Restaurant Brands half year profits up 50pc

Restaurant Brands reported a 50.3 per cent rise in half year net profit excluding non-trading items to $13.9 million, but cautioned that "economic storm clouds still remain on the horizon".

Releasing the results today for the six months to September 13, the company attributed the improved performance to higher sales in the case of KFC, some gains from closures of poorer performing stores at Pizza Hut and Starbucks Coffee, and improved operational efficiencies and lower input prices across all three brands.

It reaffirmed previous guidance for a full year profit excluding non-trading items of $24 million-$26 million.

The full impact of the GST increase versus lower direct tax rates had yet to work through into consumer spending, and consumer sentiment was not bullish, Restaurant Brands said.

KFC would continue to deliver solid profits into the second half year but would be rolling over some strong second half results from the prior year.

Pizza Hut would maintain operational improvements of the first half, but would see some input price increases.

Continued improvement in Starbucks Coffee sales was expected towards the end of the financial year, but margin growth would be limited by input price increases.

NPAT for the second half of the current year will be consistent with the 2009/10 half year result.

Revenue for the latest half year was up 3.9 per cent on a year earlier to $176.6m, with KFC sales growth of $8.8m, partially offset by a decline in Pizza Hut and Starbucks Coffee sales of $1.6m and $600,000 respectively. Same store sales were up 4.9 per cent.

A fully imputed interim dividend payable of 7c per share would be paid, up 55.6 per cent on last year.

Earnings before interest, tax, depreciation and amortisation (ebitda) rose 23.3 per cent or $6.4m to $34m. At KFC ebitda rose 20.1 per cent or $4.8m, at Pizza Hut it was up $900,000 or 42.5 per cent, and at Starbucks Coffee was up $600,000 or 47.9 per cent.

At KFC revenue rose 7.5 per cent to $127.1m, and was up 7.9 per cent on a same store sales basis.

Continued new product and promotional activity, underpinned by the continuing store transformation programme, contributed to strong sales growth, the company said. The 87 KFC stores at balance date were three more than a year earlier.

At Pizza Hut sales fell 4.6 per cent to $33.8m, with three loss making red roof restaurants having been closed. Same store sales were down 2.9 per cent. Pizza Hut finished the half with 88 stores.

Starbucks Coffee sales fell 3.8 per cent with three less stores to $15.5m, but rose 0.5 per cent on a same store basis. Store numbers were down to 39 at balance date.

- NZPA