KEY POINTS:
Restaurant Brands has reported full year net profit, excluding non trading items, up 69 per cent to $11 million.
The results for the year to the end of February reflected an end of losses from Pizza Hut Victoria, the sale of which was finalised, and a strong result from KFC, the company said today.
Net profit including non-trading items was $9m, compared to a loss of $3.6m a year earlier.
Total sales were up 3.4 per cent to $303.5m, with same store sales for the group also up 3.4 per cent.
A final dividend of 3.5c per share was being paid, bringing the total dividend for the year to 6.5c, from 5.5c last year.
The 2007/8 year was one of rebuilding for the company. With the Pizza Hut Victoria exit finally completed, a higher level of management focus would be made on the Pizza Hut NZ business, with improved results, Restaurant Brands said.
That, combined with sales momentum at KFC and Starbucks Coffee, was expected to produce a further steady improvement in the 2008/9 profit performance, economic conditions permitting.
While profit recovery at Pizza Hut NZ was expected to continue, total sales growth was not expected due to continuing store rationalisation.
Starbucks Coffee was forecast to continue steady sales growth and a margin improvement.
By year end, Restaurant Brands had 228 stores in this country, down nine on February 2007. That followed six Pizza Hut store closures, while a net three Starbucks Coffee stores were closed.
At KFC total sales were up 9 per cent to a new record of $199.1m. On a same store basis sales were up 7.7 per cent. During the year a further nine KFC stores were transformed.
Earnings before interest, tax, depreciation and amortisation (ebitda) at KFC rose 17.3 per cent to $36.6m.
The Pizza Hut NZ business continued to face tough trading conditions with slow progress in restoring sales growth and profitability, the company said.
Sales of $71.4m for the year were down 7 per cent on a same store basis.
The drop in sales, together with some cost increases, particularly for labour, saw further margin deterioration with the Pizza Hut brand. Ebitda for the year was down $400,000 to $4.7m.
But the bulk of the shortfall, compared to a year earlier, occurred in the first half with subsequent trading producing a $400,000 improvement in ebitda, despite the continuing sales shortfalls, Restaurant Brands said.
At Starbucks Coffee sales growth of 5.6 per cent, or 4 per cent on a same store basis, saw revenues exceed $33m for the first time.
The continuing impact of higher labour costs was largely offset by lower material costs and the leverage effect of higher sales to produce an ebitda up $200,000 to $3.9m.
The sale of the final Pizza Hut Victoria store was to be completed by the end of this month.
An improved cash position meant borrowing was down $6.1m over the year with closing bank debt of $42.5m, well within current facility limits of $70m.
Total assets at $113m were down on the $117.7m last year.
Restaurant Brands shares were up 2c to 82c soon after the market opened today, having ranged between 95c and 78c in the past year.
- NZPA
