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A KFC fast-food outlet in Port of Spain, Trinidad

Prestige Holdings losses climb higher amid restrictions

A KFC fast-food outlet in Port of Spain, Trinidad

Even with domestic demand slowly rising in Trinidad and Tobago, continuous restrictive measures to control the spread of COVID-19 contributed to a jump in Prestige Holdings Limited’s (PHL) consolidated net loss for the six months.

For the half-year ended ending May 31, 2021, PHL realised a consolidated net loss of TT$17.48 million, up from TT$8 million reported in the corresponding period last year.

“These results reflect the considerable difficulties affecting our industry and we expect 2021 will continue to be a difficult year for our company. We have entered the third quarter with the restrictions on all restaurant operations still in place and, while we are hopeful that this will end soon, there is no clear visibility as to when restrictions will be partially or completely removed. As a result, management has engaged in a number of initiatives to
reduce costs and further improve efficiencies,” Chairman of PHL Christian Mouttet told shareholders in his
report.

Chairman of Prestige Holdings Limited Christian Mouttet (File photo)

The operator of several fast-food franchises in Trinidad and Tobago, as well as TGI Fridays in Jamaica, saw its revenue pick up by 15 per cent to TT $157.52 million for the quarter despite limitations on all in-house dining for 15 days in April, all restaurants closed in May, and no carnival revenue at the start of the quarter.

“Even though current conditions remain difficult, we remain confident in the performance and strength of our business in the medium to long term. Our brands and operations remain strong, and our conservative balance sheet has given us the flexibility to fund our operations through this difficult period. As with all companies, our resources are not limitless; however, we fully expect that as the Government’s vaccination programme continues to be rolled out during 2021 and beyond, conditions will improve substantially for our industry and our company,” the chairman also stated

PHL’s half-year performance

For the six months, PHL’s revenue declined only by six per cent to TT$392.71 million as the restrictions from the first quarter continued into the second quarter. Gross profit, meanwhile, reduced by five per cent to TT$127.5 million.

(Photo: Corporate Governance Conference 2019)

Administrative expenses increased by six per cent to TT$39.49 million while other operating expenses grew by one per cent to TT$98.47 million. Other income fell by 72 per cent to TT$383,000.

Apart from the inclusion of International Financial Reporting Standard 16, the company incurred an operating loss of TT$10.08 million versus an operating profit of TT $2.80 million in the prior six months. Even with finance costs declining by two per cent to TT$9.70 million, the loss before tax stood at TT$19.78 million versus the TT$7.09 million.

Despite net loss for the quarter falling by nine per cent to TT$14.83 million, the net loss for the six months almost matched the total loss of TT$17.75 million incurred for the 2020 financial year.

A pause on spending?

Prestige Holdings Limited also operates TGI Fridays in Kingston, Jamaica (Photo: pripsjamaica.com)

Given the constraint on growth, Mouttet pointed out that, “…we have placed a hold on all non-essential capital expenditure, including new restaurant construction, restaurant reimaging and the development of our new distribution centre. Prior to the closure of the restaurant industry in April, we were preparing to open a new KFC at Xtra Plaza in Sangre Grande and were in the process of constructing a new Starbucks at Shoppes of Trincity. Both restaurants will open when restrictions are lifted.”

For the period under review, total assets decreased by seven per cent to TT $731.73 million with current assets down by 20 per cent to TT$100 million. Cash and cash equivalents declined by 43 per cent to TT$22.04 million as operating cash flow fell by 70 per cent to TT$2.13 million; however, PHL spent TT$13.48 million and TT$26.32 million in investing and financing activities.

Total liabilities for PHL declined by five per cent to TT$463.13 million, which was largely due to a 19 per cent reduction in current liabilities to TT$125.35million.

Equity declined by 10 per cent to TT$268.6 million, which included a TT $3.66 million dividend payment — TT$0.06 per share — in May.