Boston Pizza Royalties Income Fund
TSX : BPF.UN

Boston Pizza Royalties Income Fund
Boston Pizza International Inc.

Boston Pizza International Inc.

August 10, 2017 08:00 ET

Boston Pizza Royalties Income Fund Announces Second Quarter 2017 Results Including Franchise Sales of $212.7 Million for the Period, an Increase of 0.9% Versus the Same Period One Year Ago

Payout ratio of 99.1% for the Period despite continued challenging economic conditions in oil and gas regions

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 10, 2017) -

HIGHLIGHTS

  • System-Wide Gross Sales1 of $275.6 million for the Period and $536.8 million YTD, representing increases of 0.6% and 1.6%, respectively, versus the same periods one year ago.
  • Franchise Sales2 from royalty pool restaurants of $212.7 million for the Period and $415.1 million YTD, representing increases of 0.9% and 1.5%, respectively, versus the same periods one year ago.
  • Same Store Sales Growth of negative 1.6% for the Period and negative 0.9% YTD.
  • Distributable Cash3 per Unit decreased 0.9% for the Period and decreased 1.6% YTD.
  • Payout Ratio4 of 99.1% for the Period, 104.6% YTD, and 100.2% on a trailing 12-month basis. Cash balance at the end of the Period was $2.9 million.
  • Trustees declared July 2017 distribution to unitholders of 11.5 cents per Unit.

Boston Pizza Royalties Income Fund (the "Fund") (TSX:BPF.UN) and Boston Pizza International Inc. ("BPI") reported financial results today for the second quarter period from April 1, 2017 to June 30, 2017 (the "Period") and January 1, 2017 to June 30, 2017 ("YTD"). A copy of this press release, the condensed consolidated interim financial statements and related Management's Discussion and Analysis ("MD&A") of the Fund and BPI are available at www.sedar.com and www.bpincomefund.com. The Fund will host a conference call to discuss the results on August 10, 2017 at 8:30 am Pacific Time (11:30 am Eastern Time). The call can be accessed by dialling 1-800-319-4610 or 604-638-5340. A replay will be available until September 10, 2017 by dialling 1-855-669-9658 or 604-674-8052 and entering the access code: 1527 followed by the # sign.

Same store sales growth ("SSSG"), a key driver of distribution growth for unitholders of the Fund, was negative 1.6% for the Period and negative 0.9% YTD compared with positive 2.1% and positive 1.4%, respectively, for the same periods in 2016. Franchise Sales, the basis upon which Royalty5 and Distribution Income5 are paid to the Fund, exclude revenue from the sale of liquor, beer, wine and approved national promotions and discounts. On a Franchise Sales basis, SSSG was negative 1.6% for the Period and negative 1.0% YTD compared with positive 1.8% and positive 1.2%, respectively, for the same periods in 2016. The negative SSSG for the Period and YTD was principally due to the continued weak general economic conditions in regions directly connected to the Canadian oil and gas industry and the adverse impact of the Saskatchewan 6% provincial sales tax on restaurant purchased food, partially offset by menu re-pricing. SSSG was also impacted YTD by having one less day compared to the same period one year ago due to 2016 being a leap year. Franchise Sales of restaurants in the Fund's royalty pool were $212.7 million for the Period and $415.1 million YTD compared to $210.9 million and $408.9 million, respectively for the same periods in 2016. The increases in Franchise Sales for the Period and YTD were primarily due to the additional Franchise Sales from 11 net new restaurants added to the royalty pool on January 1, 2017, partially offset by negative SSSG.

"While our sales continue to be impacted by challenging economic conditions in oil and gas regions, we continue to see positive sales results in other regions and have several exciting initiatives underway to drive results going forward. These initiatives include our new Boston Pizza website with enhanced mobile features and online ordering capabilities that will launch in Q3, and our Team HeadQuarters sports team loyalty program that we recently launched in Ontario and Saskatchewan and will roll out nationally in October", said Mark Pacinda, President and CEO of BPI. "We are also pleased with the performance of our corporately owned restaurant on Front and John Street in downtown Toronto, which was re-opened early in the second quarter after a significant renovation to showcase our new urban prototype."

