RBD - Restaurant Brands

[Xerof]

I have had a look at the charts and can see a bearish bat formation forming with exceptionally strong resistance at $3.99. This might be breached for a period of 39 days, but will then fall below $3.99 once again, for another 2 years at least



kidding

[percy]

I have had a look at the charts and can see a bearish bat formation forming with exceptionally strong resistance at $3.99. This might be breached for a period of 39 days, but will then fall below $3.99 once again, for another 2 years at least



kidding

Can you order spicy wedges with that bat???

[winner69]

Can you order spicy wedges with that bat???

Just sent Russell an idea

Chicken wings coated in a black syrupy sauce deep fried are apparently known as bat wings ....serve them with your wedges .....will be a hit at Halloween time.

[winner69]

Carls Jnr sales were pretty strong in the last quarter

Weekly sales per store were over $37.2k - previous quarter was $35.5k. The $37.2k was the best quarter for a while

Extrapolating the numbers out for the full year the existing 18 stores should do about $37m. Group sales up 85% without any new stores

Should add something to the bottom line

That $5 even closer now methinks

[Regi]

Carls Jnr sales were pretty strong in the last quarter

Weekly sales per store were over $37.2k - previous quarter was $35.5k. The $37.2k was the best quarter for a while

Extrapolating the numbers out for the full year the existing 18 stores should do about $37m. Group sales up 85% without any new stores

Should add something to the bottom line

That $5 even closer now methinks

I might have to go for a celebratory bucket of... whatever KFC sells... when it reaches $5 :t_up:

[Snoopy]

Will "our Russell" get another $1mil if the price hits, and stays above $5.00....?

No doubt the next 'long term incentive' for the coming year will be negotiated behind closed doors straight after the annual general meeting, as this one apparently was last year.

You forgot to mention Percy that 'Our Russel' is spelt with a single 'l'. Think of all the printers ink that this has saved over the years! If he adopted a single 's' as well, he could be well on his was to his long term bonus of next year too.

The thing that I couldn't understand about note 27d was this.

If the payment of the $1m bonus was 'reasonably certain', why is the fair value of the liability only $0.3m? If Russel can oversee this kind of financial alchemy, no wonder he is worth every penny!

SNOOPY

[percy]

Apologies to "our RusseL'.
I should point out I am very much in favour of "real" incentives that are to "all" shareholders advantage.
Something an excellent CEO will achieve, while an ordinary CEO will miss.
I should make it clear too, that I think "our RusseL" has done an outstanding job on "making it happen" for shareholders.

[winner69]

No doubt the next 'long term incentive' for the coming year will be negotiated behind closed doors straight after the annual general meeting, as this one apparently was last year.

You forgot to mention Percy that 'Our Russel' is spelt with a single 'l'. Think of all the printers ink that this has saved over the years! If he adopted a single 's' as well, he could be well on his was to his long term bonus of next year too.

The thing that I couldn't understand about note 27d was this.

If the payment of the $1m bonus was 'reasonably certain', why is the fair value of the liability only $0.3m? If Russel can oversee this kind of financial alchemy, no wonder he is worth every penny!

SNOOPY

I would assume that this is to be paid sometime in FY16. To 'spread the cost take a bit now to the P&L (based on 'Reasonably certain' being not '100% certain' ) with the rest when paid.

Footnote: if a big market collapse and the share price goes sub $4 in next month or 2 and stays down for a year or 3 they can write that $300k back to profit ----- neat eh

[Rep]

Carls Jnr sales were pretty strong in the last quarter

Weekly sales per store were over $37.2k - previous quarter was $35.5k. The $37.2k was the best quarter for a while

Extrapolating the numbers out for the full year the existing 18 stores should do about $37m. Group sales up 85% without any new stores

Should add something to the bottom line

That $5 even closer now methinks

The last year's accounts suggest that had the Forsgren stores been consolidated for the full year, the additional NPAT would be about $0.6m (they took up about $0.1m) - RBD paid about $10.4 million for the business which included $1.5m of goodwill. CJ's still had an EBIT loss of $2.5m in the result for the year.

There could be some 'economies of scale' with having 18 stores but there are also some additional costs as they try and bring together the two networks... looking at the Forsgren and RBD stores, there are some differences between the networks that will need to be addressed at some stage... that may take time and incur some costs.. ultimately if they do get to 50+ stores then I'm sure Russel will remember the sins of the past RBD management in the expansion programme... like building 100 Pizza Hut stores and nearly 50 Starbucks stores... before having to manage and close the unprofitable ones or go thru and flog off the regional Pizza Hut stores to owner operators...

[Rep]

Last year's annual report was for the year ended 2 March 2015. The 2 year period commences on 25 July 2015 (i.e. the relevant period starts in about a month), it also assumes a continuous period of 40 trading days or a takeover at $4 or more - and it should be noted Russel must remain employed by the company for at least 6 months following the criteria being met.

The directors considered that the conditions were likely - note 27(d) does not say 'reasonably certain.' The $0.3m is a 'fair value' at balance date but there are still quite a few uncertainties that existed at that point and I hasten to note still remain... adverse events happen - that's why even in the absence of any level of certainty about an event, we still elect to purchase insurance.

[Snoopy]

Here follows my 'Snoopshot' on evaluating Restaurant Brands.

------

Restaurant Brands is the principal New Zealand licence holder for the following US “quick service restaurant” brands. The first two business concepts are licensed from master franchise holder ‘YUM brands’, a United States based company.

1/ KFC, the fast food chicken chain: 91 stores (there are additionally 6 independently franchised KFC outlets)
2/ Pizza Hut, the delco takeaway pizza chain : 46 stores (plus 42 independently franchised outlets).
3/ Starbucks, a coffee cafe chain, (licensed from master franchise holder the Starbucks Company based in Seattle USA). 26 stores.
4/ Carl’s Junior, a “burger chain” master franchised by CKE Restaurants Inc (USA): 18 stores. Carl’s Junior is very much in a development phase in New Zealand.

Operating licence agreements are generally for a ten-year term A ten-year option on extending the arrangements further is common.

Competition? In the fast food chicken market, KFC have 97 outlets. Second place is so far behind, no-one knows who they are!

In the takeaway Pizza market, Dominos Pizza lead with more than 90 stores. Pizza Hut is a close number 2 with 88 stores. That is still substantially more than the 66 outlets of Hell Pizza. These are the three chains with a national footprint.

