Colonel delivers for Restaurant Brands

Restaurant Brands' star performer KFC made $235.8 million in sales for the group, which helped it achieve net profit of $25.1 million for the year to February.

Restaurant Brands chief executive Russel Creedy said the group's $60 million investment into refurbishing KFC stores was paying off, as the brand remained a strong performer for the group.

Creedy said he was happy with the result, but added he would maintain a cautious approach over the next 12 months as "consumer sentiment remained soft in retail".

The group net profit (excluding non-trading items) was up 26 per cent year-on-year to $25.1 million, with total revenue of $324.9 million, up 2.1 per cent, on 2010.

Creedy said the main challenges for the 2012 financial year would be increasing food prices and the larger economic climate.

"We've got record dairy prices, milk, cheese and grain for chicken feed. This and fuel prices are putting pressure on global prices, and so we are taking a conservative approach to maintain momentum."

In a statement to the Stock Exchange, Restaurant Brands claimed that most of the group's improvement was due to another good year from KFC.

It said the results reflected the benefits of the major refurbishment programme being undertaken at KFC over the past several years.

Profit climbed in the first half of the year but the rate of growth wasn't matched in the second six months.

Trading proved more challenging as a difficult market slowed sales growth. First half results (excluding non-trading items) were up $4.7 million on the prior year with the second half only showing a $400,000 improvement.

Total store earnings before interest, tax, depreciation and amortisation (ebitda) climbed $7 million, or 13 per cent, to $61.9 million. This was on top of the $11.2 million growth in the prior year. KFC contributed $5.8 million of the group's improvement, with Pizza Hut contributing $200,000 and Starbucks Coffee $900,000.

The total store sales of KFC, Pizza Hut and Starbucks of $324.4 million were up $6.5 million, or 2.1 per cent, on the previous year's sales. Same store sales for the group were up 2.4 per cent.

Creedy said Domino's refurbishment plans would not affect Pizza Hut, which was focusing on the owner-operator model and working with new franchisees.

KFC saw same store growth of 4.4 per cent, and Starbucks 0.8 per cent, but Pizza Hut saw same store sales drop 3.8 per cent.

KFC total sales reached a high of $235.8 million, up $12.6 million, or 5.6 per cent, on the prior year.

A further nine KFC stores were rebuilt bringing total refurbished stores to 49, over half of the total network. Store numbers increased to 89 with the opening of four new stores.

Five Pizza Hut stores were sold to franchisees as part of the progressive sell-down strategy.

Three red roof dine-in Pizza Hut stores and one delivery store were closed, and four Starbucks stores closed over the 12 months.

Starbucks' new logo will soon be rolled out, Creedy said.

Starbucks produced earnings of $4.1 million, 14 per cent of sales, up from the prior year's $3.2 million. Restaurant Brands shares closed up 8c yesterday at $2.45.