BFG Preliminary announcement of full year results FY23

Burger Fuel Group Limited
Preliminary Full Year Results
For The Year Ended 31 March 2023


Results for announcement to the market
Name of issuer Burger Fuel Group Limited
Reporting Period 12 months to 31 March 2023
Previous Reporting Period 12 months to 31 March 2022
Currency NZD
Amount (000s) Percentage change
Revenue from continuing operations $ 24,016 14.5%
Total Revenue $ 24,016 14.5%
Net profit/(loss) from continuing operations $ 900 56.3%
Total net profit/(loss) $ 900 56.3%
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 $0.18 $0.17
A brief explanation of any of the figures above necessary to
enable the figures to be understood
Please refer to the accompanying market announcement and
unaudited financial statements.
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 30/05/2023

---

0


Burger Fuel Group Limited
Preliminary Full Year Results
For The Year Ended 31 March 2023

Chairman and Chief Executives’ Review

Burger Fuel Group Ltd Preliminary Full Year Results for the 12 months ended 31st March 2023

Overview – FY23

The Directors of Burger Fuel Group Limited (BFG) present the results for the 12 months to 31 March 2023.
(The audit of these results is in the process of being finalised).

Net Profit after tax for the period was $900,418 representing a 56.3% increase on the previous year.

This result reflects a strong sales year in FY23, with total Group sales back at pre Covid levels.

BurgerFuel Group (unaudited) Total System Sales (all three brands, all regions) increased by 12.77% to $106.2M on the
same period last year. The Group had strong store sales in FY23 which was helped with the opening of the BurgerFuel
Cambridge & Rolleston stores in May 2022 and October 2022 respectively, delivery sales for Winner Winner and Shake
Out, and the fact that we are benchmarking against reduced trading days in FY22, when the stores were closed due to
Covid (August & September 2022). The CBD stores also had improved sales due to office workers returning to the city
centres.

We expect the sales increase to continue into FY24 with the introduction of online delivery options for BurgerFuel
being trialled across selected stores in the BurgerFuel system. However, we are conscious of the fact that the economic
environment remains challenging, and this could impact sales.

Total income for the Group increased by 14.5% to $24.0M.

BFG RESULTS FOR THE PERIOD 1 APRIL 2022 TO 31 March 2023

31 March 2023 31 March 2022
$000 $000

Operating Revenue * 22,891 19,275
Interest Income – IFRS 16 non-occupied leases 1,089 1,267
Covid Government wage subsidy 36 430
Total Income 24,016 20,972

Operating Expenses ** (20,368) (17,689)
Depreciation Expense – IFRS 16 occupied leases
(829) (780)
Interest Expense - IFRS 16 non-occupied leases
(1,089) (1,267)
Interest Expense - IFRS 16 occupied leases
(471) (488)
Total Expenses
(22,757) (20,224)


Net Profit (Loss) Before Tax 1,259 748
Net Profit (Loss) After Tax *** 900 576



* Revenue includes: Operating revenue and interest income but excludes Covid related Government support.
** Expenses include: Operating expenses, depreciation, amortisation and interest expense.
*** The New Zealand entities had taxable income and were unable to utilise the foreign tax losses. The overseas entities had
minimal tax.

1



Overview – FY23 (continued)

As at 31 March 2023 there were 60 BurgerFuel restaurants operating in NZ and 7 operating in the Middle East
excluding third party “ghost” kitchens operating in the UAE. From 1 April 2022 the UAE now only has one store
operating in Dubai, that being the World Trade Centre store which operates under our new licence holder.

As at 31 March 2023 there were 4 Shake Out and 4 Winner Winner restaurants operating in NZ which includes the
opening of our new company owned Shake Out store in Auckland’s CBD Commercial Bay precinct.

The Year’s Results and Group Outlook

New Zealand

Total systemwide sales across New Zealand (68 restaurants, all 3 brands) increased by 19.10% on the previous year.
We are also pleased to announce the opening of the new BurgerFuel Dunedin store in April 2023 (FY24). This store has
been well received and to date is performing strongly.

