MONCTON, NB, Feb. 28 /CNW/ - PDM Royalties Income Fund (the "Fund")
(TSX: PDM.UN) announced that as of January 1, 2008: 17 new restaurants
comprised of 10 Scores, 5 Baton Rouge, 1 Mikes, and 1 Pizza Delight
restaurant, opened during the period October 3, 2006 through December 31,
2007, will be added to the royalty pool on which the Fund earns royalty
revenue. The sales from these 17 new restaurants will generate an estimated
$48.7 million in sales. The pool of restaurants will decrease from 261
locations to 259, reflecting the closure of 19 underperforming restaurants
with annual sales of $12.4 million. The closed locations included 14 Mikes and
5 Pizza Delight restaurants.
The net increase in sales of approximately $36.3 million will generate an
estimated additional $2.4 million in annual royalties for the Fund. The Fund
will compensate Imvescor Inc. (Imvescor) for this increased revenue stream
based on a formula set out in the License agreement. There is a 7.5% discount
applied to the value of the revenues which provides added value to the
existing unitholders. The consideration to Imvescor will represent the
equivalent of 1,698,990 units increasing the retained interest by 16.9% (13.8%
on a fully diluted basis). This amount will be adjusted at December 31, 2008
once the actual sales for the new restaurants are determined.
In addition, the adjustment to the January 2007 addition of restaurants
to the royalty pool has now been finalized. The actual annual sales for 2007
for the new restaurants added on January 1, 2007 were $12.6 million compared
to the original estimate of $12.3 million. Due to the additional sales, the
unit entitlement increased from 259,366 to 261,382.
The net impact of these changes increases the retained interest held by
Imvescor to approximately 3.3 million units which is 32.4% of the Fund (26.5%
on a fully diluted basis).
New restaurant development at Scores and Baton Rouge was very strong in
2007 and is continuing at a similar pace for 2008. Scores has also opened its
first Ontario restaurant in Kanata and is experiencing strong consumer
acceptance. The new "Oven Fresh Kitchen" Pizza Delight concept and "Trattoria"
Mikes has met with excellent consumer support and the franchisees for each
brand have started to commit to renovations with eight Pizza Delights and
eight Mikes planned for 2008.
PDM Royalties Income Fund (the "Fund") is a limited purpose open-ended
trust established under the laws of Ontario. The Fund makes monthly
distributions of its available cash to holders of units. The Fund indirectly
owns the trade marks and intellectual property for the Pizza Delight(R),
Mikes(R), Scores(R) and Baton Rouge(R) brands and has licensed them to
Imvescor in consideration for a royalty equal to 4% of system sales for Pizza
Delight and Mikes, and in the case of Scores and Baton Rouge, the royalty rate
Imvescor is a privately owned corporation, headquartered in Moncton, New
Brunswick. It operates franchised and corporate restaurants under the brand
names Pizza Delight, Mikes, Scores, and Baton Rouge restaurants. Pizza Delight
operates primarily in Atlantic Canada, where it dominates the family/mid-scale
segment. Mikes and Scores restaurants operate primarily in Quebec in the
family and casual dining segments and the take-out and delivery segments.
Baton Rouge has operations in Quebec and Ontario in the high end casual
For further information:
For further information: PDM Royalties Income Fund, William Lane, CMA,
Chief Financial Officer, (506) 853-0990, email@example.com; Or visit our web
sites: www.pdmfund.ca, www.imvescor.ca, www.pizzadelight.ca, www.mikes.ca,
www.scores.ca or www.batonrougerestaurants.com