February 8, 2018 10:00 am eastern

The results for Boston Pizza this morning were fairly weak. Not terrible, but weak. Distributable cash per unit declined 2.9% in Q4 and 0.6% for the year. Royalty-;igible same store sales which is the key performance number was negative 0.2% in Q4.

The units are currently down 1.3% to $20.93.

Despite a pay-out ratio of 100%, I don’t think the distribution will be cut. But it also can’t grow until and unless they get growth in royalty-eligible same store sales leading to growth in distributable cash per unit.

Given higher interest rates these units could fall in price. And of course if market sentiment is generally negative then that can lead to at least temporary declines.

The distribution remains good here and history suggests it will rise over the years.

I have quite a large exposure to this name and I may consider trimming it a little.

The previous rating was Buy at $21.12. I was thinking Q4 would show some growth given the partial economic recovery in Alberta.