BFG Preliminary announcement of full year results FY21

Burger Fuel Group Limited
Preliminary Full Year Results
For The Year Ended 31 March 2021


Results for announcement to the market
Name of issuer Burger Fuel Group Limited
Reporting Period 12 months to 31 March 2021
Previous Reporting Period 12 months to 31 March 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing operations $ 20,969 (4.1%)
Total Revenue $ 20,969 (4.1%)
Net profit/(loss) from continuing operations $ 713 41.1%
Total net profit/(loss) $ 713 41.1%
Interim/Final Dividend
Amount per Quoted Equity Security Not Applicable
Imputed amount per Quoted Equity Security Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period
Prior comparable
period
Net tangible assets per Quoted Equity Security $0.15 $0.15
A brief explanation of any of the figures above necessary to
enable the figures to be understood
Group Operating Revenue decreased on the same period
last year mainly due the Covid-19 pandemic. Group Net
Profit After Tax was also impacted by additional costs
establishing our new brands (Winner Winner and Shake
Out), additional legal costs for the USA settlement
transaction, the KPMG strategic review process, and the
partial impairment of goodwill on the company owned
BurgerFuel Takapuna and Henderson stores. These costs
were however largely offset with rent relief provided by
landlords and the Government wage subsidy received.

Authority for this announcement
Name of person authorised to make this announcement Mark Piet
Contact person for this announcement Mark Piet
Contact phone number 021 453 333
Contact email address Mark.Piet@Burgerfuel.com
Date of release through MAP 31/05/2021

Burger Fuel Group Limited
Preliminary Full Year Results
For The Year Ended 31 March 2021

Chairman and Chief Executives’ Review

Burger Fuel Group Ltd Preliminary Full Year Results for the 12 months ended 31st March 2021

Overview – FY21

The Directors of Burger Fuel Group Limited (BFG) present the audited results for the 12 months to 31 March 2021.

Net Profit after tax for the period was $712,985 representing a 41.1% increase on the previous year.

The results reflect costs associated with establishing our new brands (Winner Winner and Shake Out), exit costs for the
USA settlement, the partial impairment of goodwill on the company owned BurgerFuel Takapuna and Henderson store
and reduced revenue due to Covid-19. These and other operating costs were however largely offset with the
Government wage subsidy received by the group as well as some rent relief provided by landlords.

Trading conditions in our largest market, New Zealand, were more favourable for the second half of the year. It is worth
noting that the comparative NPAT for FY20 included many abnormal expenses including some Covid-19 write-offs.

As at 31 March 2021 the Group had no debt, and cash reserves of $7.1m.

BurgerFuel Group (unaudited) Total System Sales (all three brands) reduced by (12.5%) to $88.7m on the same period
last year. The decrease in sales is mostly due to Covid-19 trading restrictions and the permanent closure of the USA and
some Middle East stores including Iraq.

Group Operating Revenue decreased by 4.1% to $21.0m.


BFG RESULTS FOR THE PERIOD 1 APRIL 2020 TO 31 March 2021

31 March 2021 31 March 2020
$000 $000

Operating Revenue * 18,654 20,459
Interest Income – IFRS 16 non-occupied leases 1,381 1,410
Covid-19 Government wage subsidy 934 -
Total Income 20,969 21,869

Operating Expenses ** (16,941) (18,663)
Depreciation Expense – IFRS 16 occupied leases
(699) (630)
Interest Expense - IFRS 16 non-occupied leases
(1,381) (1,410)
Interest Expense - IFRS 16 occupied leases
(481) (443)
Transfer from foreign currency reserve on
windup of subsidiary
(131) -
Total Expenses
(19,633) (21,146)


Net Profit (Loss) Before Tax 1,336 723
Net Profit (Loss) After Tax *** 713 505



* Revenue includes: Operating revenue and interest income but excludes Covid-19 related Government grants.
** Expenses include: Operating expenses, depreciation, amortisation and interest expense but excludes the transfer from
foreign currency reserve on windup of subsidiary.
*** The New Zealand entities had taxable income and were unable to utilise the foreign tax losses. The overseas entities had
minimal tax.

Overview – FY21 (continued)

Covid-19 trading restrictions were significant in our New Zealand market, but greater in our Middle Eastern markets.
The drop in revenue from the Middle East reflects an entire year of difficult conditions in both UAE and Saudi Arabia.
The Group also incurred additional costs around the KPMG process and the winding up of all business affairs in the
USA.

