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Kentucky Fried Chicken (Bermuda) Limited Report to Shareholders
Hamilton, Bermuda, May 13, 2008 - "Net income for the year ended 31st January 2008 was $82,579 lower at $310,009 compared with $392,588 last year. Shareholders may recall that earnings in the first half of the 2008 fiscal year were also $100,297 lower than in the previous year, largely as a result of the two-week closure of the store in April 2007 to carry out kitchen renovations and store refurbishments.
In the second half of the 2008 fiscal year earnings recovered and increased to $197,961 compared with earnings of $180,243 in the six months ended 31st January 2007. The higher level of earnings in the second half of the 2008 fiscal year can be attributed to price increases in May 2007 following the reopening of the store as food costs were much higher than in the previous year while sales volumes were lower.
Gross profit in the 2008 fiscal year were $17,325 lower than in the previous year, but with emphasis on control of operating costs, earnings in the second half of the year were slightly higher than last year.
Payroll costs and benefits were $6,200 lower in 2008 but Direct Operating expenses were $78,709 higher due to increases in equipment repairs, energy and security costs.
Dividend payments were as follows:
Payment date Shareholders of record date Amount
15th June 2007 23rd May 2007 $0.10 per share
1st November 2007 15th October 2007 $0.10 per share
1st February 2008 15th January 2008 $0.10 per share
No shares of the Company were repurchased during the year. It is still our intention, however, to continue to repurchase shares from time to time to reduce the shares outstanding to a more acceptable level.
At 31st January 2008 cash resources amounted to $2,066,322 compared with $1,817,029 last year and total liabilities amounted to $361,996 compared with liabilities of $292,233 at 31st January 2007. Shareholders' equity at 31st January 2008 amounted to $2,620,042 or $4.42 per share compared with shareholders' equity of $2,487,603 or $4.20 per share at 31st January 2007.
The Board would like to pay tribute to all our staff for their hard work. I would particularly like to thank Frank Seuss, General Manager, Tracy Robinson, Assistant General Manager, Jerome Talbot, Operations Manager and Basil Outerbridge, who joined us in June as Restaurant Manager, for they have all worked hard to improve sales and earnings. I would also like to express our appreciation to Graham Redford, Marketing Consultant, for his help and advice.
We look forward to the 2009 fiscal year with guarded optimism and hope that the continuous steps we have taken to upgrade our facilities and to control costs will generate increased sales and profits in the future.
My personal thanks go to Llewellyn Petty and my fellow Executive Directors, Crayton Greene, Susan Wilson, Bill Thomson and Kevin Gunther for their contribution and assistance during the past year."
Donald P. Lines, OBE, FCA, JP
Chairman
May 6, 2008