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TORONTO, ONTARIO -- (Marketwire) -- 02/14/13 -- Attention Business Editors:
Pizza Pizza Royalty Corp. (the "Company") (TSX: PZA), which owns the Pizza Pizza and Pizza 73 Rights and Marks, released financial results today for the fourth quarter and year ended December 31, 2012.
Full Year 2012 highlights included:
-- Same store sales increased 2.7%-- Working capital reserve increased $1.8 million to $4.6 million-- Payout ratio was 90%-- Monthly distribution increased 2.7% in May 2012-- Effective tax rate was 19.21%-- Converted to a corporation effective December 31, 2012
Fourth Quarter highlights included:
-- Same store sales increased 3.2%-- Working capital reserve increased $635,000-- Payout ratio was 86%
SALES
In the fourth quarter, System Sales reported by Royalty Pool restaurants increased 3% to $127.3 million from $123.6 million in the 2011 comparable quarter. For the year, System Sales increased 2.9% to $481.5 million from $467.9 million in the prior year.
The Company's two market-leading brands generated positive same store sales growth ("SSSG") of 3.2% in the fourth quarter and 2.7% for the full year over the comparable periods last year. SSSG is the key driver of shareholder yield growth.
---------------------------------------------------------------------------- Fourth Quarter (%) Full Year (%)----------------------------------------------------------------------------Same store sales growth 2012 2011 2012 2011----------------------------------------------------------------------------Pizza Pizza 2.7 1.1 2.5 2.4----------------------------------------------------------------------------Pizza 73 5.7 3.0 3.4 3.9----------------------------------------------------------------------------Combined 3.2 1.4 2.7 2.6----------------------------------------------------------------------------
For the fourth quarter and year, restaurant sales at both brands benefited from an increase in the average customer cheque and an increase in customer traffic counts.
Paul Goddard, CEO, Pizza Pizza Limited, said: "Throughout 2012, we focused our efforts on major initiatives that provided consistent sales growth. In addition to improving upon our quality menu offerings, we made excellent progress in the areas of consumer satisfaction and technological advances. In this competitive and challenging environment our convenience factor is a major advantage in keeping our brands a step ahead of the competition, as shown by our latest "iPad" ordering app."
MONTHLY DISTRIBUTIONS AND WORKING CAPITAL RESERVE
For tax purposes in 2012, the distributions by the Company's predecessor, Pizza Pizza Royalty Income Fund (the "Fund"), are considered 32.5% return of capital and 67.5% taxable eligible dividend. Beginning in January 2013, the Company's dividend will be considered a taxable eligible dividend without a return of capital component.
