SIR Royalty Income Fund Reports 2025 Second Quarter Financial Results

Executive Summary

• SIR Royalty Income Fund reported its Q2 2025 financial results, showing an 8.1% increase in Pooled Revenue to $72.9 million, driven by new restaurant additions and strong performance at Scaddabush.
• Net earnings decreased to $3.5 million ($0.42 per unit) compared to $3.8 million in Q2 2024, primarily due to a smaller increase in the estimated fair value of the SIR Loan and higher income tax expenses.
• The Fund announced a subsequent event increasing its monthly cash distribution from $0.095 to $0.10 per unit, effective July 31, 2025.

Key Details

• Pooled Revenue: $72.9 million for Q2 2025, an 8.1% increase from $67.5 million in Q2 2024.
• Royalty Income: Increased to $4.4 million (from $4.0 million in Q2 2024).
• Equity Income: Increased to $2.9 million (from $2.8 million in Q2 2024).
• Net Earnings: $3.5 million for Q2 2025 ($0.42 basic / $0.40 diluted per unit), down from $3.8 million ($0.46 basic / $0.44 diluted) in Q2 2024.
• Distributable Cash: $2.5 million for Q2 2025 ($0.30 per unit), with a payout ratio of 94.5%.
• Same Store Sales (SSS): Consolidated SSS growth of 1.1% for Q2 2025.
  • Scaddabush: 7.0% SSS growth.
  • Jack Astor's: (0.8%) SSS decline.
  • Signature Restaurants: (0.5%) SSS decline.
• Restaurant Portfolio Changes:
  • Four new restaurants added to the Royalty Pool effective Jan 1, 2025 (three Scaddabush locations and Edna + VitaTM).
  • Jack Astor's location in Longueuil, Quebec permanently closed April 27, 2025; removed from Royalty Pool effective Jan 1, 2026.
  • New Scaddabush location opened in Barrie, Ontario on June 25, 2025; expected to be added to the Royalty Pool effective Jan 1, 2026.
• Financing Update: On May 15, 2025, SIR entered into a new $68.0 million credit agreement with two Schedule 1 Canadian chartered banks to refinance existing senior debt. The facility includes a $5.0M revolving term credit, $38.0M revolving term loan, and $25.0M non-revolving term loan, plus a $1.5M purchase card agreement.
• Cybersecurity Insurance Payout: SIR received a $2.0 million payout from its cyber insurance policy for first-party losses related to a September 2024 incident ($0.2M reimbursement of costs and $1.8M business interruption). The Fund is not a party to this policy, so proceeds do not flow to the Fund.
• Distribution Increase: Trustees approved a $0.005 increase to the monthly cash distribution, raising it from $0.095 to $0.10 per Fund unit, effective for the distribution paid on July 31, 2025.

Notable Quotes

• "We generated Pooled Revenue growth of 8.1% in the quarter, supported by the four new restaurants that were added to the Royalty Pool in January 2025, and consolidated same store sales increased by 1.1%, driven by the continued strong performance of Scaddabush, which generated same store sales growth of 7.0%," said Peter Fowler, CEO of SIR Corp.