KEY POINTS:
Restaurant Brands is reporting a 12 per cent lift in half-year net profit after tax (Npat) on continuing operations excluding non-trading items to $5.4 million.
That compares to $4.9m in the comparable period last year, and was made on total revenues from continuing operations up 5.1 per cent to $164.3m.
Npat including non-trading items for the half-year to September 10 was $4.5m, up $4.3m on the same period a year earlier, which included a write down of the company's Pizza Hut Victoria investment.
The company is pulling out of the Victorian operation, and said it planned to complete the exit, through the sale or closure of five remaining stores, by the end of the financial year.
"While every attempt has been made to provide for the final exit costs a further write off from these remaining stores may be required at year end," Restaurant Brands said today.
A fully imputed interim dividend of 3 cents per share is being paid, up from 2.5c a year earlier.
The improved dividend recognised improvement in trading conditions and cash flow, Restaurant Brands said.
KFC continued its transformation strategy, with sales up 10.8 per cent to $106.2m, and earnings before interest, tax, depreciation and amortisation (ebitda) up 24 per cent to $19.2m.
The KFC result was based on a continued roll out of store transformations, strong operational and customer satisfaction performance and a full promotional calendar, the company said.
Sales growth of 9.9 per cent on a same store basis was achieved despite the impact of quite significant store closures during the period as part of the store rebuild process and set a new record for the brand.
The improved KFC profit flow came despite continuing cost increases in labour, freight and some raw materials.
Four stores were transformed during the first half, with stores at Whangarei, Hastings, Massey and Invercargill South to be re-opened before Christmas
KFC store numbers remained constant at 87.
Pizza Hut New Zealand saw a flattening of the decline in sales, falling 8.2 per cent overall, or 5.7 per cent on a same store basis, to $40.5m. Ebitda at $2.4m was 24.2 per cent down on a year earlier .
The brand was starting to make some headway on its turnaround strategy, with changes to management, marketing and pricing activity, improved in-store operations and an increased focus on wastage and shrinkage, Restaurant Brands said.
Store numbers were down three during the half year with the progressive closure of another three non-performing red roof stores at Northcote, Papakura and Palmerston North, the company said.
It was expected that two more red roof restaurants and a pick-up outlet would be closed by the end of the financial year, taking store numbers to 97.
Starbucks Coffee sales for the first six months of the year were up 7.2 per cent to $17.4m, with same store sales up 2.5 per cent.
Ebitda was up 20.3 per cent to $2.1m.
Store numbers reduced by one to 46 with the closure of a non - performing store in Queen St, Auckland ahead of relocation later this year to a higher profile site.
Directors remained confident that Restaurant Brands would produce a Npat excluding non - trading items around $9m to $10m for the full year, the company said.
Restaurant Brands shares closed at 87c yesterday, having ranged between $1.18 and 80c in the past year.
- NZPA
