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Restaurant Brands eyes $45 mln underlying profit

Wednesday 10th July 2019

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Fast-food operator Restaurant Brands New Zealand is expecting profit growth of at least 6 percent this year as the firm benefits from new store openings.

The firm, which will open its first Taco Bell stores in Australia and New Zealand this year, had already had a good first-quarter, chief executive Russel Creedy told investors at the annual meeting today.

While the launch of Taco Bell here and in Australia won’t have a material affect on this year’s group earnings, he said the consistent performance of the existing network, new store builds and the stable economic environment will deliver higher earnings.

“We expect the group will deliver an NPAT - excluding non-trading items - result for the new financial year of in excess of $45 million,” Creedy said in speech notes. The projection excludes any major new acquisitions during the year and the adverse impact of new accounting standards for the treatment of leases.

Restaurant Brands reported an underlying profit of $42.2 million in the 52 weeks ended Feb. 25, up from $40.8 million a year earlier. Net profit rose 0.8 percent to $35.7 million, after allowing for a net $9 million of non-trading costs, including impairments on the Carl’s Jr chain and a gain on the sale of the firm’s interest in Starbucks Coffee.

Restaurant Brands shares rose 0.3 percent to $9.45 today, taking their gain this year to almost 14 percent.

The company, 75 percent-owned by Mexico’s Finaccess Capital, has embarked on a five-year plan to open 30 new KFC stores, 60 Taco Bell stores and refurbish 50-60 KFC stores across Australasia. It also plans to 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.

Creedy told shareholders the first Taco Bell transformation in Hawaii had been completed in Moanalua.

The company is also “actively looking” for opportunities on the west coast of the US to establish a beachhead there, he said.

(BusinessDesk)

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