Cafe de Coral to invest in food-processing plants

PUBLISHED : Wednesday, 10 December, 2008, 12:00am
UPDATED : Wednesday, 10 December, 2008, 12:00am

Cafe de Coral Holdings, operator of the world's largest Chinese fast-food restaurant chain, plans to spend HK$400 million in Hong Kong and on the mainland to build centralised food-processing plants to improve profitability.

The company posted a HK$200.64 million net profit for the half-year to September, up 14.58 per cent from a year ago. Sales rose 12.32 per cent to HK$2.34 billion.

It proposed to double interim dividend to 30 HK cents a share to celebrate its 40th anniversary.

'We'll also watch out for acquisition opportunities [under the current] economic environment,' said chairman Michael Chan Yue-kwong.

Cafe de Coral, which also runs the Spaghetti House and Oliver's Super Sandwiches restaurants in Hong Kong, opened 19 new outlets in the city in the first half.

The company is building a central food-processing plant at the Tai Po Industrial Estate costing about HK$250 million.

The plant is expected to be completed in 2010.

'Upon completion, not only our production capacity would be enhanced ... but also our profit margin would be improved by enhancing efficiency,' Mr Chan said.

On the mainland, the company had about 50 outlets in the southern region by the end of September.

'We're now constructing a central food-processing plant in Guangzhou, budgeted at HK$150 million, which we believe can provide a powerful logistics back-up.'

The company will also focus on building the Cafe de Coral restaurant brand in the Yangtze River Delta. It is finalising closures and disposals of certain stores in the loss-making Manchu Wok brand in North America.

Shares of Cafe de Coral remained unchanged yesterday at HK$13.20 after the company announced its results.