New Zealand Pizza Hut sales boost Restaurant Brands' fiscal ''02

April 7, 2003

AUCKLAND, New Zealand -- Restaurant Brands reported that strong growth in its Pizza Hut businesses in New Zealand helped the company post a positive second half of fiscal 2002.

According to, for the full year ended February, the operator of KFC, Pizza Hut and Starbucks Coffee franchises in New Zealand and Australia reported a profit of $11.11 million (U.S. $6.6 million) down 12 percent compared to last year's $12.5 million (U.S. $7.5 million) profit.

The company's chief executive, Jim Collier, said the performance of Pizza Hut in New Zealand in the second half signaled what the group can do in its struggling Pizza Hut operations in Victoria, Australia.

The New Zealand stores, which represent 25 percent of the group's sales, posted record sales in the second half of fiscal 2002 with total sales of $34.5 million (U.S. $20.6 million), up 6.1 percent on the first six months of the year. Same-store sales increased 5.7 percent for the second half of the year and 6.1 percent for the full year.

Collier said the performance marked the 11th straight quarter of sales growth for the New Zealand stores since it expanded there in 2000. (See "Restaurant Brands NZ scoops up 51 Pizza Huts.")

"The transformation of Pizza Hut via the acquisition of Eagle Boys (stores in New Zealand) in 2000 continues to exceed directors' expectations," Collier said. Earnings before interest, taxes and amortization (EBITDA) grew "more than two and a half times, or $7.1 million (U.S. $4.2 million), since the acquisition."

Collier says the business is well prepared to use aggressive strategies to rebuff any new competitor.

The same sort of performance appears to be driving business in the state of Victoria.

Restaurant Brands bought the bankrupt Victoria Pizza Hut business in April 2002 for $11.8 million (U.S.$) at what it says was below replacement cost from its receivers.

With the help of aggressive marketing and promotion, it now believes those stores can turn a profit by 2004 or 2005.

EBITDA and cash flow on those businesses achieved breakeven by year's end, which the company said was right on forecast. Sales for the year were $24.4 million (U.S. $14.6 million).

Topics: Public Companies

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