BOSTON PIZZA ROYALTIES INCOME FUND ANNOUNCES 2025 SECOND QUARTER RESULTS AND 4.3% INCREASE TO MONTHLY CASH DISTRIBUTIONS TO UNITHOLDERS
BOSTON PIZZA ROYALTIES INCOME FUND ANNOUNCES 2025 SECOND QUARTER RESULTS AND 4.3% INCREASE TO MONTHLY CASH DISTRIBUTIONS TO UNITHOLDERS |
| [14-August-2025] |
Toronto Stock Exchange: BPF.UN HIGHLIGHTS
VANCOUVER, BC, Aug. 14, 2025 /CNW/ - Boston Pizza Royalties Income Fund (the "Fund") and Boston Pizza International Inc. ("BPI") reported financial results today for the second quarter period from April 1, 2025 to June 30, 2025 (the "Period") and January 1, 2025 to June 30, 2025 ("YTD"). A copy of this press release, the unaudited condensed consolidated interim financial statements and related management's discussion and analysis ("MD&A") of the Fund and BPI are available at www.sedarplus.ca and www.bpincomefund.com. The Fund will host a conference call to discuss the results on August 14, 2025 at 8:30 am Pacific Time (11:30 am Eastern Time). The call can be accessed by dialling 1-833-821-3078 or +1-647-846-2537. A replay will be available until September 14, 2025 by dialling 1-855-669-9658 or +1-412-317-0088 and entering the access code: 3010624 followed by the # sign. The replay will also be available at www.bpincomefund.com. Capitalized terms used in this press release that are not otherwise defined have the meanings ascribed to them in the Fund's MD&A for the Period and YTD. "We are pleased to announce a 4.3% increase in the monthly cash distribution rate to a new rate of $0.120 per Unit, the highest level ever in the history of the Fund", said Marc Guay, Chair of the Board of Trustees. "The strong continued financial performance of the Boston Pizza system, along with the Fund's growing cash balance, have enabled the trustees of the Fund to increase the monthly distribution rate payable to Unitholders. While we are encouraged by recent business performance, given the ongoing economic uncertainty, the trustees of the Fund remain cautious and will continue to closely monitor the Fund's available cash balances and distribution levels, based on our goal of stable and sustainable distribution flow to Unitholders." PERIOD RESULTS SRS, a key driver of distribution growth for Unitholders, was 6.4% for the Period compared to 1.7% reported in the second quarter of 2024. SRS was 5.5% YTD compared to 0.4% reported year-to-date in 2024. SRS for the Period and YTD was principally due to effective promotional initiatives, continued momentum in take-out and delivery, and favourable comparisons to a softer performance in the same period in the prior year. Franchise Sales of Boston Pizza restaurants in the Royalty Pool were $251.8 million for the Period compared to $236.8 million for the second quarter of 2024. The $15.0 million increase in Franchise Sales for the Period was primarily due to positive SRS. Franchise Sales of Boston Pizza restaurants in the Royalty Pool were $483.0 million YTD compared to $458.8 million year-to-date in 2024. The $24.2 million increase in Franchise Sales YTD was primarily due to positive SRS. The Fund's net and comprehensive income was $14.3 million for the Period compared to $7.5 million for the second quarter of 2024. The $6.8 million increase in the Fund's net and comprehensive income for the Period compared to the second quarter of 2024 was primarily due to a $7.9 million increase in fair value gain, a $0.8 million increase in Royalty Income6 and Distribution Income7 and a $0.1 million decrease in interest expense on debt and financing fees, partially offset by a $2.0 million increase in current and deferred income tax expense. The Fund's net and comprehensive income was $20.7 million YTD compared to $15.9 million year-to-date in 2024. The $4.8 million increase in the Fund's net and comprehensive income YTD compared to the same period in 2024 was primarily due to a $4.8 million increase in fair value gain, a $1.3 million increase in Royalty Income and Distribution Income, a $0.1 million decrease in administrative expenses and a $0.1 million decrease in interest expense on debt and financing fees, partially offset by a $1.5 million increase in current and deferred income tax expense. Cash generated from operating activities for the Period was $9.9 million compared to $9.6 million in the second quarter of 2024. The increase of $0.3 million was primarily due to an increase in Royalty Income and Distribution Income of $0.8 million, partially offset by an increase in income taxes paid of $0.4 million and a decrease in changes in working capital of $0.1 million. Cash generated from operating activities YTD was $19.2 million compared to $18.7 million in the same period in 2024. The increase of $0.5 million was primarily due to an increase in Royalty Income and Distribution Income of $1.3 million, partially offset by an increase in income taxes paid of $0.4 million and a decrease in changes in working capital of $0.4 million. The