Shake Out total store sales increased by 61.6% in FY23 mainly due to the introduction of delivery services in April
2022 and the opening of our company owned Shake Out store in the Commercial Bay precinct, downtown Auckland, in
November 2022. This store is performing as expected but has had a few disruptions with the Christmas period and the
extreme weather events occurring throughout 2023. Once again, we are benchmarking against less trading days in
FY22.

Winner Winner total sales increased by 33.5%. this is also due to the introduction of delivery services and reduced sales
in FY22. In May 2023 the board of directors decided to close our company owned Winner Winner store in Takapuna,
Auckland. This site never really performed well, and its closure will reduce the ongoing losses in that location. Winner
Winner is a great brand, but trading and growth in this brand was significantly affected by the Covid period. We learnt
from this restaurant and as a result we are re-working our Winner Winner offer, to reduce complexity and ultimately to
make the brand more scalable.

For the entire financial year, the two new brands represented 8.3% of total sales for the group (9.08% of total NZ sales).

The establishment of new brands takes considerable time and financial investment and accordingly this investment has
affected our bottom line. In addition, these new brands were both affected by almost 3 years of Covid disruptions. We
do believe that both brands have a future in New Zealand, however significant resources in terms of cash and
management will be needed to continue in FY24.

The Middle East

In April 2022 we appointed a new Master Licensee for the entire region to one company that assumes responsibility for
the appointment and operations of individual stores and regional franchisees. This is effectively a Development Agent
(DA) Agreement structure.

Under the DA Agreement BFG will receive a share of royalties generated from BurgerFuel sales in the region. Each
new store will be owned or franchised under the new DA agreement. The DA will be responsible for site selection and
store construction as well as training and day to day operations. As previously advised, the Group incurred costs in
FY23 in relation to setting up this new DA structure with a view to rebuilding the brand in the MENA region over
future years.

The BurgerFuel store in Dubai will soon undergo a full refit which will reflect an updated store design. It is intended
that this new look store will attract potential franchisees within the region and allow further franchising.

The future of MENA will be entirely dependent on the success of the new DA structure. Whilst BFG’s percentage share
of royalties will be substantially lower than in previous years, our operational involvement will also be on a significantly
reduced basis.

BFG earnings from the Middle East have been diminishing for some years, and the Group doesn’t anticipate generating
any income from the Middle East until FY25.

The Middle East sales are down 29.1% in FY23. This is due to the previous UAE licence holder exiting the brand and
closing 3 stores. Saudi Arabia also closed 2 underperforming stores in FY23 and 2 stores in FY24 and now have 4 stores
operating in this region.

2


Summary and Outlook

The FY23 year was another very challenging year. The hospitality sector was hit hard by the pandemic, staff shortages
and increased costs, but given these circumstances we believe the Group achieved a solid performance and profit for the
year.

At this stage the Group Performance over the next 12 months remains uncertain with the current worsening economic
conditions but the recent sales growth is promising, as is the proposed trial of the delivery service for select BurgerFuel
outlets.

We expect growth in new stores to be modest with perhaps a few new stores across all brands occurring in FY24.

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

3


Burger Fuel Group Limited
Consolidated Statement of Comprehensive Income
For The Year Ended 31 March 2023


2023

2022



$

$





Revenue

22,799,659

19,251,105
Covid Government wage subsidy

35,606

430,292
Operating Expenses

(19,553,197)

(17,079,428)
Transfer from Foreign currency reserve on windup of
subsidiary


-

-
Profit before Interest, Taxation, Depreciation and
Amortisation


3,282,068

2,601,969





Depreciation on Property, Plant and Equipment

(648,444)

(470,161)
Depreciation on Right of Use Assets

(828,911)

(779,953)
Amortisation

(165,676)

(139,442)



(1,643,031)

(1,389,556)






Profit before Interest and Taxation

1,639,037

1,212,413



Interest Income

91,600

23,579
Interest Income leases non-occupied

1,089,474

1,266,637
Interest Expense

(325)

-
Interest Expense leases occupied

(471,326)

(487,846)
Interest Expense leases non-occupied

(1,089,474)

(1,266,637)

(380,051)

