BurgerFuel Worldwide, the fast food chain and franchisor, has boosted first-half profit 37% as sales in its Middle Eastern franchises surge and the local chain takes on a new structure. Shares sink 6.5% to $1.15.
Net profit rose to $308,000, or 0.57 cents per share, in the six months ended September 30, form $225,000, or 0.42 cents, a year earlier, the Auckland-based company says in a statement.
Revenue climbed 10% to $5.3 million, with Middle Eastern sales climbing 22% to $1.49 million. The New Zealand unit lifted revenue 12% to $3.87 million.
The company will not pay an interim dividend, preferring to horde capital for expansion.
"Results for this period demonstrate a determined focus to grow company profits, whilst at the same time balancing out the need for further investment into our international expansion," chairman Peter Brook says.
"While we are always mindful of returning profits to shareholders by way of dividends, it is essential at this time that we continue investment to support growth and take a long-term view of our business."
In recent years, BurgerFuel has increased its exposure to the Middle East by signing master licensing agreements, which earns the company up-front territory fees and on-going royalties based on store turnover.
The fast food chain is focused on breaking into Middle East nations and is part the Beachheads Global public-private partnership run by New Zealand Trade & Enterprise, which provides tailored mentoring for high-growth local companies.
The company increased system sales 27% to $22.1 million. Total system sales represent till takings across all company-owned and franchise stores.
BurgerFuel sold its company-owned Australian store to a franchisee last year and sees the market as holding large potential in the future.
The tightly-held stock trades infrequently on the NZAX and has surged 132% this year. Today's fall values the company at $61.7 million. When the company went public in 2007 it sold 15 million shares at $1 apiece.
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