TMX group

BURLINGTON, ON, June 21 /CNW/ - SIR Royalty Income Fund (TSX: SRV.UN)
("the Fund") today announced that SIR Corp. ("SIR"), the operating entity from
which the Fund derives distribution income and interest income, has filed its
fiscal 2006 third quarter financial results for the 12 and 36-week periods
ended May 7, 2006. The interim filings, which include SIR's unaudited
consolidated financial statements and management's discussion & analysis, can
be accessed via the Fund's profile on the SEDAR web site at www.sedar.com
under "Other", dated June 21, 2006.
SIR has advised the Fund that revenue for the 36 restaurants in the
Royalty pool for the 12-week period ended May 7, 2006 increased 18.1% to
$34,888,000 compared to $29,550,000 in revenue from the 34 restaurants in the
Royalty pool for the 12-week period ended May 8, 2005. Increased Royalty
pooled revenue in the third quarter of fiscal 2006 resulted from same store
sales growth ("SSSG")(1) and the addition of two new restaurants to the
Royalty pool effective January 1, 2006. With the addition of these two new
restaurant royalty streams, effective January 1, 2006, the Fund indirectly
receives royalty payments from 36 restaurants. For the 36-week period ended
May 7, 2006, revenue for the restaurants in the Royalty pool increased 13.5%
to $98,945,000 compared to $87,215,000 in pro forma revenue(2) for restaurants
in the Royalty pool for the 36-week period ended May 8, 2005.
"We demonstrated continued success with our strategy of investing in
existing and new restaurants by delivering a solid quarter with 18.1% sales
growth for restaurants in the Royalty pool," said Peter Fowler, President &
CEO of SIR Corp. "As we approach completion of the Jack Astor's(R) and Alice
Fazooli's!(R) evolution programs, we are confident that we have established a
strong foundation for our future growth."
SIR has advised the Fund that same store sales(1) for restaurants in the
Royalty pool for the 12-week period ended May 7, 2006 increased 7.9% to
$31,891,000 compared to $29,550,000 for the 12-week period ended May 8, 2005.
For the 36-week period ended May 7, 2006, same store sales for the restaurants
in the Royalty pool increased by 8.4% to $94,575,000 compared to $87,215,000
for the corresponding period in the prior year. Increased same store sales for
the 12 and 36-week periods ended May 7, 2006 was primarily attributable to the
strong performance of SIR's Concept Restaurants (Jack Astor's(R), Alice
Fazooli's!(R) and Canyon Creek(TM)).

<<
SSSG for Restaurants in                12 weeks ended     36 weeks ended
the Royalty pool(1)                      May 7, 2006        May 7, 2006
                                         (unaudited)        (unaudited)
-------------------------------------------------------------------------
Jack Astor's(R)                              8.0%               9.5%
Alice Fazooli's!(R)                          7.3%              10.0%
Canyon Creek Chop House(R)                   7.5%               8.3%
-------------------------------------------------------------------------
Concept Restaurants                          7.8%               9.4%

Signature Restaurants                        8.4%               2.8%
-------------------------------------------------------------------------
Overall SSSG                                 7.9%               8.4%
>>

As at the end of the third quarter of fiscal 2006, SIR had completed
evolutions at 18 of the 21 Jack Astor's(R) and four of the five Alice
Fazooli's!(R), originally in the Royalty pool. The evolved Jack Astor's(R)
locations have generated average same store sales increases in excess of 10%
in the year of evolution and those in their second year following evolution
have averaged a further 4% increase over and above their first year increases.
Subsequent to quarter end, one additional Jack Astor's(R) evolution was
completed. The evolved Alice Fazooli's!(R) have generated same store sales in
excess of 10%, on average, post renovation.
During the quarter, on March 6, 2006, SIR opened a new Canyon Creek(TM)
restaurant in Scarborough, Ontario. Subsequent to the end of third quarter, on
May 17, 2006, SIR opened a new Canyon Creek(TM) in Vaughan, Ontario. Both of
these restaurants are expected to be added to Royalty Pooled Restaurants on
January 1, 2007.
On May 27, SIR closed its Jack Astor's(R) location in Don Mills, Ontario,
as the shopping centre complex where the restaurant was located is expected to
be demolished by the landlord. The landlord intends on developing a new
"lifestyle" mall at this location. It is expected that this project will be
completed in the second half of calendar 2008 and that a new Jack Astor's(R)
will open in this location at that time. Under terms of the License and
Royalty Agreement, SIR is required to pay a Make-Whole payment for this closed
restaurant from the date of closure to December 31, 2006. On January 1, 2007,
the closed restaurant will be netted against the Pooled Revenue of new SIR
Restaurants opened on or before November 1, 2006, to determine the number of
Class B GP units of the SIR Royalty Limited Partnership (the "Partnership")
that can be converted into Class A GP units of the Partnership.
SIR's Adjusted EBITDA(3) for the third quarter of fiscal 2006 was
$3,024,000 compared to Adjusted EBITDA of $1,341,000 for the comparable period
in fiscal 2005. SIR's Adjusted EBITDA for the 36-week period ended May 7, 2006
was $7,113,000 compared to Adjusted EBITDA of $4,190,000 for the 36-week
period ended May 8, 2005.