Fund generated Distributable Cash of $8.0 million for the Period compared to $7.5 million for the second quarter of 2024. The increase in Distributable Cash of $0.5 million or 6.1% was primarily due to an increase in cash flows generated from operating activities of $0.3 million, SIFT Tax on Units3 adjustment of $0.2 million and lower interest paid on debt of $0.1 million, partially offset by an increase in Class B Unit entitlement of $0.1 million. The Fund generated Distributable Cash of $15.3 million YTD compared to $14.8 million for the same period in 2024. The increase in Distributable Cash of $0.5 million or 3.1% was primarily due to an increase in cash generated from operating activities of $0.5 million. The Fund generated Distributable Cash per Unit of $0.374 for the Period and $0.718 YTD compared to $0.352 per Unit and $0.696 per Unit, respectively, for the same periods in 2024. The increase in Distributable Cash per Unit of $0.022 or 6.3% for the Period and $0.022 or 3.2% YTD was primarily attributable to the increase in Distributable Cash outlined above. The Fund's Payout Ratio for the Period was 92.3% compared to 96.2% in the second quarter of 2024. The decrease in the Fund's Payout Ratio for the Period was due to Distributable Cash increasing by $0.5 million or 6.1%, partially offset by distributions paid increasing by $0.1 million or 1.8%. The Fund's Payout Ratio YTD was 96.1% compared to 96.5% year-to-date in 2024. The decrease in the Fund's Payout Ratio YTD was due to Distributable Cash increasing by $0.5 million or 3.1%, partially offset by distributions paid increasing by $0.4 million or 2.7%. Payout Ratio is calculated by dividing the amount of distributions paid during the applicable period by the Distributable Cash for that period. The Fund's Payout Ratio fluctuates quarter-to-quarter depending upon the amount of distributions paid during a quarter and the amount of Distributable Cash generated during that quarter. On a trailing 12-month basis, the Fund's Payout Ratio was 99.6% as at June 30, 2025. DISTRIBUTIONS During the Period, the Fund declared distributions on the Units in the aggregate amount of $7.3 million or $0.345 per Unit. During the second quarter of 2024, the Fund declared distributions on the Units in the aggregate amount of $7.2 million or $0.339 per Unit. During the Period, the Fund paid distributions on the Units in the aggregate amount of $7.3 million or $0.345 per Unit. During the second quarter of 2024, the Fund paid distributions on the Units in the aggregate amount of $7.2 million or $0.339 per Unit. The amount of distributions declared and paid during the Period increased by $0.1 million or $0.006 per Unit due to the monthly distribution rate increasing from $0.113 per Unit to $0.115 per Unit commencing with the November 2024 distribution (the "November 2024 Distribution Increase"). YTD, the Fund declared distributions on the Units in the aggregate amount of $12.2 million or $0.575 per Unit. During the same period in 2024, the Fund declared distributions on the Units in the aggregate amount of $12.0 million or $0.565 per Unit. YTD, the Fund paid distributions on the Units in the aggregate amount of $14.7 million or $0.690 per Unit. During the same period in 2024, the Fund paid distributions on the Units in the aggregate amount of $14.3 million or $0.672 per Unit. The amount of distributions declared YTD increased by $0.2 million or $0.010 per Unit due to the November 2024 Distribution Increase. The amount of distributions paid YTD increased by $0.4 million or $0.018 per Unit due to an increase to the monthly distribution rate from $0.107 to $0.113 per Unit commencing with the January 2024 distribution and the November 2024 Distribution Increase. On August 13, 2025, the trustees of the Fund declared a distribution for the period of July 1, 2025 to July 31, 2025 of $0.120 per Unit, which will be payable on August 29, 2025 to Unitholders of record on August 21, 2025. This is an increase of $0.005 per Unit, or 4.3%, from the previous monthly distribution rate of $0.115 per Unit. On an annualized basis, the new monthly distribution rate equates to $1.440 per Unit compared to $1.380 per Unit for the previous monthly distribution rate. Including the July 2025 distribution, which will be paid on August 29, 2025, the Fund will have paid out total distributions of $470.5 million or $28.26 per Unit, which includes 271 monthly distributions and three special distributions. FINANCIAL SUMMARY The tables below set out selected information from the Fund's unaudited condensed consolidated interim financial statements together with other data and should be read in conjunction with the unaudited condensed consolidated interim financial statements and MD&A of the Fund for the three-month and six-month periods ended June 30, 2025 and June 30, 2024, and the Fund's audited annual consolidated financial statements for the year-ended December 31, 2024.
