Restaurant Brands Q4 sales rise 8.6pc

By NZPA

Tuesday 4th March 2003

A solid performance from Pizza Hut has helped fast food operator Restaurant Brands achieve a 8.6 percent rise in fourth quarter sales.

The company said its total quarterly sales to February 24 rose to $68.6 million from $63.2 million for the same period a year ago.

Shares in Restaurant Brands -- which have fallen 18 percent over the last month on concerns about increased domestic competition -- were down 2c to $1.27 following the announcement.

Chief executive Jim Collier said Pizza Hut New Zealand sales were up 6.3 percent to $17.3 million, with same store sales up 5.8 percent.

"Pizza Hut continues to benefit from the expansion into home delivery and takeaway and has recorded 11 straight quarters of sales growth," he said.

"The brand has maintained good momentum for three years and we expect that growth to continue," he said.

In Australia, the company's recently acquired Pizza Hut operation in Victoria continued along the path to recovery. Same store sales were down an estimated 5 percent but that compared with a 14 percent decline for the previous two quarters.

Total sales were $NZ6.6 million due to better service and tighter management control, and store level profitability in terms of earnings before interest, tax, depreciation and amortisation (ebitda) was now positive.

Restaurant Brands' other operations -- Starbucks Coffee and KFC -- had mixed results.

Starbucks sales were up 9.3 percent to $5.5 million, although same store sales were down 6.3 percent.

Total sales for KFC New Zealand were down 6.5 percent to $39.2 million for the fourth quarter on the prior year, as were same store sales.

A range of initiatives was in place to address the temporary decline in KFC sales, the company said.

For the 2002 year, Restaurant Brands total store sales were up 12.8 percent to $298.1 million, and same store sales were up 0.1 percent to $261.4 million.

The company noted that its 2001 financial year had five quarters.

Restaurant Brands estimates it has about 60 to 70 percent of the pizza market in New Zealand but faces increased competition from US-based pizza chain Domino's which plans to open eight stores in New Zealand by October.

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