<<
1)  Same store sales and same store sales growth data for the 34
    restaurants in the Royalty pool for the 12 and 36-week periods ended
    May 7, 2006, does not include two current Royalty Pooled restaurants
    (Jack Astor's(R) on Front Street in downtown Toronto and Jack
    Astor's(R) in Whitby), because these locations were not open for the
    entire comparable period in fiscal 2005.

2)  As the Fund completed its initial public offering on October 12,
    2004, revenue for restaurants in the Royalty pool for the 36-week
    period ended May 8, 2005 is calculated on a pro forma basis.

3)  References to EBITDA are to SIR's net earnings (loss) from continuing
    operations, before non-controlling interest, income taxes, other
    expense (income), provision for impairment of accounts and notes
    receivable, interest, unrealized foreign exchange (gain) loss,
    interest on loan payable to SIR Royalty Income Fund, non-controlling
    interest in SIR Royalty Limited Partnership, loss from equity
    investments, other amortization and amortization of restaurant
    assets. References to Adjusted EBITDA are to SIR's EBITDA plus
    contract cancellation expense that is a significant unusual item and
    not expected to recur. Management believes that, in addition to net
    earnings or loss, EBITDA and Adjusted EBITDA are useful supplemental
    measures in evaluating SIR's performance. EBITDA and Adjusted EBITDA
    are not recognized financial measures by Canadian generally accepted
    accounting principles ("GAAP") and do not have a standardized meaning
    prescribed by GAAP. Management cautions investors that EBITDA and
    Adjusted EBITDA should not replace net earnings or loss or cash flows
    from operating, investing and financing activities (as determined in
    accordance with GAAP), as an indicator of SIR's performance. SIR's
    method of calculating EBITDA or Adjusted EBITDA may differ from the
    methods used by other issuers. Therefore, SIR's EBITDA or Adjusted
    EBITDA may not be comparable to similar measures presented by other
    issuers.
>>

About SIR Corp.

SIR Corp. ("SIR") is a privately held Canadian corporation that owns and
operates a portfolio of more than 37 restaurants in Canada. SIR's concept
brands include: Jack Astor's(R) Bar and Grill (22 locations); Alice
Fazooli's!(R) (five locations); and, Canyon Creek Chop House(R), (six
locations). SIR also operates one-of-a-kind "signature" brands in downtown
Toronto, which comprise the upscale reds(R), Far Niente(R) & Soul of the
Vine(R), Brasserie Frisco(TM), the casual Armadillo Texas Grill(R) and the
Loose Moose Tap & Grill(R). All trademarks related to the concept and
signature brands noted above are used by SIR under a license agreement with
SIR Royalty Limited Partnership (the "Partnership") in consideration for a
Royalty, payable by SIR to the Partnership, equal to six percent of the
revenue of the 35 restaurants currently included in the Royalty pool. For more
information on SIR Corp. or the SIR Royalty Income Fund, please visit
www.sircorp.com.

About SIR Royalty Income Fund

The Fund is a trust governed by the laws of the province of Ontario that
receives distribution income from its investment in the SIR Royalty Limited
Partnership and interest income from the SIR Loan. The Fund intends to pay
distributions to unitholders on a monthly basis.

Caution concerning forward-looking statements
---------------------------------------------
Certain statements in this news release may constitute "forward-looking"
statements which involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Fund to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. When
used in this document, such statements are such words as "may", "will",
"expect", "believe", "plan", "anticipate", "intend", "estimate" and other
similar terminology. These statements reflect SIR Management's current
expectations regarding future events and operating performance and speak only
as of the date of this document. These forward-looking statements involve a
number of risks and uncertainties, including those outlined under Risks and
Uncertainties in the Fund's interim filings and those set forth in the Fund's
October, 2004 prospectus and its March 31, 2006 Annual Information Form.
In formulating the forward-looking statements contained herein,
management has assumed that business and economic conditions affecting SIR's
restaurants and the Fund will continue substantially in the ordinary course,
including without limitation with respect to industry conditions, general
levels of economic activity (including in downtown Toronto), regulations
(including those regarding employees, food safety, tobacco and alcohol),
weather, taxes, foreign exchange rates and interest rates, that there will be
no pandemics or other material outbreaks of disease or safety issues affecting
humans or animals or food products, and that there will be no unplanned
material changes in its facilities, equipment, customer and employee
relations, or credit arrangements.

%SEDAR: 00020914E