Future Consumer Enterprise’s convenience stores have started running on a third party-based franchisee since January.
Henceforth, FCEL will capture revenues only from the company’s fast moving consumer goods business comprising brands like Tasty Treat, Sunkist among others, Sanjay Jain, chief financial officer, Future Group said at a post earnings conference call on Monday.
The company has a total of 314 convenience stores at present. Currently, supermarket chains such as Nilgiris, Big Apple, KBFP and KB’s Conveniently Yours are part of Kishore Biyani’s listed company Future Consumer Enterprise.
“We have shut many loss-making stores and the remaining we shifted to franchisee model. While these formats have potential in the future we will not expand the loss making convenience store formats in FY17. All our existing convenience stores are third party franchisee,” said Jain.
Jain further said the company is looking at reducing its net debt to R150-R200 crore from R558 crore as of March 31,2016. FCEL has raised $75 million enabling the company to enhance balance sheet profile by repayment of debt.
The company has already tied-up the funds partially while the remaining debt reduction will be done through improvement in Ebitda, Jain said adding that FCEL reported an Ebitda of R3 crore compared to an Ebitda loss of R18.5 crore in FY15.