As at 31 March 2021 there were 58 BurgerFuel® restaurants operating in NZ and 13 operating in the Middle East
excluding third party “ghost” kitchens operating in the UAE. There are 3 Shake Out® and 4 Winner Winner® branded
stores operating in NZ.

The Year’s Results and Group Outlook

New Zealand

Total systemwide sales across New Zealand (65 restaurants, all 3 brands) decreased by 4.3% on the previous year. This
was mainly due to the Covid-19 trading restrictions and the associated store closures, with some offset from the opening
of 4 new stores.

The Covid-19 Alert Level 4 lockdown resulted in FY21 having 27 less days of trade which impacted the Group’s NZ
sales by approx. (7.4%). For the balance of FY21 there were a further 106 days (15 weeks) of varying Alert Levels and
associated trading restrictions. This was primarily focussed on our largest market, Auckland, but it is worth noting the
CBDs and hospitality precincts of Wellington and Christchurch have also been heavily impacted by the significant
social change of working from home as well as lack of tourists and students.

BurgerFuel New Zealand opened two new locations in FY21 and now has 58 locations throughout the country. Total
sales for the year decreased by 7.3% which is largely due to Covid-19 disruptions and some offset by the opening of a
new stores in Point Chevalier, Auckland, in May 2020 and the new store in Whangarei which opened in March 2021.
Both new stores are performing well. We continue to focus on recruitment of potential new franchisees for the regional
areas that we currently do not serve. BurgerFuel has maintained its policy of not using delivery aggregation services as
the prohibitive costs are not sustainable for our franchisees. This may have moderated our sales during the 15 weeks of
varying alert levels and operating restrictions. However, preventing the erosion of Franchisee profits is central to
sustaining a healthy business for all of our key stakeholders.

Shake Out total store sales increased by 25% in FY21. The Browns Bay location was permanently closed after the Level
4 lockdown, however a new location opened in Hamilton East keeping the total at three Shake Out locations in New
Zealand. This new location was also the 7
th
restaurant for the Group (all brands) in the Waikato and the 1
st
region in
New Zealand where all 3 of our brands are operating in close proximity. Results from the Waikato have been pleasing
and have informed us on how future regions can be optimised for the Group.

Winner Winner total sales increased by 98%. This result reflects the opening of two new stores just before the financial
year commenced, and a new store in Takapuna late in the FY21 financial year. Winner Winner has a larger mix of dine-
in customers and the constantly changing Alert Levels had a larger impact on Winner Winner than our other two brands.

The new company owned store in Takapuna is only two tenancies away from our BurgerFuel location which has not
suffered any noticeable cannibalisation, and this is further informing our future network plans. It is early days for this
latest Winner Winner store with sales figures lower than expected.

For the entire financial year, the two new brands represented 6.5% of total NZ sales for the group.

The reality of establishing new brands is that it takes considerable time and financial investment. We believe both
brands have a future in New Zealand, however resources in terms of cash and management will need to be significantly
increased on FY21, if we are to build these brands in line with our vision. This investment is expected to affect cash and
profitability through to FY23.

The Middle East

The Middle East continues to be a difficult market for BurgerFuel with each country experiencing major challenges.
Total sales for the region have decreased 42% for the year.

At our mid-year update we reported that the UAE had decided to close some of its retail locations and operate via some
ghost kitchens that provide home delivery services only. The UAE has exceeded 500,000 Covid-19 cases which has
seen most of the population stay at home as much as possible and tourist numbers dry up. BurgerFuel UAE does provide
home delivery and this has been the sales channel of choice for many months now. The UAE does have a very high rate
of vaccination and we are hopeful that its eventual recovery as an international destination will improve the sales
position. However, this remains uncertain at this stage.



BurgerFuel Saudi Arabia opened a new location at Faisaliyah in the city of Dammam and closed two lower performing
stores, one in Riyadh and one in Dammam. Saudi Arabia has had in excess of 400,000 Covid-19 cases and trading
conditions have been bleak for the entire year. Saudi Arabia’s vaccination rate is a lot lower than neighbouring UAE, so
we expect these difficult trading conditions to continue for some time yet.