The coffee shop chain market is lead by has many national chain players. Number 1, helped by their association with Mitre 10 Mega, is Columbus Coffee (67) with Robert Harris (40 outlets), and Esquires (29) and ‘The Coffee Club’ (28) all ahead of Starbucks (26) in Outlet terms. BBs café (23) and the fast growing Coffee Culture (20 outlets, including 15 in their Christchurch base) are other names to watch. Starbucks is officially now a ‘niche player’, clearly spelt out on p25 of AR2015.

The burger market is lead by McDonalds (187 outlets) , Burger King (80 outlets), Burger Fuel (42 outlets) and Wendy’s Burgers (22 outlets).. Carl’s Juniors 18+ outlets clearly have a difficult growth path ahead.

Restaurant Brands success so far is entirely driven by the KFC chain which makes up 82% of concept EBITDA, on ‘only’ 74% of revenue. Pizza Hut has been barely profitable over years of resizing and changing the ownership structure. Starbucks have closed over 40% of NZ outlets since FY2007. Carl’s Junior are an unproven growth prospect.

Conclusion: Yes for KFC and Pizza Hut. No for Starbucks. The jury is out for Carl’s Junior.

[Snoopy]

I have used the net profit after tax, excluding non-trading items for the purpose of this comparison. Non trading items include those associated with store closures and sales transformation costs and insurance payments. These are omitted because they obscure how the business is performing on the ground.

Net Profit/No.of Shares

2011: $25.1m /97.763m= 25.7cps
2012: $18.4m /97.809m= 18.8cps
2013: $17.7m /97.856m= 18.1cps
2014: $18.9m /97.871m = 19.3cps
2015: $22.5m /97.871m = 23.0cps

Conclusion: No

[Snoopy]

This is the net profit, excluding non-trading items, divided by the end of year shareholders equity.

2011: $25.1m / $58.9m= 42.6%
2012: $18.4m / $59.8m= 30.8%
2013: $17.7m / $60.3m= 29.4%
2014: $18.9m / $64.7m = 29.2%
2015: $22.5m / $71.2m = 31.6%

Conclusion: Yes

[Snoopy]

This is the net profit, excluding non-trading items, divided by the total sales for the year.

2011: $25.1m / $324.4m= 7.74%
2012: $18.4m / $308.2m= 5.97%
2013: $17.7m / $311.9m= 5.68%
2014: $18.9m / $329.3m = 5.74%
2015: $22.5m / $359.5m = 6.26%

The margin has reduced over the five-year period examined. Nevertheless, the ability to recover margin after a market squeeze has been apparent over the last three years. Centralizing the company’s recruitment system and updating point of sale technology over FY2013 were partially behind the subsequent years’ recovery..

Conclusion: Yes

[Snoopy]

Pizza Hut has been turned around with the best “Concept EBITDA” since 2006. Starbucks EBITDA was the best ever in FY2015. Both of these divisions have dragged down the overall company result in previous years. At KFC the store transformation program, begun in FY2005, is 90% completed. However, the fact that all three established divisions are performing in one year does not mean we can assume they will do so in future years. The past earnings trend just isn’t good enough. This means we cannot use the Mary Buffett ‘growth model’ to estimate the future value of this share. I propose we use the average dividend paid, expressed as a dividend yield, to value this share instead.

SNOOPY

Discl: hold RBD, but not because Warren Buffett would approve!

[Snoopy]

Dividends paid in the calendar years below were as follows:

2011:: 7.0c, 10.0c
2012:: 6.5c, 9.5c
2013:: 6.5c, 9.5c
2014:: 6.5c, 10.0c
2015:: 7.5c, 10.0c

The average annual dividend 16.6 cps fully imputed. 16.6c is equivalent to a gross yield of :
16.6c / (1-0.28) = 23.1c.

Current term deposit rates are around 4%. I would want a return two percentage points better than this to allow for the greater income volatility risk of share such as this. So my June 2015 valuation for RBD is:

23.1/ 0.06 = $3.84

Should term deposit interest rates fall to 3.5% my valuation would increase to:

23.1/0.055 = $4.20

With RBD trading at up to $4.40, the company is now overvalued. However, any share can be expected to be overvalued for extended periods. Furthermore, the overvaluation is not great. If the Carl Juniors growth story takes off (i.e. my modelling is too conservative), then RBD may not be overvalued. In the absence of a better retail/food investment, I will continue to hold.

SNOOPY

[RGR367]

Dividends paid in the calendar years below were as follows:
............................

23.1/ 0.06 = $3.84

Should term deposit interest rates fall to 3.5% my valuation would increase to:

23.1/0.055 = $4.20

With RBD trading at up to $4.40, the company is now overvalued. However, any share can be expected to be overvalued for extended periods. Furthermore, the overvaluation is not great. If the Carl Juniors growth story takes off (i.e. my modelling is too conservative), then RBD may not be overvalued. In the absence of a better retail/food investment, I will continue to hold.

SNOOPY

Thanks a lot SNOOPY. A very well presention of your thought about this stock. Really enjoyed it as it was not presented in a charting form. And with basically only a gut feel to guide me on my share buying/selling and/or holding, I feel really vindicated selling most of my shares from $4.00 to $4.50. Now that the dividend has been paid and the price is on a downtrend once again, maybe it's time to start an accummulation phase once more for this stock. But how I missed the times when we were mopping them up at just 56 cents.

disc holding on still to a few bundle just to enjoy the yearly voucher as you Guys are very proud in saying :t_up:

[LAC]

The average annual dividend 16.6 cps fully imputed. 16.6c is equivalent to a gross yield of :
16.6c / (1-0.28) = 23.1c.


SNOOPY

Hi, I am pretty new to this, can someone please tell me what the (1-0.28) part of this calculation is? Is it the company tax of 28%?

[Harvey Specter]

Hi, I am pretty new to this, can someone please tell me what the (1-0.28) part of this calculation is? Is it the company tax of 28%?Imputation credits attached (note: not all companies attach IC's). Means you don't suffer double tax - do a search if you need more info as there should be plenty of info on here - or DM me if you have any specific questions.

[Snoopy]

Hi, I am pretty new to this, can someone please tell me what the (1-0.28) part of this calculation is? Is it the company tax of 28%?