(464,267)

Profit before Taxation

1,258,986

748,146

Income Tax Expense

(358,568)

(172,277)






Net Profit attributable to shareholders

900,418

575,869



Other comprehensive income:

Items that may be reclassified subsequently to profit or loss:

Movement in Foreign Currency Translation Reserve

1,708

12,684






Total comprehensive income

902,126

588,553






Basic Earnings per Share (cents)

1.79

1.14





Diluted Earnings per Share (cents)

1.79

1.14

4


Burger Fuel Group Limited
Consolidated Statement of Financial Position
As at 31 March 2023

2023

2022
Shareholders’ equity $

$
Contributed equity 11,913,499

11,913,499
Accumulated losses 209,252

(691,166)
Foreign currency translation reserve (283,768)

(285,476)


11,838,983


10,936,857
Current assets

Cash and cash equivalents 8,202,024

6,798,362
Trade and other receivables 2,133,744

1,931,950
Lease Receivable: non-occupied 1,456,504 1,538,383
Inventories 578,993

762,383
Loans 16,189

11,034

12,387,454

11,042,112
Non-current assets


Property, plant and equipment 2,441,342

2,465,244
Right of use asset - leases 6,687,547 7,727,134
Lease receivable non-occupied 15,629,170 18,172,743
Deferred tax asset 618,420

576,743
Loans 29,311 63,296
Intangible assets 2,056,255

1,905,563

27,462,045

30,910,723
Total assets 39,849,499

41,952,835
Current liabilities

Trade and other payables 1,853,546

1,249,455
Contract Liability 195,072 234,448
Lease Liability 659,714 615,881
Lease Liability: non-occupied 1,456,504 1,538,383
Income tax payable

267,063

115,649
Provisions 345,692 350,337
4,777,591 4,104,153
Non-current liabilities
Contract Liability 610,240 830,615
Lease Liability 6,950,273 7,867,267
Lease Liability non-occupied 15,629,170 18,172,743
Provisions 43,242 41,200
23,232,925 26,911,825
Total liabilities 28,010,516 31,015,978

Net assets 11,838,983 10,936,857

5


Burger Fuel Group Limited
Consolidated Statement of Financial Position
As at 31 March 2023





2023 2022


Net tangible assets per share ($ per share)


0.18


0.17
For and on behalf of the Board who approved these financial statements for issue on 30th May 2023.

Director Director

6



Burger Fuel Group Limited
Consolidated Statement of Changes in Equity
For The Year Ended 31 March 2023


2023
Contributed
Equity
Foreign Currency
Translation
Reserve
Accumulated
Losses Total Equity
$ $ $ $




Balance as at 1 April 2022

11,913,499 (285,476) (691,166) 10,936,857
Movement in foreign currency translation
reserve recognised in other comprehensive
income

- 1,708 - 1,708
Net Profit for the year ended 31 March 2023
- - 900,418 900,418
Total comprehensive income
- 1,708 900,418 902,126


Balance as at 31 March 2023
11,913,499 (283,768) 209,252 11,838,983


2022



Contributed
Equity
Foreign Currency
Translation
Reserve
Accumulated
Losses Total Equity
$ $ $ $




Balance as at 1 April 2021

11,913,499 (298,160) (1,267,035) 10,348,304
Movement in foreign currency translation
reserve recognised in other comprehensive
income

- 12,684 - 12,684
Net Profit for the year ended 31 March 2022
- - 575,869 575,869
Total comprehensive income
- 12,684 575,869 588,553


Balance as at 31 March 2022
11,913,499 (285,476) (691,166) 10,936,857

7


Burger Fuel Group Limited
Consolidated Statement of Cash Flows
For The Year Ended 31 March 2023



2023

2022

$

$
Cash flows from operating activities


Receipts from customers
22,567,953 19,286,019
Covid Government wage subsidy
35,606 445,301
Interest received
91,600 23,579
Goods and services tax
54,443 84,103
Payments to suppliers & employees
(18,948,977) (18,502,590)
Interest Paid
(325) -
Interest on leases
(471,326) (459,677)
Taxes (paid/refund)
(248,832) (541,965)
Net cash flows provided from operating activities
3,080,142 334,770


