Restaurant Brands reports 50pc profits rise

Fast food operator Restaurant Brands has announced a more than 50 per cent lift in profits for the year to February, mainly on the back of a strong performance from the KFC chain.

After-tax earnings were $9.47 million, compared with $6.31 million last year. The profit was in line with forecasts made by the company. Sales were up 3.4 per cent to $303.99 million.

One-off items took the bottom line profit for this year down to $9.02 million. But this is still a considerable improvement on last year, when  writedowns due to the exit of unprofitable businesses resulted in an all-up loss of $3.55 million.

A dividend of 3.5 cents a share will be paid, making a total payout for the year of 6.5c a share, compared with 5.5c a share a year ago.

The company's directors said KFC had "another year of sound sales and profit growth" driven by the continued store refurbishment programme. However, Pizza Hut continued to face tough trading conditions, with sales for the year down 7 per cent on a same-store basis. The Starbucks Coffee business had a "pleasing" 5.6 per cent gain in sales, with revenues topping the $33 million mark for the first time.

Directors said they were cautiously optimistic about the outlook for the company.  With completion of the exit from the Pizza Hut operations in Victoria a higher level of focus would be directed toward the Pizza Hut business in New Zealand.

"This, combined with the KFC and Starbucks Coffee sales momentum, is expected to produce a further steady improvement in the 2008-09 profit performance  economic conditions permitting," directors said.