Yes. It might more sense if you looked at the calculation the other way around: Calculating the 'net profit' from the before tax profit:

0.28 x 23.1c = 6.5c (the tax paid). As investors, of course, the most important part is what part of the profit is left over for us:

(1-0.28) x 23.1c = 16.6c

SNOOPY

[LAC]

Thank you. much appreciated guys.
Bought RBD when it was $2.60 and just wish I bought heaps more back then.... just waiting to see if it will drop around $3.50ish.
Snoopy -> thanks for the breakdown on how you value based on Div history....

[Regi]

:t_up:
https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=3904917

[Harvey Specter]

:t_up:
https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=3904917Very good but I am not sure they should be referring to increase sales/profits at KFC as "healthy"!

[Snoopy]

Tough talking Chairman Ted added some local flavour to his AGM address. A new KFC will be opening in the Christchurch eastern suburbs soon. Also two ‘Carl’s Junior’ outlets will be built in Christchurch this year, the first being at the old clock tower site in Hornby. He was pleased to bring the AGM back to Christchurch because 10% of shareholders now live here. There was a great turnout at the meeting too, with hardly a seat at the Clearwater Conference room left unfilled.

A shareholder mentioned the target of 40-50 Carls Junior stores, the fact that RBD now had 18 but that only three more were planned this financial year. Was the target of 40-50 still realistic? Answer: Yes, but directors were being very disciplined in how they spent shareholder capital. The north of the North Island now has scale. But directors want to see that part of the Carl’s Junior chain in profit before fully committing to the rest of the country.

Competition for capital is there in the form of the KFC site rebuilds. There are only nine to go now before the whole network is transformed. A shareholder brought up the point of long queues at KFC particularly in the drive in lane at dinner time. Could there be an advance order system be brought in to cut customer waiting time? CEO Creedy noted that this was the reason the new position of “General Manager Information Systems” has been created. Geoff Holton who has this position is tasked with making all of the brands mobile phone friendly. Put your orders in , in advance, and skip the queues! The Pizza Hut Website is about to re-launch to better mesh with the mobile phone interface. Similar systems are planned for Carl’s Junior and KFC. Meanwhile a monitoring program was in place to measure waiting times for both drive in and counter orders.

A shareholder noted that "Texas Chicken", branded as "Church's Chicken" in the US, has opened a store in Auckland. Did RBD consider them a threat? CEO Creedy said that he had been there and didn't think much of them. Pretty tasteless compared to KFC, and really just an inferior knock off he said. Nevertheless RBD are keeping an eye on the store because they know it is well financed. They may respond at the nearby KFC store with special offers if they ae required to do so. The story of Red Rooster arriving from over the ditch, building six stores in Auckland, then folding their tents in full retreat a few years later was relayed!

The sell-off of Pizza Hut stores is expected to continue with another 4-5 set to go to independent owners this year. There is a growing trend for potential independent franchisees to want to buy more than one store. This year the RBD share of the Pizza Hut business will drop to under half the total number of stores. For the first time, RBD has disclosed total Pizza Hut sales (including franchisees). That figure for FY2015 was $82m and only $48.2m of those were RBD owned units.

Average sales of RBD owned Pizza Hut: $48.2m / 46 stores = $1.05m
Average sales of independently franchised Pizza Hut: $33.8m / 42 stores = $0.80m

Given the PH stores sold were generally in the smaller and less profitable catchments, I might have expected RBD itself to be doing better. This shows that RBDs strategy of continuing to sell down is probably the right one.

‘Starbucks’ received more than its fair share of attention from shareholders, despite the record EBITDA result. One questioned the ‘invisible advertising’. Geraldine Oldham, General Manager Sales and Marketing noted that ‘Starbucks’ stores were their own billboards. Starbucks NZ also run their own facebook and instagram pages. Further, as with much of the ‘café culture’ the most important advertising is word of mouth. Another noted the shrinkage in the number of outlets in NZs second largest city, even as other coffee chains had expanded. Director Sue Suckling carefully articulated that RBD had different expansion options available to it and it was up to directors to use the company’s capital in a way that would provide the highest return to shareholders. All sensible stuff, except that if you really believe that Starbucks can’t compete for the use of RBD’s capital, why own Starbucks at all? RBD have been ruthless at selling off underperforming Pizza Hut stores, so why are they not selling underperforming Starbucks stores? My conclusion: the whole of Starbucks is being 'polished up' ready for a trade sale in one block. Remember you read that on Sharetrader first!

Warehousing and food distribution were brought back in house during the year. Bringing warehousing and food distribution in house has changed the ‘normal’ accounting base. CFO Grant Ellis noted that the large increase in inventories on the balance sheet, matched by an equally large increase in trade creditors will be representative of the ‘new look’ balance sheet because of this change. I am really surprised that such a large part of the company's business could be shunted off balance sheet in the past. But there you go!

Tough talking Ted has been on the RBD board since 2004, but said he was more excited than ever about RBDs business prospects and was just rearing to be re-elected. He was re-elected.

"With its three established brands all performing at a very high level and Carl’s Jr now beginning to gain some traction, we are now starting to get to a position where we can begin to evaluate another brand opportunity." Ted said.

"Whilst it would be premature to start speculating now, we have been scanning the marketplace in a number of sectors including Mexican, Asian, mid-scale casual dining and lunch day-part opportunities."

What about Taco Bell a shareholder interjected? "You must have read my mind" Ted said. So perhaps 2016 will be the year that the Taco Bell (finally) tolls? Not sure if that will be a good thing in a country without much Central American culture.

Another shareholder asked about the fall in the NZD:USD exchange rate. Will profitability going forwards be affected?

"The only major US sourced product is Starbucks coffee, amounting to some $5m of ingredients per year." "Carl's Junior did have a lost of US content, but the beef for that is now sourced locally." "So going forwards the weaker NZD/USD exchange rate is not a big issue." said Ted

Now shareholders will be watching carefully to see if Ted van Arkel's new found enthusiasm continues to come through in the company results.

SNOOPY

[percy]

A very good account of the meeting.
I was most impressed by the board's openness,skills and experience.
It is a very well directed and managed business.They know where they are,where they want to be ,and how they are going to get there.
The Beagle gave himself away by asking a question about page 52 in the annual report.!!! lol

[Regi]

Not Taco Bell!! Place is trash. I say bring Chipotle!

