BurgerFuel sneaks into profit

Listed fast food company BurgerFuel Worldwide (NZX:BFW) has reported a modest profit of $33,513 for the year to March 31.

The company’s move into the black, achieved on total revenue of $8.3 million, comes after three consecutive years of losses, a $2.15 million loss in 2008 shrinking to a $552,983 loss last year.

According to BurgerFuel the 2011 financial year saw a “determined focus to bring the group out of negative trading and into a break-even (slightly profitable) position.”

This was achieved by solid trading in the Middle East, consolidation of the existing New Zealand stores, implementation of cost efficiency initiatives, and the closure of the company owned Kings Cross store in Sydney and a reduction of overheads in Australia.

Total unaudited system sales were up 10.3% to $33 million.

BurgerFuel Middle East saw a 394% increase in United Arab Emirates and Saudi Arabia sales to $4.08 million.

A further seven stores are expected to be opened in the Middle East during the 2012 financial year, including one in Kurdistan, Northern Iraq.

However, BurgerFuel noted the strong New Zealand dollar might affect its ability to compete in some markets with its beef, which is exported from New Zealand.

BurgerFuel New Zealand’s sales edged up slightly, rising 0.9% to $27.04 million.

BurgerFuel Australia’s sales were down 18.6% to $1.88 million, the decline caused by the closure of the company-owned Kings Cross store in November last year.

The company said, “As previously advised the directors are of the view that expansion in Australia at this time under the direct ownership model is not economic due to the rising operational costs in that country, particularly the labour costs which have risen by more than 50% during the past four years.”

Niko Kloeten
Fri, 10 Jun 2011

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BurgerFuel sneaks into profit