The Fund's net and comprehensive income was $7.9 million for the Period compared to $10.0 million for the second quarter of 2016. The $2.1 million decrease in the Fund's net and comprehensive income for the Period compared to the second quarter of 2016 was primarily due to a net $1.6 million change in fair value adjustments, higher non-cash deferred income taxes of $0.3 million, and higher interest on Class B Units of Boston Pizza Royalties Limited Partnership help by BPI (the "Class B Units") of $0.2 million. The Fund's net and comprehensive income was $14.5 million YTD compared to $18.5 million year-to-date in 2016. The $4.0 million decrease in the Fund's net and comprehensive income YTD compared to the same period in 2016 was primarily due to a net $3.6 million change in fair value adjustments, higher non-cash deferred income taxes of $0.3 million, and higher interest on Class B Units of $0.3 million, partially offset by an increase in Royalty income of $0.2 million. For a detailed discussion on the Fund's net and comprehensive income, please see the "Operating Results - Net and Comprehensive Income / Basic and Diluted Earnings" section in the Fund's MD&A for the Period. The Fund's net income under International Financial Reporting Standards ("IFRS") contains non-cash items, such as the fair value adjustments on financial instruments and deferred income taxes, that do not affect the Fund's business operations or its ability to pay distributions to unitholders. In the Fund's view, net income is not the only or most meaningful measurement of the Fund's ability to pay distributions. Consequently, the Fund reports the non-IFRS metrics of Distributable Cash and Payout Ratio to provide investors with more meaningful information regarding the amount of cash that the Fund has generated to pay distributions and the extent to which the Fund has distributed that cash. Readers are cautioned that Distributable Cash and Payout Ratio are non-IFRS financial measures that do not have standardized meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. For a reconciliation between cash flow from operating activities (the most directly comparable IFRS measure) and Distributable Cash see the "Financial Summary" section of this press release. For a detailed discussion on the Fund's Distributable Cash and Payout Ratio, please see the "Operating Results - Distributable Cash / Payout Ratio" section in the Fund's MD&A for the Period and YTD.

The Fund generated Distributable Cash of $7.1 million for the Period, a nominal decrease from the second quarter of 2016. The nominal decrease in Distributable Cash of less than $0.1 million or 0.8%, was primarily due to higher interest expense on Class B Units. The Fund generated Distributable Cash of $13.4 million YTD compared to $13.6 million for the same period in 2016. The decrease in Distributable Cash YTD of $0.2 million or 1.8% was primarily due to higher interest expense on Class B Units.

The Fund's Distributable Cash per Unit of the Fund ("Unit") was $0.348 for the Period and $0.660 YTD compared to $0.351 and $0.671, respectively, for the same periods in 2016. The decreases in Distributable Cash per Unit of $0.003 or 0.9% for the Period and $0.011 or 1.6% YTD, are primarily attributable to the decreases in Distributable Cash noted above.

The Fund's Payout Ratio for the Period was 99.1% and 104.6% YTD compared to 98.3% and 101.8%, respectively, in the same periods in 2016. The increase in the Fund's Payout Ratio for the Period compared to the same period in 2016 was due to the combined effects of Distributable Cash for the Period decreasing by 0.8% and distributions paid during the Period remaining unchanged compared to the same period in 2016. The increase in the Fund's Payout Ratio YTD compared to the same period in 2016 was due to the combined effects of Distributable Cash YTD decreasing by 1.8% and distributions paid YTD increasing by $0.1 million or 0.9%. The increase in distributions paid YTD compared to the same period one year ago was due to the Fund increasing the monthly distribution from 10.83 cents per Unit to 11.50 cents per Unit beginning with the January 2016 distribution, which was paid on February 29, 2016. The Fund strives to provide unitholders with consistent monthly distributions, and as a result, the Fund will generally experience seasonal fluctuations in its Payout Ratio. The Fund's Payout Ratio is likely to be higher in the first and fourth quarters each year compared to the second and third quarters each year since Boston Pizza restaurants generally experience higher Franchise Sales during the summer months when restaurants open their patios and benefit from increased tourist traffic. Higher Franchise Sales generally result in increases in Distributable Cash. On a trailing 12-month basis, the Fund's Payout Ratio was 100.2% as at June 30, 2017. A key feature of the Fund is that it is a "top line" structure, in which BPI and Boston Pizza Canada Limited Partnership ("BP Canada LP") pay the Fund an amount based on Franchise Sales from restaurants in the Fund's royalty pool. Accordingly, Fund unitholders are not directly exposed to changes in the operating costs or profitability of BPI, BP Canada LP or individual Boston Pizza restaurants. Given this structure, and that the Fund has no current mandate to retain capital for other purposes, it is expected that the Fund will maintain a Payout Ratio close to 100% over time as the trustees of the Fund continue to distribute all available cash in order to maximize returns to unitholders.

