Impairments hit Grand Parade’s profit


Impairments hit Grand Parade’s profit

Published Date: 2019-03-14 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Impairments hit Grand Parade’s profit

The investment group has impaired its investment in Dunkin' Donuts and Baskin-Robbins after liquidating them in December.

Grand Parade Investments says it will report a slide in first-half earnings after it was forced to impair its investment in Dunkin' Donuts and Baskin-Robbins.

In a trading statement, the investment group, whose interests also include casinos and Burger King, said it would report a basic loss of up to 8.52c per share for the six months to end-December, down from earnings of 2.92c a year earlier. That includes a loss of up to 17.03c per share from its discontinued operations. Headline earnings per share would rise by between 7.2% and 27.2%, it said.

It said the decrease in basic earnings was due to the impairment of the US franchises, which entered voluntary liquidation in December and are included as discontinued operations.

Grand Parade took the decision to exit the "poor performing assets" following sustained losses and an unsuccessful process to dispose of the businesses. It signed 10-year master franchise agreements with Dunkin' Brands in 2016 for 250 Dunkin' Donuts and 70 Baskin-Robbins stores in South Africa.

While the group's Burger King business has narrowed its losses as it opens more restaurants and gains scale, the other two franchises continue to bleed cash. In the year to June 2018, Burger King's headline loss decreased to R11.5 million from R29.7 million, but Dunkin' Donuts and Baskin-Robbins reported a combined headline loss of R62.9 million. At the time, it had opened 11 Dunkin' Donut outlets and five Baskin-Robbins stores.

It expects to publish its interim results on Monday. Its shares closed unchanged at R2.65.

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