Listed QSR operator Cafe de Coral has reported an eight per cent rise in similar retailer gross sales and a robust efficiency in Hong Kong, regardless of difficult mainland China market.
The corporate launched its 2015 yr financials as we speak (June 23) reporting a 7.eight per cent improve in turnover to HK$7.356 billion and a modest one per cent improve in revenue attributable to shareholders to $587 million.
The Hong Kong QSR and institutional catering operations, led by its namesake Cafe de Coral restaurant chain and western idea Spaghetti Home, outperformed the broader market, gross sales growing by 10 per cent to $5.26 billion within the yr to March 31. Hong Kong accounts for 83 per cent of the corporate’s turnover.
CEO Hoi Lo stated the corporate achieved a “strategic leap within the quick informal phase”.
“Through the yr, we expanded the group’s quick informal portfolio. We scaled up our home-grown ideas Shanghai Lao Lao and Mixian Sense and signed on well-liked Korean and Japanese manufacturers, all of which introduced new impetus and fuelled the expansion of the quick informal phase in our enterprise.”
It additionally streamlined its operations, divesting Manchu Wok, SenseAsian and Wasabi Grill and Noodle companies in North America; and its 50 per cent share within the Hong Kong enterprise of Taiwanese-founded 85˚C bakery enterprise. Regardless of the model cull, the corporate retained almost 17,500 employees as on the finish of March.
Café de Coral and Tremendous Tremendous Congee & Noodles are among the many main QSR manufacturers in Hong Kong with sizeable market shares. The corporate operated 156 Café de Coral quick meals retailers and 35 Tremendous Tremendous Congee & Noodles outlets as of the top of March.
Now thought-about family names, these manufacturers have gained the belief and help of our clients in Hong Kong, stated Lo.
Now Cafe de Coral Holdings is increasing its portfolio of manufacturers to additional construct its share of the larger QSR market.
New manufacturers, Simply About Meals and C. Categorical will proceed to be expanded, together with full-service chains Shanghai Lao Lao and Mixian Sense, each concentrating on a youthful demographic.
“We proceed to rejuvenate the Oliver’s Tremendous Sandwiches model and idea to make sure it stays related to our numerous buyer teams,” stated Lo.
“Our collaboration with well-known Japanese and Korean companions has additionally enabled us to complement our quick informal portfolio. The current opening of The Cup, a Korean way of life quick informal chain, in Hong Kong in addition to the forthcoming Japanese donburi and pasta chains will additional increase the group’s presence within the quick informal sector.
Cafe de Coral sees its main progress engine within the years forward to be the mainland China market which Lo describes as “extremely dynamic and aggressive.
“Gamers from everywhere in the world are eyeing on this profitable market. That being stated, the speedy change of enterprise surroundings and shopper habits on this fast-growing business is a continuing problem for enterprise operators within the nation. The Café de Coral Group has a long-standing presence within the Mainland and has gained a superb understanding of the nation’s enterprise surroundings and shopper choice. This has helped us formulate the efficient enterprise methods for the group in capturing alternatives and unleashing our potential within the nation.
“Setting the fitting geographical technique is an important theme in our long-term progress plans for the Mainland. By benefiting from our similarities in tradition and language in addition to our shut proximity to Guangdong, the group is properly positioned to department out within the cities of this province. Its huge inhabitants and financial maturity present the Café de Coral Group with ample alternatives for enterprise enlargement, and we’re dedicated to rising our main chains and to capturing a bigger share of this market with new ideas and thrilling manufacturers,” he stated.
Progress in Mainland China’s catering business continued to decelerate through the yr, partly
as a result of decrease spending on business-related eating and receptions.
“This affected not solely high-end eating places but in addition different segments within the nation’s weakening eating business. In face of the enterprise setting and market development, we had adjusted our shop-opening technique and tempo in the course of the yr,” stated Lo.
“Nevertheless, working prices for our Mainland China enterprise, particularly these for rental and labour, have been rising considerably over the previous years. These mixed have affected the profitability of our enterprise operation within the Mainland.”
Regardless of the constructive comparable gross sales progress of three per cent achieved by the corporate’s 100-outlet South China Café de Coral chain, the entire income degree of the enterprise operations in Mainland China was flat in contrast with the earlier monetary yr, largely because of the adjusted shop-opening tempo. The Spaghetti Home skilled a setback in its efficiency on account of declining shopper spending within the mid-priced eating sector.
Wanting forward, Lo stated the macroeconomic surroundings in higher China stays a priority, owing to financial circumstances in Hong Kong and the uncertainties of the enterprise surroundings in Mainland China.
“Excessive rental charges, rising uncooked materials prices and the persistent labour scarcity all stay challenges for our enterprise and operation. However, we’re assured that the strong basis supporting our enterprise and the strong infrastructure we now have constructed underneath the group’s sustainability initiatives up to now years will allow us to proceed our near-term enterprise improvement and 5 yr progress plans,” he stated.
“Our regular and prudent shop-opening program for each our main manufacturers and our youthful ideas will proceed. With the brand new ventures we’ve got taken on, we’ll seize probably the most opportune time to increase in our key markets.”