Giving King Customer what he wants
"SERVICE is a career, not a part-time job," is the verdict of Dennis Finch, chief executive of King Food, whose acquisition this week of franchised pub chains Keg and McGinty's and steakhouse string Saddles gives it a critical mass of 208 outlets.
This, in turn, opens the way for King to establish its own staff-training academy.
That is Finch's intention. "In this business the customer is king. If you don't give him what he wants, you won't make any money," he says.
One of the reasons behind the two deals is that they come aboard with "unbelievably good management".
Three-year service contracts have been entered into and the vendors are retaining many of the King shares issued in consideration, says Finch.
"Having a critical mass also means that I can talk to landlords about restaurant sites from a position of strength. It brings opportunities to rationalise group overheads."
The deals have been entered into based on warranted profits. The maximum payable for Keg (which itself bought McGinty's recently) is R17.3-million, of which R11-million worth of shares will be issued within 60 days, says Finch.
The issue price of King is not given, but R11-million worth represents about 6.25 million ordinaries at the current 176c.
A maximum of R15.6-million is payable for Saddles, of which a third is payable now as scrip.
Finch says the earnings would have added 5.6c to King Food's earnings for the 12 months to August 1996 had both acquisitions been in place.
There are 45 Kegs, 23 McGinty's, 42 Saddles and another 20 being opened this year. King already operates Mike's Kitchen, Mike's Pantry, Porterhouse and Bimbo's.
Finch adds the micro-Bimbo's concept of putting a counter into Quick Shops at Engen service stations is taking off and more are under construction.
"What counts is turnover per square metre of space. People buy while they fill up with petrol," he says.
King has made another cautionary announcement, which Finch says concerns negotiations about the future of the group's wholesaling business. It will probably be sold as it lies outside the group's focus.
We make food that sells in restaurants and I hope we can do a deal on the distribution side."