VANCOUVER, March 17, 2005: The Keg Royalties Income Fund (the "Fund") has reported its financial results for the year ended December 31, 2004. Gross sales and same store sales reported by Keg restaurants, royalty income, earnings and distributable cash all increased from the prior year.
Total system sales of Keg Restaurants Ltd. for the 52 weeks ended January 2, 2005 were $321.8 million, compared to $303.4 million for the 53 weeks ended January 4, 2004, an increase of $18.4 million or 6.1%. System sales due to the extra week of sales in the prior year were $5.5 million, therefore on a comparable basis, system sales increased by $24.0 million or 8.1%. "We are proud to report The Keg continues to see strong year-over-year sales growth," said David Aisenstat, President & CEO of Keg Restaurants Ltd.
The Keg's same store sales for the comparable 52-week period increased by 2.9% in Canada and by 1.9% in the United States. Total consolidated same store sales for The Keg increased by 1.1% for the year, in spite of the continuing negative effect of the exchange rate between the Canadian and U.S. dollars on the translation of the U.S. sales into their Canadian dollar equivalent.
The Fund generated earnings of $10,903,000 ($1.09/unit) compared with $9,979,000 ($1.06/unit) during the prior year, an increase of $924,000 or 9.3%. Cash available for distribution to unitholders increased by $976,000 during the year, from $10,094,000 ($1.08/unit) in 2003 to $11,070,000 ($1.10/unit) in 2004. Distributions of $1.08 per Fund unit were paid in 2004 and 2003.
The Fund also announced that 23.63% of distributions made in 2004 will be considered a return of capital for income tax purposes and will therefore be tax deferred for unitholders.
A copy of the complete financial results are available at www.sedar.com or on the Fund's website www.kegincomefund.com.
Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select markets in the United States. In May 2002, Keg Restaurants Ltd. launched The Keg Royalties Income Fund on the Toronto Stock Exchange. This publicly traded trust (KEG.UN-TSX) receives a royalty of 4% of gross sales of all Keg restaurants in the royalty pool. Keg Restaurants Ltd. was named "Restaurant Company of the Year" by Foodservice and Hospitality Magazine in 2003, and one of the "50 Best Employers in Canada" by the Globe and Mail's Report on Business Magazine for the past three years.
This press release may contain certain "forward looking" statements reflecting The Keg Royalties Income Fund's current expectations in the casual dining segment of the restaurant food industry. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including changes in market and competition, competitive developments, and potential downturns in economic conditions generally. Additional information on these and other potential factors that could affect the Fund's financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of the prospectus, nor shall there be any sale of the Fund units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state, province or jurisdiction. The Keg Royalties Income Fund units have not been, and will not be registered under the U.S. Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an application for exemption from the registration requirement under U.S. securities laws.
The Trustees of the Fund have approved the contents of this press release.
For further information: Karyn Byrne, Manager, Investor Relations, Tel: (416) 646-4960