9 Oct 2008

Pizza writedown lowers profit for fast food group

12:57 pm on 9 October 2008

A writedown of the Pizza Hutt chain has seen half year profit for Restaurant Brands tumble by nearly half.

The fast food chain operator made $2.4 million in the six months to September, but the pizza business continues to struggle.

Restaurant Brands has written off goodwill for Pizza Hutt by $2.5 million.

Excluding that, Restaurant Brands' underlying profit fell 15% to $4.6 million. Revenues declined 1% to $165 million.

Sales at stores open at least a year rose a 0.9%, mainly driven by KFC.

The third arm of it's business, Starbucks, was unable to sustain sales growth, falling slightly compared to the previous year.

The company says all three chains saw a decline in margins due to higher costs of labour and raw materials such as chicken, milk and cheese.

Looking ahead, the company expects to close at least two loss making stores from each chain to help improve profits.