Fast food operator Restaurant Brands won’t pay a final dividend for FY19. Instead, it will retain the cash to fund its growth plans.
The company said it is facing substantial demands on its capital resources, as its growth strategy begins to accelerate.
“The directors believe that it is in the best interests of the group to retain cash in order to provide funding flexibility,” Restaurant Brands said in a press release.
“They have therefore resolved to not pay a final dividend for the FY19 year.”
Part of the company’s growth strategy is to roll out 60 Taco Bell stores in Australia and New Zealand over the next five years, together with accelerated levels of KFC store builds in both markets.
The first set of Taco Bell stores are expected to open during the 2019 calendar year.
The fast food retailer said it will refurbish 50 to 60 KFC stores, build and rebuild 10 to 12 Taco Bells in Hawaii, buy 10 to 40 KFC stores in Australia and pursue two to three KFC or Taco Bell acquisitions in the US mainland.
Restaurant Brands has posted a 3.3 per cent lift in annual earnings to $42.2 million in the 52 weeks ending February 25, up from $40.8 million in the previous corresponding period. That’s just shy of the $43-45 million guidance at last year’s annual meeting.
It posted a 5.4 per cent increase in combined brand EBITDA of $129.2 million, primarily driven by the full-year impact of the Australian stores acquired during FY18.
The retailer saw a 0.8 per cent increase in net profit to $35.7 million, including $9 million of non-trading costs, a $3.5 million impairment charge on its Carl’s Jr chain, a $3.5 million charge for underpayment of holiday pay, and $1.6 million of worker compensation in Hawaii.
A gain on the sale of the Starbucks Coffee chain offset those costs. Restaurant Brands’ disposed of its Starbucks Coffee businesses in October last year as part of a brand portfolio rationalisation.
The company said the consistent performance of its existing store network, benefit of new-store builds and a stable economic environment will help deliver a 10 10 per cent increase in NPAT for the new financial year.
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