The Keg Royalties Income Fund

The Keg Royalties Income Fund

August 10, 2016 08:00 ET

The Keg Royalties Income Fund Announces Second Distribution Increase of 2016

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 10, 2016) - The Keg Royalties Income Fund (the "Fund") (TSX:KEG.UN) is pleased to announce that it is once again increasing its monthly cash distributions.

The monthly distributions will increase 2.0% from $0.0900 per unit to $0.0918 per unit beginning with the August 2016 distribution. This equates to an annualized distribution in excess of $1.10 per unit. The distribution of $0.0918 per unit for the period from July 1, 2016 to July 31, 2016 will be payable to Unitholders of record at the close of business on August 21, 2016 and will be paid on August 31, 2016. This follows a monthly distribution increase of 2.9% in May 2016.

The Fund periodically reviews distribution levels with the objective of providing a consistent monthly distribution flow to Unitholders at the highest sustainable level. This distribution increase is primarily attributable to continued Same Store Sales Growth ("SSSG") at Keg Restaurants Ltd. ("KRL"). For the 13 and 26-week periods ended July 3, 2016, KRL reported SSSG of 2.7% and 1.9% respectively. Combined with the SSSG reported in the comparable periods of the prior year, KRL generated two year compounded SSSG of 8.0% in the quarter and 8.7% year to date.

"Given the strong compounded Same Store Sales Growth generated by KRL over the past year, the Trustees of the Fund have decided to increase distributions for the second time during 2016," said Kip Woodward, Chairman of the Fund. "The current cash reserves of $2,074,000 and positive working capital of $3,558,000 as at June 30, 2016 further support this decision."

The Fund is a limited purpose, open-ended trust established under the laws of Ontario. The Fund indirectly owns certain trademarks and other related intellectual property used by KRL in its Keg Steakhouses & Bars. In exchange for the use of those trademarks, KRL pays the Fund a royalty equal to 4% of the sales of all Keg restaurants in the Royalty Pool.

This press release may contain certain "forward looking" statements reflecting The Keg Royalties Income Fund's current expectations in the casual dining segment of the restaurant food industry. Investors are cautioned that all forward looking statements involve risks and uncertainties, including those relating to the Keg's ability to continue to realize historical same store sales growth, changes in market and existing competition, new competitive developments, and potential downturns in economic conditions generally. Additional information on these and other potential factors that could affect the Fund's financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of the prospectus, nor shall there be any sale of the Fund units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state, province or jurisdiction. The Keg Royalties Income Fund units have not been, and will not be registered under the U.S. Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an application for exemption from the registration requirement under U.S. securities laws.

The Trustees of the Fund have approved the contents of this press release.

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