Traffic Jams Boost Appetite for Philippine Food Kiosk Owner’s Shakes and Pasties

(Bloomberg) -- Congestion in the Philippine capital is boosting expansion at Fruitas Holdings Inc., a food stall operator that’s preparing for a maiden share sale in November.

Long lines and delays in airports, seaports and public transport hubs are creating foot traffic and increasing demand for Fruitas’ fresh fruit shakes, coconut water and meat-filled pastries, President and CEO Lester Yu said in an interview on Monday.

The company targets to double its store network of 949 in the next five years, Yu said. The Philippines’ largest food kiosk owner by sales will spend 60% of an estimated 1.2 billion pesos ($23 million) in IPO proceeds to open 150 to 250 stores annually through 2022.

There will likely be strong demand for Fruitas shares given its small IPO size and strong brand recall, according to AB Capital Securities senior analyst Lexter Azurin. “It’s a good bet for investors who want to participate on the consumption play in the Philippines,” he said.

Highlights:

• Fruitas, which opened its first fruit-shake store in 2002, is open to acquiring new businesses locally and overseas to add to its portfolio of more than 20 brands, Yu said.
• Company earmarks 150 million pesos for acquisitions in the next two years, adding to the 28.3 million pesos it spent in July 2018 to buy roast pig business Sabroso Lechon, which it had expanded from 2 stores to 15 as of mid-2019.
• In 2018, profit fell 42% from a year ago to 100.3 million pesos as increased capital expenditure and staffing pushed up expenses. Revenues rose 37% to 1.58 billion pesos in the same period.

To contact the reporters on this story: Claire Jiao in Manila at cjiao5@bloomberg.net;Cecilia Yap in Manila at cyap19@bloomberg.net

To contact the editors responsible for this story: Stephanie Phang at sphang@bloomberg.net, Clarissa Batino

©2019 Bloomberg L.P.