Boston Pizza Royalties Income Fund Announces 7.5% SSSG and Record Franchise Sales for Q1 2012
Trustees Declare April Distribution to Unitholders of 9.8 Cents per Unit
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/09/12 -- Boston Pizza Royalties Income Fund (TSX: BPF.UN) and Boston Pizza International Inc. -
Highlights
Boston Pizza Royalties Income Fund (the "Fund") and Boston Pizza International Inc. (" BPI") each reported today financial results for the period from January 1, 2012 to March 31, 2012 (the "Period"). A copy of this press release, the consolidated interim financial statements for the Period and related Management's Discussion and Analysis of the Fund and BPI are available at and . The Fund will host a conference call to discuss the results on May 9, 2012 at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time). The call can be accessed by dialling 1-800-319-4610 or 604-638-5340. A replay will be available until June 8, 2012 by dialling 1-800-319-6413 or 604-638-9010 and entering the pin code: 4452 followed by the # sign.
Same store sales growth ("SSSG"), a key driver of distribution growth for unitholders of the Fund, was positive 7.5% for the Period, compared to positive 1.4% for the same period in 2011. Franchise sales, the basis upon which royalties are paid by BPI to the Fund, exclude revenue from the sale of liquor, beer, wine, tobacco and approved national promotions and discounts. On a franchise sales basis, SSSG was positive 6.9% for the Period, compared to positive 2.1% for the same period in 2011. The increase in SSSG for the Period was principally due to higher takeout and delivery sales resulting from continued promotion of Boston Pizza's online ordering system, higher chicken wing sales resulting from successful marketing campaigns launched in 2011 and the extra day of sales in February as 2012 is a leap year. Other key sales initiatives in the Period included the 20th anniversary of "Heart-Shaped Pizzas" and a "Pizza Hobbyists" feature menu promotion. Franchise sales of restaurants in the royalty pool were a record $176.6 million for the Period compared to $163.1 million in the same period in 2011. The increase in franchise sales for the Period was principally due to the increase in SSSG.
"Boston Pizza continues to strengthen our position as Canada's #1 casual dining brand with record franchise sales for the first quarter and strong same store sales growth of 7.5% versus one year ago. This is the highest quarterly SSSG that we have achieved in over four years, driven by successful marketing initiatives including our Finger Cooking campaign promoting take-out and delivery and, more recently, the launch of our new 'All Meat Wings' campaign," said Mark Pacinda, President and CEO of BPI. "Boston Pizza's continued sales growth momentum led the Fund to announce during the Period a 6.5% increase in the monthly cash amount paid to unitholders from 9.2 cents per unit to 9.8 cents per unit effective for the February 2012 distribution."
The Fund posted a net loss of $6.9 million for the Period compared to net income of $2.9 million in the same period in 2011. The $9.8 million decrease in net income was driven mainly by the Fund's $0.5 million increase in revenues due to strong SSSG offset by the $10.3 million increase in the fair value adjustment of the liability related to the Class B general partnership units of Boston Pizza Royalties Limited Partnership. The Fund's net income under International Financial Accounting Standards ("IFRS") contains many non-cash items that do not affect the Fund's operations or its ability to pay distributions to unitholders. As such, it is not in the Fund's view, the only or most meaningful measurement of the Fund's ability to pay distributions. Consequently, the Fund has provided the non-IFRS metrics of distributable cash and payout ratio to provide investors with more meaningful information about the Fund's ability to pay distributions. Readers are cautioned that distributable cash and payout ratio are non-IFRS financial measures that do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. For a reconciliation between cash flow from operating activities (the most directly comparable IFRS measure) and distributable cash, please see the table below. For a detailed discussion on the Fund's distributable cash and payout ratio, please refer to the Management's Discussion and Analysis for the Period as filed on SEDAR and posted on the Fund's website at .
The Fund's distributable cash was $4.0 million or $0.274 per unit of the Fund ("Unit") for the Period compared to $3.6 million or $0.247 per Unit for the same period in 2011. This represents a 10.9% increase compared to the same period one year ago, driven by higher royalty revenue partially offset by changes in non-cash working capital for the Period. Distributions for the Period were funded entirely by cash flow from operations. No debt was incurred at any point during the Period to fund distributions. The table below sets out the Fund's distributable cash and distributable cash per Unit for the Period along with comparable figures for the same period one year ago.
