In an apparent response to an article that featured in Nairametrics, Tantalizers has revealed that it had commenced corporate restructuring of its existing debts and cost structure while looking to raise equity.
Nairametrics had reported on Sunday that the company was on the edge of a liquidation if it does not sort out its unpaid debt, ballooning losses and liquidity issues. The response suggest the company is at least, beginning to take actions to quell investors concerns.
See response below.
Tantalizers Optimistic On-going Strategic Initiatives
Will Result in Bright H2, 2017 Performance
Tantalizers Plc., Nigeria’s foremost fast food company and the only quoted QSR Company on the Nigeria Stock Exchange, has expressed business optimism regarding the efficiency of its on-going strategic initiatives aimed at reversing the recent declining profitability in the business. The initiatives which commenced in the last two years are designed to totally restructure the business, stem the declining performance and boost shareholders’ funds.
Investigation shows that as a result of the positive results from some of the initiatives, the company’s total systems revenue (corporate and franchise) has grown in the last two years by a minimum of 6% per annum and is projected to grow further by an additional 10% to N4b in 2017.
According to sources close to the company, to address the capital structure imbalance which had threatened its business fortunes, the company two years ago engaged notable consulting groups to assist in bringing in equity investors and, though the process has been largely stalled with the economic recession in the country, there has been a renewed interest from both local and foreign potential investors which is expected to crystallize before the end of 2017.
“The company is constantly looking at its cost structure particularly with the high cost of doing business in Nigeria. To this end, we have reduced outlet space where necessary in our renovated stores to make us more attractive, compact and efficient. We will continue to explore more avenues for cost reduction, while addressing other areas that we are sure will improve our competitiveness”, a recent media statement from the company stated.
“In the meantime, to manage the existing debt portfolio, the company has been in discussion with the local banks and IFC for debt restructuring. The discussions have been positive as the debts are already being re-structured. The overall effect of this will be seen in the results of the second half of the year”.
While predicting a strong outlook for the second half of the year 2017, the company in a recent presentation on the floor of the Nigerian Stock Exchange said its franchise model which was adopted three years ago is already yielding positive results.
“In the second half of 2017, we will open 5 additional stores in virgin territories thereby increasing our total foot print to 65 outlets. The planned opening of these outlets is an attestation to the strong equity of the Tantalizers brand and the consumers’ yearning for its location in their community. This will have significant impact on our market share and further consolidate our position as a market leader in the industry”.
The company further noted that “based on these ongoing initiatives and the support from all our stakeholders, we expect to commence the return to profitability position by the end of 2017 while we project dividend payment to commence as profitability improves within the next 24 months”.
“As we continue to grow total systems revenue, we will aggressively pursue over the next five years business expansion through new outlets, franchising and diversification. With this planned growth, we will return the company to a healthy profitable position and improve shareholders’ fund to over N3billion in the next three years”, it further stated.