Global Brands has been awarded the master franchise for Domino’s Pizza in Austria and this will require it to raise more cash.
Global Brands is already the Switzerland franchisee of Domino’s Pizza and it believes that the expertise it has built up in Switzerland will help it to grow in Austria.
The master franchise for Austria should be agreed by the beginning of November and Global Brands has to raise the cash it needs by the end of 2011. There was CHF477,000 in the bank at the end of June 2011 but that is required as working capital for the Switzerland business. Even that cash limits the scope for expanding in Switzerland so additional cash might be raised in order to grow faster in its core country.
Ueli Santchi has been appointed as the country manager for Austria, where he has catering management experience. Preparations have already begun so Global Brands should be able to open its first outlets in Austria in the first half of 2012.
Revenues grew 11% to CHF7.37m even though second quarter revenues were poor because of hot weather. Ongoing costs, excluding revenue based royalty payments, have been reduced and the loss fell from CHF1.34m to CHF811,000. There was a cash outflow from operations of CHF317,000 in the six months to June 2011.
One former Pizza Taxi outlet has been converted to Domino’s and sales have risen.
July and August sales are higher than the same time last year and early September trading is improving.
At 2.25p a share, Global Brands is valued at £4.59m.
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