The Fund's payout ratio was 105.0% for the Period compared to 102.0% in the same period one year ago. The Fund's payout ratio for the Period increased compared to the same period one year ago primarily due to the distribution increase beginning with the February 2012 distribution to unitholders. In addition, because the Fund strives to provide Unitholders with regular monthly distributions, the Fund will generally experience seasonal fluctuations in its payout ratio. On a trailing 12-month basis, the Fund's payout ratio was 96.4% as at March 31, 2012. The Fund's payout ratio is likely to be higher in the first and fourth quarters compared to the second and third quarters since Boston Pizza restaurants experience higher franchise sales levels during the summer months when restaurants open their patios and benefit from increased tourist traffic. A key feature of the Fund is that it is a "top line" structure, in which BPI pays the Fund a royalty equal to 4% of franchise sales from restaurants in the Fund's royalty pool. Accordingly, Fund unitholders are not directly exposed to changes in the operating costs or profitability of BPI or of individual Boston Pizza restaurants. Given this structure, and that the Fund has no current mandate to retain capital for other purposes, it is expected that the Fund will maintain a payout ratio close to 100% over time as the trustees of the Fund continue to distribute all available cash in order to maximize returns to unitholders.
The trustees of the Fund announced a cash distribution to unitholders of 9.8 cents per Unit for April 2012. The distribution will be payable to unitholders of record at the close of business on May 21, 2012 and will be paid on May 31, 2012. The Fund periodically reviews distribution levels based on its policy of stable and sustainable distribution flow to unitholders. Since the Fund's initial public offering in 2002, unitholders have received 15 distribution increases. The most recent distribution increase of 6.5% was effective for the February distribution payable in March and increased the monthly distribution amount from 9.2 cents per unit to 9.8 cents per unit. As at May 8, 2012, the Fund had paid out 117 consecutive monthly distributions totalling $144.6 million or $11.89 per Unit.
FINANCIAL SUMMARY
The tables below set out selected information from the consolidated interim financial statements of the Fund, which consolidates the accounts of the Boston Pizza Royalties Limited Partnership's (the "Partnership"), together with other data and should be read in conjunction with the interim consolidated financial statements of the Fund.
OUTLOOK
The Canadian Restaurant and Foodservices Association has forecast sales growth of 3.0% for the Canadian full-service restaurant sector in 2012. BPI's management believes that Boston Pizza is well positioned to continue outperforming this growth rate by attracting a wide variety of guests into the restaurant, sports bar and take-out/delivery parts of each location, offering a compelling value proposition to our guests and continuing to open new Boston Pizza locations across Canada.
The two principal factors that affect SSSG are changes in customer traffic and changes in average guest cheque. BPI's strategies to drive higher guest traffic include a larger marketing budget versus the previous year along with a revised calendar of national and local store promotions. Increased average cheque levels will be achieved through a combination of culinary innovation and annual menu re-pricing. BPI management recognizes that franchise sales results during the last nine months of 2011 were comparatively stronger than those posted in the first quarter of 2011 and that results from the remainder of 2012 will be compared against those stronger sales levels. In addition, BPI's franchise agreement requires that each Boston Pizza restaurant undergo a complete store renovation every seven years and nine locations have already completed renovations in 2012 with many more underway or planned for later this year. Restaurants typically close for two to three weeks to complete the renovation and experience an incremental sales increase in the year following the re-opening.
Boston Pizza remains well positioned for future expansion as evidenced by the two new Boston Pizza restaurants that have opened to date in 2012, with two more new locations under construction currently that are scheduled to open later in the year. BPI's management believe that Boston Pizza will continue to strengthen its position as the number one casual dining brand in Canada by pursuing further restaurant development opportunities across the country.
Certain information in this press release may constitute "forward-looking information" that involves k nown and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Fund, Boston Pizza Holdings Trust, the Partnership, Boston Pizza Holdings Limited Partnership, Boston Pizza Holdings GP Inc., Boston Pizza GP Inc., BPI, Boston Pizza restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. When used in this press release, forward-looking information may include words such as "anticipate", "estimate", "may", "will", "expect ", "believe", "plan" and other similar terminology. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this press release. Except as required by law, the Fund and BPI assume no obligation to update previously disclosed forward-looking information.
For a complete list of the risks associated with forward-looking information and our business, please refer to the "Risks and Uncertainties" and "Note Regarding Forward-Looking Information" sections included in the Fund's most recent Management's Discussion and Analysis for the Period available at and . The trustees of the Fund have approved the contents of this press release.
Contacts:
Boston Pizza Royalties Income Fund
Jordan Holm
Vice President of Investor Relations
604-303-6083
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Datum: 09.05.2012 - 12:30 Uhr
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