Tim Hortons Announces Fourth Quarter profits
Tim Hortons announced its fourth quarter earnings today with highlights including 23.8 per cent quarter dividend increase and a share repurchase program.
"Menu innovation and other strategic initiatives helped contribute to our growth in the fourth quarter, as shown by improvements in same-store sales growth rates compared to the previous quarter. Economic and operating conditions remain challenging. We are focused on leveraging our unique brand position, menu innovation, marketing and operational initiatives to help respond to the operating environment and continue to grow our business," said Paul House, executive chairman, president and CEO.
Tim Hortons, through its new restaurant development, saw system wide sales increased to 6.4 per cent while total revenues were up 4.1 per cent at $811.6 million in comparison to $779.8 million in Q4 2011. Tim Hortons explained the reason behind the slower revenue growth versus system wide sales was due to a more modest growth increase in the distribution sales sector which came in at 3 per cent.
Tim Hortons annual system wide sales in 2012 saw a total increase of 6.9 per cent, while revenues rose 9.4 per cent to $3.12 billion in comparison to 2011 in which Tim Hortons reached $2.85 billion.
A higher targeted annual dividend payout has been approved by the Board of Directors offering a payout range of 35 to 40 per cent. This means the Board has approved a 23.8 per cent increase totalling a payout rate of $0.26 per common share available on March 19th.
"Our strong cash flows have enabled us to increase our dividend for the sixth consecutive year and increase the target payout range, thereby returning more capital to our investors," said Cynthia Devine, Chief Financial Officer.
Additionally, today, Tim Hortons announced its share repurchase program that will allow the company to repurchase up to $250 million of common shares.
"Our confidence in the strength of our cash flows led us to increase our share repurchase program from $200 million to $250 million as a means of returning capital to our shareholders," said Cynthia Devine, Chief Financial Officer.