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Vancouver – March 15, 2023 – The Keg Royalties Income Fund (the “Fund”) (TSX: KEG.UN) is pleased to announce its financial results for the three months ended December 31, 2022 (the “quarter”) and the twelve months ended December 31, 2022 (“year”).
Royalty Pool sales(1) up 20.3% to $179.5M for the quarter and up 57.5% to $676.4M for the year
KRL system sales(1) up 19.3% to $179.5M for the quarter and up 56.6% to $676.4M for the year
• Payout ratio(2) was 104.7% for the quarter and 104.7% for the year
Royalty Pool sales reported by the 107 Keg restaurants in the Royalty Pool were $179,463,000 for the quarter, an increase of $30,271,000 or 20.3% from the comparable quarter of the prior year. For the year, Royalty Pool sales were $676,395,000, an increase of $247,056,000 or 57.5%. The increase in Royalty Pool sales during the fourth quarter of 2022 was primarily due to significantly more trading weeks of operation as there were no temporary restaurant closures related to the Covid-19 pandemic in the fourth quarter of the current year, unlike in the fourth quarter of the prior year.
Royalty income increased by $1,211,000 or 20.3% from $5,968,000 in the three months ended December 31, 2021 to $7,179,000 in the three months ended December 31, 2022. For the year, royalty income increased by $9,882,000 or 57.5% from $17,174,000 for the twelve months ended December 31, 2021 to $27,056,000 for the twelve months ended December 31, 2022.
Distributable cash available to pay distributions to public unitholders increased by $242,000 from $2,834,000 (25.0 cents/Fund unit) to $3,076,000 (27.1 cents/Fund unit) for the quarter, and increased by $5,597,000 from $6,715,000 (59.1 cents/Fund unit) to $12,312,000 ($1.084/Fund unit) for the year. During the fourth quarter of 2022 and 2021, distributions of $3,222,000 (28.4 cents/Fund unit) were paid to Fund unitholders. During the first twelve months of 2022, distributions of $12,888,000 ($1.135/Fund unit) were paid to Fund unitholders, an increase of $4,727,000 from the prior year. The increase in distributions to Fund unitholders during the comparable twelve-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 104.7% for the fourth quarter of 2022 and 104.7% for the year.
The Fund remains financially well positioned with cash on hand of $3,287,000 and a positive working capital balance of $2,178,000 as at December 31, 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 financial results of the Fund in 2022,” said Kip Woodward, Chairman of the Fund. “We are exceptionally pleased with KRL’s sales results, particularly given KRL lost an estimated $28M in restaurant sales during the first quarter of 2022, due to government-mandated restaurant closures in response to the Covid-19 pandemic.”
“Given the final results of 2022, we are very optimistic about the future of KRL’s business. Total system sales for the fourth quarter of 2022 were up 8.4% over the same quarter in 2019, and up 4.0% over the full year in 2019. We believe that a comparison to 2019 is a stronger benchmark for the health of the business given the ongoing closures that took place throughout 2021, as a result of Covid-19 restrictions.” said Nick Dean, President of The Keg. “As we embark on 2023, management of KRL will remain focused on delivering The Keg’s renowned hospitality, and are confident that this will encourage guests, who are seeking, consistency and reliability, excellent food, and legendary service, to come back even more frequently.”