Restaurant Brands releases FY23 full year result

• Total Group Store sales hit a record high of $1,322 million, an increase of $83 million (6.7%) on FY22, with all four operating divisions showing growth in terms of $NZ.

• Net Profit After Tax (NPAT) was $16.3 million (in the upper range of market guidance), NPAT was down $15.8 million on the prior year due to inflationary pressures on ingredient and wages, and underperformance in California and New Zealand, which were not fully mitigated by revenue growth.

• Cost pressures continue. The implementation of a strategic programme of price increases and cost control measures delivered margin gains in the second half of FY23, and the Group is starting to see steady signs of recovery in margins.

• Group Store EBITDA* for the period was $178.4 million, down 0.9% on the previous year.

• At present, Directors have not deemed it appropriate to declare a dividend payment.

Restaurant Brands New Zealand Limited and its subsidiaries (together the Group) delivered record total store sales of $1,322 million in FY23, an increase of $83 million (6.7%) on FY22. All four regions produced positive sales growth over the year (in terms of $NZ).

Same store sales were also positive in all regions with the exception of California, where consumer spending continues to be adversely impacted by inflation.

Inflation pressures eased in most of the regions in the second half of FY23. Inflation remains elevated and above Central Bank targets, impacting the Group’s margins.

NPAT was $16.3 million (13.04 cents per share). The decreased profit versus FY22 is primarily a result of continuing inflationary pressures, higher financing costs impacting the New Zealand region in the first half of 2023 (1H 2023), and decreased performance in the California business.

Store EBITDA was $178.4 million, down $1.6 million or -0.9% on the prior year. The decrease in Store EBITDA is due to tighter margins in 1H 2023. EBITDA margins (as a % of sales) reduced from 14.5% to 13.5% due to continued cost pressures across all divisions, particularly in 1H 2023.

Restaurant Brands New Zealand Limited Chairman, José Parés, says that while inflationary pressures continue to impact profit, sales have remained strong, with growth delivered across all four operating regions in NZ dollars.

“All divisions experienced ingredient inflation and minimum wage increases, with New Zealand stores impacted the most. This placed significant pressure on margins, particularly in the first half of FY23."

“The implementation of a strategic programme of price increases and cost control measures to relieve margin pressures proved to be successful with margin gains in the second half of FY23.”

“Our pricing strategy carefully balances the need to mitigate inflation while protecting sales volume and brand health. The delivery of record revenue growth in FY23 demonstrates this strategy is working.”

Parés says that despite FY23 being a challenging year, the Group remains well positioned to deliver on its strategy to provide continued long-term shareholder value.



Supplementary table – summary data from the Directors’ Report
$NZm Dec-23 Dec-22 Change ($) Change (%)
Total Group Store sales 1,322.2 1,239.0 +83.2 +6.7
Group Net Profit After Tax (NPAT)** 16.3 32.1 -15.8 -49.3
Group Store EBITDA* 178.4 180.0 -1.6 -0.9

* EBITDA is earnings before interest, tax, depreciation and amortisation. The Store EBITDA amounts referred to throughout this report are before General and Administration (G&A) expenses, NZ IFRS 16 and Other Items. Store EBITDA is a non-GAAP financial measure and is not in accordance with NZ IFRS.

** NPAT change may not aggregate to the total due to rounding


ENDS.

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Announcement PDF