VANCOUVER (February 23, 2006) – The Keg Royalties Income Fund (the “Fund”) (TSX:KEG.UN) is pleased to announce that it is once again increasing its monthly cash distributions.
The monthly distributions will increase 2.1% from $0.0918 per unit to $0.0937 per unit beginning with the April 2006 distribution. This equates to an annualized distribution in excess of $1.124 per unit. The distribution of $0.0937 per unit for the period from March 1, 2006 to March 31, 2006 will be payable to Unitholders of record at the close of business on April 21, 2006 and will be paid on April 30, 2006.
The Fund periodically reviews distribution levels with the objective of providing a consistent monthly distribution flow to Unitholders at the highest sustainable level. This distribution increase is primarily attributable to continued strong same store sales growth (“SSSG”) at Keg Restaurants Ltd. (“KRL”). The addition of new Keg restaurants into the royalty pool each year is also a factor. For the most recent quarter ended January 1, 2006, KRL recorded SSSG of 5.9%. Since October 2, 2005, 3 new Keg restaurants have been opened and these new units will be rolled into the royalty pool on January 1, 2007.
“We are exceptionally pleased with the performance of our brand both in Canada and the United States,” said David Aisenstat, President and CEO of KRL. “The same store sales growth at our existing Kegs continues to be strong and the excellent results at newly opened Kegs are also very encouraging. We are delighted to be able to translate those successes into increased distributions for Unitholders of the Fund.”
The Fund is a limited purpose, open-ended trust established under the laws of Ontario. The Fund indirectly owns certain trademarks and other related intellectual property used by KRL in its Keg Steakhouses & Bars. In exchange for the use of those trademarks, KRL pays the Fund a royalty equal to 4% of the sales of all Keg restaurants in the royalty pool.
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 please contact:
Karyn Byrne, Investor Relations Manager
For further information on our brand, please visit our website at www.kegsteakhouse.com