The Keg Royalties Income Fund
TSX : KEG.UN

The Keg Royalties Income Fund

April 12, 2007 07:30 ET

The Keg Royalties Income Fund Announces Strong Quarterly Sales Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 12, 2007) - The Keg Royalties Income Fund (TSX:KEG.UN) (the "Fund") and Keg Restaurants Ltd. ("KRL") today announced sales results for the 13-week period ended April 1, 2007.

Total system sales for KRL for the 13 weeks ended April 1, 2007 were $106.9 million compared to $97.0 million for the 13 weeks ended April 2, 2006, an increase of $9.9 million or 10.2%. Royalty Pool sales for the Fund for the quarter increased 12.0% to $105.2 million compared to $94.0 million for the same quarter of the prior year. These increased sales reflect the very successful new Keg restaurants which were added to the Royalty Pool on January 1, 2007, as well as very strong same store sales growth.

The Keg's same store sales (sales of restaurants that operated during the entire period of both the current and prior years) increased by 8.1% in Canada and by 3.8% in the United States for the 13-week period ended April 1, 2007. Total consolidated same store sales increased by 7.6% for the 13-week period. For the first time since the Fund's inception in May 2002, the effect of the exchange rate between Canadian and U.S. dollars on the translation of the U.S. sales into their Canadian dollar equivalent was slightly positive.

"This marks another consecutive quarter of outstanding same store sales growth for The Keg," said David Aisenstat, President & CEO of Keg Restaurants Ltd. "The Keg's consistent same store sales increases, combined with our demonstrated ability to grow our leadership position within the casual dining market, will provide The Fund's unitholders with reliable, consistent and growing distributions."

Vancouver-based Keg Restaurants Ltd. is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. Keg Restaurants Ltd. continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. The Keg has been named one of the "50 Best Employers in Canada" for the past five years by the Globe and Mail's Report on Business Magazine. For information on our brand, visit www.kegsteakhouse.com.

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 changes in market and competition, 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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