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Vancouver – May 8, 2018 – The Keg Royalties Income Fund (the “Fund”) (TSX: KEG.UN) has reported its financial results for the three months ended March 31, 2018.
The gross sales reported by the 103 Keg restaurants in the Royalty Pool were $161,963,000 for the quarter, an increase of $7,903,000 or 5.1% from the comparable quarter of the prior year. These gross sales include the sales of three net new Keg restaurants, which were added to the Royalty Pool on January 1, 2018, and a same store sales increase of 1.5% for the quarter.
The Keg’s same store sales (sales of restaurants that operated during the entire 13-week period of both the current and prior years) increased by 1.6% in Canada and by 5.4% in the United States. After translating the sales of the U.S. restaurants into their Canadian dollar equivalent, consolidated same store sales for the comparable 13-week periods increased by 1.5%. The average exchange rate moved from 1.3244 in KRL’s 13-week period ended April 2, 2017 to 1.2651 in KRL’s 13-week period ended April 1, 2018, significantly decreasing the Canadian dollar equivalent of the U.S. restaurant sales.
“We are extremely pleased with the financial performance of the Fund during the quarter,” said David Aisenstat, President and CEO of Keg Restaurants Ltd. “Despite increased interest rates and an increase in the SIFT tax rate during the comparable period, the Fund managed to generate a meaningful increase in cash available for distribution to the Fund’s unitholders.”
Royalty income increased by $273,000 or 4.4% from $6,206,000 in the three months ended March 31, 2017 to $6,479,000 in the three months ended March 31, 2018.
Distributable cash before SIFT tax increased by $197,000 from $4,776,000 (42.1 cents/Fund unit) to $4,973,000 (43.8 cents/Fund unit) for the quarter. Distributable cash available to pay distributions to public unitholders increased by $137,000 from $3,617,000 (31.9 cents/Fund unit) to $3,754,000 (33.1 cents/Fund unit) for the quarter. Distributions to Fund unitholders increased by $95,000 from $3,127,000 (27.5 units/Fund unit) during the first quarter of 2017 to $3,222,000 (28.4 cents/Fund unit) during the first quarter of 2018. The payout ratio for the quarter was 85.8% as compared with 86.5% for the comparable quarter of the prior year.
The Fund remains financially well-positioned with cash on hand of $2,522,000 and a positive working capital balance of $3,962,000 as at March 31, 2018.