KEG Royalties Income Fund T.KEG.UN

Alternate Symbol(s): KRIUF

Consumer Cyclical Restaurants

The Keg Royalties Income Fund (the Fund) is a limited-purpose open-ended trust. The Fund’s objective is to provide consistent monthly distributions to unitholders at the highest sustainable level. The Fund, through its subsidiary The Keg Rights Limited Partnership (the Partnership), purchased The Keg trademarks and other related intellectual property (the Keg Rights) from Keg Restaurants Ltd. (KRL). The business of the Partnership is the ownership of the Keg Rights and, through a License and Royalty Agreement with KRL to exploit the use of the Keg Rights and the collection of the royalty payable under the License and Royalty Agreement equal to 4% of gross sales of Keg restaurants included in a specific pool (the Royalty Pool). KRL’s principal activity is the operation and franchising of Keg steakhouse and bar restaurants in Canada and the United States. The Keg GP Ltd. is the general partner of the partnership and administrator of the Fund.

TSX:KEG.UN - Post by User

KEG Royalties Income Fund

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Post by logicandinertiaon May 16, 2019 10:37pm

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Post# 29754127

A Very Positive Outlier in Canada - The Keg

At a time when Boston Pizza, Sir Royalty, Pizza Pizza and others are struggling with negative combos and greater than 100 percent payouts, Keg’s solid results are an outlier. Payout ratio in the most recent Q was just 83.3 percent , with positive comps in Canada and the U.S.

The Fund >6.5 percent dividend yield and stability of results should suggest that yield may come down, benefiting the unit price. Not sure if Cara would ever collapse Royalty Fund structure, but if distributions continue to grow, unit holders shouldn’t mind in its current structure.

Lastly, folks underestimate the brand loyalty and staying power of the Keg. There is virtually no competition within its vertical in Canada. Meat and potatoes, consistent quality, seasoned servers and brand awareness across the country. Lots to like..

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