The Maltese nine-outlet franchise of McDonald’s experienced by far the greatest average drop in revenue during the COVID pandemic, when compared to other restaurants operated by Maltese franchisee Premier Capital.
Premier Capital, owned by Melo Hili’s Hili Ventures, is engaged in the operations of McDonald’s restaurants in Estonia, Greece, Latvia, Lithuania, Malta and Romania.
But in 2020, the Maltese network of restaurants was impacted with a 15% average drop in revenues, falling from €26.3 million to €22.2 million, a financial analysis summary for 2022 reveals.
Revenues picked up instantly back to previous levels in 2021, to €26.4 million and are project to rise to €31 million this year.
While it costs Premier Capital an average of €1.3 million to open every new McDonald’s outlet, a Maltese restaurant delivers an average revenue of €3.5 million.
Premier Capital’s largest network of McDonald’s restaurants is in Romania, with 96 out of a projected 175 this year. Total forecast revenues in Romania will be €278 million, an average of €2.9 million per restaurant – far lower than that in Malta.
Altogether, Premier Capital’s McDonald’s outlets are expected to generate over €500 million in revenue in 2022, with pre-tax profits of just over €47 million.
Premier Capital said that despite the challenging conditions brought about by the pandemic, drive-thru and delivery options McDrive and McDelivery assisted the group to exceed projections.
“As the pandemic situation edges closer to normality, the Group has now largely resumed regular operating patterns,” Premier Capital said, which insisted there had been no COVID-19 related job losses throughout 2021, as the group preserved its staff complement by tapping national wage support programmes.
Indeed, total revenues jumped back from €318 million in 2020 to €405 million in 2021, pre-tax profits climbing from €25.9 million to €45.3 million.
The group said it was monitoring the effects of the war in Ukraine on its operations in neighbouring countries Romania and the Baltics. “Inflationary pressures, supply chain disruption and heightened utility costs are presently being experienced by certain operations within the Group. It is still challenging however, to quantify and differentiate what extent of such pressures emanate from the unrest in Ukraine and the concurrent pandemic related events, but the compounded effect on the footprint of managed restaurants is potentially material.”
In 2021, the group increased its total number of restaurants to 166, compared to 159 in the prior year. Of these restaurants, 92 are operated in Romania, 40 in the Baltics – Estonia, Latvia and Lithuania – 25 in Greece, and nine in Malta.
The group plans to invest over €28 million in its restaurant footprint during the course of 2022, half of which for new restaurant openings, the rest targeted to restaurant capital expenditure and digital upgrades. Investment in Malta will account for 7%.
Despite the COVID pandemic, the group increased its footprint by 20 restaurants since 2019, investing €31.6m on new stores and €2.5m on the remodelling of old stores. 16 existing restaurants were upgraded to accommodate McDonald’s newest service and digital platforms, allowing for the roll-out of table service and self-ordering kiosks. By the end of 2021, a total of 156 restaurants had deployed McDelivery.