SIR Royalty Income Fund announces SIR Corp. fiscal 2007 second quarter financial results



    BURLINGTON, ON, March 28 /CNW/ - SIR Royalty Income Fund (TSX: SRV.UN)
("the Fund") today announced that SIR Corp. ("SIR"), the private operating
entity from which the Fund derives distribution income and interest income,
has filed its fiscal 2007 second quarter financial results for the 12 and
24-week periods ended February 11, 2007.
    SIR has advised the Fund that revenue for restaurants in the Royalty pool
for the second quarter of fiscal 2007 increased 8.1% to $36.5 million compared
to $33.8 million for the same period a year ago. The number of restaurants in
the Royalty pool increased to 38 as at February 11, 2007 compared to 36 as at
February 12, 2006. Three new Canyon Creek(TM) restaurants were added to the
Royalty pool effective January 1, 2007, which was offset by the exclusion of
the closed Jack Astor's(R) Don Mills location. The increase in number of
restaurants, along with increased same store sales growth(1) ("SSSG") has
contributed to the increase in revenue from the Royalty Pooled Restaurants. In
addition, revenue from the two new Jack Astor's restaurants that were added to
the Royalty pool effective January 1, 2006 is included for the entire second
quarter in fiscal 2007 versus only the period from January 1, 2006 to February
12, 2006 in the second quarter of fiscal 2006. Effective January 1, 2007, the
Fund indirectly receives royalty payments from 38 restaurants.
    For the 24-week period ended February 11, 2007, revenue for the
restaurants in the Royalty pool increased 9.7% to $70.3 million compared to
$64.1 million for restaurants in the Royalty pool for the 24-week period ended
February 12, 2006. During the period, SIR Concept Restaurants (Jack Astor's,
Alice Fazooli's!(R) and Canyon Creek) accounted for approximately 87% of
Royalty Pooled Revenue and the Signature Restaurants (reds(R), Far Niente(R) &
Soul of the Vine(R), Brasserie Frisco(TM), Armadillo Texas Grill(R) and the
Loose Moose Tap & Grill(R)) accounted for approximately 13% of Royalty Pooled
Revenue.
    SIR's loss from continuing operations decreased 23% to $0.8 million in
the second quarter of fiscal 2007 compared to $1.1 million in the second
quarter of fiscal 2006. SIR's loss from continuing operations totaled
$3.0 million for the 24-week period ended February 11, 2007, essentially flat
compared to the same period a year ago.
    For the second quarter of fiscal 2007, SIR's cash provided by continuing
operations increased by $0.7 million to $3.1 million compared to $2.4 million
in the same period a year ago. Cash provided by continuing operations was
$3.2 million for the 24-week period ended February 11, 2007, an increase of
$1.1 million compared to the same period a year ago. SIR used cash in
continuing investing activities of $2.3 million and $5.5 million for the 12
and 24-week periods ended February 11, 2007, respectively, primarily for the
purchase of property, plant and equipment related to new and renovated
restaurants.
    SIR has advised the Fund that same store sales(1) ("SSS") for restaurants
in the Royalty pool for the second quarter of 2007 increased 2.9% to
$35.4 million compared to $34.4 million for the comparable period a year ago.
For the 24-week period ended February 11, 2007, SSS(1) increased 2.9% to
$69.2 million compared to $67.3 million for the comparable period a year ago.

    
                                 12 weeks ended        24 weeks ended
    SSSG(1) for Restaurants     February 11, 2007    February 11, 2007
    in the Royalty pool(1)         (unaudited)          (unaudited)

    -------------------------------------------------------------------
    Jack Astor's                       1.5%                 1.7%
    Alice Fazooli's!                   3.5%                 4.9%
    Canyon Creek                       5.0%                 6.4%
    Signature Restaurants              7.0%                 3.6%
    -------------------------------------------------------------------
    Overall SSSG                       2.9%                 2.9%
    

    SIR's fiscal 2007 second quarter filings, which include its unaudited
interim consolidated financial statements and management's discussion &
analysis, can be accessed via the SIR website or under the Fund's profile on
the SEDAR website at www.sedar.com under "Other".

    About SIR Corp.
    SIR is a privately held Canadian corporation that owns and operates a
portfolio of more than 39 restaurants in Canada. SIR's concept brands include:
Jack Astor's Bar and Grill, with 23 locations; Alice Fazooli's!, with five
locations; and Canyon Creek Chop House(R), with seven locations. SIR also
operates one-of-a-kind "signature" brands in downtown Toronto, which comprise
the upscale reds, Far Niente & Soul of the Vine, Brasserie Frisco, the casual
Armadillo Texas Grill and the Loose Moose Tap & Grill. All trademarks related
to the concept and signature brands noted above are used by SIR under a
license agreement with SIR Royalty Limited Partnership in consideration for a
Royalty, payable by SIR to the Partnership, equal to six percent of the
revenue of the 38 restaurants currently included in the Royalty Pool. For more
information on SIR or the Fund, please visit www.sircorp.com.

    About SIR Royalty Income Fund
    The Fund is a trust governed by the laws of the province of Ontario that
receives distribution income from its investment in the SIR Royalty Limited
Partnership and interest income from the SIR Loan. The Fund intends to pay
distributions to unitholders on a monthly basis.

    Caution concerning forward-looking statements
    ---------------------------------------------
    Certain statements in this news release may constitute "forward-looking"
statements which involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Fund to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. When
used in this document, such statements are such words as "may", "will",
"expect", "believe", "plan", "anticipate", "intend", "estimate" and other
similar terminology. These statements reflect SIR Management's current
expectations regarding future events and operating performance and speak only
as of the date of this document. The Fund and SIR expressly disclaim any
obligation or undertaking to publicly release any updates or revisions to any
forward-looking statements contained herein to reflect any change in
expectations with regard thereto or any changes in events, conditions or
circumstances on which any statement is based.
    In formulating the forward-looking statements contained herein,
management has assumed, among other things, that business and economic
conditions affecting SIR's restaurants and the Fund will continue
substantially in the ordinary course, including without limitation with
respect to industry conditions, general levels of economic activity (including
in downtown Toronto), regulations (including regarding employees, food safety,
tobacco and alcohol), weather, taxes, foreign exchange rates and interest
rates, that there will be no pandemics or other outbreaks of disease or safety
issues affecting humans or animals or food products, and that there will be no
unplanned material changes in its facilities, equipment, customer and employee
relations, or credit arrangements. For more information concerning the Fund's
risks and uncertainties, please refer to the Fund's periodic interim filings,
October, 2004 prospectus and/or its March 31, 2006 Annual Information Form.


    (1) Same store sales and same store sales growth exclude revenue from
    restaurants which are not included in the Royalty pool, and exclude
    revenue from restaurants opened or closed during the current or prior
    fiscal year and therefore not open for the full period in both years.

    %SEDAR: 00020914E




For further information:

For further information: Jeff Good, Chief Financial Officer, SIR Corp.,
Tel: (905) 681-2997; Bruce Wigle, Investor Relations, Tel: (416) 815-0700 ext.
228, Email: bwigle@equicomgroup.com


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