Sharechat Logo

BurgerFuel more than doubles 1H earnings on store openings

Wednesday 12th November 2014

Text too small?

BurgerFuel Worldwide, the NZAX listed fast food chain, more than doubled first half earnings as it opened seven new stores in the period, lifting sales.

Net profit rose to $213,000 in the six month period ended Sept. 30, from $96,000 a year earlier, the Auckland based company said in a statement. Group operating revenue rose 27 percent to $8.5 million, while system sales, which includes burger sales in its franchised stores, rose 29 percent to $38.6 million. Operating expense rose 24 percent to $8.2 million. 

In the period, the chain opened seven new restaurants, with the total number of BurgerFuel outlets at 62, and last month announced plans for five more stores in Australia before the end of its 2015 financial year. In September, the burger chain announced plans to bring franchise stores in-house to boost profit, buying an outlet in Henderson, Auckland, for an undisclosed sum. It is targeting at least a 20 percent return on investment from company owned stores, and is considering opening its own restaurants in New Zealand, before taking the format overseas.

"We had previously advised the market given the need for considerable investment this year, we expected expenditure in the year to be greater than revenue, resulting in a possible loss for the period," the company said. Accordingly, its first half profit "was a particularly good result. We do however expect development expenditure to continue through the second half of the year." 

BurgerFuel said the local burger market remains "highly competitive" with the presence of international chains like McDonalds, Burger King and the arrival of Carl's Jr, which is owned by fellow listed fast food operator, Restaurant Brands, as well as 'a number of smaller, niche market burger concepts". It said sales across its 39 New Zealand stores and two in Australia rose 36.3 percent in the period. 

The company also has 21 BurgerFuel stores across the Middle East, where it said sales increased 18 percent in the six month period. Conflict in the region saw it close its single store in Iraq, while sales in its two Egyptian stores were slow. The company was looking to capitalise on rising tourist numbers in Dubai, boosting its international exposure and said Saudi Arabia had potential for further stores. 

At the start of this year, BurgerFuel raised $5.9 million from US investor Franchise Brands to help fund its global growth aspirations, including plans to reach into the world’s biggest economy. BurgerFuel has partnered with Subway and Franchise Brands LLC to guide its entry into the US, where it plans to launch next year. 

Shares of BurgerFuel were unchanged at $3.50, and have climbed 119 percent since the start of the year. 

 

 

 

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
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:

Unions gearing up to oppose 'market tests' on Fair Pay Agreements
Mandatory farm plans scorned as 'tick box' exercises
Kiwi dollar firms on weak US retail data, capped by rate-cut expectations
17th October 2019 Morning Report
SkyCity hoses down union claims over potential job losses
OPINION: Fair Payment Agreements and 'swallowing vomit' - the lot of the CTU
MARKET CLOSE: NZ shares gain; Restaurant Brands climbs on upbeat outlook
NZ dollar stalls after Bascand's rate cut comments
Bascand says RBNZ will consider changing bank capital proposals
Affordable electricity key to decarbonisation - Genesis

IRG See IRG research reports