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Australian investor in Restaurant Brands

NZN 22/07/2016 Fiona Rotherham

Australian businessman Stephen Copulos said getting shares in listed Restaurant Brands, in which he is now the second-largest shareholder, was a key part of the fast food brands company acquiring his family's KFC franchise in New South Wales.

Restaurant Brands, which operates fast food chains KFC, Pizza Hut, Starbucks and Carls Jr in New Zealand, paid $A82.4 million ($NZ88.13 million) in April to purchase QSR, the largest KFC franchisee in New South Wales with 42 stores.

It is the company's first foray into Australia since its disastrous attempt to expand through Pizza Hut in the state of Victoria which it exited nearly a decade ago.

The acquisition was settled by issuing Mr Copulos's family interests five million shares at market price and the rest in cash, which Restaurant Brands funded through debt.

Mr Copulos, who was one of three directors re-elected to the Restaurant Brands board on Friday at the annual meeting in Auckland, has since acquired a further two and half million shares.

Mr Copulos said he had no ambition to further boost his stake at this stage and wouldn't speculate on any ambition to become the largest shareholder in the company.

"I'm very happy with the investment I've made and the position the company is in," he said.

"I've been involved with the fried chicken business for a number of years - it's in my blood."

His family interests have a wide range of business investments from fast food and hospitality to manufacturing, property development and mining spread across a number of countries. This is its first investment in New Zealand.

The Restaurant Brands board on Friday reiterated its forecast net profit after tax for the current financial year at $28 to $30m.

The Australian business was making $A100m in revenue and $A15m in profit when acquired, but chief executive Russel Creedy said the current year's results would be impacted by the acquisition although it was already earnings accretive.

KFC is the big money-spinner for the company, accounting for $282.5m of its total $387.6m sales in the year ending February 2016 and for $57.2m of total $67m earnings before interest, tax, depreciation and amortisation.

Chairman Ted van Arkel said KFC margins are expected to be maintained this financial year with sales momentum continuing, though it will be a "little more measured".

Mr Creedy said the only way to achieve the target set by the board of $1b in turnover within five years was to expand into Australia but he was keen to avoid the mistakes made with the Pizza Hut foray where under-performing stores, including ones in receivership, were bought which they then struggled to turn around.

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