McDonald's NZ profit up 19pc

McDonald's has lured more customers while enjoying lower raw material costs. Photo / AP

McDonald's Restaurants (NZ) posted a 19 per cent gain in 2015 profit as the local unit of the world's biggest fast-food chain opened more outlets and lured consumers with custom burgers and drive-through coffee, while also benefiting from lower raw material costs.

Profit rose to $36.7 million in 2015 from $30.8 million a year earlier, according to the Auckland-based company's annual report. Sales rose 10 per cent to $244 million.

Under chief executive Steve Easterbrook, who took over at McDonald's in March last year, the fast-food chain has been attempting to reinvigorate itself worldwide including the rollout of all-day breakfast, which reached all New Zealand stores at the start of May this year.

The New York-listed stock, which plateaued in early 2012, surged to a record US$131.62 last month and has gained 28 per cent in the past year, outpacing a 1.5 per cent gain in the Standard & Poor's 500 Index.

In New Zealand, McDonald's sales growth is outpacing that of unprofitable rival Burger King, while Restaurant Brands' Carl's Jr is still too small to be a serious challenger.

The listed Burger Fuel Worldwide claims its market size is forcing larger rivals to take notice although its operating expenses outstripped sales in the first half, resulting in a small loss.

McDonald's has 166 restaurants, of which about 80 per cent are owned and operated by franchisees, and its sales are made up of company-owned restaurants and fees paid by franchisees.

The company opened or relocated six new restaurants around New Zealand last year, while two food-court outlets closed and its store in Silverstream burned down.

The company paid dividends of $30 million, or $1.09 a share, to its parent in 2015 - little changed from $30.5 million, or $1.11 a share, in 2014.

The parent company typically gives a recommendation on the dividend payment, which is ratified by the local board, McDonald's has said.

McDonald's yesterday celebrated 40 years in the New Zealand market.

High global prices for beef weighed on 2014 earnings but those pressures abated last year, said Simon Kenny, head of communications at McDonald's NZ. "We saw some supply chain relief, with commodity prices for core ingredients like New Zealand beef reducing as global prices dropped."

- BusinessDesk