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Canada Newswire  02/06/2014 11:41 AM ET
A&W Revenue Royalties Income Fund Announces Fourth Quarter 2013 Results

A&W POSTS STRONG FOURTH QUARTER

  • Same store sales up 3.1% for the quarter
  • 14 new A&W restaurants opened during the quarter
  • Royalty income increased 7.6% for the quarter

TRADING SYMBOL:  The Toronto Stock Exchange - AW.UN

VANCOUVER, Feb. 6, 2014 /CNW/ - A&W Revenue Royalties Income Fund (the Fund) and A&W Food Services of Canada Inc. (A&W Food Services) reported today results for the fourth quarter and year ended December 31, 2013. The Fund will hold a conference call to discuss the results on Thursday, February 6, 2014 at 1:00 p.m. Pacific Time (4:00 p.m. Eastern Time).  The call can be accessed by dialling toll-free 1-800-814-4859 or (416) 644-3414.  A replay will be available until February 20, 2014, by dialling toll-free 1-877-289-8525 or (416) 640-1917 Passcode: 4662721#.

A&W restaurants generated strong results in the fourth quarter on all key measures.  Same store sales growth for the fourth quarter of 2013 was +3.1%.  This strong performance occurred despite an ice storm that had many homes and businesses without power for some days during the peak Christmas shopping season in central and eastern Canada.  On an annual basis, same store sales growth for 2013 was +0.4% as compared to 2012, erasing the impact of a soft first quarter which was impacted by poor weather.  Total sales for all A&W restaurants in the Royalty Pool increased by 7.6% for the quarter.

"We are pleased to report strong same store sales growth in the fourth quarter and positive same store sales growth for the year.  The launch of our new beef with no added hormones or steroids has been very positively received by our guests," said Paul Hollands, President and CEO of A&W Food Services of Canada Inc. (A&W Food Services).  "We are focussed on our strategy to reposition and differentiate the A&W brand as a "better burger" quick service restaurant, and are pleased with the progress we are making."

Distributable cash per unit increased by 3.7 cents to 44.4 cents per unit in the fourth quarter of 2013 and increased by 3.7 cents to $1.349 per unit in 2013.

A&W Food Services' strategy also includes accelerating the pace of growth of new restaurants.  Thirty seven new A&W restaurants were opened across the country in 2013 and 26 of these are in Ontario and Quebec, important growth markets for A&W.  An important milestone was achieved in December with the opening of the 800th A&W restaurant in Canada.

On January 5, 2014, the annual adjustment to the Fund's Royalty Pool took place.  On that date, the number of A&W restaurants for which royalties are paid to the Fund increased by 38 new restaurants that opened between October 2012 and September 2013 less eight restaurants that permanently closed during this period. The addition of these 30 net new A&W restaurants brings the total number of A&W restaurants in the Royalty Pool to 790.

"We are proud that this is the largest annual increase to the Royalty Pool since the inception of the Fund in 2002.  Since 2002, the number of A&W restaurants for which royalties are paid to the Fund has increased by 205 restaurants, from 585 to 790" said Hollands.

Total sales reported by A&W restaurants in the Royalty Pool increased by 7.6% to $278.1 million in the fourth quarter of 2013 compared to $258.4 million in the fourth quarter of 2012.  2013 sales increased by 4.0% to $856.4 million compared to $823.3 million in 2012.  Royalty income was $8,343,000 for the quarter compared to $7,752,000 for the same quarter of 2012.  2013 royalty income was $25,691,000 compared to $24,700,000 for 2012.  The increase in sales and royalty income resulted from the increase in the number of A&W restaurants in the Royalty Pool from 737 to 760 effective January 5, 2013 and the same store sales growth.

 

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