Boston Pizza Royalties Income Fund (BPF.UN) Q3 2024 earnings summary

Executive summary

• Franchise sales in the royalty pool were CAD 238.6 million for Q3 and CAD 697.4 million year-to-date, down 0.6% and 0.1% year-over-year, reflecting macroeconomic pressures.

• Same restaurant sales declined 0.6% in Q3 but were up 0.1% year-to-date, with guest engagement supported by effective marketing campaigns.

• Net and comprehensive income for Q3 2024 was CAD 9.4 million, up from CAD 4.9 million in Q3 2023, mainly due to higher fair value gains.

• Distributable cash for Q3 2024 was CAD 8.1 million (down 1.8% year-over-year), and distributable cash per unit was CAD 0.3814 (down 1.6%).

• No new restaurants opened in Q3; year-to-date, two opened, four closed, and 18 renovated.

Financial highlights

• Royalty income was CAD 9.5 million for Q3 and CAD 27.9 million year-to-date, nearly flat year-over-year.

• Distribution income was CAD 3.1 million for Q3 and CAD 9.2 million year-to-date, also nearly unchanged.

• Cash flows from operating activities were CAD 10.0 million in Q3 2024, up 3.4% year-over-year; year-to-date cash flows were CAD 28.7 million, up 0.2%.

• Distributions declared in Q3 2024 totaled CAD 7.2 million (CAD 0.339 per unit), up from CAD 6.8 million (CAD 0.321 per unit) in Q3 2023.

• Total assets as of September 30, 2024 were CAD 424.9 million; total liabilities were CAD 140.0 million.

Outlook and guidance

• Q4 initiatives include a CAD 15 lunch menu, Hockey Night in Canada partnership, and a holiday campaign with new menu items and gift card incentives.

• Management remains focused on long-term growth and guest experience, but maintains a cautious outlook due to inflation, high interest rates, supply chain issues, and labor shortages.

• Four new restaurant openings expected for 2024, with two under construction; no specific 2025 guidance provided.

• Strategies include menu mix changes, price increases, and targeted promotions to drive guest traffic.

• Trustees will continue to monitor cash balances amid economic uncertainty.