Overall, revenue from the Middle East has significantly declined during the pandemic period and the region is not yet
showing signs of bouncing back, but as a nation the UAE in particular is highly committed to recovery. That said, as
always, we continue to caution the market in regard to the Middle Eastern region.

Summary and Outlook

The FY21 year brought with it many challenges which overall the Group managed to navigate well. The BurgerFuel
brand in particular demonstrated a high level of resilience throughout the various lockdowns and levels imposed as a
result of Covid-19. At present the hospitality market feels somewhat devitalised and therefore system development is
measured and certainly slower than we would like. The ability to match long term, suitable franchisees to winning
operating locations, remains challenging. We are however, pleased that our focus on the basics in FY21, allowed us to
operate safely and open further locations in what was an challenging and unprecedented year.

BurgerFuel Group in conjunction with its advisors KPMG are still reviewing its options regarding a possible sale,
merger, joint venture, international partnership, domestic partnership or alternative process. The Board will keep the
market updated with any material developments should they occur throughout the ongoing strategic review process.

We would like to thank all shareholders, staff, franchisees, suppliers and of course our valued customers for their
continued support.

Best regards,



Peter Brook Josef Roberts
Chairman Group CEO

Burger Fuel Group Limited
Consolidated Statement of Comprehensive Income
For The Year Ended 31 March 2021


2021

2020


$

$




Revenue 18,615,623

20,345,736

Covid-19 Government wage subsidy 934,020 -
Operating Expenses (16,322,939)

(17,973,431)

Transfer from Foreign currency reserve on windup of
subsidiary
(130,882)

-

Profit before Interest, Taxation, Depreciation and Amortisation 3,095,822

2,372,305




Depreciation on Property, Plant and Equipment (477,008)

(545,765)

Depreciation on Right of Use Assets (698,813) (630,329)
Amortisation (142,067)

(143,084)


(1,317,888)

(1,319,178)






Profit before Interest and Taxation 1,777,934 1,053,127


Interest Income


38,816

113,223

Interest Income leases non-occupied

1,380,726 1,410,421
Interest Expense

(86)

(345)

Interest Expense leases occupied

(480,899) (442,632)
Interest Expense leases non-occupied

(1,380,726) (1,410,421)


(442,169)

(329,754)


Profit before Taxation 1,335,765

723,373


Income Tax Expense (622,780)

(217,895)






Net Profit attributable to shareholders 712,985 505,478


Other comprehensive income:

Items that may be reclassified subsequently to profit or loss:

Movement in Foreign Currency Translation Reserve 12,257

(117,216)




Total comprehensive income 725,242

388,262


Basic Earnings per Share (cents) 1.37

0.94


Diluted Earnings per Share (cents) 1.37 0.94

Burger Fuel Group Limited
Consolidated Statement of Financial Position
As at 31 March 2021

2021

2020
Shareholders’ equity $

$
Contributed equity 11,913,499

13,594,825
Retained earnings (1,267,035)

(1,980,020)
Foreign currency translation reserve (298,160)

(441,299)
10,348,304

11,173,506
Current assets

Cash and cash equivalents 7,114,119

5,570,167
Trade and other receivables 2,076,126

3,189,334
Income tax receivable - 184,326
Lease Receivable: non-occupied 1,553,671 1,518,310
Inventories 548,352

565,217
Loans 127,722

174,325

11,419,990

11,201,679
Non-current assets


Property, plant and equipment 2,609,570

2,462,017
Right of use asset - leases 8,375,067 7,828,007
Lease receivable non-occupied 20,947,424 21,238,840
Deferred tax asset 615,988

689,104
Loans 109,928 134,140
Intangible assets 2,043,642

2,421,445

34,701,619

34,773,553
Total assets 46,121,609

45,975,232
Current liabilities

Trade and other payables 1,856,625

1,470,949
Contract Liability 283,965 412,620
Lease Liability 511,735 423,538
Lease Liability: non-occupied 1,553,671 1,518,310
Income tax payable 524,580

-
Provisions 438,163 436,456
5,168,739 4,261,873
Non-current liabilities
Contract Liability 1,245,448 1,625,998
Lease Liability 8,371,494 7,635,815
Lease Liability non-occupied 20,947,424 21,238,840
Provisions 40,200 39,200
30,604,566 30,539,853
Total liabilities 35,773,305 34,801,726

Net assets 10,348,304 11,173,506

Burger Fuel Group Limited
Consolidated Statement of Financial
Position As at 31 March 2021





