The owner of the Red Rooster and Chicken Treat fast food chains has reported its third successiuve annual loss, and also revealed the price it paid to acquire 40 CHOOKS stores.
The owner of the Red Rooster and Chicken Treat fast food chains has reported its third successive annual loss, and also revealed the price it paid to acquire 40 CHOOKS stores.
Balcatta-based Quick Service Restaurant Holdings Pty Ltd has reported a net loss of $4.5 million for the year to 30 June 2010.
That followed losses of $14.6 million and $6.1 million in the two prior years.
However the company has told WA Business News that "performance across the group was in line with projections for the year".
"The business has experienced significant change over the past twelve months which places us in a strong position to achieve continued improvement over the coming financial year," it said in a statement.
The major change underway at the goup, which has about 600 stores across the Red Rooster, Chicken Treat, Oporto and CHOOKS brands, is the gradual conversion from company-owned stores to franchised stores.
Currently, 72 per cent of the group's stores are under franchise operation, a significant turnaround from 2007 when the group had a majority (78 per cent) of corporate store operations.
As a consequence, sales revenue was down from $279 million to $230 million, while franchise revenue was up from $19.9 million to $24.9 million.
The company said a positive trend was the 18.1 per cent increase in "normalised EBITDA" (earnings before interest, tax, depreciation and amortiosation) to $33.6 million".
The difference between normalised EBITDA and net profit reflects several factors, including: interest expense ($24.3 million), depreciation ($6.4 million) and the loss from company-owned Red Rooster stores in South Australia ($4.9 million), which the group is seeking to sell.
The group also had closed store provision costs ($1.9 million) and provided short term lease support for a limited number of recently converted franchise stores ($1.0 million).
QSRH is majority owned by Sydney-based investor Quadrant Private Equity and its management team, led by directors Frank Romano and Mark Lindsay.
The company's annual accounts, lodged with the Austraian Securities and Investments Commission, also reveal that it plans to pay a total of $6.4 million for the Chooks Fresh & Tassty chain in WA.
This comprises $4.8 million in October and a further conditional payment of $1.5 million due in July 2011.