[Xerof]

Chipotle - my favorite when I lived in Virginia a few years ago, along with '5 guys and fries'

Used to be under McDonalds' influence, although divorced in 2006.

wonderfully simple mex meals, cheap as, and great with an in-house marguerita

[Rep]

The sell-off of Pizza Hut stores is expected to continue with another 4-5 set to go to independent owners this year. There is a growing trend for potential independent franchisees to want to buy more than one store. This year the RBD share of the Pizza Hut business will drop to under half the total number of stores. For the first time, RBD has disclosed total Pizza Hut sales (including franchisees). That figure for FY2015 was $82m and only $48.2m of those were RBD owned units.

Average sales of RBD owned Pizza Hut: $48.2m / 46 stores = $1.05m
Average sales of independently franchised Pizza Hut: $33.8m / 42 stores = $0.80m

SNOOPY

System Sales
Actually, RBD have disclosed the PH system sales previously. In 2012/13 they disclosed that they were $62.2m for the year. They quietly dropped disclosure of the system sales thereafter.
The major increase by a third to $80m since then is consistent with the significant same store increases since then...
http://www.restaurantbrands.co.nz/files/documents/quarterly_sales_announcements/2012-13/q4_sales_report_2012-13.pdf/

Starbucks
The sale of the Pizza Hut stores to independent franchisees is a helluva lot easier than looking to do the same for Starbucks. PH around the world is based on a franchise model - apart from New Zealand, I'm not aware of many countries where Starbucks has provided an independent franchisee. RBD Shareholders are probably not aware of the hideous open cast money pit that Starbucks International managed to create in Australia (it dwarves RBD's disasterous foray into Pizza Hut Victoria by probably a factor of 3) when they built over 60 stores before closing over half of them almost overnight and having less than a third still operating. Any trade sale would have to either to SBI or to a franchisee that SBI approve.

As a shareholder, I'd rather that any RBD investment is into something that produces the best return and it isn't Starbucks. But there isn't any point doing a firesale as it producing a return.

[Snoopy]

Starbucks
The sale of the Pizza Hut stores to independent franchisees is a helluva lot easier than looking to do the same for Starbucks. PH around the world is based on a franchise model - apart from New Zealand, I'm not aware of many countries where Starbucks has provided an independent franchisee. RBD Shareholders are probably not aware of the hideous open cast money pit that Starbucks International managed to create in Australia (it dwarves RBD's disasterous foray into Pizza Hut Victoria by probably a factor of 3) when they built over 60 stores before closing over half of them almost overnight and having less than a third still operating. Any trade sale would have to either to SBI or to a franchisee that SBI approve.

As a shareholder, I'd rather that any RBD investment is into something that produces the best return and it isn't Starbucks. But there isn't any point doing a firesale as it producing a return.

Actually the topic of the sale of Starbucks NZ has come up before. This from Tuesday July 2, 2013:

http://www.nbr.co.nz/article/restaurant-brands-closes-ailing-starbucks-stores-entertains-offers-ahead-sale-decision-bd-14

-----

The fast-food operator closed six Starbucks stores last financial year and may shutter a further five outlets as leases come up for renewal, leaving 22 profitable cafes in the group, chairman Ted van Arkel said in an interview.

"We are tidying up, we are working at reducing the number of stores and when we are ready we will put it on the market," he says. "In the meantime, we are getting some inquiries but there is nothing firm on the table."

-------

So much for my 'scoop'! They currently have 26 cafes left, so maybe another four to close up?

I had a short chat with one of the Starbucks minions after the AGM, as I figured anyone in a green apron probably wasn't being paid enough to lie. The sole remaining store in Christchurch is apparently doing rather nicely as they have benefitted from the loyal clientele of the closed city branches coming in for their Starbucks fix. The main attraction is of course those heavily creamed tall drinks which true coffee conniseurs (of which I am not one!) might well regard as vile. Nevertheless there is a market for these type of drinks. And if Starbucks can get people coming citywide to get them, well good on them!

SNOOPY

[Snoopy]

The sell-off of Pizza Hut stores is expected to continue with another 4-5 set to go to independent owners this year. There is a growing trend for potential independent franchisees to want to buy more than one store. This year the RBD share of the Pizza Hut business will drop to under half the total number of stores. For the first time, RBD has disclosed total Pizza Hut sales (including franchisees). That figure for FY2015 was $82m and only $48.2m of those were RBD owned units.

Average sales of RBD owned Pizza Hut: $48.2m / 46 stores = $1.05m
Average sales of independently franchised Pizza Hut: $33.8m / 42 stores = $0.80m

Given the PH stores sold were generally in the smaller and less profitable catchments, I might have expected RBD itself to be doing better. This shows that RBDs strategy of continuing to sell down is probably the right one.



System Sales
Actually, RBD have disclosed the PH system sales previously. In 2012/13 they disclosed that they were $62.2m for the year. They quietly dropped disclosure of the system sales thereafter.
The major increase by a third to $80m since then is consistent with the significant same store increases since then...
http://www.restaurantbrands.co.nz/files/documents/quarterly_sales_announcements/2012-13/q4_sales_report_2012-13.pdf/


Thanks for that Rep. Company Pizza sales for FY2013 were $47.9m. So with a bit of judicious subtraction, we can find out how the non-company to company sales equation looked two years ago.

Average sales of RBD owned Pizza Hut: $47.9m / 57 stores = $840k
Average sales of independently franchised Pizza Hut: $14.3m / 26 stores = $550k

Now we can look at the sales improvement over the last two years:

Sales of company owned restaurants improved by: $1.05m/$0.840m = 25%
Sales of non-company owned restaurants improved by: $0.800m/$0.550m = 45%

A clear win to the owner operators. Fortunately RBD does not become totally divorced from the owner operator stores once they are sold. The owner operators still remain under the watchful eye of the RBD Pizza Hut area manager. So hopefully RBD themselves will be able to learn from the owner operators so thet they can keep improving their own Pizza Hut store performance.

SNOOPY

[winner69]

How much cut does RBD get from the independents, assuming there is one on an ongoing basis?

[Harvey Specter]

How much cut does RBD get from the independents, assuming there is one on an ongoing basis?
The Pizza Hut franchisees? Standard for food franchises is 10-12% split between royalty and advertising fee. Also profit from supply sales if sourced from HO.

[Rep]

The Pizza Hut franchisees? Standard for food franchises is 10-12% split between royalty and advertising fee. Also profit from supply sales if sourced from HO.

Harvey, you are forgetting that the independent franchisees have a Pizza Hut franchise with Yum not with RBD. Both the independents and the franchisees contribute to the advertising - although the arrangement between Yum, the independent franchisee and RBD over royalties isn't something that has been published as far as I am aware. RBD is apparently providing some services to the independents such as the Area Manager but for how much isn't apparent and probably commercially sensitive.

