Shares in KFC, Starbucks and Pizza Hut operator Restaurant Brands closed at a seven-year high last night, after the company's announcement it would make a 50 per cent improvement in profits this year.
Apparently proving that consumers do turn to takeaways in a recession, the company said yesterday that stronger
than expected trading results meant it had increased its profit forecast for the year to next February to $17.5 million.
That was up $5.8 million or 50 per cent on the 2009 result.
However, chief executive Russel Creedy said the company was in growth mode before the recession, particularly KFC. "I think all that's happened is that it has continued."
The growth had been accelerated by smarter marketing and operational improvements. He put improvements in the Pizza Hut business down to "getting our act together", including new menu items and staff training.
"The wonderful thing about this business is it can be leveraged quite strongly once it gets a bit of momentum behind it."
At the half-year the company reported a net profit (excluding non-trading items) of $9.3 million, up 89.4 per cent on the corresponding period last year.
It said the increase arose largely because it was not required to take up any further impairment charge to the carrying value of goodwill on Pizza Hut. KFC and Pizza Hut both saw increased margins but Starbucks' coffee sales declined.
KFC's same-store sales grew 8.8 per cent on the back of promotional activity, new products such as the Popcorn Chicken Roller, and new meals such as the Ultimate Burger Meal with Wicked Wings.
The Pizza Hut business had begun to show signs of a turnaround with same-store sales growth of 5.2 per cent, the first growth in the brand's sales for nearly four years, it said.
However, Starbucks sales were down 7.1 per cent.
The company's third quarter sales results will be released on December 16. Restaurant Brands shares closed up 16c at $1.62.
