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Kentucky Fried Chicken (Bermuda) Limited Releases Interim Report For 31st July 2004
"Earnings for the first six months ended 31st July 2004 amounted to $165,003 compared to $65,560 in the first half of last year, an increase of 152%. The increase in earnings is due to the combination of a 7.90% increase in sales and improved control over operating costs.
Our management team has worked hard to improve the competitive position of the Company and to increase sales and profits. Their hard work has resulted in an upturn in sales and earnings for the Company despite increases in the cost of staff (including payroll tax, pension and health insurance) which is 6.1% or $40,410 higher in the first six months of this year compared with the same period last year.
The cost of chicken has increased approximately 27.5% from the previous year. This cost increase is an aberration due to worldwide supply limitations and it is hoped that the cost of chicken will return to more normal levels by next year. Consideration may be required to institute a temporary price increase on the Company's chicken products to partially offset this increase in cost if there is no change in market conditions.
At 31st July 2004 cash resources amounted to $939,437 compared with $803,230 last year at this time and total liabilities amounted to $331,742 compared with liabilities of $276,603 last year at this time.
In last year's Report to Shareholders the Company stated "We anticipate a significant increase in capital expenditure later this year and early next year in connection with the refurbishment of the dining area and improvement of the layout of the facilities". These improvements were effected in May 2004 and the store was closed for ten days to carry out the renovations. The Company is pleased to report that the renovation was completed on schedule and under budget at a cost of $317,144 and customer response to the renovation has been very positive.
On 14th May 2004 we paid a dividend of $0.10 per share to Shareholders of record 30th April 2004. At the Directors Meeting held on 26th August 2004, a further dividend of $0.10 per share was declared payable on 15th November 2004 to shareholders of record 29th October 2004.
In our Annual Report to Shareholders issued in May 2002, we stated that it was our intention to continue to buy back shares of the Company for cancellation to the extent we have surplus funds available - with the view to reducing the shares outstanding to a more acceptable level. During the six months ended 31st July 2004, the Company repurchased 1,800 of its own shares at an average price of $3.50 reducing shares outstanding to 595,900. At the Director's Meeting held on 26th August 2004, it was resolved to continue the share repurchase program."
Signed by:
The Chairman