Grand Parade Investments (GPI) has warned shareholders to expect a major hit on its finances for the six months ended December 2018, due to the costs of disposing of the Dunkin Donuts and Baskin Robbin brands in the country.<\/p>\n
In a trading statement issued on Wednesday, GPI said that it expects to report a basic loss per share between 8.52 to 7.94 for the period – down over 300% from the same period in 2017.<\/p>\n
“The decrease in the basic earnings per share is due to the impairment of Dunkin\u2019 Donuts and Baskin-Robbins, which was liquidated subsequent to 31 December 2018 and is reported as part of discontinued operations,” it said.<\/p>\n
Continuing operation will contribute basic earnings per share of between 7.69 to 9.09 cents, but this is pushed into the red by the Dunkin impairment, which will contribute a loss per share of between 16.22 and 17.03.<\/p>\n
The group still expects headline earnings to be 3.43 to 4.07 cents per share (up between 7.2% and 27.2%) thanks to the contribution from continuing operations (7.81 to 9.26 cents per share). Discontinued operations are expected to contribute a loss per share of between 5.19 to 4.38 cents per share.<\/p>\n
GPI announced in February that it would be closing down the two brands in South Africa, after it was unable to find a buyer for it.<\/p>\n
\u201cThe decision to exit Dunkin Donuts and Baskin Robbins was made following sustained losses in these businesses and an unsuccessful process to dispose of these businesses,\u201d it said.<\/p>\n
\u201cThe decision is in line with the company\u2019s value-based strategy, which aims at improving the groups capital allocation by channelling capital to high-value potential assets, such as Burger King.\u201d<\/p>\n
The brands have been in South Africa for little over two years, after GPI launched them in country at the end of 2016.<\/p>\n
In January 2016 Grand Foods acquired the South African master franchise licences for Dunkin\u2019 Donuts and Baskin-Robbins, from the Dunkin\u2019 Brands group.<\/p>\n
According to the Dunkin\u2019 Brands group, under the agreement, Grand Parade was to develop more than 250 Dunkin\u2019 Donuts restaurants and more than 70 Baskin-Robbins shops in South Africa time, with an initial focus on Cape Town and Johannesburg.<\/p>\n
However, the brands never exited the Mother City, and rollouts slumped in 2018.<\/p>\n
As of February 2019, there were only 11 Dunkin Donuts stores in the country \u2013 all in Cape Town and surrounds \u2013 while only 5 Basking Robbins outlets opened, all in the same city.<\/p>\n