Also in terms of sales for the independents vs RBD stores - I am not totally convinced that this is the appropriate measure. We don't know the EBITDA margins of the independents and whatever fee that RBD banks for services is almost probably in the segment result in the accounts distorting their margins. If a store is open for longer, it can have more revenue but not necessarily more profitably.

OTOH Independent PH franchisees are probably not bound by the collective contract that RBD has with the union either so there will be variations in labour costs. RBD stores are nearer urban centres - I can't imagine that RBD and the franchisees have a transport model like Fonterra where these are equal. Moving bulk ingredients to the Invercargill franchise is going to cost more than a store in West Auckland. And almost certainly the ingredients have to come from RBD to pass all the franchisor accreditation for consistency (I seem to recall Russel mentioning that local sourcing for Carl's Jr was hampered by delays in this area.)

[Harvey Specter]

Rep - haven't checked specifically but I think the independents only have a relationship with RBD as area master franchisee, and not with YUM. RBD would then pass on a portion of that to YUM.

[Snoopy]

In terms of sales for the independents vs RBD stores - I am not totally convinced that this is the appropriate measure. We don't know the EBITDA margins of the independents and whatever fee that RBD banks for services is almost probably in the segment result in the accounts distorting their margins. If a store is open for longer, it can have more revenue but not necessarily more profitably.

OTOH Independent PH franchisees are probably not bound by the collective contract that RBD has with the union either so there will be variations in labour costs. RBD stores are nearer urban centres - I can't imagine that RBD and the franchisees have a transport model like Fonterra where these are equal. Moving bulk ingredients to the Invercargill franchise is going to cost more than a store in West Auckland. And almost certainly the ingredients have to come from RBD to pass all the franchisor accreditation for consistency (I seem to recall Russel mentioning that local sourcing for Carl's Jr was hampered by delays in this area.)

Rep, I feel that you are correct in that 'sales' do not necessarily provide a good guide on 'store profitability' for all of the reasons you mention. However sales are the only figures disclosed for the non-company owned stores. Because the independently owned stores are just that -independent- we will never know exactly what the individual franchisees profitability is. So although sales is not necessarily a good guide to profitability, it is the only guide we have, or are likely to get. Nevertheless more sales does at least provide a potential leverage to more profitability, even if that is not guaranteed.

You aren't right about the service fees RBD earns from independents being buried in the accounts though. It is listed under note 4 as a separate item. Revenue from independents may also be found in the segmented results (note 3) under the heading "All other segments",and so neatly separated from the RBD owned store revenue.

SNOOPY

[Snoopy]

How much cut does RBD get from the independents, assuming there is one on an ongoing basis?


Winner, the definition of 'cut' has changed this year (FY2015). If you look at note 4, 'the cut' has jumped from $1.130m in FY2014 to $13.075m this year. The main reason for this jump is that RBD has taken direct control of the distribution of ingredients to all stores, including independents, whereas previously this service was contracted out. I would argue that distribution of raw materials to allow a business to function does not come under the heading 'cut'. Nevertheless I would argue that the basic overseeing function, as billed in FY2014, could be classed as a 'cut'. Unfortunately it seems RBD did not release the overall sales (including independent franchisee) sales in FY2014. So we can't calculate the independent franchisee sales. And therefore we can't calculate the 'cut'.

From the FY2013 annual report, sales of services amounted to $0.912m. These would relate to the (at the time)

a/ 8 franchised KFC stores (cf 9 at EOFY2012) and
b/ the 26 franchised Pizza Hut Stores (cf 13 at EOFY2012).

So 'on average' over the year you could say that $912k was spread over 8.5 KFC stores and 19.5 Pizza Hut Stores. That works out to be an average of:

$912,000 / (8.5 + 19.5) = $32,571 per store.

I have already calculated (post 2132) that the average independent PH store turnover for that year was $550,000.

On that basis, the 'cut' that RBD makes on those independently owned PH stores in FY2013 was:

$32,571/ $550,000 = 5.9%

I suspect there would be another 'cut' due to master franchisee YUM that is additional to that figure.

SNOOPY

[winner69]

Shareprice keeps falling

Out of favour is RBD - bloody heck even The Queen is selling down

Disaster if it falls to 4 bucks.

[RGR367]

Shareprice keeps falling

Out of favour is RBD - bloody heck even The Queen is selling down

Disaster if it falls to 4 bucks.

Don't worry W69, as this is just our old reliable stock way of calling us back to buy it again after selling it at as high as $4.50 just about 6 weeks ago. The gut-o-meter pull to buy it again is strong at $4.10. Wow, this stock would just keep giving :t_up:

[Rep]

Shareprice keeps falling

Out of favour is RBD - bloody heck even The Queen is selling down

Disaster if it falls to 4 bucks.

If the SP dips below $4 then Russel's bonus gets a measurement reset.

[blackcap]

If the SP dips below $4 then Russel's bonus gets a measurement reset.

Ahha insto's "manipulating" a CEO's bonus... :P:) great fun and games.... (tongue in cheek fully)

[bull....]

was over brought at 4.50 I reckon so probably just having a rest, I switched out of rbd a while back into Collins in aus who are doing nicely too and picked up the currency slump as well , so kfc in general seem to be doing well

[winner69]

Fisher Funds been buying the last few months

That's a real bugger ...Balance always said they seem to buy high etc

RBD might be close to be given the chop after all these years

Heck, where is Balance these days. I miss him

[winner69]

Jeez Her Majesty has been selling

They said the decoration at Buck House was costing a fortune but she could have sold something else

[bull....]

they must be eating more kfc in aus as Collins hit a new high yesterday and it just paid its div couple weeks back

[Snoopy]

If the SP dips below $4 then Russel's bonus gets a measurement reset.

Well, who would have thought? RBD now sitting at $4! One more cent down and Russel's $1m after tax bonus goes on holiday. Even though I am a shareholder, I can't help looking at the share price and thinking dive! dive! dive!

SNOOPY

[blackcap]

Well, who would have thought? RBD now sitting at $4! One more cent down and Russel's $1m after tax bonus goes on holiday.