Cash flows from investing activities

Repayment of loans 28,830 163,320
Sale of property, plant and equipment 187,050 77,576
Acquisition of intangible assets
(427,050) (1,364)
Acquisition of property, plant & equipment
(815,465) (383,584)
Net cash flows applied to investing activities
(1,026,635) (144,052)


Cash flows from financing activities

Lease Liability Capital Component
(662,486) (505,496)
Net cash flows applied to financing activities
(662,486) (505,496)


Net movement in cash and cash equivalents
1,391,021 (314,778)
Exchange gains / (loss) on cash and cash equivalents
12,641 (979)
Opening cash and cash equivalents
6,798,362 7,114,119
Closing cash and cash equivalents
8,202,024 6,798,362

8



Burger Fuel Group Limited

SEGMENT REPORTING

Operating Segments

The Group operates in two operating segments; these operating segments have been divided into the following
geographical regions, New Zealand and International markets. 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.

2023 New Zealand International Consolidated

$ $ $
Revenue

Sales
9,802,833
-
9,802,833
Royalties
5,868,406
-
5,868,406
Franchising fees
422,010
24,991
447,001
Training fees
37,500
-
37,500
Property management fees
59,000
-
59,000
Advertising fees
4,215,561
-
4,215,561
Foreign exchange gain
19,764
(5,481)
14,283
Sundry income
2,146,255
112,320
2,258,575
Rent Relief on Non-Occupied Leases
96,500
-
96,500
Interest received
91,593
7
91,600
Interest Leases
1,089,474
-
1,089,474
Covid Government wage subsidy
35,606
-
35,606
Total Revenue 23,884,502 131,837 24,016,339



Interest Expense
325
-
325
Interest Expense Leases Occupied
471,326
-
471,326
Interest Expense Leases non occupied
1,089,474
-
1,089,474
Depreciation
648,444
-
648,444
Depreciation Leases
828,911
-
828,911
Amortisation
165,676
-
165,676

Segment Result before Income Tax
1,637,057
(378,071) 1,258,986
Income Tax Expense
358,568
- 358,568

Segment Assets
39,660,424
189,075 39,849,499
Segment Liabilities
27,986,575
23,941 28,010,516

Acquisition of Property, Plant & Equipment & Intangible Assets


Other 1,231,832 - 1,231,832

9


Burger Fuel Group Limited

SEGMENT REPORTING (CONTINUED)

2022 New Zealand International Consolidated

$ $ $
Revenue

Sales 8,035,134 42,140 8,077,274
Royalties 4,933,041 45,580 4,978,621
Franchising fees 236,599 249,754 486,353
Training fees - - -
Property management fees 57,000 - 57,000
Advertising fees 3,507,309 - 3,507,309
Foreign exchange gain (2,749) (10,972) (13,721)
Sundry income 2,016,172 327 2,016,499
Rent Relief on Non-Occupied Leases 141,770 - 141,770
Interest received 23,551 26 23,577
Interest Leases 1,266,637 - 1,266,637
Covid Government wage subsidy 430,292 - 430,292
Total Revenue 20,644,756 326,855 20,971,611



Interest Expense 2 - 2
Interest Expense Leases Occupied 487,846 - 487,846
Interest Expense Leases non occupied 1,266,637 - 1,266,637
Depreciation 463,451 6,710 470,161
Depreciation Leases 779,953 - 779,953
Amortisation 139,442 - 139,442

Segment Result before Income Tax 634,351 113,795 748,146
Income Tax Expense 172,277 - 172,277

Segment Assets 41,724,930 227,905 41,952,835
Segment Liabilities 30,960,790 55,188 31,015,978

Acquisition of Property, Plant & Equipment & Intangible Assets


Other 384,948 - 384,948

10


Burger Fuel Group Limited
Company Directory
As at 31 March 2023

NZ Companies Office - Registered Office Accountants
Burger Fuel Group Limited KPMG
66 Surrey Crescent 18 Viaduct Harbour Avenue,
Grey Lynn Auckland 1140
Auckland 1021


