BurgerFuel turns to profit

BurgerFuel Worldwide says it posted a $1.2 million net profit for the year ended March, a turnaround from the previous year’s $463,000 net loss, as it transitions to a new business model.

Sales fell 15 per cent to $21m, mostly reflecting the sale of the company-owned store in the United States to founding director Chris Mason in March last year, while expenses dropped 22.7 per cent to $19.2m.

“This internal change lowers revenue from our proprietary product manufacturing operation but will ensure that this business unit becomes more financially efficient,” the company said.

Total system sales — including both company-owned and franchised stores — fell 2.9 per cent to $102m.

There were 78 BurgerFuel stores worldwide and two new outlets in New Zealand, one for each of its new concepts, Shake Out, a new burger concept developed in-house, and Winner Winner, the chicken concept purchased by BFW in December 2017.

The company is changing from a singlebrand international company to a multibrand New Zealand company.

“This transition is going well . . . we have managed to absorb all the costs associated with this transition, as well as the costs to develop the new brands and provide an acceptable profit for full-year 2019,” it says.

Of the BurgerFuel stores, 56 are in New Zealand.

The Middle East had “been very challenging in recent years” and the company expected sales there to continue to decline. In the US, Mason is still looking for “an established US partner” but the single store continues to trade, although with sales declining.

Burger Fuel shares are 1 cent higher at 47 cents, valuing the company at $25.2m. They have fallen more than 40 per cent in 12 months.