BRITISH COLUMBIA

A&W fund says new locations have boosted sales, older stores are recovering

10/16/2012 01:45 EDT | Updated 12/16/2012 05:12 EST
VANCOUVER - A&W Revenue Royalties Income Fund's pool of burger restaurants has begun to show signs of improvement, although sales of older locations continued to decline compared with a year earlier — only at a slower pace.

Paul Hollands, president and CEO of A&W Food Services of Canada Inc., said the fund's operating company has responded to the current economic climate since the previous financial report.

"We are committed to growing the business long-term and building market share, despite the unsteady economy. In September we launched a new value-priced line of burgers called "Buddy Burgers" to significantly enhance our appeal to more price-conscious customers," Hollands said.

The income fund (TSX:AW) receives a percentage of revenues from A&W locations in its restaurant pool. The fund declared 35.1 cents per unit of distributions in the quarter ended Sept. 9, the same as a year before.

Hollands said 29 new restaurants will be added, and six will be closed, when the royalty pool goes through its annual adjustment in January.

Same-store sales growth — a measure of how older stores performed and a key metric for the fund's investors — was negative 0.2 per cent in the third quarter, an improvement on the decline of 3.0 per cent in the second quarter.

Total sales at the operating level, including from locations added since last year rose 3.7 per cent to $202.1 million. Royalty income at the fund was $6 million, compared with $5.8 million for the same quarter of 2011.