Grand Parade’s losses widen on Covid-19

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Grand Parade’s losses widen on Covid-19

Published Date: 2020-09-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Grand Parade’s losses widen on Covid-19

The investment group has accelerated the sale of non-core assets in response to the pandemic.

Grand Parade Investments will report a bigger loss this year after it was forced to close most of its businesses in April, with only some resuming limited trading in May due to the lockdown.

The investment group, which is selling assets to reduce debt and return capital to shareholders, said its Burger King fast-food franchise sold no burgers in April and was only permitted to resume home deliveries in May, with all service modes resuming in June. Its gaming businesses, including SunWest casino and Sun Slots, were closed from the end of March until the end of June and only resumed operations in July under restrictive operational controls.

The group said it took a number of measure to reduce costs and preserve cash, including salary reductions, reduced working hours and the temporary layoff of some staff. It also negotiated rental holidays with landlords and renegotiated trading terms with creditors. The sale of non-core assets was accelerated.

In July, Grand Parade said it would receive more than R100 million less for its stake in Burger King and its Grand Foods Meat Plant due to the impact of Covid-19 on its business. The deal with private equity group Emerging Capital Partners (ECP) Africa Fund for its 95.36% stake in the local burger franchise was renegotiated due to disruptions caused by the lockdown. It will now get R570 million for Burger King, down from the R670 million announced in February, and R23 million for Grand Foods Meat, from R27 million previously. The sale of its 33 Heerengracht head office property in Cape Town was also still ongoing, it said.

For the year to end-June, the company expects to report a basic loss of between 27.52c and 29.22c per share, down from last year's 8.48c loss. Its headline loss per share will widen to between 13.18c and 14.96c per share from earnings of 8.91c previously.

Grand Parade's shares closed unchanged at R1.90 yesterday.





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