Revenue for the interim period decreased by 9% to R483.1 million (R529.2 million) whilst gross profit was 4% higher at R207.8 million (R200.6 million). LBITDA worsened to R53.8 million (loss of R24.7 million). Operating profit also dived to R73.3 million (loss of R41.2 million). Loss attributable to equity holders widened to R65.8 million (loss of R34.4 million). In addition, headline loss per share took a knock to 15.9cps (9.0cps).
Despite improvements in sales in the most recent quarter the group remains bearish with regard to a material sales recovery in the next six months. As appropriate, we will continue to invest in marketing expenditure, enhancing the customer value proposition and building on the operational improvements made to date.
Shareholders∆ attention is drawn to the cautionary announcement made on 29 September 2017 wherein the group announced it was evaluating a capital restructure that would see its long term debt of R225 million materially reduced and a combination of debt and equity raised to fund future Starbucks and Domino∆s stores. On the basis that this restructure is successful and assuming a moderate consumer recovery next year, the Food division will reach a cash breakeven during the second half of next year. The next six months will no doubt continue to test to the fortitude of South African consumers. We are however confident that the strength of our brands across our divisions will see the group well placed to capitalise on consumer spending as the cycles turn.