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Vancouver – August 9, 2022 – The Keg Royalties Income Fund (the “Fund”) (TSX: KEG.UN) is pleased to announce its financial results for the three months ended June 30, 2022 (the “quarter”) and the six months ended June 30, 2022 (“YTD”).
• Royalty Pool sales(1) up 197.4% to $176.4M for the quarter and up 148.7% to $318.1M YTD
• KRL system sales(1) up 197.3% to $176.4M for the quarter and up 148.7% to $318.1M YTD
• Distributable cash(1) up 199.6% to 29.8 cents/Fund unit for the quarter and up 181.2% to 51.9 cents/Fund unit YTD • Payout ratio(2) was 95.2% for the quarter and 109.3% YTD
Royalty Pool sales reported by the 107 Keg restaurants in the Royalty Pool were $176,364,000 for the quarter, an increase of $117,066,000 or 197.4% from the comparable quarter of the prior year. Year-to-date, Royalty Pool sales were $318,070,000, an increase of $190,197,000 or 148.7%. The increase in Royalty Pool sales during the second quarter of 2022 was due to significantly more trading weeks of operation in the second quarter of 2022, as KRL’s restaurants were temporarily closed, by government health mandates related to the Covid-19 pandemic, for less time in the second quarter of 2022, than in the second quarter of 2021.
Royalty income increased by $4,683,000 or 197.4% from $2,372,000 in the three months ended June 30, 2022 to $7,055,000 in the three months ended June 30, 2021. Year-to-date, royalty income increased by $7,608,000 or 148.7% from $5,115,000 for the six months ended June 30, 2021 to $12,723,000 for the six months ended June 30, 2022.
Distributable cash available to pay distributions to public unitholders increased by $2,254,000 from $1,129,000 (9.9 cents/ Fund unit) to $3,383,000 (29.8 cents/Fund unit) for the quarter, and increased by $3,800,000 from $2,097,000 (18.5 cents/ Fund unit) to $5,897,000 (51.9 cents/Fund unit) year-to-date. During the second quarter of 2022, distributions of $3,222,000 (28.4 cents/Fund unit) were paid to Fund unitholders, an increase of $2,030,000 from the comparable quarter of the prior year. During the first six months of 2022, distributions of $6,444,000 (56.8 cents/Fund unit) were paid to Fund unitholders, an increase of $3,890,000 from the comparable period of the prior year. The increase in distributions to Fund unitholders during the comparable three and six-month periods, was entirely due to the return of monthly distributions to their pre-pandemic level 9.46 cents/Fund unit per month commencing in October of 2021. The payout ratio was 95.2% for the second quarter of 2022 and 109.3% year-to-date.
The Fund remains financially well positioned with cash on hand of $2,214,000 and a positive working capital balance of $3,042,000 as at June 30, 2022.
(1) This is a non-IFRS supplementary financial measure. Please refer to the “non-GAAP and other financial measures disclosure (NI 52-112)” section of this press release. (2 )This is a non-IFRS ratio. Please refer to the “non-GAAP and other financial measures disclosure (NI 52-112)” section of this press release.
“We are very pleased with the sales results of KRL during the current quarter” said Kip Woodward, Chairman of the Fund. “The increase in Royalty Pool sales and related royalty income resulted in an improvement in the payout ratio to 95.2% in the second quarter, more in line with historical targets.”
“The second quarter of the current year represents the first period since the pandemic began where we have been able to operate fully opened Keg locations. The Royalty Pool sales for the current quarter reported are of course nearly double what they were in the second quarter of 2021, but it is even more impressive that the current Q2 results also exceeded the same quarter 2019 prior to the pandemic by 13.5%.” said David Aisenstat, Chair of The Keg. “Our loyal Keg guests are back, and more new guests are joining them. Our skilled Keggers are also back with us happily providing The Keg’s legendary guest experience in all of our locations. The quarters’ sales and our consistent feedback tells us we have successfully kept the many things people have loved about The Keg for over fifty years fully intact. That achievement was and remains our very focused goal - past, present and in the future.” added Aisenstat.