Burger Fuel Group has lifted first-half profit despite softer revenue, reporting a stronger bottom line for the six months to September as the business continued to revamp its store network and brand portfolio.
The group posted an unaudited net profit after tax of $849,595, up 93.6 per cent on the same period last year. Group operating revenue fell 0.75 per cent to $12.3 million, while total system sales across all regions and brands were broadly stable at $54.6 million.
In New Zealand, where the company operates 61 stores, sales increased 0.6 per cent. Growth was supported by new franchised openings in Whanganui and Royal Oak in Auckland, partly offset by the closure of the Hamilton Base store, which a new site on Te Rapa Straight has since replaced.
As part of its structural review, the company will sell its company-owned Ponsonby store, noting the site is expected to perform better under a franchise model and free up head-office resources.
In the Middle East, where Burger Fuel operates under a development agent model in the UAE and Saudi Arabia, system sales declined 26 per cent following the closure of the Nakhlah store last year.
The group said it does not expect further growth in the region until next year.
Virtual kitchens improve franchisee profitability
Category-wise, Shake Out recorded a 16 per cent increase in sales, supported by the rollout of 21 virtual delivery-only kitchens operating from existing Burger Fuel stores. The company expects to reach about 30 virtual kitchens by year-end, saying the model improves franchisee profitability with minimal labour costs.
Shake Out’s Hamilton East physical store closed in March and now operates solely as a virtual site.
Meanwhile, Winner Winner’s sales fell 18.8 per cent, with only one store trading during the period. The Hamilton East site closed in September due to declining foot traffic caused by a nearby new food precinct.
The group said it does not receive royalties from that store and confirmed there is no active investment in the brand.
Looking ahead, Burger Fuel said trading conditions across food and hospitality remain challenging.
“Whilst the recent interest rate cuts appear to be providing a slight positive turn in consumer confidence, it remains to be seen if this will hold and ultimately grow consumer spending,” it said.
“Our goal remains firmly on maintaining the momentum of both store sales and company performance into the second half of the year.”
This article was first published on sibling website Inside Retail.
