THE board of Max’s Group Inc. on Monday said it approved the consolidation of 11 of its separate entities under one roof.
The company said in a statement that it will consolidate the following entities into Max’s: Max’s Kitchen Inc., Max’s Baclaran Inc., Chicken’s R. Us Inc., Max’s (Ermita) Inc., Max’s Makati Inc., Max’s Food Services Inc., Max’s Franchising Inc., Max’s Circle Inc., Max’s SM Marikina Inc., Square Top Inc. and Max’s Express Restaurant Inc.
Max’s Kitchen will be the surviving entity of all these firms and it will be renamed Max’s Restaurant Inc., the country’s largest casual-dining restaurant operator said.
The move is still part of the consolidation efforts of Max’s, a company that has been family-run since its inception.
Last year Max’s incurred a consolidated net loss of P56 million as a result of the costs on the acquisition and integration with the operations of Pancake House Inc.
The figure already includes the combined full-year operations of Max’s and Pancake House, a company the Trota group purchased last year from the Lorenzo family. Last year the combined company booked a net income of P260.8 million on a proforma basis.
Revenues for last year was at P9.55 billion, slightly higher than the P9.22 billion in 2013, while its core net income for 2014 reached P154.1 billion.
For the year, Max’s said it will allot between P500 million and P550 million in capital expenditures, which will be used to open 80 to 90 new branches in the Philippines.
The amount, however, did not include its expansion overseas of up to eight new stores of mostly Max’s and Yellow Cab brand in the Middle East and North America where there are concentrations of overseas Filipinos.
The company normally use the Max’s Restaurant brand when it expands to North America, Max’s and Yellow Cab pizza in the Middle East and Pancake House in Southeast Asia and Asia Pacific. “We focused on investments in restaurant operations and on revamping key brands, which has always been our strategy for long-term growth,” said Dave Fuentebella, the company’s chief financial officer.
Fuentebella said Max’s expenditures last year included marketing costs, write-off of doubtful accounts receivables, one-off fees, and expenses for kitchen upgrades, repairs and maintenance, along with the revamping of new and key branches of Pancake House, Teriyaki Boy and Dencio’s.
Company officials, however, said it will report to the Philippine Stock Exchange that include Max’s income for the last two months of the year.
Fuentebella said that since Max’s acquisition of Pancake House entailed merging the two organizations, it secured regulatory approval to file a report in 2014 to contain mostly Pancake House’s financials.
“We put in a lot of resources in making sure that all aspects of our business—from the kitchen to the store and menu layout, to the actual products and services of our various brands—are taken to the next level in terms of quality and performance,” Robert Trota, the company’s president and CEO, said. Last year the company closed down some 33 stores, Trota said.
The company did not give a breakdown of the stores, but a Max’s official said most of these were from the Pancake House group.