The Keg Royalties Income Fund Announces Third Quarter 2017 Results
Not for distribution to U.S. News wire services or dissemination in the U.S.
Vancouver – November 2, 2017 – The Keg Royalties Income Fund (the “Fund”) (TSX: KEG.UN) is pleased to announce its financial results for the three and nine months ended September 30, 2017.
The gross sales reported by the 100 Keg restaurants in the Royalty Pool were $147,798,000 for the quarter, an increase of $2,273,000 or 1.6% from the comparable quarter of the prior year. Year to date gross sales increased by $18,216,000 or 4.2% to $447,330,000. 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 2.8% for the quarter and 4.6% 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 3.0% in Canada and by 5.2% in the United States for the 13-week period ended October 1, 2017. For the 39-week period ended October 1, 2017, same store sales increased by 4.8% in Canada and by 2.4% in the United States. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales increased by 2.8% for the 13-week period and by 4.6% for the 39-week period. The average exchange rate moved from 1.3012 to 1.2414 in the comparable 13-week period, and from 1.3214 to 1.3069 in the comparable 39-week period, significantly reducing the Canadian dollar equivalent of the U.S. restaurant sales.
Royalty income increased by $166,000 or 2.8% from $5,827,000 in the three months ended September 30, 2016 to $5,993,000 in the three months ended September 30, 2017. For the nine months ended September 30, 2017 royalty income increased by $897,000 or 5.2% from $17,171,000 to $18,068,000.
Distributable cash before SIFT tax increased by $338,000 from $4,211,000 (37.1 cents/Fund unit) to $4,549,000 (40.1 cents/Fund unit) for the quarter and by $554,000 from $13,072,000 ($1.151/Fund unit) to $13,626,000 ($1.200/Fund unit) for the nine-month period. Distributable cash available to pay distributions to public unitholders increased by $329,000 from $3,114,000 (27.4 cents/Fund unit) to $3,443,000 (30.3 cents/Fund unit) for the quarter and by $404,000 from $9,865,000 (86.9 cents/Fund unit) to $10,269,000 (90.4 cents/Fund unit) year to date.
The Fund remains financially well-positioned with cash on hand of $2,618,000 and a positive working capital balance of $3,920,000 as at September 30, 2017. The Fund’s payout ratio was 90.8% for the third quarter of 2017 and 91.3% year to date.
“We are very pleased with the financial performance of the Fund during 2017, particularly the increase in cash available for distribution to Fund unitholders,” said David Aisenstat, President and CEO of Keg Restaurants Ltd. “Strong same store sales growth of 4.6% during the first nine months of 2017, has been the primary driver of the growth in distributable cash”.
As a result of the strong financial performance of the Fund during 2017, the Trustees of the Fund are pleased to announce that the Fund is increasing its monthly cash distributions by 3.1% from 9.18 cents/Fund unit to 9.46 cents/Fund unit. The November 2017 cash distribution of 9.46 cents/Fund unit will be payable to unitholders of record on November 21, 2017 and will be paid on November 30, 2017.