Company Number Bridgepoint Group Accounting Pty Ltd
1947191 Suite 301, 8 West Street,

North Sydney
Date of Incorporation NSW 2060
14-Jun-07 Australia

Directors Auditors
Peter Brook - Chairman (Independent) Baker Tilly Staples Rodway
Alan Dunn (Independent) Level 9, Tower Centre
Josef Roberts (Executive) 45 Queen Street
Tyrone Foley (Non-Independent) Auckland 1010

Board Executives
Mark Piet (Chief Financial Officer / Company Secretary)


Business Headquarters
66 Surrey Crescent
Grey Lynn
Auckland 1021


Bankers
ASB Bank Limited
CBA Bank Limited (Australia)



Solicitors

Dentons Kensington Swan, 18 Viaduct Harbour Avenue, Auckland 1011.

Buddle Findlay, HSBC Tower, 188 Quay Street, PO Box 1433, Auckland 1140.

Wynn Williams PO Box 2401, Shortland Street, Auckland 1140.

Corporate Counsel Limited Solicitors, P.O Box 37-322, Parnell, Auckland 1151 *
*Ceased providing services to the Group on 25 July 2022.

---

TUESDAY, 30 MAY 2023
BURGER FUEL GROUP LIMITED PRELIMINARY FULL YEAR RESULTS FOR THE
YEAR ENDED 31 MARCH 2023
OVERVIEW – FY23
The Directors of Burger Fuel Group Limited (BFG) present the results for the 12 months
to 31 March 2023. (The audit of these results is in the process of being finalised).
Net Profit after tax for the period was $900,418 representing a 56.3% increase on the previous
year.
This result reflects a strong sales year in FY23, with total Group sales back at pre Covid levels.
BurgerFuel Group (unaudited) Total System Sales (all three brands, all regions) increased by 12.77%
to $106.2M on the same period last year. The Group had strong store sales in FY23 which was helped
with the opening of the BurgerFuel Cambridge & Rolleston stores in May 2022 and October 2022
respectively, delivery sales for Winner Winner and Shake Out, and the fact that we are benchmarking
against reduced trading days in FY22, when the stores were closed due to Covid (August & September
2022). The CBD stores also had improved sales due to office workers returning to the city centres.
We expect the sales increase to continue into FY24 with the introduction of online delivery options for
BurgerFuel being trialled across selected stores in the BurgerFuel system. However, we are conscious
of the fact that the economic environment remains challenging, and this could impact sales.
Total income for the Group increased by 14.5% to $24.0M.
As at 31 March 2023 there were 60 BurgerFuel restaurants operating in NZ and 7 operating in the
Middle East excluding third party “ghost” kitchens operating in the UAE. From 1 April 2022 the UAE
now only has one store operating in Dubai, that being the World Trade Centre store which operates
under our new licence holder.
As at 31 March 2023 there were 4 Shake Out and 4 Winner Winner restaurants operating in NZ which
includes the opening of our new company owned Shake Out store in Auckland’s CBD Commercial Bay
precinct.
BURGERFUEL GROUP - PRESS RELEASE

