Pizza Pizza Royalty Corp. released financial results for the fourth quarter and year ended December 31, 2015.
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For the quarter, system sales from the 730 restaurants in the Royalty Pool increased by 4.4% to $141.4 million from $135.5 million in the prior year quarter when there were 722 restaurants in the pool.
For the year, Royalty Pool System Sales increased 5.6% to $533.8 million from $505.4 million in the prior year.
Same store sales growth (SSSG), the key driver of yield growth for shareholders of the company, increased 3.4% for the quarter when compared to the same period in 2014 and increased 4.5% for the full year when compared to the prior year.
Pizza Pizza declared shareholder dividends of $5.1 million, or $0.2074 per share, for the quarter compared to $4.4 million, or $0.2001 per share, for the prior year quarter.
The payout ratio was 91% for the quarter and was 90% in the prior year quarter.
For the year ended December 31, 2015, Pizza Pizza declared dividends of $19.7 million, or $0.8155 per share, compared to $17.5 million, or $0.8004 per share for the prior year; the payout ratio was 95% for the year and 99% in 2014.
For Canadian federal tax purposes, the dividend is considered a taxable eligible dividend.
Fully-diluted EPS for the quarter was $0.225 per share compared to $0.222 per share for the same quarter in 2014.
The period over period increase is attributable to an increase in royalty income and decrease in interest expense. However, instead of EPS, Pizza Pizza considers adjusted EPS to be a more meaningful indicator of the company’s operating performance and, thus, also presents fully-diluted adjusted EPS.
When adjusted for non-cash items, EPS for the quarter increased 0.9% to $0.233 per share compared to adjusted EPS of $0.231 per share in the comparable period last year.
For the year, EPS was $0.821 compared to $0.826 for the prior year. The period over period decrease is attributable to a non-cash expense of $1.25 million related to renewing Pizza Pizza’s credit facility during the second quarter, offset by an increase in royalty income and decrease in interest expense.
When adjusted for non-cash items, EPS for the year increased 3.9% to $0.895 per share compared to adjusted EPS of $0.861 per share in the prior year. ■