Table Of Contentanytime, anywhere
a n n u a l r e p o r t 2 0 0 7
Contents
Highlights 1
Vision and mission 2
Timeline 3
The Taste Holdings way 4
Directorate 6
Chairman’s report 8
CEO’s report 12
Corporate governance 18
Financial statements 25
Shareholders’ analysis 52
Shareholders’ diary 53
JSEperformance 53
Notice of annual general meeting 54
Form of proxy Attached
Administration IBC
www.tasteholdings.co.za
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2006 2007 2006 2007 2006 2007
REVENUE (Rm) OPERATING HEADLINE
PROFIT (Rm) EARNINGS (Rm)
Highlights
41% 141% 162%
REVENUE OPERATING PROFIT HEADLINE EARNINGS
R29,5 million R10,6 million R7,78 million
(2006: R20,9 million) (2006: R4,4 million) (2006: R2,97 million)
120% 71% 195%
HEPS OPERATING PROFIT PROFIT AFTER
MARGIN TAXATION
2007: 6,6 cents 2007: 36% 2007: R8,4 million
(2006: 3,0 cents) (2006: 21%) (2006: R2,8 million)
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Taste Holdings 2007 Annual Report
Vision
To become the preferred Food Franchising
Company in Africa by 2010
“the preferred Food Franchise Company” – we may not become the biggest but we
certainly will be the best in the areas where we trade. Being the best includes giving
franchisees and stakeholders great returns on their investments.
Mission
To develop brands into dominant market positions through leading
operational and marketing activities, while retaining their unique retail
formulas. In doing this we will ensure franchisee profitability, brand
dominance and consumer satisfaction.
Through this focus the group is driven to deliver exceptional stakeholder and shareholder
value as it continues its strategy of becoming an integrated franchising company by 2010.
“to develop” – capitalising on the benefits of critical mass, increased leverage and
economies of scale
“dominant market position” – each of the brands will have the potential to be dominant
where it trades as either market leader or challenger brand in its category
“leading operational” – best practice not only across outlets within a chain but
across brands to achieve competitive advantage
“marketing activities” – marketing will drive all consumer related facets of the business
ensuring consumer needs are understood and exceeded
“while retaining their unique retail formulas” – each brand has a retail formula and this
will always be identified, retained, and developed. Each brand has to have a champion
and we will strive to retain the founders and develop strong successors for the future
“profitability” – profitable franchisees are vital assets
“consumer satisfaction” – product quality, value for money, service and innovation are the
cornerstones to ensuring that customers’ needs are satisfied
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Taste Holdings 2007 Annual Report
Timeline
2000
September – The first Scooters Pizza outlet opens in Durban
2001
• Scooters Pizza buys Chess Pizza and converts 10 outlets
and expands into Johannesburg
• Winner FASA* Newcomer Franchisor of the Year
• Winner FASA* KwaZulu Natal Franchisee of the Year
• Finalist FASA* Brand Builder of the Year
2002
• Finalist FASA* Newcomer Franchisor of the Year
• Winner FASA* Brand Builder of the Year
• Included in the Deloitte & Touche “one of the most promising
companies in South Africa” publication
• Included in the Deloitte & Touche “one of the best companies
to work for in South Africa” publication
• DTI selects Scooters Pizza as one of South Africa’s
top 300 national companies
2003
Scooters Pizza opens its first store in the Western Cape
2005
• Winner FASA* Brand Builder of the Year
• Finalist FASA* Franchisor of the Year
• Winner FASA* KwaZulu Natal Franchisee of the Year
• Scooters Pizza purchases Maxi’s in April 2005
2006
Taste Holdings lists its shares on the AltX – 21st June 2006
Scooters Pizza opens 100th store
* FASA – Franchising Association of Southern Africa
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Taste Holdings 2007 Annual Report
The Taste
Holdings way...
Our behaviour
We are competitive
There are winners and losers
We execute
It’s all about speed and discipline, get things done fast and effectively
We are a team
This is a commitment to act as one company, plain and simple
Our principles
• We strive to make our customers’ lives easier
• Place yourself in the shoes of the customer
• Manage for success and high performance
• Be performance driven and measured
• Value diversity of ideas and opinions
• Be principle driven
• Attack the process not the man
• Be decisive and move forward with urgency
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Taste Holdings 2007 Annual Report
Our characteristics
Personal leadership –
we lead from the front
Execution –
we get the job done
Focus –
keep the main thing the main thing
Culture
• Have a sense of mission
• Demand accountability
• Pursue high speed innovation
• Be self inspired
•Have a product/customer vision
• Act as if your life depends on it
• Know the measure of success
Focus on the core
Ultimately...
anytime, anywhere
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Taste Holdings 2007 Annual Report
Bill Daly (64)
BA, LLB
Non-executive Director
Chairman of the board
Chairman of the Remuneration Committee
Bill is an attorney and practises as a director of RL Daly Inc. which manages a large call centre
specialising in the collection of debt on behalf of large national corporates, retailers and
banks. Bill is a director of a number of companies including H.B.Z. Bank Limited and has been
the Chairperson of the board since its inception in 2000.
