KEY POINTS:
Fast food retailer Restaurant Brands has marked a turnaround in its fortune, reporting a 69 per cent increase in full-year net profit.
Net profit after tax, excluding non-trading items, was $11 million for the year ending February 29, up $4.5 million from the previous year.
This was achieved
on the back of strong results from KFC and the end of losses from Pizza Hut Victoria, the sale of which has been finalised.
Net profit including non-trading items was $9 million, compared to a loss of $3.6 million a year earlier.
The results saw the share price rise 6c, or 7.5 per cent, to 86c not long after the market opened yesterday. It closed at 84c.
Chief executive Russel Creedy, who took the reins last September from Vicki Salmon, was happy with the turnaround.
"It's been a good year, far better than the previous one. And we see that continuing.
"If the economy retains a reasonable degree of buoyancy, and we don't see dramatic fossil fuel price shocks or interest rates shocks, then I think we'll have a reasonably good year again and build on this one that we've had."
Total sales were up $9.9 million to $303.5 million, with record sales for KFC and Starbucks.
The fried chicken restaurants posted same store sales increases of 7.7 per cent to $199.1 million, while the American coffee franchise grew same store sales by 4 per cent to $33 million.
But Pizza Hut's sales fell 7 per cent to $71.4 million. The exit from Victoria has been finalised with all stores but one sold or closed. The remaining store was expected to be sold by month's end.
Creedy said the outlook was looking positive. The company would continue with the refurbishment of its KFC stores, which has already seen "significant" sales growth in the 30 refurbished stores.
Pizza Hut continued to trade in difficult conditions. Six stores closed over the year as part of plans to restore profitability to the franchise.
New operational and marketing initiatives introduced over the past year would mean better results, he said.
"The business has certainly stabilised and is now looking like it can sustain a profit at a much lower sales level, which is good news.
"The re-adjustment of the business to operate at smaller sales levels has been very important for the brand." The easing of competitor discounting due to high commodity prices such as cheese and flour would also help, said Creedy.
While profit recovery at Pizza Hut was expected to continue, total sales growth was not expected due to continuing store reductions.
At the end of the financial year, the company had 228 stores, down nine on the same time last year. There were 87 KFC stores, 44 Starbucks and 97 Pizza Hut stores.
A final dividend of 3.5c per share was declared, bringing the total dividend for the year to 6.5c, up from 5.5c last year.