Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Second Quarter Sales Increase Of 3.1%

20 September 2005
Q2 Media Release

Restaurant Brands Reports Second Quarter Sales Increase Of 3.1%

Restaurant Brands today released second quarter sales results showing a 3.1% increase in total sales on the back of continuing strength at Pizza Hut New Zealand and Starbucks Coffee.

Chief Executive Vicki Salmon said sales totalled $98.2 million for the 16 week period ended 12 September 2005, compared with $95.3 million in the same period last year. On a same store basis, total sales were up 1.4% for the quarter.

“Our New Zealand businesses continue to perform well and in line with expectations, however Pizza Hut Victoria had a disappointing second quarter. Changes we are announcing to this business today are designed to improve the performance of this business in future,” she said.

For the first half of the 2005/06 financial year, total sales were $170.6 million, compared with $167.8 million, or an increase of 1.7% on prior year. Same store sales increased 0.1%.

“The extensive brand transformation programme we are undertaking at KFC is delivering excellent results with three refurbished outlets opening in Hamilton East, Mangere and Balmoral in Auckland during the quarter. Sales at these stores are similar to the other refurbished stores after reopening,” said Salmon.

She said, as previously indicated, the extended temporary closure of some stores required to undertake the brand transformation programme, had a slight negative impact on total sales during the quarter.

“Sales were also impacted by the removal of delivery service from nine stores when compared with the prior year, however this has improved margins and the lost sales are expected to return over time.”

KFC sales were $52.0 million for the second quarter, a decrease of 0.6% on the prior year. Same store sales increased 1.3%. Year to date KFC sales totalled $90.8 million, down 1.7% on prior year but up 0.1% on a same store sales basis.

“During the quarter we saw good results from the re-release of traditional favourites Hot ‘N Spicy and Popcorn chicken, together with a new product called Wicked Wings,” said Salmon.

A Batman promotion during the school holidays and the release of a “Chicken ‘N Chips” product line were also undertaken during the period.

“The Lions tour and the release of Big Dippers helped Pizza Hut New Zealand deliver another strong performance during the quarter, although sales dropped away towards the end of the period as the weather warmed up.

“We are encouraged by the early sales trends and customer feedback to the launch of our new permanent range of Gourmet pizzas, which occurred early in the quarter.”

Total sales at Pizza Hut New Zealand increased $2.6 million or 9.8% to $29.2 million. On a same store basis, sales increased 2.6%. Year to date, sales at Pizza Hut New Zealand totalled $49.9 million, a $3.5 million or 7.5% increase on the prior year, with same store sales declining a marginal 0.1%

“While this result was achieved within the face of increasing competition and the cannibalisation impact of new store development, it was at the expense of some margin,” said Salmon.

The New Lynn red roof restaurant was also reopened during the period as the first refurbished dine-in Pizza Hut, offering a more comprehensive menu and enhanced dining experience, and is showing good results, said Salmon.

“Starbucks Coffee continues its winning streak and delivered the seventh consecutive quarter of same store sales growth.”

For the second quarter, sales totalled $8.2 million, a 13.2% increase on the prior year with same store basis increasing 2.9%. Year to date, Starbucks Coffee sales totalled $14.3 million, an increase of 11.9%, and same store sales increased 2.1%.

Salmon said the 41st Starbucks Coffee store opens today in Nelson with a further three new outlets planned for the second half of the year.

“Pizza Hut Victoria was the disappointment this quarter as we were unable to produce a positive sales result due to poor promotional performance and increased competition in this market.”

Total sales for the quarter were A$8.1 million, a decline of 3.4% on prior year. Same store sales declined 3.1%. For the first half, sales were A$14.4 million, compared with A$14.6 million in the prior period. Same store sales declined 0.9% in the first half.

“We have now instituted a store rationalisation programme in Victoria which will see a number of stores re-franchised to individual franchisees over the next six months. This will ensure the continuity of the Pizza Hut brand in Victoria, whilst allowing the company to exit a number of stores that for reasons of volume or location are not suitable for continued corporate operation,” she said.

Salmon said there was no further update on progress of discussions between private equity firm CVC Asia Pacific Limited and Yum! Restaurants International Inc.

“Discussions are continuing on certain commercial matters relating to the franchise agreements to apply following any successful takeover offer made by CVC for Restaurant Brands, and we have no further update at this time.”

She said a number of previously indicated factors have put pressure on the company’s first half profit margins and as a result group net profit after tax and non trading items for the first half of the financial year is expected to be slightly below the prior year period.

