Jubilant Enpro withdraws Jubilant Foodworks' charge on corporate brand royalty payment
The announcement came hours after the fast food operator approved of the said payment.
Jubilant Foodworks, the operator of Domino’s and Dunkin’ Donuts in India, has announced in a stock exchange filing that their pormoter group company Jubilant Enpro Pvt. Ltd. has rejected their decision to charge corporate brand royalty payment of the fast food operator.
The update came after the Domino’s operator said that they approved of the payment which will enable the promoter to “help protect, nurture and enhance the corporate brand name , JUBIlANT, and the group's image globally.”
However, the move has raised concerns from shareholders about rewarding promoters as minor shareholders fear that the promoter would only unequally distribute the shares to make gains.
“Jubilant Enpro Pvt. Ltd. (a promoter group company), has decided not to charge the corporate brand royalty of 0.25% of the consolidated revenues of the Company and the same stands withdrawn,” the announcement said.
Last week, Jubilant also released their third quarter results for FY19 with an operations revenue growth of 16.8% year-over-year to ₹9.29 billion.
This increase is attributed to Domino’s operations, having a 14.6% same store growth during the quarter. They also mentioned that 35 new Domino’s stores were opened in Q3.
“This was accompanied by a tight control on operating costs that led to EBITDA margins improving to a seven year high of 18.4%. In addition, Dunkin’ Donuts also broke even during the quarter, ahead of the targeted Q4 timeline. We are happy with our performance and confident of the prospects ahead, as evident in the 35 new stores opened in Q3, the highest in eleven quarters,” Pratik Pota, CEO and whole time director of Jubilant FoodWorks Limited, said.
EBITDA also went up 24.6% to ₹1.71 billion whilst post-tax profit is at ₹965 million, representing a 46.3% rise year-over-year.
“I am delighted to share that we have once again delivered healthy earnings growth during the quarter which stood inline with our expectations. Performance was driven by consistent progress made across each of the growth pillars,” Jubilant Foodworks’ chairman Shyam Bhartia and co-chairman Hari S. Bhartia said.
Photo credit: Domino's India Facebook
