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Vancouver – May 14, 2019
The Keg Royalties Income Fund (the “Fund”) (TSX: KEG.UN) and Keg Restaurants Ltd (“KRL”) are pleased to announce the financial results of the Fund for the first quarter of 2019.
The Royalty Pool sales reported by the 105 Keg restaurants in the Royalty Pool were $165,776,000 for the quarter, an increase of $3,813,000 or 2.4% from the comparable quarter of the prior year. These gross sales include the sales of two net new Keg restaurants, which were added to the Royalty Pool on January 1, 2019, and a same store sales increase of 1.8% 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 1.1% in Canada and by 3.8% 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 1.8%. The average exchange rate moved from 1.2651 in KRL’s 13-week period ended April 1, 2018 to 1.3301 in KRL’s 13-week period ended March 31, 2019, significantly increasing the Canadian dollar equivalent of the U.S. restaurant sales.
“The Keg has once again enjoyed same store sales growth in what has been a difficult time for the restaurant industry in general,” said David Aisenstat, President and CEO of Keg Restaurants Ltd. “We continue to work hard every day to ensure our Keg guests continue to experience the high levels of food quality, service and ambience, which have earned us their loyalty.”
Royalty income increased by $207,000 or 3.2% from $6,479,000 in the three months ended March 31, 2018 to $6,686,000 in the three months ended March 31, 2019.
Distributable cash before SIFT tax increased by $147,000 from $4,973,000 (43.8 cents/Fund unit) to $5,120,000 (45.1 cents/Fund unit) for the quarter. Distributable cash available to pay distributions to public unitholders increased by $113,000 from $3,754,000 (33.1 cents/Fund unit) to $3,867,000 (34.1 cents/Fund unit) for the quarter. Distributions to Fund unitholders remained the same at $3,222,000 (28.4 units/Fund unit) during the first quarter of 2018 and the first quarter of 2019. The payout ratio for the quarter was 83.3% as compared with 85.8% for the comparable quarter of the prior year.
The Fund remains financially well positioned with cash on hand of $2,553,000 and a positive working capital balance of $3,967,000 as at March 31, 2019.