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Taste Holdings’s earnings fall, needs another year before profitable

FY earnings down 44%.

Taste Holdings said on Friday it would take at least another year to return to profitability after the owner of Domino’s Pizza and Starbucks stores completed a restructuring of its business.

Full-year earnings before interest, tax, depreciation and amortisation (Ebitda) fell by 44% in the financial year to the end of February, hampered by losses in its jewellery business, the company — which is split into food and luxury goods divisions –said.

Taste, which runs 48 Domino’s Pizza and 12 Starbucks stores, joins a long list of struggling South African retailers hit by a sluggish economy, poor retail sales, and high unemployment rates.

It said its jewellery business made a R14 million ($960 153) loss in the financial year ending February 28, in part from booking a R39 million goodwill impairment at jewellery and watch retailer Arthur Kaplan.

A decrease in group revenue of 7% to R960 million was driven by a 12% reduction in luxury goods sales and 1% decline in food sales, it said.

Taste struggled after taking on the two global brands and introducing a centralised distribution system. It temporarily halted the rollout of Domino’s and Starbucks stores in November after reporting a loss in the first half of the financial year.

“Strong evidence of (an) operational turnaround has already emerged in the group’s 2018/19 year-end financials, but a journey of a year or more remains for restoring Taste to sustainable profitability,” Taste said in a statement.

Diluted losses per share fell to 35.0 cents compared with 51 cents in the previous full period and the company said it will not pay a dividend for the financial year just ended.

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The business model of Starbucks can only work in the country where the spending power of citizens is supported by the fact that their government enjoys the “exorbitant privilege” of being able to print the reserve currency of the world.

@Sensei …..too true ! [ well, its not the US govt itself that actually controls the US money supply….its that independent secret organisation known as the Federal Reserve ]

And the Fed Res has got to be one of the most corrupt entities in the world [ along with the Clinton Foundation….and the 3 letter acronym entities known as FBI…CIA….NSA…..etc etc ]

Now, if only the Americans themselves knew !??

End of comments.

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