The Keg Royalties Income Fund Announces First Quarter Results

The Keg Royalties Income Fund (the “Fund”) reported its first quarter financial results for the three months ended March 31, 2004. The Fund’s earnings and cash flows have continued to generate distributions to unitholders in the expected amount of 9 cents per unit per month, or $1.08 per unit on an annual basis. 

“Total system sales continue to grow and once again reached a new record level for the quarter,” said David Aisenstat, President and CEO of Keg Restaurants Ltd. Total system sales of Keg Restaurants Ltd. (“KRL”) for the 13 weeks ended April 4, 2004 were $79,831,000 compared to $77,088,000 for the 13 weeks ended March 30, 2003, an increase of $2,743,000 or 3.6%. 

While actual restaurant traffic remained consistent with the prior year, same store sales declined, primarily due to the unfavourable impact of the U.S. dollar exchange rate when translating the sales of the U.S. Keg restaurants into Canadian dollars for Fund reporting purposes. There was also an unfavourable impact on comparable sales attributable to the fact that The Keg’s New Years Eve sales did not fall into the first quarter of the Fund’s 2004 year. 

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. 

For more information please contact: 
Karyn Byrne, Manager, Investor Relations 
tel: 416-646-4960 
karynb@kegrestaurants.com