SNOOPY

That is a $1m benefit to shareholders.... so the shareprice goes up? Has a really circular feel about this one.... :)

[winner69]

I have had a look at the charts and can see a bearish bat formation forming with exceptionally strong resistance at $3.99. This might be breached for a period of 39 days, but will then fall below $3.99 once again, for another 2 years at least



kidding

Maybe you weren't kidding you guru Xerof

[Rep]

That is a $1m benefit to shareholders.... so the shareprice goes up? Has a really circular feel about this one.... :)

Actually it was a $1m LTI (net of tax) so arguably of a larger benefit with the differential in top marginal personal vs company tax rates. In any case, the SP is $3.97 so there's probably a reset for another 40 days.

[winner69]

That bonus is getting further and further away

Might never get it if the market turns turtle

[blackcap]

That bonus is getting further and further away

Might never get it if the market turns turtle

What are the squiggly lines telling you on this one winner? Time to get out or was that a while back?
I only have a small holding (so I can get my free meal in July) so its irrelevant really but from an academic point of view.....

[winner69]

What are the squiggly lines telling you on this one winner? Time to get out or was that a while back?
I only have a small holding (so I can get my free meal in July) so its irrelevant really but from an academic point of view.....

All gone now. Last lot went when 200ma was breached

A good multi-year trade it was.

Maybe another time we will see the sort of action

[Snoopy]

That bonus is getting further and further away

Might never get it if the market turns turtle

Blimey RBD up nearly 5% today on no news! Russel's bonus clock just started ticking again. Actually there was one bit of news. ACC has been buying. But it was only in June that they finished their long steady selldown before reversing things not even two months later. I do wonder about some of these fund managment type people when I see sudden reversals on no news like this.

SNOOPY

[percy]

I wonder whether they make their investment decisions on FA,TA or just spin the bottle.!!!

[blackcap]

I wonder whether they make their investment decisions on FA,TA or just spin the bottle.!!!

I once met a broker who did some dealings with them... Percy you sum it up quite nicely with your third option :)

(but generally they get a lot of money and its got to go somewhere. I think they are probably on the register of most NZ listed companies?)

[winner69]

Blimey RBD up nearly 5% today on no news! Russel's bonus clock just started ticking again. Actually there was one bit of news. ACC has been buying. But it was only in June that they finished their long steady selldown before reversing things not even two months later. I do wonder about some of these fund managment type people when I see sudden reversals on no news like this.

SNOOPY
Russel counting the days again ....hope not a is traction?

Last sales report showed KFC still booming

Carls not so hot, definite trend down and their talk that opening activity last year is a bit of smoke and mirrors. But with his bonus on the line Russel wouldn't be too negative would he.

[winner69]

No wonder the share price has surged lately

Great result, well done russel. You deserve your big bonus

https://www.nzx.com/files/attachments/223621.pdf

[blackcap]

I cannot (well my partner can't) work out why KFC sales would be increasing so much. I do eat it sparingly but she hates it, as do many other people I know. But on the flip side, there are more and more that do enjoy the odd piece of dripping chicken and maybe its becoming more affordable relative to other products out there? Or they are just doing a great job of selling their stores a lot better than their competition. KFC same store sales up 8% is phenomenal. Well done RBD.

[bull....]

anyone else get into Collins - au kfc brand over there stellar results out price up 70% now since mentioned on here

[blackcap]

Should see a $5 in front of the shareprice soon if this goes on much longer...

https://www.anzsecurities.co.nz/DirectTrade/dynamic/announcement.aspx?id=4044736

[Snoopy]

anyone else get into Collins - au kfc brand over there stellar results out price up 70% now since mentioned on here


Since mid 2011 (4.5 years ago) , when CKF was first mentioned, the RBD share price has gone from $2.50 to $4.35. Over that time fully imputed dividends of 76cps have been paid. So the compounding rate of return for RBD over that period has been:

$2.50(1+r)^4.5=($4.35+S0.76) => (1+r)^4.5 = 2.044 => r=0.172

This is a compounding annual rate of return of 17.2%.

So not too shabby: a total return of over 100% (204.4% -100% =104.4%) for the period. Not sure what the equivalent figure for Collins is as you haven't told us what the dividends from Collins were over the period (remember ther are no imputation credits for NZ investors though - they pay NZ tax on any Collins dividends). Collins returns may even be a little better.

But given the currency risk, and execution risk from the unproven Collins managment team (looked at through 2011 eyes) I am very happy that I kept all my RBD cash together and did not diversify into Collins. Congratulations to those who took the risk and did well with CKF though.

SNOOPY

[winner69]

Has Russel earned his million bucks bonus yet

Wasn't it 40 days over 4 bucks or something

[bull....]

Since mid 2011 (4.5 years ago) , when CKF was first mentioned, the RBD share price has gone from $2.50 to $4.35. Over that time fully imputed dividends of 76cps have been paid. So the compounding rate of return for RBD over that period has been:

$2.50(1+r)^4.5=($4.35+S0.76) => (1+r)^4.5 = 2.044 => r=0.172

This is a compounding annual rate of return of 17.2%.

So not too shabby: a total return of over 100% (204.4% -100% =104.4%) for the period. Not sure what the equivalent figure for Collins is as you haven't told us what the dividends from Collins were over the period (remember ther are no imputation credits for NZ investors though - they pay NZ tax on any Collins dividends). Collins returns may even be a little better.

But given the currency risk, and execution risk from the unproven Collins managment team (looked at through 2011 eyes) I am very happy that I kept all my RBD cash together and did not diversify into Collins. Congratulations to those who took the risk and did well with CKF though.

SNOOPY

yes restaurant brands has been a great performer no doubt about it, my point was you made more money from Collins in the same time frame as I posted - post 1955 90% return from Collins in that time frame + divs and currency , rbd 15% + divs for the same time frame

[Snoopy]

yes restaurant brands has been a great performer no doubt about it, my point was you made more money from Collins in the same time frame as I posted - post 1955 90% return from Collins in that time frame + divs and currency , rbd 15% + divs for the same time frame


So Collins is up 90% since 15th February 2015? Ah well, good on shareholders who took that ride. Over more years the outperformance (if any) against RBD is perhaps not so good. I think we can both agree that generally both have been more than satisfactory investments over more recent times.

SNOOPY

[jetski1999]

RBD has both ends of the market covered, if the down turn comes people will go for the cheaper option for takeaways and buy more pizza's if not KFC and carls will do well

[Lewylewylewy]

Is this share close to peaking, or do people expect to see continued performance in line with historical gains?

[Snoopy]

Is this share close to peaking, or do people expect to see continued performance in line with historical gains?