On August 9, 2017 the trustees of the Fund approved a cash distribution to unitholders of 11.5 cents per Unit for July 2017. The distribution will be payable to unitholders of record at the close of business on August 21, 2017 and will be paid August 31, 2017. The Fund periodically reviews distribution levels based on its policy of stable and sustainable distribution flow to unitholders. Including the July 2017 distribution, which will be paid on August 31, 2017, the Fund will have paid out 181 consecutive monthly distributions totalling $264.2 million or $18.69 per Unit since the Fund's initial public offering in 2002.

FINANCIAL SUMMARY

The tables below set out selected information from the Fund's condensed consolidated interim financial statements together with other data and should be read in conjunction with the condensed consolidated interim financial statements and MD&A of the Fund for the three and six month periods ended June 30, 2017 and 2016.

Q2 2017 Q2 2016 YTD 2017 YTD 2016
(in thousands of dollars - except restaurants, SSSG, Payout Ratio and per Unit items)
System-Wide Gross Sales 275,637 274,039 536,837 528,221
Number of restaurants in Royalty Pool 383 372 383 372
Franchise Sales reported by restaurants in the Royalty Pool 212,691 210,852 415,097 408,901
Royalty income 8,508 8,434 16,604 16,356
Distribution Income 2,686 2,728 5,244 5,293
Interest income 452 452 904 904
Total revenue 11,646 11,614 22,752 22,553
Administrative expenses (335 ) (296 ) (637 ) (583 )
Interest expense on debt (612 ) (612 ) (1,213 ) (1,222 )
Interest expense on Class B Unit and Class C Unit liabilities (1,756 ) (1,573 ) (2,953 ) (2,657 )
Profit before fair value adjustments and income taxes 8,943 9,133 17,949 18,091
Fair value adjustment on investment in BP Canada LP 2,575 6,511 1,868 10,398
Fair value adjustment on Class B Unit liability (1,561 ) (3,407 ) (1,414 ) (5,459 )
Fair value adjustment on interest rate swaps 493 7 492 (436 )
Current and deferred income tax expense (2,527 ) (2,240 ) (4,400 ) (4,081 )
Net and comprehensive income 7,923 10,004 14,495 18,513
Basic earnings per Unit 0.39 0.49 0.71 0.91
Diluted earnings per Unit 0.39 0.49 0.71 0.91
Distributable Cash / Distributions / Payout Ratio
Cash flows from operating activities 9,379 9,323 18,121 18,012
Class C Unit distributions to BPI (450 ) (450 ) (900 ) (900 )
BPI Class B Unit entitlement (1,304 ) (1,119 ) (2,634 ) (2,280 )
Interest paid on long-term debt (619 ) (617 ) (1,220 ) (1,222 )
SIFT Tax on Units 53 (20 ) 20 17
Distributable Cash 7,059 7,117 13,387 13,627
Distributions paid 6,998 6,998 13,997 13,878
Payout Ratio 99.1 % 98.3 % 104.6 % 101.8 %
Distributable Cash per Unit 0.348 0.351 0.660 0.671
Distributions paid per Unit 0.345 0.345 0.690 0.683
Other
Same store sales growth (1.6 %) 2.1 % (0.9 %) 1.4 %
Number of restaurants opened 1 4 2 4
Number of restaurants closed 1 0 2 2
Jun 30, 2017 Dec 31, 2016
Total assets 455,536 444,332
Total liabilities 189,493 181,120

Notes:

