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


Restaurant Brands cans final dividend to fund growth plans

By Paul McBeth

April 16 (BusinessDesk) - Restaurant Brands New Zealand won't pay a final dividend after lifting annual earnings 3.3 percent, saying it wants to retain cash for a record capital spending programme that includes the roll-out of 60 Taco Bell stores across Australasia.

The fast-food operator reported an underlying profit of $42.2 million in the 52 weeks ended Feb. 25, up from $40.8 million a year earlier. That's just shy of the $43-45 million guidance at last year's annual meeting.

Net profit increased 0.8 percent to $35.7 million, which included $9 million of non-trading costs, including a $3.5 million impairment charge on its Carl's Jr chain, a $3.5 million charge for underpayment of holiday pay, and $1.6 million of worker compensation in Hawaii. A gain on the sale of the Starbucks Coffee chain offset those costs.

The board decided against paying a final dividend, saying the company faces substantial capital demands with a new store build programme including the Taco Bell launch in New Zealand and Australia over the next five years and a faster rollout of KFC store builds in both of those markets.

On top of that, there are significant potential acquisitions in the US and Australia, it said.

"While some of this store development and acquisition growth can be funded from increased borrowings, directors believe that it is in the best interests of the group to retain cash in order to provide funding flexibility," it said. "Directors have therefore resolved not to pay a final dividend for the FY19 year."

Over the next five years, Restaurant Brands plans to open 30 new KFC stores, 60 Taco Bell stores and refurbish 50-60 KFC stores across Australasia, build and rebuild 10-12 Taco Bells in Hawaii, buy 10-40 KFC stores in Australia, and pursue 2-3 KFC or Taco Bell acquisitions on the US mainland.

While the bulk of Restaurant Brands shareholders will have pocketed $9.45 a share in the scaled takeover bid, today's decision by the board means investors won't receive any dividends this year after directors put off paying an interim dividend due to Finaccess Capital's offer.

It paid 28 cents per share for the 2018 financial year and, while chair Ted van Arkel told shareholders at last year's annual meeting that the board will lift dividends in line with higher earnings, those returns will always be subject to capital spending plans.

The Mexican firm would prefer to use equity funding as a last resort for that capital programme.

Restaurant Brands spent $36.9 million buying intangibles, property, plant and equipment in the year, and raised $10.2 million from the sale of assets.

The company's KFC New Zealand unit lifted earnings before interest, tax, depreciation and amortisation 5.9 percent to $70.4 million, maintaining strong margins despite cost pressures, while its Pizza Hut earnings dropped 38 percent to $2 million as rising ingredients and labour costs squeezed margins, and it owned fewer stores - it now owns 30, down from 36 a year ago.

Carl's Jr earnings slumped 53 percent to $900,000 on falling sales, and rising labour and ingredients costs, and Restaurant Brands booked a $3.5 million impairment charge on the value of the burger chain.

Its Australian KFC stores lifted earnings 34 percent to A$27 million, while its Hawaiian Taco Bell unit lifted earnings 2.9 percent to US$14.3 million and its Hawaiian Pizza Hut ebitda shrank 44 percent to US$1.9 million, reflecting marketing costs and higher ingredients and wages costs. lt has 44 Pizza Hut stores in Hawaii



© Scoop Media

Business Headlines | Sci-Tech Headlines


Tiwai Point: Rio Tinto Announces Plans To Close Tiwai Point Smelter

Rio Tinto has just announced that it will wind down New Zealand Aluminium Smelters - the Tiwai Point smelter - saying the business is no longer viable. More>>


Freight: New Report On Auckland Port Relocation

The Government has released a major new report on the options for relocating the Port of Auckland’s freight operations while deferring any decision on the issue. More>>


Chartered Accountants: COVID-19 Fails To Knock Kiwi Investor Confidence, But More Disclosure Wanted

Three months of COVID-19 lockdown and investment turmoil has done little to knock confidence in New Zealand capital markets and listed companies with overall investor sentiment very similar to 2019, an investor survey held in mid June shows. However, ... More>>


Taxation: Black-Market Tobacco Sidesteps $287 Million In Excise Tax

Year-on-year increases in consumption of illicit tobacco in New Zealand have seen illegal trade swell to 11.5% of the total market. If consumed legally, illicit products would have netted the Government $287 million in excise tax during 2019. Independent ... More>>


Energy Sector: Meridian Spilled Water To Hike Electricity Prices - Authority Ruling

The Electricity Authority has found that generator Meridian Energy manipulated the power market, costing consumers about $80 million. More>>


XE Data Update: RBNZ Official Cash Rate Decision

The RBNZ will keep the Official Cash Rate (OCR) at 0.25%. T he key points in the RBNZ statement are: RBNZ keeps the OCR unchanged at 0.25% Maintain the LSAP (large scale asset purchase) at NZD$60 billion. Committee prepared to use additional monetary ... More>>


Electricity: Kiwis Ignore Promise Of Cheaper Power

Electric Kiwi and Flick Electric Co are joint winners of Canstar Blue’s award for Most Satisfied Customers | Electricity Providers From putting on an extra layer – rather than turning on a heater – to turning off lights and choosing the energy-saving ... More>>


Electricity: Transmission Pricing For A Low Carbon Future

The Electricity Authority has decided on new guidelines for transmission pricing. James Stevenson-Wallace, Chief Executive of the Electricity Authority says the new guidelines will deliver significant benefits to consumers, through lower electricity ... More>>


RNZ: Economic Activity And Business Confidence Bouncing Back

Two surveys from ANZ show business confidence and economic activity have rebounded, but uncertainty about the future remains extreme. More>>


NIWA: The Climate Record That Keeps Getting Broken

Among the multitude of New Zealand climate statistics there is one record that continues to be broken month after month. Since January 2017 there has not been one month that recorded a below average nationwide temperature, according to NIWA’s seven station ... More>>


Govt: Extended Loan Scheme Keeps Business Afloat

Small businesses are getting greater certainty about access to finance with an extension to the interest-free cashflow loan scheme to the end of the year. The Small Business Cashflow Loan Scheme has already been extended once, to 24 July. Revenue and Small ... More>>


Science: 2019 Prime Minister’s Science Prizes Announced

The 2019 Prime Minister’s Science Prizes have been announced in a digital livestream event today. The Prizes recognise the impact of science on New Zealanders’ lives, celebrate the achievements of current scientists and encourage scientists of the ... More>>


RNZ: Fuel, Alcohol Costs To Go Up From Today

The increase today in the taxes on fuel, road user charges and alcohol is being called a tone-deaf move. More>>


Stardome Observatory: Young Kiwi Astro-Photographer Shoots For The Stars

Matariki by Josh Kirkley. The stars are aligning for up-and-coming Auckland-based astro-photographer Josh Kirkley (Kāi Tahu). During lockdown, one of his images was picked up by NASA and shared on the space agency’s Instagram to its 59.2 million ... More>>

DCANZ: Time For EU To Commit To A Level Playing Field For Trade

The Dairy Companies Association of New Zealand (DCANZ) has welcomed New Zealand Trade Minister David Parker’s statement that it is unacceptable for New Zealand exporters to continue facing an ‘unlevel playing field’ in the EU. Details leaked ... More>>


New Zealand Government: Supporting Kiwi Businesses To Resolve Rent Disputes

The Government will legislate to ensure businesses that suffered as a result of the COVID-19 response will get help to resolve disputes over commercial rent issues, Justice Minister Andrew Little announced today. More>>