Lockdown lifts Restaurant Brands New Zealand’s Taco Bell and KFC stores

A number of fast food chains have reported upbeat earnings and sales through the pandemic.

A number of fast food chains have reported upbeat earnings and sales through the pandemic

Restaurant Brands New Zealand, the billion dollar fast food operator that operates Taco Bell and KFC stores across Australasia, Hawaii and California reaped the rewards of people stuck in lockdowns and opting for a tasty treat, with it posting a 2.8 per cent lift in full-year net profit to $30.9m as sales rose 26.5 per cent to $892.4m.

A number of fast food chains have reported upbeat earnings and sales through the pandemic, such as McDonald’s Australia and Collins Foods, the ASX-listed group that also owns a stable of KFCs in Australia, as online delivery also booms.

Restaurant Brands, which is listed both in Australia and on the New Zealand stockmarket, said on Thursday that Covid-19 created considerable disruption across all four operating divisions, and was particularly testing for the New Zealand operations with the entire business being closed for nearly five weeks in March-April 2020.

The Australian, Hawaiian and Californian operations, while adversely affected, had generally continued to trade through the crisis and consequently have sustained much less of an adverse profit impact, the company said.

Following a change of its reporting dates, the latest 2021 results are for 52 weeks (full year) versus 44 weeks for the December 2019 period previously reported.

Restaurant Brands said like-for-like store sales were up approximately 7 per cent for the year, primarily because of the inclusion of $51.9m of sales for the four months following the acquisition of 69 stores in California (58 KFC and 11 joint KFC/Taco Bell outlets).

In New Zealand sales were up 11.7 per cent to $410.4m and earnings up 11.8 per cent to $75.9m, in Australia sales were up 26.3 per cent to $202.4m and earnings up 18.4 per cent to $27.7m. Its Hawaiian operations saw sales rise 25.8 per cent to $US139.3m and earnings up 43.4 per cent to $US21.5m, and in California sales were $US35.6m and earnings at $US5.8m.

As part of the Covid-19 response, the New Zealand business received a government wage subsidy of $22m, which was fully passed on to all staff.

At its Australian arm, Restaurant Brands said an investment in KFC store upgrades continued, together with new store openings. Two new drive-through Taco Bell sites and four additional KFC stores opened during the year, bringing total store numbers to 70.

With the extended closure of the dine-in facilities due to Covid-19, the home delivery service was expanded into NSW regional locations, which generated further growth in the KFC delivery channel.

The company said this helped maintain same store sales growth over the past 12 months, but added to the cost pressures of the business which, together with initial Taco Bell set up costs, was reflected in an EBITDA slide as a percentage of sales to 13.7 per cent.

No dividend was declared.