As a shareholder I would say the best growth years are over. There will be a big one off charge this year in recognition of Russel's $1m - after tax - bonus. Operationally everything is coming together in a most favourable way. KFC is going better than ever. Even dear old Starbucks is looking better. And most of the low hanging fruit from the Pizza Hut turnaround and sell down are picked.

So I predict a steady dividend , increasing in line with inflation. That means no big share price gains. But the dividend yield would suggest no great share price falls either. I intend to continue to hold.

Growth over and above inflation will depend on how the roll out of Carl's Junior goes, and any new food chains management decide to develop. Management's record in this regard is patchy.

SNOOPY

[LAC]

As a shareholder I would say the best growth years are over. There will be a big one off charge this year in recognition of Russel's $1m - after tax - bonus. Operationally everything is coming together in a most favourable way. KFC is going better than ever. Even dear old Starbucks is looking better. And most of the low hanging fruit from the Pizza Hut turnaround and sell down are picked.

So I predict a steady dividend , increasing in line with inflation. That means no big share price gains. But the dividend yield would suggest no great share price falls either. I intend to continue to hold.

Growth over and above inflation will depend on how the roll out of Carl's Junior goes, and any new food chains management decide to develop. Management's record in this regard is patchy.

SNOOPY

I read somewhere that they had the rights for Taco Bell, can you confirm?

[Raz]

Taco Bell is very good product & process...amazed it never has come here...

[Harvey Specter]

I read somewhere that they had the rights for Taco Bell, can you confirm?I just through they had first right of refusal, so effectively a blocking interest.

[Snoopy]

I just through they had first right of refusal, so effectively a blocking interest.


Pizza Hut, KFC and Taco Bell are all master franchise brands owned by YUM foods in the USA. Restaurant Brands were set up with a strong position in KFC and Pizza Hut already established in New Zealand. Come franchise renewal time, YUM I think it is fair to say become rather unhappy with RBD's performance in NZ. IIRC there was talk of letting RBD continue to hold the PH and KFC franchises for another ten years, but without the previously expected right of further renewal. This wake up call was enough to galvanise RBD management into action. They embarked on a nationwide project of KFC refurbishment (only now approaching completion) and Pizza Hut transformation from a dine in restaurant chain,with takeaway option, to a takeaway deli style chain only. In recent years RBD has become more of a darling of master franchise holder YUM, pointing the way for how to turn around other overseas markets.

Before RBD took on Carl's Junior, they were actively evaluating Taco Bell. At last year's AGM, Chairman Ted said that Taco Bell was again under consideration for NZ. However, I am not sure that Taco Bell is a 'natural' for downunder. The Taco Bell brand lasted eight years in Australia before it was pulled in 2005. Thus I regard Taco Bell as not the potential cash cow in NZ that some see. I am sure a couple of restaurants could be made to work in Auckland. But that hardly justifies the cost of setting up a national chain.

It is probably politically a good move for YUM to see that RBD keeps reevaluating Taco Bell. I don't think YUM wants to upset RBD these days. And if YUM farmed out Taco Bell to another operator, Russel and Ted might get upset. I sincerely hope that Taco Bell does not come to NZ,as RBD does not need the distraction, whether they end up operating Taco Bell in New Zealand or someone else is the operator. All in all, I think Harvey's comment that 'RBD has first right of refusal', is probably the best way of thinking about it. But the best outcome, I believe, for RBD will be if Taco Bell does not come here.

SNOOPY

[LAC]

Interesting. Thanks Snoopy.
There would be a time at some point in the future where they will need to grow the business further, if not Taco Bell, what could the next chain be? Or do you think they would just buy out one of their competition?
Kind of looks like Starbucks will be let go at some point as they aren't really investing in the outfits of those stores. if that happens they would have to invest in another big name, any ideas what that could be?

[winner69]

I often wonder how much RBD can continue to be re-rated by the market

Its PE ratio keeps going up and up and on current price and consensus earnings the PE is over 17

Earnings have been a bit lumpy over the last few years as well and even F16 isn't going to be much higher than 2011 .... but PE has gone from ~10 to ~17. Nearly all the gains in share price over that time has come from a more positive market view of the company (higher PE) than the company actually growing profits

Dividends drive the price? if so when interest rates inevitably rise I wouldn't want to be holding RBD at these lofty multiples

Last few years been good, I not complaining ..... but watching those charts

See what I mean belwo

[Snoopy]

Interesting. Thanks Snoopy.
There would be a time at some point in the future where they will need to grow the business further, if not Taco Bell, what could the next chain be? Or do you think they would just buy out one of their competition?

Kind of looks like Starbucks will be let go at some point as they aren't really investing in the outfits of those stores. if that happens they would have to invest in another big name, any ideas what that could be?


I went to the last AGM. Tough talking Ted said RBD were now known internationally as the 'go to' guys for an overseas chain wanting to establish here. They get approached all the time, so get first dibs at many new prospective concepts. I think there was some mention of a sit down restaurant chain they were evaluating; "Hooters NZ" by RBD anyone? Who knows, but there are plenty of prospects out there.

There was also mention of having another go overseas: Australia perhaps? I couldn't help notice at the AGM how old the longest serving director director, Danny Diab, looks these days. A successful Pizza Hut Entrepreneur in New South Wales in his day, but Danny has to be over 40 now. Being an old fart around the board is good as that is an appropriate avenue down which to distill your experience. But actually operating your own business at Diab's age? Come on! His back would break under the strain of three or four Pizza boxes! This is 2016, not 1987! Danny may have the body of a quadragenarian, but in these digital days that equates to the brain of a nonagenerian. Danny the dinosaur is well overdue for retirement. And what better vehicle to tip those NSW based Pizza Hut franchises into than RBD? A few of those older KFC franchise holdouts in New Zealand have done that to RBD over the last couple of years. The Victorian venture showed how not to run Pizza Hut in Australia, so -lessons learned- a return to Australia, and Pizza Hut, would see RBD immediately up to speed. Remember, you read it here first!

SNOOPY

[Rep]

I went to the last AGM. Tough talking Ted said RBD were now known internationally as the 'go to' guys for an overseas chain wanting to establish here. They get approached all the time, so get first dibs at many new prospective concepts. I think there was some mention of a sit down restaurant chain they were evaluating; "Hooters NZ" by RBD anyone? Who knows, but there are plenty of prospects out there.