2021 2020


Net tangible assets per share ($ per share)


0.15


0.15
For and on behalf of the Board who approved these financial statements for issue on 31st May 2021.

Director Director

Burger Fuel Group Limited
Consolidated Statement of Changes in Equity
For The Year Ended 31 March 2021


2021

Contributed
Equity
Foreign Currency
Translation
Reserve
Retained
Earnings Total Equity
$ $ $ $




Balance as at 1 April 2020

13,594,825 (441,299) (1,980,020) 11,173,506
Buyback and cancellation of ordinary shares
(1,681,326) - - (1,681,326)
Reclassification of FX translation reserve on
windup of USA subsidiary

- 130,882 - 130,882
Movement in foreign currency translation
reserve recognised in other comprehensive
income

- 12,257 - 12,257
Net Profit for the year ended 31 March 2021
- - 712,985 712,985
Total comprehensive income
- 12,257 712,985 725,242


Balance as at 31 March 2021
11,913,499 (298,160) (1,267,035) 10,348,304


2020

Contributed
Equity
Foreign Currency
Translation
Reserve
Retained
Earnings Total Equity
$ $ $ $




Balance as at 31 March 2019
13,864,066 (324,083) (2,541,498) 10,998,485
Impact of Changes in Accounting Policies
- - 56,000 56,000
Balance as at 1 April 2019

13,864,066 (324,083) (2,485,498) 11,054,485
Buyback and cancellation of ordinary shares
(269,241) - - (269,241)
Movement in foreign currency translation
reserve recognised in other comprehensive
income

- (117,216) - (117,216)
Net Profit for the year ended 31 March 2020
- - 505,478 505,478
Total comprehensive income
- (117,216) 505,478 388,262


Balance as at 31 March 2020
13,594,825 (441,299) (1,980,020) 11,173,506

Burger Fuel Group Limited
Consolidated Statement of Cash Flows
For The Year Ended 31 March 2021



2021

2020

$

$
Cash flows from operating activities


Receipts from customers
18,552,954 20,260,648
Covid-19 Government wage subsidy
445,133 488,887
Interest received
38,816 113,223
Goods and services tax
(79,859) (5,547)
Payments to suppliers & employees
(15,587,996) (18,555,148)
Interest
(86) (345)
Interest on leases
(452,073) (442,632)
Taxes
187,245 (527,380)
Net cash flows provided from operating activities
3,104,134 1,331,706


Cash flows from investing activities

Repayments from suppliers & staff 70,816 12,436
Sale of property, plant and equipment 122,015 50,054
Acquisition of intangible assets
(7,264) (21,507)
Advances to franchisee and staff
- (150,000)
Acquisition of property, plant & equipment
(690,933) (512,459)
Share buyback & cancellation
(700,000) (269,241)
Net cash flows applied to investing activities
(1,205,366) (890,717)


Cash flows from financing activities

Lease Liability
(397,744) (398,984)
Net cash flows applied to financing activities
(397,744) (398,984)


Net movement in cash and cash equivalents
1,501,024 42,005
Exchange gains / (loss) on cash and cash equivalents
42,928 24,689
Opening cash and cash equivalents
5,570,167 5,503,473
Closing cash and cash equivalents
7,114,119 5,570,167

Burger Fuel Group Limited

SEGMENT REPORTING

Operating Segments

The Group operates in four operating segments; these operating segments have been divided into the following
geographical regions, New Zealand, Australia, USA and the Middle East. All the segment’s operations are made up of
franchising fees, royalties and sales to franchisees. The segments are in the business of Franchise Systems - Gourmet
Burger Restaurants. New Zealand’s segment result is also due to the amortisation of intangible assets.

The amounts provided to the Board with respect to total liabilities are measured in a manner consistent with that of the
financial statements. These liabilities are allocated based on the operations of the segment.

