20 Oct 2010

Restaurant Brands lifts half year profit

12:50 pm on 20 October 2010

Restaurant Brands continues to defy the economic downturn, with the company reporting strong sales at KFC and improved profitability at its Pizza Hut and Starbucks stores.

The listed fast food operator has reported a 50% increase in half-year profits to just under $14 million for the six months to 13 September.

Sales rose $177 million, largely thanks to strong growth across its 87 KFC stories.

Restaurant Brands says sales at KFC increased 8% in the first half of its financial year, which helped offset declining sales at the company's other chains Pizza Hut and Starbucks.

The fall in sales at those two brands were largely due to the closure of poor performing stores, which actually improved their overall profitability improved by nearly half.

KFC's profitability improved by 20% during the period due to a new chicken contract, the roll out of new products and promotions, and the refurbishment and opening of new stores.

Restaurant Brands says it will continue to sell or close more Pizza Hut stores, and open more KFC outlets over the coming year.

Despite a strong performance so far this year, the company says consumers still remain cautious and impact of the recent GST rise will start to be felt in the second half.

It expects to make a full year profit of between $24 million and $26 million this year.