(1) "System-Wide Gross Sales" means the gross revenue: (i) of the corporate Boston Pizza restaurants in Canada owned by BPI; and (ii) reported to BP Canada LP by franchised Boston Pizza restaurants in Canada, without audit or other form of independent assurance, and in the case of both (i) and (ii), including revenue from the sale of liquor, beer, wine and revenue from BP Canada LP approved national promotions and discounts and excluding applicable sales and similar taxes.
(2) "Franchise Sales" is the basis upon which Royalty and Distribution Income are payable, and means the gross revenue: (i) of the corporate Boston Pizza restaurants in Canada owned by BPI; and (ii) reported to BP Canada LP by franchised Boston Pizza restaurants in Canada, without audit or other form of independent assurance, and in the case of both (i) and (ii), after deducting revenue from the sale of liquor, beer, wine and revenue from BP Canada LP approved national promotions and discounts and excluding applicable sales and similar taxes. Nevertheless, BP Canada LP periodically conducts audits of the Franchise Sales reported to it by its franchisees, and the Franchise Sales reported herein include results from sales audits of earlier periods.
(3) Distributable Cash is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. This non-IFRS financial measure provides useful information to investors regarding the amount of cash the Fund has generated for distribution on the Units. The preceding table provides a reconciliation from this non-IFRS financial measure to cash flows from operating activities, which is the most directly comparable IFRS measure. Investors are cautioned that this should not be construed as an alternative to cash flows from operating activities. For additional information regarding this financial metric, see the heading "Description of Non-IFRS and Additional IFRS Measures" in the Fund's MD&A for the Period and YTD.
(4) Payout Ratio is calculated by dividing the distributions paid by the Fund during a period by the Distributable Cash generated in that period. Payout Ratio is a non-IFRS financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. This non-IFRS financial measure provides investors with useful information regarding the extent to which the Fund distributes cash on the Units. Investors are cautioned that this should not be construed as an alternative net income measure of profitability. As the Payout Ratio is calculated from a formula which includes Distributable Cash, which is a non-IFRS measure, a reconciliation of Payout Ratio to an IFRS measure is not possible. For additional information regarding this financial metric, see the heading "Description of Non-IFRS and Additional IFRS Measures" in the Fund's MD&A for the Period and YTD.
(5) The Fund licenses BPI the right to use various Boston Pizza trademarks in return for BPI paying the Fund a royalty equal to 4% of Franchise Sales of Boston Pizza restaurants in the Fund's royalty pool ("Royalty"). "Distribution Income" is income received indirectly by the Fund on Class 1 LP Units and Class 2 LP Units of BP Canada LP. See the "Overview - Purpose of the Fund / Sources of Revenue" section of the Fund's MD&A for the Period and YTD for more details.
(6) Profit before fair value adjustments and income taxes is an additional IFRS measure. For additional information regarding these financial metrics, see the heading "Description of Non-IFRS and Additional IFRS Measures" in the Fund's MD&A for the Period and YTD.
(7) Other capitalized terms used in these tables are defined in the Fund's MD&A for the Period and YTD.

