Fast food giant Restaurant Brands has taken an even bigger bite into New Zealand's growing fast food market, with its bottom line profit up 208 per cent from $11.2 million to $34.5m.
The owner of KFC, Pizza Hut, Carl's Jr and Taco Bell restaurants in New Zealand, Australia, Hawaii and California has reported its half-year earnings to June 30, 2021.
The business is also planning to open up four new Taco Bell stores and two KFC stores.
The group reported sales revenue of $540.6m up from $383.4m on the previous half a year period in 2020.
The company said this is the result of the inclusion of the California business in 2021 but it suffered the adverse impact of Covid-19 in 2020.
The brands' earnings before interest, tax, depreciation and amortisation (ebitda) were up by $26.5m to $89.9m, of which $12.7m came from the inclusion of a maiden profit from the new California division.
In New Zealand, the store sales were up by 37 per cent, taking it to $239.3m. Its KFC and Carl's Jr stores brought in the most sales, with Taco Bell sales being relatively small with only five stores in New Zealand.
The group said seven of its stores were sold to independent franchise operators and it opened two new stores by independent franchisees over the first half-year.
The Pizza Hut network now stands at 105 outlets.
The group reported that despite the impact of Covid-19 it will continue to open up more stores in the second half of the year globally, but the uncertainty due to recent lockdowns in Australia and New Zealand made it difficult to provide profit guidance.
"The overall business continues to deliver solid results across all geographic markets and this strong performance has carried over into the second half of the year.
"However, while current trading remains strong across all divisions, the prevailing uncertainties with Covid-19, particularly in the Australian and most recently the New Zealand markets make it difficult to provide firm profit guidance," the company reported.
The result includes $77.3m in sales and $12.7m of brand EBITDA from the newly acquired California division.
"This, combined with the adverse effect of Covid-19 on the 1H 2020 results, compromises the opportunity for direct comparisons between the two half years' reported results.
"Comparisons at a reported profit level are further distorted by the recognition of $11.4m ($US8.1m) in relation to the PPP loan drawn down last year at the beginning of the Covid-19 pandemic, that was forgiven during the period," the company said.
Total store sales hit a new high of $540.6m, up to $157.2m or 41 per cent on 1H 2020, thanks to the inclusion of $77.3m in sales from the California business (acquired in September 2020). Strong same-store sales growth from the other divisions also contributed.
The group reported that it now has a total of 350 stores globally 60 more since the first half of 2020.
In New Zealand, it has 132 RBD-owned stores and 73 in Hawaii, 69 in California and 76 in Australia.
In Australia, the business contributed total sales of $123m which were up 37.9 per cent from $16.3m. It also bought five additional KFC stores in February this year including a Taco Bell store.
In Hawaii, for the same period, the sales were $104.72m (US$72.7m )which was up by 15.8 per cent from $16.8m (US$11.6m).
The company reported the "stagnant" sales of Taco Bell while Pizza Hut's sales "flourished".
In California, the group saw a 16.5 per cent increase in sales taking it to $80m (US$55.2m).
The group also reported that its bank debt at the end of the half-year was down to $222.3m compared to $235.6m at the previous year-end.
As of June 30, 2021, the group had bank debt facilities totalling $357m available.
Cash and cash equivalents decreased by $8.5m during the period resulting in net debt reducing by $4.8m to $195.1m over the half-year.