Grand Parade Investments H1 HEPS down 59%

Grand Parade Investments, a South African company, recently released its financial results for the six months ended December 2016. The company highlighted a strategic shift away from gaming and leisure investments towards food investments. The group saw a significant decline in headline earnings per share, dropping by 59% to 0.84 cents. Dylan Pienaar, the CFO of Grand Parade Investments, joined CNBC Africa to discuss the company's performance and strategy moving forward. Pienaar explained that the decrease in headline earnings was primarily due to the limited exit from the company's gaming assets, as part of a strategic move over the past 18 months. Grand Parade Investments sold a 10% stake in its investment portfolio at Sunwest International, resulting in a 20 million rand drop in earnings contribution. Despite the decline in headline earnings, the company received proceeds of 660 million rand from the disposal of the investment. These funds were used to de-risk the balance sheet, repay debt, and reduce gearing from 30% to 16.5%. Additionally, Grand Parade Investments paid a dividend of 25 cents per share, a 67% increase from the previous dividend. The company's foray into food investments, including brands like Burger King, Dunkin' Donuts, and Baskin-Robbins, has been met with positive consumer response. Dunkin' Donuts, launched in November, saw impressive sales numbers, setting a global record for the longest queue outside a store. The company plans to expand to Johannesburg once a local donut production facility is operational. The facility is expected to improve margins by up to 10% at a gross margin level. Looking ahead to the second half of the year, Grand Parade Investments is focused on maximizing earnings in its food group. Burger King, in particular, is showing signs of profitability at the EBITDA level for the first time. The company aims to continue the successful rollout of Dunkin' Donuts and Baskin-Robbins to drive future growth and profitability. Shareholders and the market can expect a continued focus on food investments and profitability in the coming months.