Restaurant Brands Shows Continued Improvement

Restaurant Brands Shows Continued Improvement In Fourth Quarter

Continued strength in its Pizza Hut business, and the ongoing improvements at KFC and Starbucks, helped contribute to another solid quarter for Restaurant Brands.

Total sales for the company’s four businesses increased 11.3% to $77.7 million for the thirteen weeks ended 28 February, 2005. This result was helped by the addition of an extra ‘leap’ week in the current year quarter when compared with the prior year.

Chief Executive Officer, Vicki Salmon, said the overall strength of the business is indicated by the 1.5% increase in total company same store sales, which is not impacted by this additional week.

“We remain encouraged by the strength of all four of our brands, and in particular the ongoing momentum at Pizza Hut New Zealand,” she said. “This is the second quarter in a row that all four businesses achieved positive sales growth, with both KFC and Starbucks showing another promising performance.

“While still early in the new financial year, we are encouraged by the continuation of this sales momentum in the first few weeks of March.”

KFC

KFC sales in the fourth quarter were driven by the successful Cajun chicken and honey roast burger promotions, as well as the continued growth of the Family Meal category. Total sales for the thirteen week period were $42.5 million, an increase of 8.3% on the prior year. Same store sales for the quarter increased 1.5% over the prior year. …/2 - 2 -

“We are particularly encouraged by the early success of our recently refurbished store in Frankton, Hamilton. Same store sales at this location have shown strong growth since the store reopened in December. The refurbishment programme will be trialed in more KFC stores in the new financial year.”

The company ended the fourth quarter with 87 KFC locations.

Pizza Hut New Zealand

Sales at Pizza Hut New Zealand continued to strengthen as a result of the company’s rapid store expansion, increasing 18.3% to $21.3 million during the fourth quarter. On a same store basis, sales declined by 0.1% due to the expected short-term cannibalization effect of these new stores on existing locations.

“We are monitoring the Pizza Hut business closely as the competitive environment continues to change, but have yet to see any slowdown in the strength of this business which continues to meet our sales targets,” said Salmon.

“We are currently evaluating the national rollout of a new gourmet pizza range, which has achieved promising results during a recent trial in Hamilton.”

During the fourth quarter, the company opened its 101st Pizza Hut location in Westown, New Plymouth.

Starbucks Coffee

“We are pleased with the continuing rebound of the Starbucks business which saw sales grow 7.8% to $6.6 million, or 3.6% on a same store basis, during the fourth quarter. Sales were driven by the warmer weather in the second half of the quarter and the launch of the new Frappucino Lite and Neapolitan beverages.” …/3 - 3 -

The company opened two new stores during the quarter in New Lynn, Auckland, and Napier, bringing the total store count to 39.

Pizza Hut Victoria

Sales at Pizza Hut Victoria increased 10.8% during the fourth quarter to $A6.8 million. On a same store basis, sales increased 4.9%.

“We continue to make improvements in the operation of this business and saw good sales results from its promotions during the fourth quarter,” said Salmon.

Store numbers remained constant at 51 over the quarter.

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