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Pizza Hut has dragged down Restaurant Brands sales results for its fourth quarter as the company continues to consider approaches from potential buyers.
Chief executive Vicki Salmon yesterday said Restaurant Brands had been discussing approaches from parties "expressing interest in their potential participation in the future of the company".
There had been no firm proposals, but it is understood two private equity firms - Pacific Equity Partners and CVC Asia Pacific - have been in talks.
In June last year, CVC Asia Pacific offered $1.65 a share, but withdrew because of concerns that Restaurant Brands' franchise contracts had only months to run.
Franchise contracts for the rights to the profitable KFC brand have been renewed for 10 years, removing that barrier.
But fourth-quarter results for Pizza Hut have done nothing to make any suitor increase its offer.
Restaurant Brands announced growth across the group in the 12 weeks to February 26. KFC and Starbucks both made ground.
But Pizza Hut defied expectations of a significant improvement.
The chain's total sales of $17.2 million were down 8.6 per cent on the same 12-week period last year.
Over the entire year, Pizza Hut New Zealand sales were $79.2 million, a drop of 10.5 per cent overall and down 11.8 per cent as a comparison of same-store sales.
Forsyth Barr retail analyst Guy Hallwright said Pizza Hut's sales fall had slowed in the fourth quarter compared with the second and third.
But the chain was facing some issues.
"The pizza market is being driven by Domino's. It is aggressive competition, and Restaurant Brands says it is spending heavily on marketing and you can see that promotion.
"But it is hard to know whether they are correct saying that is due to cross subsidisation from Australia."
Restaurant Brands was putting more resources into marketing Pizza Hut, as it needed to do.
That would affect margins and profits, Hallwright said.
Salmon said Restaurant Brands knew Pizza Hut would still be negative in the fourth quarter, but the figure was "slightly higher than we thought".
"It was slightly disappointing but it will come back."
The New Zealand master franchise for Burger King last year bought the Hell Pizza brand, and the Australian owners of Domino's Pizza made a big marketing push last year.
But Salmon said there was no evidence that this would be a repeat of last year, which produced new competitors and 31 new stores.
It was a significant shift in the market, she said.
"When the market becomes more stable and you are grabbing back customer share and it will be easier to manage."
KFC, which provides about two thirds of Restaurant Brands' sales income, reported fourth-quarter sales of $44.6 million and same-store growth of 7.8 per cent.
Over the full year sales reached a record $182.7 million and a 7.1 per cent same-store growth.
Salmon said KFC's improvements came from better marketing and capital spending in a makeover of KFC outlets, expected to cost about $22 million.
Starbucks Coffee delivered its 13th consecutive quarter in a row of sales growth.
The fourth quarter was up 10.6 per cent to $7.9 million, and same-store growth was up 3.9 per cent.
Restaurant Brands received $3 million revenue from its discontinued operations from Australia, but these were not incorporated into its overall sales results.
Salmon said the sale of Australian assets had taken longer than expected, but should be completed in the first quarter this year.
Restaurant Brands is forecasting net profit before non-trading items will be $6.2 million to $6.5 million when figures are issued in April.
The company's share price closed unchanged yesterday at $1.13.