“Over the past year we have seen significant labour and freight cost increases in New Zealand. Pizza Hut has also seen a major increase in the price of cheese and delivery. Margins have also been impacted by increased competition in the pizza sector.”

“However, barring substantial increases in the levels of competitor activity or change in the current economic environment, the company continues to expect to produce a slightly improved profit result (excluding non trading items) in the second half of the year,” said Salmon.

ENDS


20 September 2005
NZX

RESTAURANT BRANDS REPORTS SECOND QUARTER SALES
INCREASE OF 3.1%

Restaurant Brands today announced total sales of $98.2 million for the 16 week period ended 12 September 2005. This compares with $95.3 million in the same period last year, a 3.1% increase. On a same store basis, total sales were up 1.4% for the quarter.

Total sales from the company’s three New Zealand businesses grew during the quarter with sales increasing $3.2 million or 3.8% on prior year; due to the continuing strong growth from both the Pizza Hut New Zealand and Starbucks Coffee chains. Australian operations declined 3.0% due to poor promotional performance and continuing difficult trading conditions in Victoria.

For the first half of the 2005/06 financial year, total sales were $170.6 million, compared with $167.8 million in the prior year, or an increase of 1.7%. Same store sales increased 0.1%.

KFC
KFC sales were $52.0 million for the second quarter, a decrease of 0.6% on the prior year. Same store sales increased 1.3%. Year to date KFC sales totalled $90.8 million, down 1.7% on prior year but up 0.1% on a same store sales basis.

As previously reported, the temporary closure of some stores required to undertake the brand transformation programme had a slightly negative impact on total sales during the quarter. Sales were also impacted by the removal of delivery service from nine stores compared with the prior year, however this has improved margins and the forfeited sales are expected to return over time.

The extensive brand transformation programme at KFC is progressing well and delivering excellent results in stores that have reopened. During the quarter, three stores in Hamilton East, Mangere and Balmoral in Auckland completed major refurbishments and reopened for business with initial sales results similar to other refurbished stores. The refurbishment of the Motueka store was also completed during the quarter.

Promotional activity during the period included a Batman promotion during the school holidays; the release of a Chicken ‘N Chips product line; a re-release of Hot ‘N Spicy and Popcorn Chicken - both traditional favourites – and the release of a new product – Wicked Wings.

There were 86 KFC stores in operation at quarter’s end. Two new stores are planned to open in regional locations in the second half of the year. The store refurbishment programme will continue.

Pizza Hut New Zealand
Pizza Hut New Zealand delivered another strong sales performance during the quarter with total sales increasing $2.6 million or 9.8% to $29.2 million. On a same store basis, sales increased 2.6%. This result was achieved in the face of increasing competition and the cannibalisation impact of new store development, but at the expense of some margin.

Year to date, sales at Pizza Hut New Zealand totalled $49.9 million, a $3.5 million or 7.5% increase on the prior year, with same store sales declining a marginal 0.1%.

During the period, Pizza Hut launched the new range of Gourmet Pizzas, a new permanent menu addition. While still early in the launch phase, sales trends and customer feedback are both extremely positive.

Sales in the early part of the quarter were assisted by the successful release of the Big Dippers product and the Lions tour, but dropped away towards the end of the quarter as a result of unusually warm weather for the time of year.

Two new infill delcos opened in Mangere Central and Howick during the quarter bringing the total number of Pizza Hut stores to 103. A further four store are planned to open in the next quarter.

The New Lynn restaurant reopened during the period as the first refurbished dine-in Pizza Hut, offering a more comprehensive menu and an enhanced dining experience. This store is a trial for other red roof Pizza Hut restaurants with initial results being very positive, in line with other Pizza Hut markets.

Starbucks Coffee
The Starbucks Coffee business continued to perform well delivering a seventh consecutive quarter of same store sales growth. Total sales during the second quarter were $8.2 million or 13.2% up on prior year. On a same store basis, sales increased 2.9%. Year to date, Starbucks Coffee sales totalled $14.3 million, an increase of 11.9%, and same store sales increased 2.1%.

During the quarter one store was closed in High St, Auckland, and another opened in Queenstown, maintaining store numbers at 40. Another four Starbucks Coffee are planned to open in the second half of the year, including a store in Nelson which opens today.

Pizza Hut Victoria
Pizza Hut Victoria had a disappointing quarter with sales suffering from poor promotional activity and increased competition. Total sales for the quarter were A$8.1 million, a decline of 3.4% on prior year. Same store sales declined 3.1%. For the first half, sales were A$14.4 million, compared with A$14.6 million in the prior period. Same store sales declined 0.9% in the first half.

