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Kentucky Fried Chicken (Bermuda) Limited Release Interim Financial Report to 31 July, 2009
Hamilton, Bermuda - 17 November, 2009 - Kentucky Fried Chicken (Bermuda) Limited (KFCB.BH) release the Chairman's report to Shareholders for period to 31 July, 2009.
"Net income for the six months ended 31st July 2009 amounted to $156,893 compared with adjusted net income of $142,469 in the six months ended 31st July 2008 - an increase of 10.1%.
Sales in the six months ended 31st July 2009 were higher than those for the six months ended 31st July 2008 by $157,855 (6.3%) owing to price increases implemented in the second half of 2008. Gross profit increased by $143,860 (7.7%) over the same period in 2008.
Operating expenses increased by $40,831 (7.5%) from the same period in the previous year and are inclusive of Advertising & Promotion costs which are a vital expenditure in a difficult economic environment. Payroll costs increased by $63,896 (7.8%) over the same period in the prior year. Increased payroll expenses were driven primarily by wage increases agreed with unionized employees in the multi-year agreement with the Bermuda Industrial Union that was finalised in May, 2009.
At 31st July 2009 cash on hand amounted to $2,103,815 compared with $2,305,572 at 31st January 2009 as a portion of excess cash was invested in income producing securities. Total liabilities amounted to $396,404 compared with liabilities of $413,504 at 31st January 2009. Shareholders' equity at 31st July 2009 amounted to $2,924,157 or $5.02 per share versus $4.85 per share at 31st January 2009.
No dividends were paid in the first half of the year. However, a subsequent payment of 10¢ per share was paid on 1st September, 2009 to shareholders of record as at 17th August, 2009. The directors have declared a further dividend of 10¢ per share to be paid on 1st December, 2009 to shareholders of record on 16th November, 2009.
While the Company believes it is ultimately in the best interests of its shareholders to delist from the Bermuda Stock Exchange, insufficient shareholders were represented at the Company's Annual General Meeting in May to support the shareholders' resolution in favour of delisting from the Exchange. The Board continues to believe that a delisting of the Company at the earliest opportunity is in shareholders' best interests in order to eliminate unnecessary administrative costs which result from a stock exchange listing of a thinly traded stock.
To date, a challenging economic climate has made 2009 a difficult year for your Company to grow. It is anticipated that further challenges lie ahead in the next year as our customers feel the effects which a global recession has had on Bermuda. However, with focused staff and a dedicated management team, your Company will continue to closely control costs while investing in future growth opportunities for the business in order to provide positive returns to shareholders."
Donald P. Lines, OBE, FCA, JP
Chairman