Hello, this is the conference call operator. Thank you for standing by. Welcome to Boston Pizza's first quarter 2024 conference call. As a reminder, all participants are in listen-only mode and conference is being recorded on May 10th, 2024. After the presentation, there will be a question-and-answer session. Participants on the call may also pose their questions via email to Boston Pizza's Investor Relations Department at investorrelations@bostonpizza.com. Should anyone need assistance during the conference call, they can signal the operator by pressing star, then zero on their telephone. At this time, I would like to turn the conference over to Michael Harbinson, Chief Financial Officer. Please go ahead.
Thank you and welcome to the call, everyone. Today we'll be discussing the 2024 first quarter results for both Boston Pizza Royalties Income Fund, or the Fund, and for Boston Pizza International, or BPI. For complete details on our financial results, please see our first quarter materials filed earlier today on SEDAR+ or visit the Fund's website at bpincomefund.com. Should you require additional information after the call, you can reach us via the Investor Relations phone number listed in our press release. The Fund is a limited-purpose, open-ended trust established under the laws of British Columbia to acquire, indirectly, certain trademarks and trade names used by BPI in its Boston Pizza restaurants in Canada. BPI pays royalty and distribution income to the Fund based on franchise revenues of royalty pool restaurants.
For a complete description of the Fund and its business, please see the Annual Information Form dated February 13th, 2024, which was filed on SEDAR+. Before I turn the call over to Jordan Holm, President of BPI, I would like to note that certain information in the following discussion may constitute forward-looking information. For a more complete definition of forward-looking information and the associated risks, please refer to the Fund's Management's Discussion and Analysis issued earlier today. Forward-looking information is provided as of the date of this call and, except as required by law, we assume no obligation to update or revise forward-looking information to reflect new events or circumstances. And with that, I will now turn the call over to Jordan. Jordan?
Thank you, Michael, and welcome, everyone, to Boston Pizza's first quarter investor conference call. Today I'll be discussing our first quarter results and share a brief outlook. Michael will summarize our key financial highlights and, as usual, we'll leave time for your questions at the end of today's call. The first quarter of 2024 presented certain macroeconomic challenges for the full-service industry. Prevailing economic conditions characterized by high interest rates and inflationary pressures have influenced consumer behavior, impacting discretionary spending and leading to a cautious approach toward dining out. The Fund posted Franchise Sales from restaurants in the Royalty Pool of CAD 222.0 million for the quarter, representing a decrease of 1.0% versus the same period one year ago. Same restaurant sales was -1.0% for the quarter. SRS for the quarter was principally due to macroeconomic challenges faced by the full-service industry, partially offset by menu price increases.
From a marketing standpoint, we began the first quarter of 2024 with our Pasta Tuesday all-month-long promotion, where guests were able to enjoy pastas every day of the week starting at CAD 11.99 and gourmet pastas for CAD 15.99 all month long in January. The promotion was supported by significant TV, digital, and social media channels, along with in-restaurant promotions at participating Boston Pizza restaurants across the country. Boston Pizza also celebrated Valentine's Day with its Paper Hearts fundraising program and Heart-Shaped Pizza promotion, where CAD 1 from each pizza sold went to help local charities. These charitable initiatives combined to raise over CAD 570,000 for local charities. Also in the first quarter, Boston Pizza unveiled new flavors for our New York Sicilian Square Footer pizza lineup, garnering positive feedback from our guests.
Turning to restaurant development, one restaurant opened during the first quarter and three restaurants closed permanently, and seven restaurants completed full renovations during the quarter. We have some fantastic initiatives planned to drive sales and guest traffic in the second quarter of 2024, which I'll speak about in a moment. First, however, I'll turn the call back to Michael for a review of the Fund's financial performance. Michael?
Thank you, Jordan. The Fund posted royalty income of CAD 8.9 million for the quarter, compared to CAD 9 million for the same period one year ago. The Fund posted distribution income of CAD 2.9 million for the quarter, a nominal change from the same period one year ago. Royalty and distribution income for the quarter were based on 372 Boston Pizza restaurants in the royalty pool that reported franchise sales of CAD 222 million for the quarter. For the same period in 2023, royalty and distribution income were based on the royalty pool of 377 Boston Pizza restaurants, reporting franchise sales of CAD 224.2 million. The Fund's net and comprehensive income was CAD 8.5 million for the quarter, compared to CAD 6.7 million for the same period in 2023.
