AUCKLAND, N.Z.—Pizza Huts in Australia and New Zealand continue to struggle and are hurting the profits of multi-concept franchisee Restaurant Brands New Zealand.

According to The Age, despite forecasts that the 51 Victoria-based Pizza Hut outlets would be profitable in 2003, the company reported on March 31 that the division had lost NZ $606,000 (U.S. $398,000) in the 12 months to February, compared with a loss of NZ $618,000 (U.S. $406,000) the year before.

The company, which also operates KFC and Starbucks chains in New Zealand, posted increased sales of NZ $304.6 million (U.S. $200.1 million), marking its second successive year of falling profits.

Restaurant Brands' chief executive Vicki Salmon said the company's Pizza Hut units in New Zealand showed improved sales and earnings over 2002, and that she was encouraged by the performance of Pizza Huts in the Australian state of Victoria.

The company has invested heavily in revitalizing its Australian outlets, but though sales at its Victoria units improved nearly 19 percent to NZ $29 million (U.S. $19 million) last year, the group isn't profitable.

"We believe we are now positioned for growth in the current year and will be focusing our efforts on operational performance and reintroducing the brand to our customers," Salmon said.

Read related Pizza Hut articles by clicking here.

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