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Restaurant Brands profit edges higher

NZ NewswireNZ Newswire 13/04/2016 Jonathan Underhill

Annual profit for Restaurant Brands has grown at it slowest pace in three years but the fast-food company said next year's earnings could rise as much as 25 per cent.

Profit edged up $24.1 million in the 52 weeks ended February 29, from $23.8 million in the prior year, which covered 53 weeks, it said.

It already reported annual sales on March 10, which rose 7.8 per cent to $387.6m led by KFC, Carl's Jr. and Starbucks, while revenue from Pizza Hut fell.

The company carried out a major expansion in March, making its first foray across the Tasman by buying QSR Pty, the biggest KFC franchisee in NSW, with 42 stores, for $A82.4m ($NZ91.5m).

Its shares have soared on the prospects of Australian earnings growth from KFC, its most successful New Zealand brand.

It announced a 10.5 per cent gain in dividend to 21 cents a share and said barring any unexpected hiccups, profit in the current year is forecast to be $28m-$30m.

"Restaurant Brands continues to enjoy strong cash flows and dividend levels will continue to increase as the company continues to enhance its profit performance," it said.

"The new Australian acquisition is expected to contribute to increased profitability from late in the first quarter, but there will be some further one-off transaction costs."

QSR is expected to contribute $A100m in annual sales and $A15m in store earnings before interest, tax, depreciation and amortisation.

The shares reached a record $5.19 on Wednesday and closed at $5.10 and the stock has gained about 15 per cent this year.

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