"The bulk of the improvement arose from another very solid performance by KFC, but both the Pizza Hut and Starbucks Coffee businesses recorded improved profitability," chief executive Russel Creedy said in a statement to markets yesterday.
Shares in Restaurant Brands dropped below 60c in late 2008, but rose strongly through 2009, and traded up 18c last week to $2, yesterday edging towards $2.10.
Restaurant Brands has increased its profit forecast three times since August last year.
Forsyth Barr broker Suzanne Kinnaird said the overall result was in line with the profit upgrade earlier in the month and described the same-store sales growth of 9.2% as "impressive".
"This was a good result, with KFC continuing to perform strongly, benefiting from store refurbishments and new menu options introduced over the last 12 months," she said.
Restaurant Brands' outlook was good as KFC had a store expansion programme of up to three stores a year for the next few years and the company should continue to benefit from further refurbishments and wider menu choices, she said.
For the year ended in February, after-tax profit was $19.5 million, compared with $8.3 million for the previous corresponding period, and total revenues for the company were $318.3 million, up $8.8 million, or 2.8%, on a year ago, with same-store sales up 6.8%.
While Starbucks' sales were down 2.9% on a same-store basis, the business managed to improve earnings by $300,000, up 9.6% on last year, boosting earnings before interest, tax, depreciation and amortisation to $3.2 million and representing a 10.6% increase in sales.
"A more favourable exchange rate and enhanced in-store controls, together with some product rationalisation, all contributed to the improved result," Mr Creedy said.
He said Pizza Hut had finally returned to profitability in 2009-10, despite two stores closing, resulting in a 0.7% drop in sales, returning $64.2 million.
"The brand delivered same-store sales growth of 3.9% in the year, the first time Pizza Hut has seen an increase in same-store sales since 2002-03."
He said more importantly, the leverage from the sales growth and closure of unprofitable stores, together with initiatives to improve margins and continued emphasis on improved controls, resulted in the brand producing earnings before interest, tax, depreciation and amortisation of $5.4 million for the year, $2.6 million, or 95%, higher than the year before.
Mr Creedy said bank debt was reduced by $16.6 million, after last year's $8.2 million reduction, as the company continued to reduce borrowings on the back of strong operating cash flows.
A fully imputed 8c-per-share dividend will be paid, boosting the full-year dividend to 12.5c, up 5.5c on last year's payout.
Restaurant Brands - No of stores - Sales - % change
KFC - 85 (incl six refurbished) - $223.2 million - Up 5.5%
Pizza Hut - 91 (incl two closed during year) - $64.2 million - Up 3.9%
Starbucks - 41 (incl one closed during year) - $30.5 million - Down 2.9 %
(Sales figures on same-store basis)
