KFC, Taco Bell help triple profits for Restaurant Brands

Restaurant Brands New Zealand, which owns Pizza Hut, KFC, Taco Bell and Carl’s Jr stores across Australia, NZ and the US has tripled its profit in the first half.

Taco Bell is doing a roaring trade as it expands in Australia. Picture: Stewart McLean

Restaurant Brands New Zealand, which operates Taco Bell, KFC, Pizza Hut and Carl’s Jr across Australasia, Hawaii and California, has seen its half-year profits more than triple as it included a new Californian fast-food chain for the first time and saw an upswing in some of its markets from previous poor trading triggered by Covid-19.

It doubled its earnings in Australia where it operates KFC and a burgeoning Taco Bell chain.

The company, which is listed on the ASX and New Zealand stock exchange, reported that its first-half profit raced to $NZ34.5m ($A33.12m) from $NZ11.2m in the first half of 2020, a gain of 208 per cent.

Revenue for the period rose 41 per cent to $NZ540.6m. No dividend was declared, and it last paid a dividend in 2018.

The bumper first half profit includes $NZ77.3m in sales and $NZ12.7m of brand EBITDA from the newly acquired California division which was 69 stores in California (58 KFC and 11 joint KFC/Taco Bell outlets).

Restaurant Brands’ store numbers at the end of the half totalled 350, up 60 on the first half, largely due to the inclusion of 69 stores in California. This is partly offset, however, by the sale of New Zealand Pizza Hut stores to independent franchisees.

In Australia, total sales were $A114.8m, up 21.6 per cent on last year, primarily due to the acquisition of five additional KFC stores in February 2021, the effect of additional store openings, and solid same store sales growth, up 5.2 per cent.

It booked earnings in Australia of $NZ16.3m, up 37.9 per cent and an operating profit of $NZ5.6m, up 106.3 per cent.

“Australian operations continue to face challenges with Covid-19 lockdowns,” the company said.

“These restrictions have adversely impacted dine-in sales across the network and many of the mall and in-line city store sales are operating below pre-Covid-19 levels. During the initial Covid-19 lockdown restrictions the Australian business successfully expanded home delivery services and generated further growth in KFC mobile ordering.”

It said its Australia business had partially recovered from mall store closures and dine in restrictions. The restaurant owner is also rolling out Taco Bell in Australia, not to be confused with rival Taco Bill, which it said is gaining momentum in the market.

Restaurant Brands bought five KFC in North Sydney early in the half year and one new Taco Bell opened in Green Square, Sydney. This store produced record opening day transactions this year for the entire Asia Pacific region, the company said.

Four more new Taco Bells are scheduled to open by the end of the year. Two Taco Bell and three KFC stores also opened in the second half.

Originally published as KFC, Taco Bell help triple profits for Restaurant Brands