BUSINESS

Fast-food group MTY Food raising dividend 18%, CEO says growth will continue

01/21/2015 07:07 EST | Updated 03/23/2015 05:59 EDT
MONTREAL - The new owner of the Manchu Wok fast food franchise, MTY Food Group (TSX:MTY), is raising its quarterly dividend payment by 18 per cent.

Montreal-based MTY added Manchu Wok, SensAsian and Washabi Grill & Noodle to its extensive list of brands in a $7.9-million cash deal that closed in December.

MTY now has a network of more than 2,800 outlets that generate $1 billion in annual system sales.

Its new dividend rate of 10 cents per share, up from 8.5 cents per share, will be payable Feb. 13.

MTY chief executive Stanley Ma said in a statement Wednesday that the higher payout to shareholders will "in no way affect our growth strategy, including but not limiting to acquisitions and organic growth."

The company's announcement follows a recent report by market research firm NPD Group, which predicts a shift in consumer spending habits could slow growth in the fast-food industry to a crawl.

Traffic at Canada's fast-food restaurants is forecast to increase by less than one per cent annually over the next five years, a "modest rate'' that signals an era of more intense competition, the report said.

Fast-food chains, known within the industry as quick-service restaurants, generate $23 billion in sales in Canada each year, with about 4.3 billion visits from customers.

MTY Group has grown through acquisitions of a wide range of food types, many located in shopping mall food courts across Canada.

It added 133 stores — 114 franchised — when it acquired Manchu Wok, SenseAsian and Wasabi Grill — in a deal that was in Oct. 23 and closed on Dec. 18.