Kotipizza Group posted interim report for February 1, 2016 to April 30, 2016. Chain-based net sales grew 18.3% (4.7%) and comparable net sales were 15.4 MEUR (13.1). Growth was 17.7%.
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Tommi Tervanen, CEO of Kotipizza Group, said: "The first quarter of the year opened the first year which Kotipizza Group will spend fully as a listed company on the OMX Nasdaq Helsinki main list.
The chain-based net sales growth also continued its almost historical pace during the quarter, as it did during the previous fiscal year. In April, the Kotipizza restaurant chain reached the highest monthly sales in its 29-year history.
"The chain-based net sales were 7.14 MEUR in April as the previous all record 7.07 MEUR was from July 2015. The Kotipizza chain's net sales continued on a good level both in same-store sales and in number of customers.
"The number of customers increased 12.2% and the average purchase 6.1% in the brick-and-mortar restaurants. At the end of the review period, orders made through the online store amounted to nearly a tenth of the net sales in brick-and-mortar restaurants. The chain-based net sales growth was 18.3 percent in February-April, being clearly above the average growth in the Finnish fast food market.
"The growth in net sales is particularly significant considering that the net amount of Kotipizza restaurants continued to decrease during the review period. At the end of the period, the number of Kotipizza restaurants was 254 (263). The decrease in the number of restaurants is due to the consistent closing of non-profitable restaurants.
"At the same time, the chain also invests in the opening of new brick-and-mortar restaurants, so it can be estimated that the number of restaurants will start growing again during 2016.
One of the main reasons for chain-based net sales growth is Kotipizza's brand and concept renewal, which was started at full speed at the beginning of 2015. The renewal will be finalized by the end of this year.
"We expect that chain-based net sales will continue to develop favorably. Achieving similar relative growth figures will however become more challenging month after month as comparison months from the previous year are getting tougher.
"Group net sales grew 17.7% in the first quarter of the year and were 15.4 MEUR (13.1). Comparable EBITDA was 1.29 MEUR (0.85) in the first quarter, a growth of 52.0%. Previous year's EBITDA was still burdened by two administrative costs as company's previous headquarter in Vaasa was closed at the end of May 2015.
"We don't expect any material changes to the chained fast food market this year compared to the previous year. The economic growth in Finland is expected to be slow and to underperform Eurozone. The development of the national economy has a direct impact to consumer demand and to demand for chained fast food. However, according to the statistics demand growth for fast food has been stable, surely following the overall economic development, during the past 15 years in Finland.
"The growth of our chain-based net sales exceeded the market growth for chained fast food in year 2015 based on the ongoing concept renewal in Kotipizza, efficient marketing activities, innovative R&D and sustainable procurement. We don't see any such structural changes in the market place that we would not expect our chain based net sales to grow in line with the fast food market growth in Finland or even to exceed the market growth in 2016.
"We therefore estimate the group's chain-based net sales will during the present financial year grow by over 5% as compared to the previous financial year, and the comparable gross margin/EBITDA will grow as compared to the previous financial year." ■