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Vancouver – August 9, 2017 – The Keg Royalties Income Fund (the “Fund”) (TSX: KEG.UN) is pleased to announce its financial results for the three and six months ended June 30, 2017.
The gross sales reported by the 100 Keg restaurants in the Royalty Pool were $145,472,000 for the quarter, an increase of $8,669,000 or 6.3% from the comparable quarter of the prior year. Year to date gross sales increased by $15,943,000 or 5.6% to $299,532,000. The increase in Royalty Pool sales during the quarter and year to date, reflect the sales of the new Keg restaurant added to the Royalty Pool on January 1, 2017, and same store sales increases of 6.5% for the quarter and 5.5% year to date.
The Keg’s same store sales (sales of restaurants that operated during the entire period of both the current and prior years) increased by 6.1% in Canada and by 5.7% in the United States for the 13-week period ended July 2, 2017. For the 26-week period ended July 2, 2017, same store sales increased by 5.7% in Canada and by 2.9% in the United States. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales increased by 6.5% for the 13-week period and by 5.5% for the 26-week period. The average exchange rate moved from 1.2840 to 1.3450 in the comparable 13-week period significantly increasing the Canadian dollar equivalent of the U.S. restaurant sales, and from 1.3298 to 1.3341 in the comparable 26-week period, slightly increasing the Canadian dollar equivalent of the U.S. restaurant sales.
Royalty income increased by $397,000 or 7.3% from $5,472,000 in the three months ended June 30, 2016 to $5,869,000 in the three months ended June 30, 2017. For the six months ended June 30, 2017 royalty income increased by $731,000 or 6.4% from $11,344,000 to $12,075,000.
Distributable cash before SIFT tax increased by $161,000 from $4,140,000 (36.5 cents/Fund unit) to $4,301,000 (37.9 cents/Fund unit) for the quarter and by $216,000 from $8,861,000 (78.0 cents/Fund unit) to $9,077,000 (79.9 cents/Fund unit) for the six-month period. Distributable cash available to pay distributions to public unitholders increased by $88,000 from $3,121,000 (27.5 cents/Fund unit) to $3,209,000 (28.3 cents/Fund unit) for the quarter and by $75,000 from $6,751,000 (59.5 cents/Fund unit) to $6,826,000 (60.1 cents/Fund unit) year to date.
The Fund remains financially well-positioned with cash on hand of $2,267,000 and a positive working capital balance of $3,853,000 as at June 30, 2017. The Fund’s payout ratio was 97.4% for the second quarter of 2016 and 91.6% year to date.
“We are very pleased with the same store sales growth generated during the quarter,” said David Aisenstat, President and CEO of Keg Restaurants Ltd. “Despite some headwinds recently felt in some provinces in Canada and by the restaurant industry in general, The Keg’s performance continues to reflect the strength of our brand”.