How could anyone bugger up something like Burger King?
Grand Parade Investments is still battling to turn the fast food joint into the black, despite shareholder revolt
After determined bouts of shareholder activism at Grand Parade Investments (GPI) late last year one might have expected a bit more action.
GPI has a strong value underpin in the form of gaming assets (most notably significant minority stakes in GrandWest and SunSlots). But its operational thrust into the fast food sector has underwhelmed – especially the prolonged effort to turn key brand Burger King to profit.
With activists holding two board seats and considerable influence as shareholders, the market might have hoped that hard decisions on unviable brands like Dunkin’ (coffee and confectionery) and Baskin-Robbins (ice cream) might have already been taken.
In recent weeks the GPI share price has started to drift lower again – perhaps betraying a worry by investors that unlocking and restoring value at the company might be more difficult than initially anticipated. After peaking at a 12 months high of 350c in December, GPI’s share price has retreated back to 295c.
The news this week of the appointment of an acting CEO for GPI hardly caused a flutter in the market. News of a permanent CEO might have got investors’ attention – but there’s not much to read into the appointment of COO Mohsin Tajbhai as temporary CEO.
Tajbhai did a sterling job in chairing the adjourned special meeting last year – but he is an engineer with an MBA … and arguably short on the FMCG (fast moving consumer goods) experience that the activist shareholders argue is necessary to rapidly turn GPI’s food hub into a sustainable profit generator. Perhaps the appointment of an acting CEO simply means GPI is looking far and wide for a suitable candidate to head the group.