Same-Store Sales grew in Q4 and for the full year

Moncton, N.B. - PDM ROYALTIES INCOME FUND (TSX: PDM.UN, PDM.DB) (“PDM” or the “Fund”) reported today its financial results for the fourth quarter, 2008 and the year ended December 31, 2008. The Fund indirectly owns the trademarks and intellectual property for the Pizza Delight, Mikes, Scores, and Baton Rouge brands and has licensed them to Imvescor.

Fund revenues increased to $14.2 million during the year compared to $14.1 million for 2007. The revenue increase was generated primarily by the new restaurants added to the royalty pool on January 1, 2008.

Annual sales from the 259 restaurants in the Royalty Pool were $407.7 million, a 10.7 percent increase over annual sales of $368.3 million in 2007. In the fourth quarter, sales from restaurants in the pool were $101.6 million compared to $90.0 million in 2007. Sales growth was primarily due to the addition of new restaurants to the royalty pool on January 1, 2009.

Same store sales growth was 0.6 percent for the year and 0.1 percent for the fourth quarter ended December 31, 2008.

For the full year ending December 31, 2008, net earnings for the fund were $11.6 million, a 22 percent increase over the same period the previous year. Net earnings per Fund unit rose 26 percent to $1.64 per share. The increase is mainly attributed to the future income tax adjustments made in the current and previous years. Net earnings for the fourth quarter ending December 31, 2008 were $1.41 million, down from $2.6 million the previous year. Basic earnings per fund unit were $0.199 in the fourth quarter of 2008 compared to $0.354 the previous year. The Fund declared distributions of $1.44 per unit for 2008.

2008 ended with significant challenges in world markets as well as increased pressure on disposable income which affects consumer spending in restaurants.

Outlook

On January 1, 2009, the Fund acquired an additional 12 restaurants with sales estimated at $32.8 million annually. Twelve underperforming locations with annual sales of $10.2 million were removed from the Royalty Pool. As a result of these transactions, PDM estimates that it will experience a net increase in Royalty Pool Sales of $22.6 million annually, starting in 2009. These new restaurants are expected to generate an additional $1.5 million in royalties.

As a result of the contribution of the additional sales to the Royalty Pool, Imvescor will earn approximately 1.0 million Fund units, subject to final adjustment when actual sales for the new restaurants are confirmed. Imvescor now holds a 30.5% interest in the Fund on a fully diluted basis.

PDM believes that three of its four restaurant brands are well positioned in the market during these difficult economic times. Imvescor, which franchises and supports the four brands, intends to continue its focus on growing existing restaurant sales and expanding the number of franchised restaurants in Ontario, Quebec, Atlantic Canada and Western Canada. The opening of new restaurants in 2009 may be affected by the slower pace of commercial real estate development and by access to financing, which is restricted for most companies due to weak economic conditions.

Imvescor management expects significant same sales store growth due to renovations to existing Mikes and Pizza Delight concepts. The new Oven Fresh Kitchen concept for Pizza Delight and the Trattoria Mikes concept continue to be implemented across the systems with very positive franchisee support. The Franchisee support is expected to enable the target of 15 renovations in 2009 to be achieved. Baton Rouge and Scores continues with new restaurant development in both Ontario and Quebec.

The Trustees continue to regularly explore all options for the long term for the Fund in light of the Tax changes scheduled for 2011. To date no decisions have been made.