Not for distribution to U.S. News wire services or dissemination in the U.S.
Vancouver – August 9, 2023 – The Keg Royalties Income Fund (the “Fund”) (TSX: KEG.UN) is pleased to announce its financial results for the three months ended June 30, 2023 (the “quarter”) and the six months ended June 30, 2023 (“YTD”).
- Royalty Pool Sales(1) down 2.9% to $171.2M for the quarter and up 14.2% to $363.1M YTD
- KRL Average Sales per Operating Week(1) down 1.3% to $126,000 per Operating Week for the quarter and up by 6.6% to $133,000 per Operating Week YTD
- Same Store Sales(1) down 2.3% for the quarter and up 14.9% YTD
- Distributable Cash(1) down 1.2% to 29.4 cents/Fund unit for the quarter and up 22.2% to 63.5 cents/Fund YTD
Royalty Pool Sales reported by the 107 Keg restaurants in the Royalty Pool were $171,216,000 for the quarter, a decrease of $5,148,000 or 2.9% from the comparable quarter of the prior year. Year-to-date, Royalty Pool sales increased by $45,020,000 or 14.2% to $363,090,000. The decrease in Royalty Pool Sales during the second quarter of 2023 was mostly due to a slight decrease in Same Store Sales, while the YTD increase was primarily due to 169 more Operating Weeks(1) in the first half of the current year, than in the first half of the prior year. During the first quarter of the prior year, restaurants were closed for 218 Operating Weeks because of temporary government-mandated restaurant closures related to the Covid-19 pandemic, whereas in the current year there were no such closures.
Royalty income decreased by $206,000 or 2.9% from $7,055,000 in the three months ended June 30, 2022 to $6,849,000 in the three months ended June 30, 2023. For the first six months of 2023 royalty income increased by $1,801,000 or 14.2% from $12,723,000 for the six months ended June 30, 2022 to $14,524,000 for the six months ended June 30, 2023.
Distributable Cash available to pay distributions to public unitholders decreased by $41,000 from $3,383,000 (29.8 cents/Fund unit) to $3,342,000 (29.4 cents/Fund unit) for the quarter, and increased by $1,310,000 from $5,897,000 (51.9 cents/Fund unit) to $7,207,000 (63.5 cents/Fund unit) year-to-date. During the second quarter of 2023 and 2022, distributions of $3,222,000 (28.4 cents/Fund unit) were paid to Fund unitholders. During the first six months of both 2023 and 2022, distributions of $6,444,000 (56.8 cents/Fund unit) were paid to Fund unitholders. The Payout Ratio was 96.4% for the second quarter of 2023 and 89.4% year-to-date.
The Fund remains financially well positioned with cash on hand of $2,345,000 and a positive working capital balance of $3,661,000 as at June 30, 2023.
(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 satisfied with KRL’s financial performance thus far during 2023, despite a slight decline in guest visits and same store sales during the second quarter of 2023” said Nick Dean, President of KRL. “During the second quarter of the prior year, there was a temporary surge in guest visits, following almost two years of guests being confined to their homes because of the Covid-19 pandemic,” he continued. “Throughout the remainder of 2023, Management will remain focused on delivering a superior product and service experience, and driving guest demand with world-class marketing,” he concluded.
“We are very pleased with the financial results of the Fund during the second quarter of 2023,” said Kip Woodward, Chairman of the Fund. “Distributable cash available to pay distributions to public unitholders and the payout ratio remain well within our targets.”