During the quarter one store closed at lease end, bringing total store numbers down to 50.

The company has instituted a store rationalisation programme in Victoria which will see a number of stores re-franchised to individual franchisees over the next six months. This will ensure the continuity of the Pizza Hut brand in Victoria, whilst allowing the company to exit a number of stores that for reasons of volume or location are not suitable for continued corporate operation.

CVC Update
The company has no further update to its previous announcement on CVC and advises that private equity firm CVC Asia Pacific Limited is still in discussions with Yum! Restaurants International Inc, one of RBNZ’s key franchisors, on certain commercial matters relating to the franchise agreements to apply following any successful takeover offer made by CVC for RBNZ.

Outlook
While sales continue to be strong across the majority of the business, a number of previously indicated factors have put pressure on the company’s first half profit margins. These include significant labour and freight cost increases across all three New Zealand businesses. The Pizza Hut business has also seen a major increase in the price of cheese and delivery. Margins have also been impacted by increased competition in this sector. As a result, group net profit after tax and non trading items for the first half of the financial year is expected to be slightly below the prior year period.

However, barring substantial increases in the levels of competitor activity or a material change in the current economic environment, the company continues to expect to produce a slightly improved profit result (excluding non trading items) in the second half of year.

RESTAURANT BRANDS NEW ZEALAND LIMITED
Quarterly Sales Report
Summary of Results for the 2nd Quarter (Q2)
(for the 16 weeks 24/05/05 - 12/09/05)
Q2 2005/6 vs Q2 2004/5 Q2 2005/6 ($000's) Q2 2004/5 ($000's) % change
Total Store Sales - KFC 51,988 52,316 -0.6%
Total Store Sales - Pizza Hut NZ 29,238 26,619 9.8%
Total Store Sales - Starbucks 8,168 7,215 13.2%
Total NZ Concepts 89,394 86,150 3.8%
Total Store Sales - Pizza Hut Victoria* 8,834 9,106 -3.0%
TOTAL STORE SALES 98,228 95,256 3.1%

Same Store Sales - KFC 51,988 51,313 1.3%
Same Store Sales - Pizza Hut NZ 27,170 26,472 2.6%
Same Store Sales - Starbucks 7,358 7,152 2.9%
Total NZ Concepts 86,516 84,937 1.9%
Same Store Sales - Pizza Hut Victoria** 8,823 9,114 -3.1%
TOTAL SAME STORE SALES 95,339 94,051 1.4%

YTD 2005/6 vs YTD 2004/5
Total Store Sales - KFC 90,758 92,282 -1.7%
Total Store Sales - Pizza Hut 49,869 46,389 7.5%
Total Store Sales - Starbucks 14,348 12,821 11.9%
Total NZ Concepts 154,975 151,492 2.3%
Total Store Sales - Pizza Hut Victoria 15,627 16,288 -4.1%
TOTAL STORE SALES 170,602 167,780 1.7%

Same Store Sales - KFC 90,758 90,633 0.1%
Same Store Sales - Pizza Hut 46,018 46,049 -0.1%
Same Store Sales - Starbucks 13,031 12,758 2.1%
Total NZ Concepts 149,807 149,440 0.2%
Same Store Sales - Pizza Hut Victoria** 15,389 15,529 -0.9%
TOTAL SAME STORE SALES 165,196 164,969 0.1%

NUMBER OF STORES OPEN AT QUARTER END
Qtr End no of Stores - KFC 86 87
Qtr End no of Stores - Pizza Hut 103 95
Qtr End no of Stores - Starbucks 40 36
Total Stores - NZ Concepts 229 218
Qtr End no of Stores - Pizza Hut Victoria 50 51
TOTAL QTR END NO OF STORES 279 269

* Includes favourable impact of foreign exchange movement of 0.4%.
** Same store sales prior year comparatives are restated to current year exchange rates to enable like comparison. The following table shows sales performance in Australian Dollars.

Pizza Hut Victoria Sales Performance - AUD Q2 2005/6 ($000's) Q2 2004/5 ($000's) % change
Q2 2005/6 vs Q2 2004/5
Average AUD/NZD translation rate $0.914 $0.918
Total Store Sales 8,077 8,363 -3.4%
Same Store Sales 8,067 8,335 -3.1%
YTD 2005/6 vs YTD 2004/5
Average AUD/NZD translation rate $0.925 $0.898
Total Store Sales 14,449 14,631 -1.2%
Same Store Sales 14,226 14,355 -0.9%

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>

ALSO:

Results:

Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news