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Underlying Restaurant Brands Performing Well
MONCTON, NB, Sept. 30 /CNW/ - PDM Royalties Income Fund ("PDM" or the "Fund") (TSX: PDM.UN), which indirectly owns the Pizza Delight(R), Mikes(R), Scores(R) Rotisserie and Ribs, and Baton Rouge(R) restaurant brands, announced today that it intends to purchase 50,000 to 100,000 units for cancellation under a previously approved buyback program..
All of PDM's brands are performing at or above expectations. As a result, the Fund is in a strong financial position and has generated surplus cash. Given recent market conditions and the current high yield of the Fund, Trustees believe that the units are undervalued, and that continuing the buyback program is a prudent investment for a part of the Fund's cash on hand.
In December, 2007 PDM filed a notice with the Toronto Stock Exchange ("TSX") and received its approval to purchase, through the facilities of the TSX for cancellation, up to 350,000 of its units ("Units"), representing approximately 5% of the issued and outstanding Units. The Trustees and senior management of the Fund are of the opinion that, from time to time, the purchase of Units at the prevailing market price is a worthwhile investment and in the best interests of the Fund and its unitholders. Prior to today's announcement, the Fund had purchased 101,214 PDM units under its 350,000 unit allotment.
In accordance with the requirements of the TSX, the Fund will not repurchase more than 2,674 Units per day unless the block purchase exception is relied upon.
About the Fund
The Fund is a limited purpose open-ended trust established under the laws of Ontario. The Fund makes monthly distributions of its available cash to holders of units. The Fund indirectly owns the trade marks and intellectual property for the Pizza Delight(R) and Mikes(R) brands and has licensed them to Imvescor Inc. ("Imvescor") and Imvescor Restaurants Inc., respectively, in consideration for a royalty equal to 4% of system sales generated by Pizza Delight(R) and Mikes(R) restaurants. The Fund also indirectly owns the trade marks and intellectual property for the Scores(R) Rotisserie and Ribs and Baton Rouge(R) brands and has licensed each to Mikes in consideration for a royalty equal to 6% of system sales generated by Scores(R) Rotisserie and Ribs and Baton Rouge(R) 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) Rotisserie and Ribs and Baton Rouge(R). Pizza Delight(R) restaurants operate primarily in Atlantic Canada, where they dominate the family/mid-scale segment. Mikes(R) restaurants operate primarily in Quebec in the casual dining segment and the take-out and delivery segments. Scores(R) Rotisserie and Ribs restaurants operate primarily in Quebec in the family dining segment and the take-out and delivery segments. Baton Rouge(R) restaurants operate in the casual dining segment in Ontario and Quebec.