Listed restaurant chain operator Shakey’s Pizza Asia Ventures Inc. is holding off the rollout of new stores and cutting by half its capital outlays this 2020 to prepare for a prolonged period of the difficult operating environment brought to us by the coronaconomy. This year to P300 million as it delays expansion plans to preserve cash according to the company CEO.
In a virtual stockholders’ meeting on Wednesday, Shakey’s President and Chief Executive Officer Vicente Gregorio said these measures included postponing its planned opening of 38 stores this year and cutting its P600-million capital expenditure (capex) to between P250 million and P300 million.
“This translates to a more conservative store renovation plan, suspension of new store openings, agreements with partner-lessors for rent waivers, coordination with suppliers for discounts and extended payment terms and accelerated efficiency programs at both [the] store and head office level,” Gregorio explained.
“Our pre-Covid balance sheet provides us some room as well, and we remain confident that while we put our growth-oriented strategy on pause, we will be more than ready to revert to these plans when the good times return,” Gregorio said.
“Until then, we will focus on our efforts on maximizing existing assets, most especially those geared to the guests who remain at home,” he added. The company will continue to invest in the digital space and focus on the “use of analytics, mobile ordering, and various web resources.”
Shakey’s was forced to temporarily close 256 of its 280 stores after the government put Luzon under enhanced community quarantine in mid-March to contain the spread of Covid-19 in the country.
The company earnings in the first quarter fell 35% to P114 million due to the temporary closure of 91% of its stores as of end-March. Overseas, Shakey’s had already closed two of its four stores in the Middle East and is currently considering whether to shut it down for good.
Shakey’s was originally planning to open 38 new stores this year, but this plan is put on hold due to the economic uncertainties. After temporarily closing 91% of its store network in March, leaving it with 24 operational stores out of 280, the pizza chain has already reopened 267 stores as of end-June, or 95% of its network.
Shakey’s Pizza Asia Ventures, Inc. is listed in the Philippine Stock Exchange as $PIZZA and as of July 15, 2020, 03:30:00 PM it was last traded at P6.10 per share -0.33% lower than its previous closing price.
-Stockbytes PH, July 16 2020,
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