The CAD 1.8 million increase in the Fund's net and comprehensive income for the quarter, compared to the first quarter of 2023, was primarily due to a CAD 2.4 million increase in fair value gain, partially offset by a CAD 0.4 million increase in deferred income tax expense, a CAD 0.1 million decrease in royalty and distribution income, and a CAD 0.1 million increase in interest expense on Class B Unit liability. The Fund's cash flows generated from operating activities were CAD 9.1 million for the quarter, compared to CAD 9.2 million for the same period in 2023. The decrease of CAD 0.1 million was primarily due to an increase in income taxes paid of CAD 0.2 million and a decrease in royalty and distribution income of CAD 0.1 million, partially offset by an increase in working capital of CAD 0.2 million.
While net and comprehensive income or loss and cash flows from operating activities are both measurements under IFRS accounting standards, the Fund is of the view that net income or loss and cash flows from operating activities do not provide the most meaningful measurement of the Fund's ability to pay distributions. Net income contains non-cash items that do not affect the Fund's cash flow, whereas cash flow from operating activities is not inclusive of all the Fund's required cash outflows and, therefore, is not indicative of cash available for distributions to unit holders. Non-cash items include fair value adjustments of the investment in Boston Pizza Canada Limited Partnership, the Class B Unit liability, interest rate swaps, and changes in deferred income taxes.
Consequently, the Fund reports the non-IFRS metrics of distributable cash and payout ratio to provide investors with, in the Fund's opinion, more meaningful information regarding the Fund's ability to pay distributions to unit holders. The Fund generated distributable cash of CAD 7.3 million for the quarter, compared to CAD 7.2 million for the same period in 2023. The increase in distributable cash of CAD 0.1 million, or 1.8%, was primarily due to SIFT tax on units adjustment of CAD 0.2 million and lower interest paid on debt of CAD 0.1 million, partially offset by decreased cash flows from operating activities of CAD 0.1 million. The Fund generated distributable cash per unit of CAD 0.344 for the quarter, compared to CAD 0.334 per unit for the same period in 2023.
The increase in distributable cash per unit of CAD 0.01, or 3%, was primarily due to the increase in distributable cash stated earlier and fewer units outstanding, compared to the same period in 2023, due to the Fund's normal course issuer bid that was in effect from June 20th, 2023, to no later than June 19th, 2024. The Fund's payout ratio for the quarter was 96.8%, compared to 91.6% for the same quarter in 2023. The increase in the Fund's payout ratio for the quarter was due to distributions paid increasing by CAD 0.5 million, or 7.6%, primarily offset by distributable cash increasing by CAD 0.1 million, or 1.8%. On a trailing 12-month basis, the Fund's payout ratio was 89.9% as of March 31st, 2024.
The Fund's payout ratio is typically higher in the first and fourth quarters compared to the second and third quarters, since Boston Pizza restaurants generally experience higher franchise sales levels during the summer months when restaurants open their patios and benefit from increased tourist traffic. On May 9th, 2024, the trustees of the Fund approved a cash distribution for the period of April 1st, 2024, to April 30th, 2024, of CAD 0.113 per unit, which will be paid on May 31st, 2024, to unit holders of record at the close of business on May 21st, 2024. The trustees' objective in setting a monthly distribution amount is that it be sustainable. The trustees will continue to closely monitor the Fund's available cash balances, given the fluctuating economic outlook. With that, I will turn the call back to Jordan for more on the outlook. Jordan?
Thank you, Michael. Boston Pizza began its second quarter of 2024 with our playoff promotion as hockey and basketball playoffs get underway. This promotion introduces several new shareable menu items, plus cocktail innovations, and includes new TV and digital media advertising focused on Boston Pizza's new Team Up for the Win campaign, optimizing every aspect of the Boston Pizza Sports Bar experience to maximize enjoyment for our guests. An updated main menu will also launch in May, introducing several new recipes in various menu categories, all available every day for our guests to enjoy. Earlier this month, Boston Pizza's franchisees, suppliers, partners, and corporate employees gathered at our franchisee conference to kick off Boston Pizza's 60th anniversary celebrations. To commemorate this special occasion, we have planned a series of special events, exclusive promotions, and culinary delights that pay homage to our rich history.
2024 marks six decades of culinary innovations, warm hospitality, and unforgettable experiences at Boston Pizza. With continued supply chain challenges, higher interest rates, and increasing input costs impacting most of the restaurant industry, BPI's management remains cautious. Despite these obstacles, we had solid franchise sales in the first quarter, underscoring the resilience of our business. We remain pleased with the dedication demonstrated by our franchisees and their restaurant teams. BPI's management continues to adapt the business to successfully mitigate these challenges and to maintain positive sales levels in 2024. With that, I'd like to turn it back to the operator to begin the question and answer session.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star then one on their touch-tone phone or send a question via email to investorrelations@bostonpizza.com. Please note, those questions that we do not get to during the call will be answered via email immediately following the end of the investors' conference call. The first question comes from Nick Corcoran with Acumen Capital. Please go ahead.