SUMMARY OF QUARTERLY RESULTS
SUMMARY OF QUARTERLY RESULTS (continued)
SHORT-TERM OUTLOOK The success of the Fund, BPI, Boston Pizza Canada Limited Partnership ("BP Canada LP"), and Boston Pizza restaurants, including the amount of Franchise Sales, Royalty Income, Distribution Income, and Distributable Cash available for distribution to Unitholders, depends on both consumer demand and restaurant-level operations. Consumer demand is driven by consumer confidence and discretionary spending, both of which are influenced by macroeconomic factors such as inflation and interest rates, wage growth and unemployment levels, recession risks, competition within the restaurant industry, evolving consumer preferences, changes in taxation and major geopolitical developments, including tariffs. At the restaurant level, success is also impacted by supply chain disruptions, labor availability, rising input costs, and other operational challenges. The heightened trade tensions between Canada and the United States of America, including the imposition of tariffs and counter-tariffs, have created uncertainty and concern for Canada's macroeconomic outlook. The effects of these heightened trade tensions and associated uncertainty have the potential to increase input costs and decrease availability of goods for Boston Pizza restaurants, together with dampening consumer demand, confidence, and discretionary spending, and increasing unemployment rates. These dynamics can contribute to broader economic contractions or recessionary conditions that directly adversely affect the performance of consumer-facing industries like casual dining. However, as noted above, Boston Pizza's supply chain is currently well positioned to weather the volatility caused by trade tensions and threats of tariffs and counter-tariffs as the overwhelming majority of raw materials purchased by Boston Pizza restaurants in the day-to-day operation of their businesses are sourced within Canada and not subject to counter-tariffs. In addition, the trade tensions with the United States of America have resulted in Canadian consumers spending less on travel to the United States of America and more on supporting Canadian brands like Boston Pizza. Conversely, any degradation of consumer demand, confidence or discretionary spending, or increases in unemployment rates and recessionary fears may result in reduced guest visitation, average guest cheque amounts, Franchise Sales, Royalty Income, Distribution Income, the Fund's Distributable Cash available for distribution to Unitholders, and profitability of Boston Pizza restaurants, all of which would increase the risk of Boston Pizza restaurants closing. Despite these obstacles, Boston Pizza restaurants have consistently generated strong Franchise Sales by providing guests with appealing dining options that emphasize quality, value, and convenience, both on-premise and off-premise. BPI, BP Canada LP, and Boston Pizza restaurants have demonstrated adaptability in navigating changing economic conditions and challenging operating environments. BPI's management remains proactive and committed to adjusting its business strategy to effectively address these challenges and sustain positive sales momentum in 2025. The trustees of the Fund will continue to closely monitor the Fund's available cash balances and distribution levels to maintain a stable and sustainable return for the Unitholders. BPI DISCLOSURES The financial information relating to BPI (the "BPI Financial Information") contained in this press release has been derived from the financial statements and management's discussion and analysis of BPI (the "BPI Disclosures"), which have been filed by the Fund on behalf of BPI pursuant to an undertaking dated July 9, 2002 provided by BPI to the various securities commissions in Canada. BPI's senior management prepares the BPI Disclosures and provides them to the Fund for filing. The auditors of BPI report to the sole shareholder of BPI, and not to the trustees or Unitholders of the Fund. The Fund does not own, control, or consolidate BPI and therefore, the Fund's disclosure controls and procedures and its internal controls over financial reporting do not encompass BPI or BPI's internal controls over financial reporting. The BPI Disclosures are the responsibility of BPI and its directors and officers and not the Fund and its trustees and officers. The Fund provides no assurances as to its accuracy or completeness. The Fund disclaims any and all liability for the BPI Financial Information. Forward Looking Information Certain information in this press release constitutes "forward-looking information" that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Fund, Boston Pizza Holdings Trust, Boston Pizza Royalties Limited Partnership, Boston Pizza Holdings Limited Partnership, Boston Pizza Holdings GP Inc., Boston Pizza GP Inc., BPI, BP Canada LP, Boston Pizza Canada Holdings Inc., Boston Pizza Canada Holdings Partnership, Boston Pizza restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Fund or its trustees expect or anticipate will or may occur in the future, including such things