Boston Pizza Royalties Income Fund (BPF.UN) Q2 2024 earnings summary

Executive summary

• Franchise sales in the royalty pool reached CAD 236.8 million for Q2 2024, up 1.3% year-over-year, and CAD 458.8 million year to date, up 0.2% year-over-year.

• Same Restaurant Sales (SRS) increased 1.7% for the quarter and 0.4% year to date, mainly due to menu price increases.

• Net and comprehensive income for Q2 was CAD 7.5 million, down from CAD 12.8 million in Q2 2023, mainly due to a decrease in fair value gain.

• Distributable cash per unit for Q2 was CAD 0.352, down 3.6% from Q2 2023.

• Guest traffic improved in Q2, supported by sports promotions, menu innovation, and favorable NHL playoff activity.

Financial highlights

• Royalty income was CAD 9.5 million for Q2 and CAD 18.4 million year to date, both slightly higher than the prior year.

• Total revenue was CAD 12.6 million for Q2 2024, up from CAD 12.4 million in Q2 2023.

• Distributable cash for Q2 was CAD 7.5 million, down 4.5% year-over-year.

• Basic EPS was CAD 0.35 for Q2 2024, compared to CAD 0.59 in Q2 2023.

• Cash flows from operating activities for Q2 were CAD 9.6 million, slightly down from CAD 9.8 million in Q2 2023.

Outlook and guidance

• Management remains vigilant and cautiously optimistic amid high interest rates, inflation, and rising input costs, focusing on strategies to maintain positive sales.

• Focus remains on adapting to economic headwinds, leveraging marketing and menu strategies, and maintaining positive sales.

• Upcoming initiatives include a football-themed menu and the return of the Kids Card promotion in Q3.

• Trustees approved a cash distribution of CAD 0.113 per unit for July 2024, payable in August.

• Trustees will closely monitor cash balances amid ongoing uncertainty.