Sharechat Logo

Burger Fuel FY profit jumps 55 percent on Middle East sales, plans to build up cash for investment

Wednesday 12th June 2013

Text too small?

Burger Fuel Worldwide, the fast food chain franchisor, boosted annual profit 55 percent as sales in the Middle East continued to surge. The company won't pay a dividend as it builds up cash for investments.

Net profit rose to $1.1 million, or 2.05 cents per share, in the 12 months ended March 31, from $708,000, or 1.32 cents, a year earlier, the Auckland-based company said in a statement. Sales climbed 25 percent to $12 million, led by a 35 percent gain in Middle East revenue.

The company raised $2 million in December in a placement to Milford Asset Management in a year when its operating cash flows slumped 45 percent to $337,000. As at March 31, the company held cash of $4.2 million.

"In accordance with the previously outlined policy, since listing on the NZAX, there will be no dividends paid," the company said. "This is to ensure that the group can build up and maintain adequate cash reserves for further investment into the business."

In recent years Burger Fuel has increased its exposure to the Middle East by signing master licensing agreements, which earns the company up-front territory fees and on-going royalties based on store turnover.

The fast food chain is focused on breaking into Middle East nations, and is part the Beachheads Global public-private partnership run by New Zealand Trade & Enterprise, which provides tailored mentoring for high-growth local companies.

The company lifted system sales 29 percent to $49.3 million. Total system sales represent till takings across all company-owned and franchise stores.

Burger Fuel increased New Zealand sales 17 percent to $8 million in the year, though earnings more than halved to $481,000. Its Australian segment revenue more than doubled to $560,000, turning profitable with earnings of $519,000.

The Middle East unit boosted sales to $3.5 million from $2.6 million a year earlier, with earnings more than doubling to $314,000.

The tightly-held stock trades infrequently on the small-cap NZAX, and was unchanged at $1.55 today, valuing it at $85.6 million. When the company went public in 2007 it sold 15 million shares at $1 apiece.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Burger Fuel raises $2 mln in placement to Milford funds
Burger Fuel boosts first-half profit 37% as Middle East sales surge
BurgerFuel signs Master Licence in Kuwait
Arab Spring opens door for Burger Fuel in post-Gaddafi Libya
Burger Fuel Worldwide
BurgerFuel expands into Qatar, shares jump
Burger Fuel turns profitable in first-half as Middle East franchise fees kick in
Burger Fuel opens new store in Saudi Arabia

IRG See IRG research reports