Fast food firm’s profit plunges
AUCKLAND: Restaurant Brands’ profit declined 42.9% in the first half of 2020 as the fast food company that operates KFC, Pizza Hut, Carl’s Jr and Taco Bell in NZ was disrupted by Covid19.
The firm, majority owned by Mexico’s Finaccess Capital, posted a net profit after tax of $11.4 million for the 26 weeks to June 30, down $8.6 million on the previous period, which stretched to 28 weeks due to a balance date change.
Sales revenue was $383.4 million, down $59.2 million, or 13.4%, compared with $442.6 million a year earlier. The company said its earnings were adversely affected by Covid19.
Earnings before interest, tax, depreciation and amortisation (ebitda) fell
$62.1 million.
The firm changed its balance date from February to December in the year ended December 19.
Scaling back the previous year’s results to enable a 26week comparison resulted in sales down $27.6 million and net profit down $7.2 million.
Restaurant Brands received $22.1 million in wage subsidies and retained all of its staff on full pay during the lockdown period.
While the wage subsidy helped offset the cost to the business, there was a shortfall of $500,000 per week, the company said.
The fiveweek closure of its New Zealand stores under Alert Level 4 resulted in a loss of more
$10.6 million
to than about $40 million, it said.
Under Level 3, operating only its drivethrough locations also affected its results.
Restaurant Brands will forgo paying an interim dividend. It said it continued to ramp up capital expenditure, investing in more than 60 Taco Bell outlets in New Zealand and Australia over the next five years.
Despite the challenges Covid19 presented, the directors were pleased with the firm’s earnings in its first six months of FY20.
Although its overall earnings were down $8.6 million, these had ‘‘recovered strongly’’ towards the end of the second quarter as New Zealand sales returned to nearnormal levels.
Its New Zealand sales were down $56.2 million, or 24.3%, in the first six months of the year.
Store ebitda dropped $9.1 million, which the company attributed to a shorter comparable reporting period and the fiveweek store closures.
New Zealand sales had bounced back after lockdown, led by strong performance of its KFC and Carl’s Jr stores, it said.
Sales in Australia declined by 5.1% to $94.4 million in the period, while sales in the US declined by 3.1% to $68.7 million.
In December, the group acquired 70 KFC and Taco Bell stores in California for $US73 million ($109 million). — The New Zealand Herald