The Keg Royalties Income Fund Announces An Increase In Distributions to Unitholders
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VANCOUVER, British Columbia, Oct. 13, 2020 (GLOBE NEWSWIRE) — The Keg Royalties Income Fund (TSX: KEG.UN or the “Fund”) today announced that it would be increasing the monthly distributions on units of the Fund (“Units”) commencing with the October 2020 distribution. Monthly distributions will be increased from their current level of $0.035 per Unit to $0.05 per Unit. The revised monthly distribution of $0.05 per Unit has therefore been declared and will be paid on October 30, 2020 to unitholders of record on October 21, 2020. Annually, the revised distributions result in an increase from the current level of $0.42 per Unit to $0.60 per Unit. The Fund currently plans to make those distributions each month for the next three months on the traditional pattern beginning on October 30, 2020, as noted above.The Fund’s objective continues to be to provide consistent monthly distributions to unitholders at the highest sustainable level, and the Trustees of the Fund continue to review distribution levels on an on ongoing basis to fulfill that objective. The Trustees have reviewed current Royalty Pool sales forecasts as prepared by senior management of KRL, and after due consideration, the Trustees have concluded that the revised distribution of $0.05 cents per Unit per month is sustainable, at least for the next three months. However, should a surplus in cash available for distribution to the Fund’s unitholders arise over the next three months, as a result of royalty fee income exceeding current expectations, a special distribution will be declared in December 2020 to resolve that issue. The magnitude of that special distribution, should it be required, will be subject to reserves as considered reasonable by the Trustees in the circumstances at that time.“At this point, the outlook remains uncertain and unpredictable for The Keg’s sales levels going forward. We have been relatively satisfied with our performance since restaurants have reopened starting in late May through to the beginning of July. Despite substantially limited capacity due to COVID-related mandates involving physical distancing and hours of operation, our guests have been very supportive of The Keg,” said David Aisenstat, CEO of The Keg.“Unfortunately, that is somewhat offset by recent events,” added Aisenstat. “Clearly, the COVID virus is not under satisfactory control. That has caused Quebec to close indoor restaurant dining once again beginning October 3rd. On October 10th, much of Ontario followed with additional closures. We certainly hope those closures are short-lived and we certainly hope additional closures, unless warranted, are not adopted by other provinces, but we cannot predict that with any degree of certainty.”The Fund (TSX: KEG.UN) is a limited purpose, open-ended trust established under the laws of the Province of Ontario that, through The Keg Rights Limited Partnership, owns certain trademarks and other related intellectual property used by Keg Restaurants Ltd. (“KRL”). In exchange for use of those trademarks, KRL pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool.Vancouver-based KRL is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. KRL has been named one of the “50 Best Employers in Canada” for the past seventeen years by Aon Hewitt. For more 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 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.For media inquiries contact:
Nick Dean, President
Tel: 416-695-2400
www.kegincomefund.com
