Restaurant Brands predicts flat profit, holds interim dividend
Net profit rises 2.4% to $8.8 million in the six months ended September 10 on a 0.2% lift in group revenue.
Net profit rises 2.4% to $8.8 million in the six months ended September 10 on a 0.2% lift in group revenue.
BUSINESSDESK: Fast-food franchise operator Restaurant Brands is forecasting a flat annual profit after reporting a mixed first-half result which included higher costs ahead of the startup of Carl's Jr stores.
Net profit rose 2.4% to $8.8 million in the six months ended September 10 on a 0.2% lift in group revenue.
Including non-trading items, profit fell 9.2% to $6.9 million. The $2.9 million of non-trading items included a writedown of goodwill and store closure costs, and was up from $1.7 million the previous year.
The company is forecasting annual profit before non-trading items in the vicinity of $18 million, little changed from the $18.4 million reported last year.
The shares fell 0.8% to $2.44 and have climbed 20% this year.
The board declared a first-half dividend of 6.5 cents a share, unchanged from last year, and payable on November 23.
General and administration costs of $7.2 million rose 17% due to the cost of establishing the Carl Jr brand. Three stores are expected to open in the second half of the year and the company expects them all to be immediately profitable.
The Pizza Hut brand performed significantly better than last year but Starbucks Coffee experienced a decline in sales and margins. Pricing changes, revised beverage formulations and a revamped food range are expected to turn Starbucks around.
The KFC brand is facing higher input costs in the second half but the chain will be boosted by new "fusion" stores.
The directors say they are comfortable with the overall trading result in a continuing challenging retail environment and are particularly pleased with the performance of the Pizza Hut brand.
The group had total sales of $167.2 million in the first half, up from $166.8 million in the same period last year.