Sfinks reports net profit of PLN 34.6 m for 2014

Last year, when assessing the forecasts, we did not expect such influence of one-off events on the results of the company. The results of the Chłopskie Jadło chain as well as the trends disclosed in the marketing research related to the clients attitude towards Polish cuisine, including perception of the offer and concept of Chłopskie Jadło, give the basis for a more optimistic outlook for the future of the chain. Therefore, the improved valuation of the trademark is justified. However, the company still did not perform a valuation of the trademark to the full sum of write-offs from the previous years, explains Sylwester Cacek, the President of Sfinks Polska.

 

After four quarters of 2014, the net profit also improved as the result of better results from the principal activity. It is the result of, among others, higher efficiency of the restaurant chain, lower than assumed overheads, higher valuation of the chain and other factors. Their aggregate additional impact on the net profit was PLN 2.3 m.

Higher after the 4th quarter than the planned profit from the principal activity, and the increased probability of fulfilling the forecast in the next few years influenced the change in  the valuation of a tax asset and creation of this asset with a higher value than planned. Also, following an increased influence of one-off events on the result for the year 2014, these factors will have smaller influence on the data regarding the year 2015, which caused the necessity to adjust our profit forecast for this period accordingly, adds Sylwester Cacek.

 

In 2014, Sfinks generated EBITDA of PLN 15.1 m, almost a twofold increase, compared to 2013. Last year, EBITDA constituted 9 % of the sales, and the year before  — 5 %.

Higher profitability was supported by a few factors. On the one hand, changes in the chain management structure, on the other, implementation of many new measures aiming at improvement of sales and the margin. Introduction of five seasonal cards with novelties, in addition to the Sphinx menu, was a really good move, generating up to 10% of the restaurant's turnover. Moreover, the sales were supported by breakfast offer, kid's menu and students offer. We plan on continuing the marketing and sales policy, announces the President of Sfinks.

 

In 2015, clients of the Sphinx restaurants may expect seven cards with novelties which will also contain more dishes in comparison with the offers of this type implemented so far. New proposals will comprise, among others, steaks which have grown to have a significant contribution to the restaurant's turnover. In Chłopskie Jadło, the company plans to have up to five novelty cards. At the same time, the main menu of both restaurants is to be modified.

In accordance with the published strategy, Sfinks Polska intents to develop mainly the Sphinx chains. In the 1st quarter this year, new restaurants of this brand with open in Kołobrzeg (Hosso Shopping Centre) and Warsaw (Błękitny Wieżowiec). In the 1st half of the year, restaurants in Malbork, Cracow, Lublin, Wrocław and Warsaw should be operating. More restaurants are scheduled to be opened in the second half of the year in the capital and other cities. Also, many other contracts are being negotiated.

In the consolidated report, at the end of 2014, Sfinks Polska Group reached the sales revenues of PLN 179.9 m (PLN 176.6 m in 2013). At the same time, in the 1st half of 2014, the company excluded 12 franchise restaurants from consolidation. Including these restaurants, the sales reached PLN 185.3 m, compared to PLN 176.6 m in 2013. Last year, Sfinks generated consolidated net profit of PLN 34.5 m (-PLN 1.1 m in 2013) and EBITDA of PLN 15.2 m (PLN 11.2 m in 2013).