as, the expected timing of payment of the distribution to unitholders of the Fund, the success of BPI, BP Canada LP and Boston Pizza restaurants, and the amount of Franchise Sales, Royalty Income, Distribution Income and Distributable Cash available for distribution to Unitholders, depending on both consumer demand and restaurant-level operations, consumer demand being driven by consumer confidence and discretionary spending, both of which are influenced by macroeconomic factors such as inflation and interest rates, wage growth and unemployment levels, recession risks, competition within the restaurant industry, evolving consumer preferences, changes in taxation and major geopolitical developments, including tariffs, restaurant-level success being impacted by supply chain disruptions, labor availability, rising input costs, and other operational challenges, increased input costs and decreased availability of goods for Boston Pizza restaurants due to heightened trade tensions and associated uncertainty, dampening consumer demand, confidence and discretionary spending, and increasing unemployment rates, Boston Pizza's supply chain being well positioned to weather the volatility caused by trade tensions and threats of tariffs and counter-tariffs as an overwhelming majority of raw materials purchased by Boston Pizza restaurants in the day-to-day operation of their businesses are sourced within Canada and not subject to counter-tariffs, trade tensions with the United States of America resulting in Canadian consumers spending less on travel to the United States of America and more on supporting Canadian brands like Boston Pizza, the impact of broader economic contractions or recessionary conditions on consumer-facing industries, any degradation of consumer demand, confidence or discretionary spending, or increases in unemployment rates and recessionary fears resulting in reduced guest visitation, average guest cheque amounts, Franchise Sales, Royalty Income, Distribution Income, the Fund's Distributable Cash available for distribution to Unitholders, and profitability of Boston Pizza Restaurants, and resulting in increased risk of Boston Pizza restaurants closing; BPI's management remaining proactive and committed to adjusting its business strategy to effectively address challenges and sustain positive sales momentum in 2025, the trustees of the Fund remaining cautious and continuing to closely monitor the Fund's available cash balances and distribution levels to maintain a stable and sustainable distribution flow for the Unitholders, and other such matters are forward-looking information. When used in this press release, forward-looking information may include words such as "anticipate", "estimate", "may", "will", "expect", "believe", "plan", "should", "continue" and other similar terminology. The material factors and assumptions used to develop the forward-looking information contained in this press release include the following: the Fund maintaining the same distribution policy, expectations related to future general economic conditions and geopolitical developments, expectations related to guest traffic and average guest cheques, expectations related to the resiliency of the Boston Pizza system, the impact of and response to changing competitive landscapes and guest behaviours, strategies and efforts to strive for profitability of BPI, BP Canada LP and Boston Pizza Restaurants, ability to maintain a stable supply chain, including the ability to continuously source raw materials within Canada, ability to attract and retain qualified employees, key personnel and qualified franchisees and operators, and Boston Pizza restaurants maintaining operational excellence. Risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by the forward-looking information contained herein, relate to (among others): competition, demographic trends, business and economic conditions, interest rates and inflationary pressures, legislation and regulation, reliance on operating revenues, financial reporting and accounting controls, policies and practices, the results of operations and financial condition of BPI, BP Canada LP and the Fund, labour availability, cost and efficiency, extreme weather events, as well as those factors discussed under the heading "Risks and Uncertainties" in the most recent Annual Information Form of the Fund. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this press release. Except as required by law, neither the Fund nor BPI assumes any obligation to update previously disclosed forward-looking information. For a complete list of the risks associated with forward-looking information and the Fund's business, please refer to the "Risks and Uncertainties" and "Note Regarding Forward-Looking Information" sections included in the most recent Annual Information Form of the Fund available at www.sedarplus.ca and www.bpincomefund.com. The trustees of the Fund have approved the contents of this news release.
SOURCE Boston Pizza Royalties Income Fund | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: Toronto:BPF.UN | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
