Pancake House incurs 30% drop in net profit in 2013

MANILA, Philippines - Listed restaurant chain Pancake House Inc., now a part of the Max’s Group of Companies, posted a double-digit profit decline last year as higher costs and expenses offset the in- crease in sales.

Marketing campaigns and brand revitalization programs that started last year are expected boost sales in the coming years, Pancake House said in a regulatory filing.

Net income attributable to equity holders of the parent firm sank 30 percent to P105.63 million from P151.4 million in 2012.

Consolidated revenues of the coun- try’s largest casual dining group climbed by nearly a tenth to P3.75 billion from P3.43 billion.

However, total costs and expenses rose at a faster pace, up 11 percent to P3.63 billion last year from P3.26 billion.

“The group’s profitability declined as it posted a net income ratio of two percent compared with four per- cent in the previous year,” Pancake House said.

“The decline was attributable mainly to the intensified marketing campaigns and brand revitalization programs, both of which are expected to benefit the company in the succeeding years,” it added.

Specifically, consolidated sales and marketing expenses doubled to P131 million due to numerous brand revitalization programs to continuously defend the brand from ag- gressive competitors.

Pancake House said it focused on the market share of its Japanese cuisine lines Teriyaki Boy and Sizzlin’ Pepper Steak, as well as the need to increase customer aware- ness through loyalty programs and billboard communication.

In terms of sales, the homegrown restaurant chain said store sales grew 9.6 percent to P3.1 billion from P2.83.

Commissary sales and franchise in- come picked up seven percent and 9.7 percent to P503.47 million and P144.86 million, respectively.