By SIMON HENDERY
Fast Food operator Restaurant Brands' annual profit dropped 25 per cent last year, but the company says it was a result of repositioning for growth.
Restaurant Brands, which runs 186 franchised KFC, Pizza Hut and Starbucks coffee stores, yesterday reported a $9.8 million profit for the 53 weeks to November 30, down from $13 million the previous year.
The listed company wrote off $2.8 million associated with the acquisition of rival pizza chain Eagle Boys, now fully merged into the Pizza Hut operation.
Total group sales were up 8.8 per cent to $234 million, a pleasing result, chief executive Jim Collier said, given that takeaway food sales were up just 1.8 per cent overall in the year to October 31.
But analysts suggested yesterday that company mainstay KFC, which accounted for about 70 per cent of group sales, was now a "mature business" which would struggle to grow further.
"KFC will continue to grow, but at a more modest clip," Mr Collier said.
The franchise's strategy included modernising its menu to include more "snack" food and items designed specifically to meet New Zealanders' tastes.
"We will always sell original recipe chicken the stuff the Colonel invented - but increasingly it will be a business that sells chicken burgers and snacks."
Mr Collier said Pizza Hut had retained about 85 to 90 per cent of Eagle Boys sales since its $28 million purchase of the chain last year.
It was protecting its market position by offering nationwide delivery of a range of snacks and drinks, including beer and wine, with its pizzas.
Next month, it will launch a 15 per cent cheaper "value pizza" in a bid to add to market share.
Starbucks' earnings before interest, tax depreciation and amortisation were $445,000 in its second full year of operation.
While refusing to be drawn on a growth figure for the next year, Mr Collier said an expected pickup in general economic activity would help produce good growth for Pizza Hut and Starbucks, and good cashflow from KFC.
The company will pay a final dividend of 5.5c a share, taking the total dividend for the year to 10c.
Restaurant Brands shares closed up 1c at $1.31 after yesterday's trading.
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