BFG RESULTS FOR THE PERIOD 1 APRIL 2022 TO 31 MARCH 2023
Operating Revenue *
Interest Income – IFRS 16 non-occupied leases
Covid-19 Government wage subsidy
31 March 2023
$000
22,891
1,089
36
31 March 2022
$000
19,275
1,267
430
Total Income24,01620,972
(20,368)(17,689)
(829)(780)
(1,089)(1,267)
(471)
Operating Expenses **
Depreciation Expense – IFRS 16 occupied leases
Interest Expense - IFRS 16 non-occupied leases
Interest Expense - IFRS 16 occupied leases
(488)
Total Expenses
(22,757)
(20,224)
Net Profit (Loss) Before Tax
1,259
748
Net Profit (Loss) After Tax ***
900
576
THE YEAR’S RESULTS AND GROUP OUTLOOK
NEW ZEALAND
Total systemwide sales across New Zealand (68 restaurants, all 3 brands) increased by 19.10% on
the previous year.
We are also pleased to announce the opening of the new BurgerFuel Dunedin store in April 2023
(FY24). This store has been well received and to date is performing strongly.
Shake Out total store sales increased by 61.6% in FY23 mainly due to the introduction of delivery
services in April 2022 and the opening of our company owned Shake Out store in the Commercial
Bay precinct, downtown Auckland, in November 2022. This store is performing as expected but has
had a few disruptions with the Christmas period and the extreme weather events occurring
throughout 2023. Once again, we are benchmarking against less trading days in FY22.
Winner Winner total sales increased by 33.5%. this is also due to the introduction of delivery
services and reduced sales in FY22. In May 2023 the board of directors decided to close our
company owned Winner Winner store in Takapuna, Auckland. This site never really performed well,
and its closure will reduce the ongoing losses in that location. Winner Winner is a great brand, but
trading and growth in this brand was significantly affected by the Covid period. We learnt from this
restaurant and as a result we are re-working our Winner Winner offer, to reduce complexity and
ultimately to make the brand more scalable.
The establishment of new brands takes considerable time and financial investment and accordingly
this investment has affected our bottom line. Unfortunately, with the ongoing impact of temporary
COVID store closures and reduced hours we were unable to gain much traction with these brands in
FY22. We do however believe that both brands have a future in New Zealand, however significant
resources in terms of cash and management will need to continue in FY23. The future development
of these brands in FY23 is very much dependant on the impact of COVID as well as general market
conditions.
*
**
***
Revenue includes: Operating revenue and interest income but excludes Covid related Government support.
Expenses include: Operating expenses, depreciation, amortisation and interest expense.
The New Zealand entities had taxable income and were unable to utilise the foreign tax losses. The overseas entities had
minimal tax.

For the entire financial year, the two new brands represented 8.3% of total sales for the group
(9.08% of total NZ sales).
The establishment of new brands takes considerable time and financial investment and accordingly
this investment has affected our bottom line. In addition, these new brands were both affected by
almost 3 years of Covid disruptions. We do believe that both brands have a future in New Zealand,
however significant resources in terms of cash and management will be needed to continue in
FY24.
THE MIDDLE EAST
In April 2022 we appointed a new Master Licensee for the entire region to one company that
assumes responsibility for the appointment and operations of individual stores and regional
franchisees. This is effectively a Development Agent (DA) Agreement structure.
Under the DA Agreement BFG will receive a share of royalties generated from BurgerFuel sales in
the region. Each new store will be owned or franchised under the new DA agreement. The DA will
be responsible for site selection and store construction as well as training and day to day
operations. As previously advised, the Group incurred costs in FY23 in relation to setting up this
new DA structure with a view to rebuilding the brand in the MENA region over future years.
The BurgerFuel store in Dubai will soon undergo a full refit which will reflect an updated store
design. It is intended that this new look store will attract potential franchisees within the region and
allow further franchising.
The future of MENA will be entirely dependent on the success of the new DA structure. Whilst BFG’s
percentage share of royalties will be substantially lower than in previous years, our operational
involvement will also be on a significantly reduced basis.
BFG earnings from the Middle East have been diminishing for some years, and the Group doesn’t
anticipate generating any income from the Middle East until FY25.
The Middle East sales are down 29.1% in FY23. This is due to the previous UAE licence holder exiting
the brand and closing 3 stores. Saudi Arabia also closed 2 underperforming stores in FY23 and 2
stores in FY24 and now have 4 stores operating in this region.

SUMMARY AND OUTLOOK
The FY23 year was another very challenging year. The hospitality sector was hit hard by the
pandemic, staff shortages and increased costs, but given these circumstances we believe the Group
achieved a solid performance and profit for the year.
At this stage the Group Performance over the next 12 months remains uncertain with the current
worsening economic conditions but the recent sales growth is promising, as is the proposed trial of
the delivery service for select BurgerFuel outlets.
We expect growth in new stores to be modest with perhaps a few new stores across all brands
occurring in FY24.
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 f urther information please
contact: Mark Piet
+64 21 453 333
communications@burgerfuel.com
www.burgerfuel.com