Restaurant Brands total group sales grew 2.7 percent over during the first half of FY20, though net profit fell 2 per cent due to the adoption of a new leasing standard.
Total group sales, which include KFC, Pizza Hut and Carl’s Jr. in New Zealand, as well as KFC operations in Australia, and Taco Bell and Pizza Hut in Hawaii, grew to $442.6 million – an increase of $11.6 million on the prior year.
Net profit fell to $20 million, 2 percent lower than the $20.4 million seen during 1H19, due to the adoption of NZ IFRS 16, which knocked net profit down $2.9 million as a result of lease depreciation costs.
The bulk of the sales improvement came from KFC’s New Zealand operations, which saw sales up 7.9 per cent to $193.5 million.
Same-store sales grew 5.7 percent, while EBITDA totaled $41.8 million, driven by a further roll-out of the business’ delivery operations, as well as successful product promotions and the opening of three new stores.
Pizza Hut saw a more difficult half, with total sales down 10.5 percent to $18.3 million despite the expansion of the chain’s store network. Same-store sales also fell 4.4 percent due to competitive pressure, the impact of launching new stores, as well as the appearance of new food delivery companies in the New Zealand market.
Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with MarketBeat.com's FREE daily email newsletter.
Restaurant Brands also confirmed it would be opening its first New Zealand Taco Bell at LynnMall Shopping Centre in Auckland next month.
“Initial planning and setup is well underway to bring this exciting new brand to the New Zealand market with the first new store in Auckland targeted to open in November,” the company said in a release.
Restaurant Brands chief executive Russel Creedy said the group would launch up to 25 Taco Bells across New Zealand in the next five years.
The group’s Australian results were adversely affected by a stronger New Zealand dollar, with KFC Australia seeing 4.2 percent total sales growth to $99.5 million. Restaurant Brands is also planning to open two Taco Bell stores in New South Wales, Australia in the calendar year.
“The overall business continues to deliver solid results across all geographic markets and this strong performance is expected to continue in the second half of the year,” the group said.
The directors believe that, not including further impact of NZ IFRS 16, Restaurant Brands will deliver an NPAT at least 10 per cent higher than FY19 – having previously stated they are expecting a net profit of $45 million for the FY20 period.