MONCTON, N.B. – Imvescor Restaurant Group Inc. (TSX:IRG), the owner of Pizza Delight, Mikes and other brands, had a profit of $494,000 in the fourth quarter or 5.3 cents per share, with $9.6 million of revenue from royalties.
That was an improvement from a year-earlier loss of $20.4 million or $2.164 per share with $10 million of revenue but not as strong as the third quarter ended Aug. 1 when it had $2 million of net earnings or 22.2 cents per share with just under $10 million of revenue.
The Moncton, N.B.-based company says its overhead expenses in the quarter were higher, partly because of a recent refinancing that brought in about $25 million of shareholder equity.
Imvescor receives royalties on sales by restaurants that use its brands — mainly in Atlantic Canada and Quebec.
Total system sales for the fourth quarter ended Oct. 30, 2011, was $102.2 million, up from $101.5 million in the comparable period of 2010.
Same-store sales in the quarter were up 0.6 per cent in the quarter, with the improvement attributed to more focused marketing.
“The company has made substantial progress in restructuring its operations and exiting certain underperforming locations and unfavourable lease terms,” the company said in a statement issued late Thursday.
“Through these measures, the company has reduced expenses by approximately $2.0 million on an annual basis. The company intends to use some of these savings to support additional marketing efforts and other initiatives in future periods to increase system sales and improve franchisee profitability.”
“The company is in particular deploying management efforts to negotiate with authorized suppliers with the objective of reducing the cost at which food is sold to franchisees.”
General, administrative and franchise support costs for the fourth quarter were $5.2 million, up about $400,000 from a year earlier due to legal expenses related to settlements and evaluating its refinancing options.