The Keg Royalties Income Fund Announces Third Quarter Results

Vancouver, November 14, 2003 -- The Keg Royalties Income Fund today reported its third quarter financial results for the period ended September 30, 2003. 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. 

“The challenges faced by the foodservice industry in 2003 are by now well known. While The Keg has not been immune to these challenges, 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 for The Keg for the period from January 1, 2003 to September 30, 2003 were $218,796,000, an increase of $9,004,000 or 4.3% over the same period in 2002. For the quarter from July 1, 2003 to September 30, 2003 total system sales were $72,272,000, an increase of $2,154,000 or 3.1% over the same quarter in 2002. 

The Keg’s same store sales fell by 5.6% for the third quarter, and are down by 3.1% year to date. 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 accounts for a large part of this decrease. 
The Keg continues to deliver overall growth. Keg management remains singularly focused on running great steakhouses and bars, the brand’s legendary quality remains its hallmark, and The Keg continues to enjoy the loyalty of its guests. 

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.