Max's Group returns to profitability (Sabong News)

Max’s Group Inc. (MGI) reported a net income of P451 million last year, a significant turnaround from the P1.68 billion net loss it incurred in 2020 due to cost savings realized from rightsizing and more efficient operations. In a disclosure to the Philippine Stock Exchange, the firm said that, even excluding one-off gains in 2021, it still ended the year with a net income of P74 million. “With dine-in channels expected to return in 2022, significant margin upsides are expected in the coming year when the market comes back,” MGI added. MGI’s systemwide sales, which is composed of sales from both company-owned stores and franchised stores, increased by 15 percent to P12.52 billion in 2021 from P10.85 billion in 2020. The increase in 2021 was achieved even with 2020 operating 2.5 months pre-covid as well as strict dine-in restrictions during various periods of lockdowns in 2021. Revenues, which comprise restaurant sales, commissary sales, and franchising and other revenue increased by 7 percent to P7.64 billion from P7.14 billion in 2020. Restaurant sales amounted to P6.00 billion, a 4 percent increase from P5.74 billion in 2020. Commissary sales and Franchising and other revenue grew 29 percent and 12 percent, respectively. The increase in revenues was driven largely by overall market conditions as well as continued growth in off-premise channels of all brands. Shifts in channel segments were seen as the consumer adjusts to government-mandated protocols such as limited dine-in due to health and safety precautions. During GCQ, the channel share shifted to delivery instead of dine-in and takeout has been stable. Over the course of the pandemic, delivery has grown double in its contribution versus pre-pandemic. Core brands continue to drive the demand and increase in SWS while the other brands were strategically placed in cloud kitchens which added extra boost in sales without the significant capex in opening a brick-and-mortar store. MGI said its Yellow Cab and Krispy Kreme brands are recovering faster as these brands are delivery and takeout centric even pre-covid. Max’s and Pancake House are expected to have a hockey stick recovery once dine -in restrictions are relaxed creating more demand. International business reported a 33 percent growth in sales versus the prior year and has recovered faster compared to the local market as less stringent lockdown measures were in place.