Burger Fuel Group Limited Analysis

Overview

The company listed on the NZAX market in July 2007.

The offer was for up to 15m shares (25% of the total) at $1 each with a minimum of $8m sought in order to list. Investors received 1 option for every 5 shares they acquired.

Founding Shareholders Chris Mason and Josef Roberts purchased shares from the public pool, on the same terms as all other applicants, to ensure the minimum subscription was met.

BFW has four main areas of revenue: up-front franchise fees, on-going royalty fees, sales of certain proprietary goods and store income from company-owned stores.

Performance

The following information was extracted from Burger Fuel Group Limited's half year results, released 30 May 2025:

The Directors of Burger Fuel Group Limited (BFG) present the results for the 12 months to 31 March 2025.

(The audit of these results is in the process of being finalised).

Net Profit after tax for the period was $1,026,779 representing a 22.6% decrease on the previous year.

The FY25 profit result is down on the previous year due to a decline in sales, increased costs and a general downturn in the economy. Given the lower revenue in FY25 the Group posted a solid result. The FY25 Group results were reduced by legal costs of $221,687 incurred within the period to respond to the single shareholder opposition that was filed in relation to the proposed return of capital.

BFG (unaudited) Total System Sales (all three brands, all regions) decreased by 7.59% to $108.2M on the same period last year.

Regarding sales, it is worth noting that last financial year (FY24), we achieved our best sales year, with over $100M in sales for the New Zealand BurgerFuel system alone. This was partly due to the introduction of delivery services in New Zealand. We are now benchmarking against those higher introductory delivery sales for the same period last year. As we predicted, delivery sales spiked in the early months of introduction but ultimately resulted in many existing customers simply transferring from collecting orders themselves to using a delivery service.

Total income for the Group was down 8.45% to $24.97M.

As of 31 March 2025, 61 BurgerFuel restaurants were operating in New Zealand and 3 were operating in the Middle East (one fewer than last year), excluding some third-party “dark” kitchens operating in the UAE.

As of 31 March 2025, there were 4 Shake Out and 2 Winner Winner restaurants operating in NZ. The Shake Out Hamilton East store, however, closed on 31 March 2025, bringing the number of physical Shake Out locations to three.

Return of Capital occurring in June 2024 – more costs incurred to respond

FY25 Group results would have been further improved to circa $1.25M (Net profit after tax) if BFG had not been required to incur ongoing costs to respond to the single shareholder’s opposition that was filed against the proposed return of capital to all shareholders. The Company incurred legal fees of approximately $205,500 in FY24 and an additional $221,687 in FY25, (Total impact $427,187 or 18.15% of profit for the two years) specifically to address and respond to the opposition. This amount excludes the many months of management time that were also incurred throughout the opposition process. The net result of the defence ultimately cost shareholders two years of reduced profits and likely had an adverse effect on the BFG share price.