SUMMARY OF QUARTERLY RESULTS

Q2 2017 Q1 2017 Q4 2016 Q3 2016
(in thousands of dollars - except restaurants, SSSG, Payout Ratio and per Unit items)
System-Wide Gross Sales 275,637 261,200 270,800 281,538
Number of restaurants in Royalty Pool 383 383 372 372
Franchise Sales reported by restaurants in the Royalty Pool 212,691 202,406 204,121 215,597
Royalty income 8,508 8,096 8,165 8,624
Distribution Income 2,686 2,558 2,617 2,790
Interest income 452 452 452 452
Total revenue 11,646 11,106 11,234 11,866
Administrative expenses (335 ) (302 ) (299 ) (292 )
Interest expense on debt (612 ) (601 ) (620 ) (619 )
Interest expense on Class B Unit and Class C Unit liabilities (1,756 ) (1,197 ) (2,184 ) (1,551 )
Profit before fair value adjustments and income taxes 8,943 9,006 8,131 9,404
Fair value adjustment on investment in BP Canada LP 2,575 (707 ) 5,098 9,237
Fair value adjustment on Class B Unit liability (1,561 ) 147 (2,668 ) (4,833 )
Fair value adjustment on interest rate swaps 493 (1 ) 967 171
Current and deferred income tax expense (2,527 ) (1,873 ) (2,782 ) (3,473 )
Net and comprehensive income 7,923 6,572 8,746 10,506
Basic earnings per Unit 0.39 0.32 0.43 0.52
Diluted earnings per Unit 0.39 0.26 0.43 0.52
Distributable Cash / Distributions / Payout Ratio
Cash flows from operating activities 9,379 8,742 9,128 9,718
Class C Unit distributions to BPI (450 ) (450 ) (450 ) (450 )
BPI Class B Unit entitlement (1,304 ) (1,330 ) (1,134 ) (1,108 )
Interest paid on long-term debt (619 ) (601 ) (612 ) (560 )
SIFT Tax on Units 53 (33 ) (7 ) 27
Distributable Cash 7,059 6,328 6,925 7,627
Distributions paid 6,998 6,999 6,999 6,999
Payout Ratio 99.1 % 110.6 % 101.1 % 91.8 %
Distributable Cash per Unit 0.348 0.312 0.341 0.376
Distributions paid per Unit 0.345 0.345 0.345 0.345
Other
Same store sales growth (1.6 %) 0.0 % (3.1 %) (0.5 %)
Number of restaurants opened 1 1 5 4
Number of restaurants closed 1 1 0 0

SUMMARY OF QUARTERLY RESULTS (continued)

Q2 2016 Q1 2016 Q4 2015 Q3 2015
(in thousands of dollars - except restaurants, SSSG, Payout Ratio and per Unit items)
System-Wide Gross Sales 274,039 254,182 272,017 275,009
Number of restaurants in Royalty Pool 372 372 366 366
Franchise Sales reported by restaurants in the Royalty Pool 210,852 198,049 205,365 212,367
Royalty income 8,434 7,922 8,215 8,494
Distribution Income 2,728 2,565 2,708 2,799
Interest income 452 452 452 452
Total revenue 11,614 10,939 11,375 11,745
Administrative expenses (296 ) (287 ) (298 ) (395 )
Interest expense on debt (612 ) (610 ) (596 ) (590 )
Interest expense on Class B Unit and Class C Unit liabilities (1,573 ) (1,084 ) (1,862 ) (1,339 )
Profit before fair value adjustments and income taxes 9,133 8,958 8,619 9,421
Fair value adjustment on investment in BP Canada LP 6,511 3,887 3,584 (18,453 )
Fair value adjustment on Class B Unit liability (3,407 ) (2,052 ) (1,634 ) 8,356
Fair value adjustment on interest rate swaps 7 (443 ) 47 (287 )
Current and deferred income tax expense (2,240 ) (1,841 ) (1,954 ) (1,908 )
Net and comprehensive income (loss) 10,004 8,509 8,662 (2,871 )
Basic earnings (loss) per Unit 0.49 0.42 0.42 (0.14 )
Diluted earnings (loss) per Unit 0.49 0.42 0.42 (0.45 )
Distributable Cash / Distributions / Payout Ratio
Cash flows from operating activities 9,323 8,689 9,259 9,472
Class C Unit distributions to BPI (450 ) (450 ) (450 ) (450 )
BPI Class B Unit entitlement (1,119 ) (1,161 ) (1,011 ) (947 )
Interest paid on long-term debt (617 ) (605 ) (617 ) (543 )
SIFT Tax on Units (20 ) 37 (23 ) 9
Distributable Cash 7,117 6,510 7,158 7,541
Distributions paid 6,998 6,880 6,642 6,655
Payout Ratio 98.3 % 105.7 % 92.8 % 88.3 %
Distributable Cash per Unit 0.351 0.320 0.350 0.368
Distributions paid per Unit 0.345 0.338 0.325 0.325
Other
Same store sales growth 2.1 % 0.6 % 2.2 % 2.7 %
Number of restaurants opened 4 0 5 3
Number of restaurants closed 0 2 2 2

OUTLOOK

Boston Pizza is well positioned for future growth and should continue to strengthen its position as the number one casual dining brand in Canada by achieving positive SSSG and opening new Boston Pizza locations across Canada.

