MONCTON, NB, May 15 /CNW/ - PDM ROYALTIES INCOME FUND (TSX: PDM.UN, PDM.DB) (the "Fund") reported today its financial results for the first quarter, 2008.
During the first quarter of 2008 the Fund earned revenues of $3.5 million, consistent with 2007 earnings. Sales for the royalty pooled restaurants grew to $96.7 million from $89.1 million as a result of the vend-in of new Scores and Baton Rouge restaurants on January 1, 2008. A harsh winter and record snowfalls, especially in Quebec and parts of Atlantic Canada, had an obvious negative effect on restaurants sales in these regions where the brands have a larger presence. This contributed to a same store sales decrease of 1.4% compared to a positive 1.1% growth in 2007.
Management of each of the brands are confident there will be a definite improvement in same store sales due to the various marketing programs planned for the year and the positive momentum gained from concept updates already underway.
With the structure of the PDM Royalties Income Fund, monthly distributions of $0.12 per unit will easily continue despite the mild slowdown experienced during the first quarter of 2008. The Fund's cash position increased by $265,000 during the quarter, net of a reserve for the proportionate share of the debenture interest payment due June 30, 2008.
Growth from new restaurants is progressing well with two new Scores and two new Baton Rouge restaurants opened to date in 2008. Concept updates are also on target with three Mikes, three Pizza Delights, and one Baton Rouge restaurant undergoing renovations to date this year.
The new Oven Fresh Kitchen concept at Pizza Delight and the Trattoria concept at Mikes continue to attract customers and positively impact sales. An additional five to seven renovations are expected to be completed in 2008 for each of these brands.
Complete financial statements are available at www.sedar.com
About the Fund
The Fund is a limited purpose open-ended trust established under the laws of Ontario. The Fund will make monthly distributions of its available cash to holders of units. The Fund indirectly owns the trade marks and intellectual property for the Pizza Delight, Mikes, Scores, and Baton Rouge brands and has licensed them to Imvescor in consideration for a royalty equal to 4% of system sales for Pizza Delight and Mikes restaurants, and a royalty rate of 6% for Scores and Baton Rouge restaurants.
Imvescor is a privately owned corporation, headquartered in Moncton, New Brunswick. It operates franchised and corporate restaurants under the brand names Pizza Delight(R), Mikes(R), Scores(R), and Baton Rouge(R) restaurants. Pizza Delight(R) operates primarily in Atlantic Canada, where it dominates the family/mid-scale segment. Mikes(R) and Scores(R) restaurants operate primarily in Quebec in the family and casual dining segments and the take-out and delivery segments. Baton Rouge(R) operates in the Province of Quebec and Ontario in the casual dining segment.
Certain information regarding the Fund contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Fund believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Fund cautions that actual performance will be affected by a number of factors, many of which are beyond the Fund's control, and that future events and results may vary substantially from what the Fund currently foresees. Discussion of the various factors that may affect future results is contained in the annual information form of the Fund dated March 28, 2008 which is available at www.sedar.com. The Fund's forward-looking statements are expressly qualified in their entirety by this cautionary statement.