year due to additional allowances for past due accounts and higher compensation-related costs, the company reported.

With its intensified advertising activities to broaden product awareness in the market, the country’s largest casual dining group said selling and marketing expenses likewise surged 28 percent to P66.4 million in the first half as opposed to P51.7 million the previous year.

“Management does not expect this downtrend to continue and remains steadfast in its commitment to take all of its brands to its next phase of growth,” Pancake House said.

“As other brands continue to ramp up, the company is poised to sustain its revenue growth trajectory with the rollout of additional stores located in strategic growth areas. This will be supplemented by an aggressive marketing campaign aimed at enhancing brand recognition and promoting new products across all lines,” the company added.

Last month, the Max’s Group was folded into Pancake House Inc. in a P4-billion reverse acquisition that further cemented Pancake House’s position as the largest casual dining chain in the Philippines.