Restaurant Brands lifts profit forecast

KFC enjoyed nearly 10 per cent growth every quarter over the past year. Photo / Supplied

Restaurant Brands is forecasting a 67 per cent rise in its annual profit to $19.5 million.

The company says its KFC stores - responsible for 70 per cent of the company's revenue - recorded growth of close to 10 per cent every quarter during the past year.

The profit upgrade is up $2 million on the last upgrade, issued at the end of November, and takes into account a renegotiated chicken supply contract.

Chief executive Russel Creedy said there was continued momentum to build new outlets and revamp existing stores.

"Generally the momentum of the brand is doing well in keeping us ahead with the building and rebuilding of new stores."

The first Kentucky Fried Chicken store opened in Auckland in 1971 and there are now 85 KFCs around the country.

New menus and Krusher drinks have helped increase sales.

Pizza Hut had previously been a poor performer but had now enjoyed four quarters of same-store sales growth, Creedy said.

"That's certainly signalling a steady turnaround in that business. Again it's a case of good momentum, good marketing and it's starting to show through."

There were 92 Pizza Huts and new outlets would be run as franchise agreements with owner-operators.

Starbucks coffee shops sales were flat but profitability was improving with a trimmed-down range of products on offer.

In December the company announced it had renegotiated the supply arrangements for its KFC business, splitting its purchases between New Zealand's two largest chicken suppliers. The company awarded its chicken supply business for its North Island stores to Inghams (its current supplier) and its South Island stores to Tegel.

Creedy said the savings were now appearing in the bottom line.

Restaurant Brands had benefited from habits changing during the recession.

"I'm sure the economic state is responsible for a few percentage points of that growth but it's not going to pull it back to zero once the economy gets back into the boom days."

Restaurant Brands shares dipped below 60c in 2008 but rallied strongly last year. They closed yesterday at $1.98, up 16c.

It reports its full-year profit on April 7.