Good morning. Thanks for taking my questions.
Good morning, Nick.
Good morning.
Maybe just one question on the month-to-month trend in Same Restaurant Sales growth. Maybe can you speak to the trend through the quarter and what you see in the April kind of quarter today?
Michael, do you want to take that one?
Yeah, I can jump in on that. And maybe just to give a little more context, I can dial the clock back to, call it, maybe Q3 of last year, just to start. So yeah, so we're talking same restaurant sales on a franchise sales basis, obviously, versus prior year. So Q3 of last year, we were positive 5.3%. And then Q4, which followed that, we were positive 6%. So we saw a bit of a deceleration in the SRS from Q3 to Q4. And then this quarter, the first quarter of 2024, same restaurant sales was negative 1%. So we've seen kind of a gradual softening kind of quarter-over-quarter. But Nick, more to your question in terms of the trend within the quarter. So yeah, looking at January, February, March results for Q4 2024, same restaurant sales was pretty consistent within the quarter.
So meaning the 1% where we ended the quarter, it was pretty consistent throughout Q1. There was some kind of lumpiness week to week, as you would expect. There's certain kind of calendar timing differences that drive that. But just kind of by and large, from a trend perspective, yeah, it was a pretty consistent trend throughout the quarter. And then in terms of April, what I would share there is there's not a dramatic swing kind of upwards or downwards. It's really kind of a consistent trend that we're seeing compared to the Q1 results.
That's helpful. Maybe if we can just break apart the change in guest traffic versus check size, just so I can understand that.
Jordan, do you want that one?
Sure. Maybe I'll start it off, but Michael can jump in at any time. So obviously, we've taken some pricing increases over the last couple of years coming out of the pandemic. That's always a practice that we have, is to adjust prices where we feel like we can and when we feel like we need to due to rising input costs. And we've seen that, certainly, on key ingredients coming out of the COVID period again. So average check has increased primarily because of the menu increase costs, or prices, rather. And obviously, if the overall sales were flat or down slightly at -1% year-over-year in the first quarter on a same restaurant sales basis, that would indicate that traffic is down.
And that's what we're seeing, is fewer guest visits but a higher average guest check, which is leading us to the flat or slightly down year-over-year franchise sales, again, on that same restaurant basis. The positive thing, I suppose, is we've got a real focus on driving increased visitation. I mentioned the sports calendar is favorable for us right now. Patio season is just around the corner, which is an increasingly important part of our kind of four-concept under one roof. So you've got the dining room, the sports bar, the patio. And of course, takeout and delivery now represents in the neighborhood of 25% of our sales nationally. So really leaning into all four of those areas to get the traffic numbers back where they need to be and continuing to build on the sales momentum.
That's helpful. Maybe one more question from me. Just in terms of the renovations for the remainder of 2024, what should we expect the pace of those to be?
In the full year 2023, we completed 20 renovations. That was a solid number, just given it was the first construction cycle that we'd had, really, since the restrictions were on during the COVID period. This year, we'll have about a 50% increase in renovations, so targeting around 30. I've been to a few that have been completed already this year. I think there's seven completed so far this year. I'll see some more in the next few weeks as construction season gets into full swing with the better weather. But yeah, the number would be about 30 for this year or 50 for 2023 and 2024 combined. Nice to see those investments in the restaurant renovations and the confidence that our franchisees have in making those improvements to their restaurants and ultimately to the guest experience.
Good. And maybe one more question from me. What does the pipeline for new restaurants look like?
Don't give a forecast number, but I can tell you that we have opened one already this year. We had one open late last year in Hope, British Columbia. The one that opened earlier this year was in Vaughan, Ontario. We have two under construction in Ontario right now and probably another two or three projects that, if the construction calendar and permitting and the stars align, they will open later this year as well. So that's really positive for us. It's really nice to see us going into new markets again, underserviced restaurant markets where we can come out of the gate and do really well for our franchise partners and bring the brand to new communities across Canada. So we'll announce them as they come, but certainly more activity on the development side this year than we've seen dating back to probably 2018, 2019.
Thanks. This is good color. All that, excellent.
Thanks, Nick.
Once again, if you have a question, please press star then one. This concludes the question and answer session. I'd like to turn the conference back over to Jordan Holm for any closing remarks.
All right. Thank you, operator. And as there are no further questions, I'd like to thank everyone for taking the time to listen in. We look forward to speaking with you all again at our second quarter conference call in August 2024. Thanks, everyone.
Thank you.
This brings to an end today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.