February 10, 2016 11 am eastern (Boston Pizza)

The Boston Pizza Royalty units Q4 report out this morning far exceeded my expectations. Same-store sales royalty-eligible sales were up 1.8% despite the slower economy in Alberta. Distributable cash per unit was up a remarkable 13.3% due to a transaction whereby the fund effectively purchased more of the franchise fee from related entities in mid 2015 and did so on an accretive basis. It was also due to buybacks of units. That kind of growth is not sustainable but the BP units are trading at a price that appears to suggest the distribution could fall.

The bottom line is that this entity remains highly attractive unless one predicts a relatively sharp drop in restaurants sales.

P.S. I forgot to mention when I posted this that the distribution has been raised 6.2% to $1.38 per unit per year for a current yield of about 8.2%.