2021
New
Zealand
Australia Middle East USA Consolidated

$
$

$
$ $
Revenue





Sales
7,728,400
- 47,595
-

7,775,995
Royalties
4,662,874
- 158,807
-

4,821,681
Franchising fees
242,742
- 55,262 -
298,004
Training fees
30,000
- -
-

30,000
Property management fees
57,000
- -
-

57,000
Advertising fees
3,340,587
- 435
-

3,341,022
Foreign exchange gain
97,739
46,075 -
(114,089)

29,725
Sundry income
1,841,177
21 8,563
27,699

1,877,460
Rent Relief on Non-Occupied Leases
384,736
- -
-

384,736
Interest received
38,050
766 -
-

38,816
Interest Leases
1,380,726
- - -
1,380,726
Covid-19 Government wage subsidy
934,020
- - -
934,020
Total Revenue 20,738,051 46,862 270,662 (86,390) 20,969,185

Interest Expense 153 (59) - (8) 86
Interest Expense Leases Occupied 480,899 - - - 480,899
Interest Expense Leases non occupied 1,380,726 - - - 1,380,726
Depreciation 474,279 - 2,729 - 477,008
Depreciation Leases 698,813 - - - 698,813
Amortisation 142,067 - - - 142,067

Segment Result before Income Tax 1,532,323 33,468 7,240 (237,266) 1,335,765
Income Tax Expense 622,780 - - - 622,780

Segment Assets 45,754,881 149,232 217,495
-

46,121,609
Segment Liabilities 35,649,635 24,859 98,810
-

35,773,305




Acquisition of Property, Plant & Equipment & Intangible Assets


Other 698,197 - - - 698,197

Burger Fuel Group Limited

SEGMENT REPORTING (CONTINUED)

2020
New
Zealand
Australia Middle East USA Consolidated

$
$

$
$ $
Revenue





Sales
8,324,238
- 89,253
-

8,413,491
Royalties
4,876,942
- 791,785
15,498

5,684,225
Franchising fees
316,234
- 46,543 13,077
375,854
Training fees
110,000
- -
-

110,000
Property management fees
53,000
- -
-

53,000
Advertising fees
3,581,227
- 143,941
-

3,725,168
Foreign exchange gain
(74,525)
(17,095) (11,485)
245,997

142,892
Sundry income
1,694,215
1,937 65,243
79,711

1,841,106
Interest received
67,076
1,009 834
44,304

113,223
Interest Leases
1,410,421
- - -
1,410,421
Total Revenue 20,358,828 (14,149) 1,126,114 398,587 21,869,380

Interest Expense 214 40 - 91 345
Interest Expense Leases Occupied 442,632 - - - 442,632
Interest Expense Leases non occupied 1,410,421 - - - 1,410,421
Depreciation 542,143 - 3,622 - 545,765
Depreciation Leases 630,329 - - - 630,329
Amortisation 143,084 - - - 143,084

Segment Result before Income Tax (190,877) 24,351 588,948 300,951 723,373
Income Tax Expense 219,190 - - (1,295) 217,895

Segment Assets 44,383,022 542,381 97,178
952,651

45,975,232
Segment Liabilities 34,698,950 10,611 92,165
-

34,801,726




Acquisition of Property, Plant & Equipment & Intangible Assets


Other 533,996 - - - 533,996

Burger Fuel Group Limited
Company Directory
As at 31 March 2021

Registered Office Accountants
Grant Thornton New Zealand Limited Grant Thornton New Zealand Limited
152 Fanshawe Street Level 4
Auckland 1011 152 Fanshawe Street

Auckland 1011
Company Number

1947191 Bridgepoint Group Accounting Pty Ltd

Suite 301, 8 West Street,
North Sydney
Date of Incorporation NSW 2060
14 June 2007 Australia

Directors Citrin Cooperman
Peter Brook - Chairman (Independent) 529 Fifth Avenue
Alan Dunn (Independent) New York, NY 10017
Josef Roberts (Executive) USA


Board Executives KPMG
Tyrone Foley (Chief Operating Officer)
Mark Piet (Chief Financial Officer / Company Secretary)
18 Viaduct Harbour Avenue,
Auckland 1140


Business Headquarters
66 Surrey Crescent

Grey Lynn Bankers
Auckland 1021 ASB Bank Limited

CBA Bank Limited (Australia)
Auditor Emirates NBD (UAE)
Baker Tilly Staples Rodway Bank of America Merrill Lynch (USA)
Level 9, Tower Centre

45 Queen Street

Auckland 1010




Solicitors
Dentons Kensington Swan, 18 Viaduct Harbour Avenue, Auckland 1011.
Buddle Findlay, PwC Tower, 188 Quay Street, PO Box 1433, Auckland 1140.
Wiggin and Dana LLP, Two Liberty Place, 50 S. 16th Street, Suite 2925, PA, 19102, USA.
Corporate Counsel Limited Solicitors, P.O Box 37-322, Parnell, Auckland 1151.

