A lot of it some some figures that Heidi was pointing out there.
I wanted to just clarify first. I hope you don't mind.
This is a bit technical as we start off this interview.
System wide sales pass us seventy eight point six billion.
There's also another revenue figure of fifty five billion for the first
quarter. I'm wondering, what's the difference
between the two numbers, Richard? Right.
So systemwide sales is a measurement that counts for all of our
line earnings coming in from both company owned stores as well as the
franchise stores. Whereas revenues Israeli are company
owned stores, plus our royalty income that comes through.
So you will always see a gap with system wide sales being higher.
And that's because we're 57 percent franchised and 43 percent company owned
stores. Understood.
Thank you for that clarification. I'm looking now at estimates from
analysts. Just throwing the story forward, full
year revenues they expect for 2023 240 billion.
Philippine currency Philippine pays us. What do you think of that estimate?
Is that an easy target for you? Is that fingers crossed?
Is it likely? Is it possible, Richard?
Well, David, we had a very strong first quarter, and we're very encouraged by
the fact that it wasn't only a growth on year on year, but it was also growth
versus pre pandemic of 2019. In fact, we had a 44 percent top line
growth versus 20 19. We believe that first quarter being also
are soft this quarter in terms of seasonality.
We believe this trend will continue through a chorus two, three and four
where a fourth quarter typically is our strongest quarter.
So we are sticking to our guidance of top line growth somewhere between 15 to
20 percent and bottom line growth somewhere between 20 to 25 percent.
Richard, what's your outlook when it comes to China, whether consumer and
services growth has been so strong in this recovery?
But we're also seeing, you know, a lot of food operators and restaurant
operators like Yum, China, heavily discounting in this environment.
Right. 2022, you know, that was a difficult
year for I think most operators in China due to the Covid lockdown.
Having said that, we're seeing very encouraging signs in the first quarter.
So China is up double digits. And we believe the second quarter will
continue this momentum and in fact, be even stronger.
So I think our three brands are well positioned and really caters, I think,
to the Chinese consumers appetite and demand to come back to indicting.
Richard, we spoke with Sir Otto, the seal that late last year and his
guidance for this year was for the China business looking to open around 100
stores. Are you guys on track for that?
I believe will be there or perhaps even exceed that target.
And again, we have three very interesting brands in China with very
focused expansion strategy through franchising as well.
So we believe that that will be attainable in the.
Thank you, Richard. Inflation globally, globally.
Sorry. It remains an issue.
I'm wondering whether you're seeing that play out as far as cost pressures are
concerned. That's one part of the question.
The second part is if you are are you still looking to pass it on to the
consumer? Right.
So 2022, as we all know, was an incredibly challenging year visa v
inflation. Having said that, Charlie B's been
around for 45 years and we're very proud that our management, our processes was
able to take this on head for us. So that's all the way from procurement
to supply chain and commissary. So having a very robust process in
place, we're in fact able to absorb a lot of the inflation.
So cost efficiency programs resulted in very good yields for us.
So we did not pass on all the pricing to consumers.
And this, of course, is very important for us because we do want to provide
very tasty, great food at very affordable prices as well.
What's the interest when it comes to further emanates and deals at this
point? You know, since we started this business
in 1978, it really started with one brand and Dusty Charlie brand and pretty
much every other brand we've acquired through MBNA through a course of long
history. We believe we're now well positioned to
represent keep brands in for strategic pillars.
So I think where we'll spend our focus on really is to build out these brands
and also optimize opportunities outside of the Philippines through our
international strategy as well. Richard, well, we'll take that for now
at face value that you're focusing on organic growth.
Final question for you. Interest rates have been high globally.
RTS. Oh, are you looking at raising any funds
this year in the public markets, debt or equity, or at least changes to your
capital structure? A day that will have been very
unfortunate in terms of our debt as well as our total obligation portfolio where
86 percent fixed rate and these rates were in fact fixed before the start of
the interest rate hikes sometime last year.
So I think we're in a good position with long tenures as well.
So we will hold to our capital structure as we have it today.
We're also very fortunate that our operating cash flow is very strong.
So we're funded our growth as well as working capital needs through our
liquidity programs that we have through our regular business.