3 Apr 2012

Slump in profit at fast food group

6:43 pm on 3 April 2012

Full year profit for Restaurant Brands slumped nearly 30% due to the Christchurch earthquake, Pizza Hut store sales and a tough trading environment.

The company, which operates the KFC, Starbucks and Pizza Hut chains, reported a profit of $16.9 million for the year to February, compared with $24.3 million a year earlier. Revenue fell nearly 5% to $309 million.

Chief financial officer Grant Ellis says it is a satisfactory result in the current trading environment.

KFC remains the main earner, with sales hitting a record high of more than $236 million, though high costs squeezed margins, and sales at stores open at least a year fell 2%.

Higher cheese prices hurt Pizza Hut's sales, which fell by 23%, while Christchurch's earthquakes clobbered Starbucks, closing three stores, while sales fell 10%.

Restaurant Brands says its sales programme of Pizza Hut stores is gaining momentum, with 13 stores sold to franchisees.

Meanwhile, its newly acquired Carl's Jr burger chain will add up to four stores in the second half of the year.

Looking ahead, the company's forecasting a similar profit this year, and will cut costs and pursue new marketing initiatives.

It will pay a full year dividend of 16 cents per share.

Restaurant Brands share price ended Tuesday's trading up 5 cents at $1.91.