Food

Mac Brothers Catering Equipment

Profile

The “Mac Brothers Catering Equipment” business model is geared for scale, with a world-class production facility and the ability to import and manufacture international products.”

ownership structure

100%
effective ownership (as at 30 June 2015)
(R2.0 million)
contribution to GPI headline earnings for the period

gpi_slots

“Grand Sport is confident that the investment in technology, supported by the rollout of retail licences, will grow the brand’s reach in a dynamic, high-growth industry.”

factsheet

managing executive

Derek McMahon

GPI directors at Mac Brothers Catering Equipment board level

Hassen Adams, Alan Keet

BBBEE rating

Level 6

Employees

Total employee complement: 248

Historically disadvantaged individuals (HDIs) represent 82% of the total employee complement

Females represent 18% (44) of the total employee complement

Head office

Cape Town

Operational footprint

  • Catering and refrigeration equipment manufacturing facility in Cape Town
  • Branches in Cape Town, Durban, Johannesburg and Harare
  • Established agency network throughout Africa

Key financial performance indicators (R’000s)

2015     Mar – Jun
2014
2014* 2013*
Revenue 233 924     65 171 180 436 149 565
EBITDA 8 807     1 009 12 361 11 023
Net profit after tax 3 736     (469) 8 333 7 525
Shareholder loan 25 602     10 244
Total debt excluding shareholder loans 67 726** 68 388 76 198 54 578
 
*   Prior to GPI owning 100%, financial year-end was end February; included for comparative purposes only.
**  Includes GPI Properties loans of R2.529 million.

Operating context and performance

Mac Brothers Catering Equipment is well-positioned as one of the leading companies serving the food service industry in South Africa and into Africa. The brand is well established after many years of providing high-quality products and services to a growing and diverse customer base.

The newly upgraded manufacturing facility in Cape Town is technologically advanced with the latest fabrication equipment available, taking advantage of locally sourced stainless steel and other materials. Mac Brothers Catering Equipment has negotiated some key agreements to manufacture and supply certain equipment items not made in South Africa under licence, in cooperation with some of the leading overseas equipment manufacturers. This is a ground-breaking move in terms of local manufacture and price competitiveness, as well as future strategic potential to export this equipment. The Company has expanded its design capabilities to further add value and assist customers, with a comprehensive service including architectural design, kitchen engineering, cold room and freezer installations and extraction and ventilation technology. The combination of local manufacturing, agency-supplied equipment and bespoke design expertise allows Mac Brothers Catering Equipment to provide clients with an end-to-end kitchen equipment solution.

Despite muted economic conditions in South Africa, the local food service and hospitality industry continues to grow. The fact that kitchen equipment requires regular maintenance and periodic replacement contributes to the sustainability of this market as a whole and is a key source of income for the Company. The most significant operational challenges during the year were a result of machinery breakdown due to load shedding. The risk of further disruption has been mitigated through the commissioning of the new equipment as well as the installation of a generator capable of running the facility. In addition, the implementation of the Sage X3 ERP system will greatly assist the Company in integrating the process of design, manufacture and installation, as well as monitor and support the after-sales service requirements.

Sales related to BURGER KING® SA contributed over 30% to company revenues, which grew by 9.7% during the period. EBITDA decreased by 1.7%, largely due to the increased investment in human resources and other logistics required to gear the Company for the forecast BURGER KING® SA expansion. Exports into Africa decreased by 56% to R7.4 million, largely as a result of contextual factors, including the reduced oil price in key customer economies and significantly reduced tourism activity. In spite of these challenges, opportunities for substantial growth remain, and the business has established a solid foundation of branches and agents in various African countries.

Prospects

The appointment of Mac Brothers Catering Equipment as the kitchen equipment supplier to BURGER KING® SA necessitated the upgrading of the manufacturing facility, Sabenza Manufacturing Systems, creating opportunities to export equipment to other markets. While Sabenza currently sells 96% of its product to Mac Brothers Catering Equipment, the long-term aim is to expand and diversify the customer base. The facility is highly scalable, with the potential to significantly increase volumes at a minimal additional cost. Taking advantage of this potential is the primary strategic focus in the coming year.