Carlo Gonzaga (33)
BSocSci, LLB
Chief Executive Officer
Carlo completed a law degree after which he and his father, Luigi, owned four franchised
pizza outlets in the Durban region. Carlo was Chairman of the Franchisee Council for three
years and during this time Carlo won Marketer of the Year, and the Franchisee of the Year
awards twice. In 1999 Carlo sold his interests and commenced the ground work to create a
new pizza delivery concept which became Scooters Pizza in September 2000. Since 2000
Carlo has headed up the team that has driven the chain to win many prestigious awards, and
become the number two pizza brand in the country in just five years. Carlo guides the strategic
direction of the company and oversees the growth strategy of the company.
Duncan Crosson (41)
BCompt (Hons)
Chief Financial Officer
Member of the Audit Committee
Duncan obtained his BCompt (Hons) whilst serving articles with Morrison Murray in Durban.
Duncan gained valuable experience in a manufacturing and distribution environment servicing the
retail and Fast Moving Consumer Goods industry. Duncan progressed to Chief Financial Officer
and shareholder of the group of companies. Duncan joined Scooters Pizza in 2000 when he
took an equity stake in the business and was appointed to the board in 2001. Duncan has been
instrumental in the successful management and control of the significant growth of the group over
the past six years.
Luigi Gonzaga (63)
Executive Director
In 1996 Luigi opened a pizza franchise with Carlo and in the four years owned four outlets in
the Durban region. Prior to that Luigi was involved in the construction industry in South and East
Africa for some forty years. During the four years with the group, the stores that Luigi owned
were used as benchmarks for the rest of the group due to standards and profitability.
Achievements during this time included Franchisee of the Year and Marketer of the Year
awards on four occasions and finalist for the First National Bank Entrepreneur of the Year
award in 1998.
Luigi is a key member of the executive team and his years of experience have been invaluable as
the company grows. Luigi specifically ensures that strategies are implemented in the Coastal region
as well as strategically growing the region with site and franchisee recruitment. Luigi has owned six
food franchises in the last 10 years, and is a vital contributor to the success of the group.
Directorate
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Taste Holdings 2007 Annual Report
Trevor Edwards (50)
Non-executive Director
Member of the Remuneration and Nominations Committee
Trevor Edwards was the Sales and Marketing Director at Pharma Natura (Pty) Limited for eight
years. Trevor left Pharma Natura (Pty) Limited in 1994 and purchased the Steers KwaZulu Natal
Regional licence, followed by the Debonairs Pizza Master Franchise. Trevor, together with
partners, grew annual turnover of this business to over R200 million in five years. These
businesses were then sold to Famous Brands Limited in 1999. On two occasions Debonairs
Pizza was voted Franchisor of the Year by the Franchising Association of Southern Africa.
Since January 2003, Trevor has been the Chief Executive Officer of Enaleni Pharmaceuticals
Limited.
Kevin Utian (39)
BCom, BAcc, CA(SA)
Non-executive Director
Member of the Remuneration and Nominations Committee
Kevin is currently the Managing Director of Nando’s South Africa. Kevin is a Chartered
Accountant by profession and provides key access to resources within the Nando's group. This
extends from operational performance, site selection and access to strategies and research. Kevin
has been a board member from the inception of Scooters Pizza in 2000. The experience that
Kevin brings to the group, within the South African and growth contexts, is invaluable to the group.
Jay Currie (33)
BSc
Non-executive Director
Chairman of the Audit and Risk Committee
Member of the Remuneration and Nominations Committee
Jay commenced his working career managing the Mala Mala Game Reserve before starting a
private venture in the IT industry and then joining Comparex Africa in 1998. He started with the
Massdiscounters division of the listed South African retailer, Massmart in 1999 where he led a
major re-investment in the Game & Dion chain IT systems and approach to supply chain
management. He left his position as Systems & Supply Chain Director of Massdiscounters in
2006 to join the holding company, Massmart Holdings Limited as Group Commercial Executive
where he is currently responsible for all areas of collaboration between the various businesses
of the R30billion retailer.
“we are driven to make our
customers’ lives easier”
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Taste Holdings 2007 Annual Report
Bill Daly
Chairman’s report
36% 71%
SYSTEM WIDE SALES OPERATING PROFIT MARGIN
“organic growth the primary driver”
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Taste Holdings 2007 Annual Report
Description:retail and Fast Moving Consumer Goods industry. Duncan progressed to Chief Financial Officer and shareholder of the group of companies. Duncan joined Scooters Pizza in 2000 when he took an equity stake in the business and was appointed to the board in 2001. Duncan has been instrumental in the