The two principal factors that affect SSSG are changes in customer traffic and changes in average guest cheque. BPI's and BP Canada LP's strategies to drive higher guest traffic include attracting a wide variety of guests into the restaurant, sports bar and take-out/delivery parts of each location, offering a compelling value proposition to guests and leveraging a larger marketing budget versus the previous year along with a revised calendar of national and local store promotions. Increased average cheque levels are expected to be achieved through a combination of culinary innovation and annual menu re-pricing. In addition, the franchise agreement governing each Boston Pizza restaurant requires a complete store renovation every seven years. Restaurants typically close for two to three weeks to complete the renovation and experience an incremental sales increase in the year following the re-opening.

Boston Pizza remains well positioned for future expansion as evidenced by the 11 net new restaurants that opened in 2016 and the two new locations that have opened to date in 2017. There are currently nine new locations under construction. BPI's management believes that Boston Pizza will continue to serve more guests in more locations than any other casual dining brand in Canada by pursuing further restaurant development opportunities across the country.

ABOUT US

The Fund is a limited purpose open ended trust with an excellent track record for investors since its IPO in 2002. Including the July 2017 distribution which is payable on August 31, 2017, the Fund has delivered 18 distribution increases and 181 consecutive monthly distributions to unitholders totalling $264.2 million or $18.69 per unit since 2002. The Fund earns revenue based on the franchise system sales of the 383 Boston Pizza restaurants included in the Fund's royalty pool.

BPI is Canada's number one casual dining brand with annual gross sales in excess of $1.0 billion serving more than 45 million guests through over 380 mainly franchisee operated restaurants. The Boston Pizza brand has successfully existed for over 50 years since opening its first restaurant in Edmonton, Alberta in 1964. BPI has been recognized as a Platinum Member of Canada's 50 Best Managed Companies and has been a Franchisees' Choice Designation winner for six consecutive years.

Certain information in this press release constitutes "forward-looking information" that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Fund, Boston Pizza Holdings Trust, Boston Pizza Royalties Limited Partnership, Boston Pizza Holdings Limited Partnership, BP Canada LP, Boston Pizza Holdings GP Inc., Boston Pizza GP Inc., BPI, Boston Pizza restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Fund or management of BPI expects or anticipates will or may occur in the future, including such things as, seasonal fluctuations in the Payout Ratio, the Payout Ratio is likely to be higher in the first and fourth quarters, higher Franchise Sales generally result in increases in Distributable Cash, a Payout Ratio close to 100% will be maintained, trustees of the Fund will continue to distribute all available cash in order to maximize returns to unitholders, Boston Pizza being well positioned for future growth, the strengthening of Boston Pizza's position as the number one casual dining brand in Canada, the achievement of positive SSSG, opening of new restaurants, increases in average guest cheques levels, incremental sales increasing after store renovations, plans to pursue restaurant development opportunities and other such matters are forward-looking information. When used in this press release, forward-looking information may include words such as "anticipate", "estimate", "may", "will", "expect", "believe", "plan", "should", "continue" and other similar terminology.
The material factors and assumptions used to develop the forward-looking information contained in this press release include the following: future results being similar to historical results, expectation related to future general economic conditions, business plans, receipt of franchise fees and other amounts, franchisees access to financing, pace of commercial real estate development, protection of intellectual property rights of Boston Pizza Royalties Limited Partnership and absence of changes of laws. Risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievement expressed or implied by the forward-looking information contained herein, relate to (among others) competition, demographic trends, consumer preferences and discretionary spending patterns, business and economic conditions, legislation and regulation, Distributable Cash and reliance on operating revenues, accounting policies and practices, the results of operations and financial condition of BPI, BP Canada LP and the Fund, as well as those factors discussed under the heading "Risks and Uncertainties" in the most recent Annual Information Form of the Fund. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this press release. Except as required by law, the Fund and BPI assume no obligation to update previously disclosed forward-looking information. For a complete list of the risks associated with forward-looking information and the Fund's business, please refer to the "Risks and Uncertainties" and "Note Regarding Forward-Looking Information" sections included in the Fund's MD&A for the Period available at www.sedar.com and www.bpincomefund.com.

The trustees of the Fund approved the contents of this press release.

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