---

MONDAY, 31
ST
MAY 2021

BURGER FUEL GROUP LIMITED PRELIMINARY FULL YEAR RESULTS FOR THE
YEAR ENDED 31 MARCH 2021
OVERVIEW – FY21
The Directors of Burger Fuel Group Limited (BFG) present the audited results for the 12 months to 31
March 2021.
Net Profit after tax for the period was $712,985 representing a 41.1% increase on the previous
year.
The results reflect costs associated with establishing our new brands (Winner Winner and Shake Out),
exit costs for the USA settlement, the partial impairment of goodwill on the company owned
BurgerFuel Takapuna and Henderson store and reduced revenue due to Covid-19. These and other
operating costs were however largely offset with the Government wage subsidy received by the group
as well as some rent relief provided by landlords.
Trading conditions in our largest market, New Zealand, were more favourable for the second half of
the year. It is worth noting that the comparative NPAT for FY20 included many abnormal expenses
including some Covid-19 write-offs.
As at 31 March 2021 the Group had no debt, and cash reserves of $7.1m.
BurgerFuel Group (unaudited) Total System Sales (all three brands) reduced by (12.5%) to $88.7m on
the same period last year. The decrease in sales is mostly due to Covid-19 trading restrictions and the
permanent closure of the USA and some Middle East stores including Iraq.
Group Operating Revenue decreased by 4.1% to $21.0m.
Covid-19 trading restrictions were significant in our New Zealand market, but greater in our Middle
Eastern markets. The drop in revenue from the Middle East reflects an entire year of difficult conditions
in both UAE and Saudi Arabia. The Group also incurred additional costs around the KPMG process and
the winding up of all business affairs in the USA.
As at 31 March 2021 there were 58 BurgerFuel® restaurants operating in NZ and 13 operating in the
Middle East excluding third party “ghost” kitchens operating in the UAE. There are 3 Shake Out® and 4
Winner Winner® branded stores operating in NZ.
BURGERFUEL GROUP - PRESS RELEASE

BFG RESULTS FOR THE PERIOD 1 APRIL 2020 TO 31 MARCH 2021
31 March 2021 31 March 2020
$000 $000

Operating Revenue * 18,654 20,459
Interest Income – IFRS 16 non-occupied leases 1,381 1,410
Covid-19 Government wage subsidy 934 -
Total Income 20,969 21,869

Operating Expenses ** (16,941) (18,663)
Depreciation Expense – IFRS 16 occupied leases (699) (630)
Interest Expense - IFRS 16 non-occupied leases (1,381) (1,410)
Interest Expense - IFRS 16 occupied leases (481) (443)
Transfer from foreign currency reserve on windup of
subsidiary
(131) -
Total Expenses (19,633) (21,146)

Net Profit (Loss) Before Tax 1,336 723
Net Profit (Loss) After Tax *** 713 505

THE YEAR’S RESULTS AND GROUP OUTLOOK
NEW ZEALAND
Total systemwide sales across New Zealand (65 restaurants, all 3 brands) decreased by 4.3% on the
previous year. This was mainly due to the Covid-19 trading restrictions and the associated store
closures, with some offset from the opening of 4 new stores.
The Covid-19 Alert Level 4 lockdown resulted in FY21 having 27 less days of trade which impacted the
Group’s NZ sales by approx. (7.4%). For the balance of FY21 there were a further 106 days (15 weeks)
of varying Alert Levels and associated trading restrictions. This was primarily focussed on our largest
market, Auckland, but it is worth noting the CBDs and hospitality precincts of Wellington and
Christchurch have also been heavily impacted by the significant social change of working from home
as well as lack of tourists and students.
BurgerFuel New Zealand opened two new locations in FY21 and now has 58 locations throughout the
country. Total sales for the year decreased by 7.3% which is largely due to Covid-19 disruptions and
some offset by the opening of a new stores in Point Chevalier, Auckland, in May 2020 and the new
store in Whangarei which opened in March 2021. Both new stores are performing well. We continue
to focus on recruitment of potential new franchisees for the regional areas that we currently do not
serve. BurgerFuel has maintained its policy of not using delivery aggregation services as the
prohibitive costs are not sustainable for our franchisees. This may have moderated our sales during
* Revenue includes: Operating revenue and interest income but excludes Covid-19 related Government grants.
** Expenses include: Operating expenses, depreciation, amortisation and interest expense but excludes the transfer from foreign
currency reserve on windup of subsidiary.
*** The New Zealand entities had taxable income and were unable to utilise the foreign tax losses. The overseas entities had
minimal tax.

