Restaurant Brands New Zealand says it has gained approval from Yum! Brands, the parent company of Pizza Hut and Taco Bell, to acquire the only franchisee for those stores in Hawaii but the time taken for sign-off means full-year profit was at the lower end of guidance.
The fast-food retailer announced its conditional agreement to buy Pacific Island Restaurants (PIR), which has 82 Taco Bell and Pizza Hut stores, last October and had expected to complete the US$105 million deal by late December. But in early January it said disruptions over the Christmas/New Year period mean approval from franchisor Yum would take until the end of February.
Settlement is expected in the next two weeks, the Auckland-based company said in a statement. The delay means profit excluding non-trading items in the year ended February 27 was at the lower end of the company's guidance of $30m to $32m, it said.
Restaurant Brands NZ raised $94m in November last year to help fund the acquisition; $52m from institutions and $42m from retail investors, through the offer of one new share at $4.70 apiece for every 5.15 shares already owned.
The company is expanding into new markets to spread its risk and drive future earnings growth. In April 2016, it bought the biggest KFC franchisee in New South Wales, Australia.
Restaurant Brand shares last traded at $5.33 and have gained 30 per cent in the past 12 months.