Prime Business AfricaIn a bid to stem its losses, Tantalizers, a quick service restaurant (QSR), has cut staff incentives and implemented cost-saving measures.
The company reported a loss of over N260 million in 2024, despite a 9.99% increase in system revenue.
Join our WhatsApp ChannelTo mitigate the impact of rising costs, Tantalizers reduced distribution costs, advertising expenses, and administrative expenses. The company’s efforts seem to be paying off, with a slower increase in operating loss and a reduction in loss after tax.
In 2024, Tantalizers reported that its system revenue, comprising the company’s turnover and income from franchisee-owned outlets, increased by 9.99 percent year-on-year, from N2.63 billion in 2023 to N2.90 billion in 2024.
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A breakdown of Tantalizers’ financial statements for the year ended December 31 2024, showed that the company’s revenue (excluding income from franchisee-owned outlets) decreased to N1.19 billion, which is 2.09 percent lower than the N1.22 balloon generated the previous year.
Prime Busness Africa’s analysis gathered that a 20.45 percent increase in the company’s franchisee-owned outlets turnover threw the system revenue a lifeline, as it grew by 20.45 percent from N1.41 billion to N1.70 billion.
However, it was not enough to curb the cost of sales, which gulped 64.52 percent of revenue, after rising to N773.33 million from N742.37 million, which consumed 60.64 percent of the company’s revenue in 2023.
Consequently, Tantalizers’ gross profit grew marginally by 0.4 percent to end last year with N425.16 million, compared to N423.45 million reported in 2023.
To ease the impact of cost on its earnings, Tantalizers reduced the company’s distribution costs from N15.11 million to N3.14 million after cutting its staff competition incentives during the reviewed period.
In the last four years, the company had been increasing its staff competition incentives, which accounted for N832.500 in 2023, N617,000 the year before, N429,500, and N150,000 in 2021, 2020 and 2019, respectively.
However, in 2024, Tantalizers cut the incentives.
Tantalizers also reduced its advertising and promotional expenses from N16.29 million to N11.07 million last year – indicating a decline of 32.03 percent, lower than the 72.87 percent decrease announced in 2023.
The cut continued in the administrative expense, which was reduced to N825.85 million in 2024, compared to the N847.72 million reported the year before.
The cost-saving measures seem to be paying off as the increase in the company’s operating loss slowed to 5.76 percent, from N179.58 million to N189.93 million within the period in review.
Prime Business Africa gathered that the increase is lower compared to the 7.16 percent recorded in 2023 and 26.21 percent in 2022.
This was further reflected in the loss after tax, which dropped to N265.58 million in 2024, compared to the N290.73 billion recorded the year before – indicating a reduction of 8.65 percent, compared to the 10.08 percent increase recorded in 2023.
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