the 15 weeks of varying alert levels and operating restrictions. However, preventing the erosion of
Franchisee profits is central to sustaining a healthy business for all of our key stakeholders.
Shake Out total store sales increased by 25% in FY21. The Browns Bay location was permanently
closed after the Level 4 lockdown, however a new location opened in Hamilton East keeping the total
at three Shake Out locations in New Zealand. This new location was also the 7th restaurant for the
Group (all brands) in the Waikato and the 1st region in New Zealand where all 3 of our brands are
operating in close proximity. Results from the Waikato have been pleasing and have informed us on
how future regions can be optimised for the Group.
Winner Winner total sales increased by 98%. This result reflects the opening of two new stores just
before the financial year commenced, and a new store in Takapuna late in the FY21 financial year.
Winner Winner has a larger mix of dine-in customers and the constantly changing Alert Levels had a
larger impact on Winner Winner than our other two brands.
The new company owned store in Takapuna is only two tenancies away from our BurgerFuel location
which has not suffered any noticeable cannibalisation, and this is further informing our future
network plans. It is early days for this latest Winner Winner store with sales figures lower than
expected.
For the entire financial year, the two new brands represented 6.5% of total NZ sales for the group.
The reality of establishing new brands is that it takes considerable time and financial investment. We
believe both brands have a future in New Zealand, however resources in terms of cash and
management will need to be significantly increased on FY21, if we are to build these brands in line
with our vision. This investment is expected to affect cash and profitability through to FY23.
THE MIDDLE EAST
The Middle East continues to be a difficult market for BurgerFuel with each country experiencing
major challenges. Total sales for the region have decreased 42% for the year.
At our mid-year update we reported that the UAE had decided to close some of its retail locations and
operate via some ghost kitchens that provide home delivery services only. The UAE has exceeded
500,000 Covid-19 cases which has seen most of the population stay at home as much as possible and
tourist numbers dry up. BurgerFuel UAE does provide home delivery and this has been the sales
channel of choice for many months now. The UAE does have a very high rate of vaccination and we
are hopeful that its eventual recovery as an international destination will improve the sales position.
However, this remains uncertain at this stage.
BurgerFuel Saudi Arabia opened a new location at Faisaliyah in the city of Dammam and closed two
lower performing stores, one in Riyadh and one in Dammam. Saudi Arabia has had in excess of
400,000 Covid-19 cases and trading conditions have been bleak for the entire year. Saudi Arabia’s
vaccination rate is a lot lower than neighbouring UAE, so we expect these difficult trading conditions
to continue for some time yet.
Overall, revenue from the Middle East has significantly declined during the pandemic period and the
region is not yet showing signs of bouncing back, but as a nation the UAE in particular is highly
committed to recovery. That said, as always, we continue to caution the market in regard to the
Middle Eastern region.

SUMMARY AND OUTLOOK
The FY21 year brought with it many challenges which overall the Group managed to navigate well. The
BurgerFuel brand in particular demonstrated a high level of resilience throughout the various
lockdowns and levels imposed as a result of Covid-19. At present the hospitality market feels
somewhat devitalised and therefore system development is measured and certainly slower than we
would like. The ability to match long term, suitable franchisees to winning operating locations,
remains challenging. We are however, pleased that our focus on the basics in FY21, allowed us to
operate safely and open further locations in what was a challenging and unprecedented year.
BurgerFuel Group in conjunction with its advisors KPMG are still reviewing its options regarding a
possible sale, merger, joint venture, international partnership, domestic partnership or alternative
process. The Board will keep the market updated with any material developments should they occur
throughout the ongoing strategic review process.
We would like to thank all shareholders, staff, franchisees, suppliers and of course our valued
customers for their continued support.

Best regards,








Peter Brook
Chairman
Josef Roberts
Group CEO
For further information please
contact: Mark Piet
+64 9 360 6730
communications@burgerfuel.com
www.burgerfuel.com