There was also mention of having another go overseas: Australia perhaps? I couldn't help notice at the AGM how old the longest serving director director, Danny Diab, looks these days. A successful Pizza Hut Entrepreneur in New South Wales in his day, but Danny has to be over 40 now. Being an old fart around the board is good as that is an appropriate avenue down which to distill your experience. But actually operating your own business at Diab's age? Come on! His back would break under the strain of three or four Pizza boxes! This is 2016, not 1987! Danny may have the body of a quadragenarian, but in these digital days that equates to the brain of a nonagenerian. Danny the dinosaur is well overdue for retirement. And what better vehicle to tip those NSW based Pizza Hut franchises into than RBD? A few of those older KFC franchise holdouts in New Zealand have done that to RBD over the last couple of years. The Victorian venture showed how not to run Pizza Hut in Australia, so -lessons learned- a return to Australia, and Pizza Hut, would see RBD immediately up to speed. Remember, you read it here first!

SNOOPY


I doubt Danny as a successful multi-store franchisee needs to work in any of his Pizza Hut stores in Sydney. He is extremely well respected and has been a senior figure representing the franchisees interests with Yum in Australia. I doubt a sale by a existing Director of his business interests to the group could be done without shareholder approval and even if it went to a vote, there are a shipload of shareholders who vividly remember the corpse that RBD left the last time they crossed the ditch. Especially when they funded it with the proceeds of the Sale and Leaseback of a number of KFC outlets where they had previously owned land and buildings.

Hooters, IMHO, is a dog. The 5 Australian outlets went to voluntary administration last year and was eventually bailed out by one of the passive investors in that business after the operators "didn't do a good job." If you can't make a buck with 3 outlets in Western Sydney and one on the Gold Coast selling wings, ribs, beer and Jack Daniels with waitresses in skin tight T Shirts and Orange shorts then it won't get off the ground here.

Taco Bell pulled back overseas expansion plans the last time RBD kicked the tyres - I vaguely recall it was about 2011 when the US business had a lot of bad press about how much beef actually was actually in their meat filling and what grade it actually was.

Disc - I hold RBD but I agree with Snoopy that the PE doesn't make sense unless you think CJs is going to return a KFC level of return at some stage

[Lewylewylewy]

Fast food is an easy business to grow. Sure NZ is saturated and anything new is competing against yourself, but there are other avenues to explore. Gluten free, cafes, healthy takeout, classy takeout, delivered weekly lunches, etc. These ideas came to me as far as I could to type, I think with any brain power and knowledge applied, it shouldn't be hard.

[dobby41]

A successful Pizza Hut Entrepreneur in New South Wales in his day, but Danny has to be over 40 now. Being an old fart around the board is good as that is an appropriate avenue down which to distill your experience.

Old at 40?
I have learnt something today!
Steve Jobs was well past it wasn't he?
You young whipper snapper.

[Rep]

Fast food is an easy business to grow. Sure NZ is saturated and anything new is competing against yourself, but there are other avenues to explore. Gluten free, cafes, healthy takeout, classy takeout, delivered weekly lunches, etc. These ideas came to me as far as I could to type, I think with any brain power and knowledge applied, it shouldn't be hard.

Ideas are easy, actually setting up a QSR business and growing are difficult... otherwise you would know who the following are:

Uncles
Pennylanes
Red Rooster
Homestead
Chicken Spot
Pizza Haven
Spawn
Gobble

All of these have come and gone... Georgie Pie as a concept was dead rather than as a product line at McDonalds.

[fungus pudding]

Ideas are easy, actually setting up a QSR business and growing are difficult... otherwise you would know who the following are:

Uncles
Pennylanes
Red Rooster
Homestead
Chicken Spot
Pizza Haven
Spawn
Gobble

All of these have come and gone... Georgie Pie as a concept was dead rather than as a product line at McDonalds.

There's a squillion of them. It's a tough game.

https://en.wikipedia.org/wiki/List_of_defunct_fast-food_restaurant_chains

Wikipedia gives a list of mainly American failures, but down under we've had Pie World come and go as well as Georgie pie. There's ben a few others.

[Onion]

There's a squillion of them. It's a tough game.

https://en.wikipedia.org/wiki/List_of_defunct_fast-food_restaurant_chains

Wikipedia gives a list of mainly American failures, but down under we've had Pie World come and go as well as Georgie pie. There's ben a few others.

Who could forget the Big Tex chain that extended from Paraparaumu in the south, through Levin and all the way to Foxton. :t_up: I used to shout myself a weekly burger ("hold the onions") after my Friday night job as a school boy.

PS. I didn't have a job as a school boy -- that would be weird -- I was a school boy with a job.

[winner69]

Some of you said this would happen

RBD buys biggest KFC franchisee in NSW

This time WILL be different eh - Russel is in charge

https://www.nzx.com/companies/RBD/announcements/278770

[bull....]

good move, look how Collins in aus is performing

[noodles]

I calculate 11% eps accretive in FY17. Is it really worth it for the risk of going into Aussie. Remember the unsuccessful Pizza Hut foray?




Current FY16
Fy17 forecast
aus
proforma
proforma fy17
accretion


sales








EBITDA
52.8
58.1
15
67.8
73.1



Operating profit (EBIT)
35.2
40.5

45.2
48.73333333



Interest
1.2
0.2

3.3
2.9



Pre-Tax Profit (EBT)
34
40.3

41.9
45.8



tax
8.8
12.3

11.93694
13.0568



NPAT
25.2
28

29.9
32.8



Debt
14.9
5

82.9
73



Market cap
410.1
410.1

430.1
430.1



EV
425.0
415.1

513.0
503.1



EV/EBIT
12.1
10.2

11.3
10.3



eps
0.257
0.286

0.291
0.318
11.30%


pe
16.27
14.65

14.39
13.16

[Balance]

Some of you said this would happen

RBD buys biggest KFC franchisee in NSW

This time WILL be different eh - Russel is in charge

https://www.nzx.com/companies/RBD/announcements/278770

Let's do the time warp again?

https://www.youtube.com/watch?v=aizCMO-mI1Q

[Harvey Specter]

I calculate 11% eps accretive in FY17. Is it really worth it for the risk of going into Aussie. Remember the unsuccessful Pizza Hut foray?If you look at the NZ business, an investment in more KFC's is definitely more worthwhile than Pizza Huts. I also wonder what the KFC's look like and whether a transformation project like they did in NZ would give further profitable results.

It is an interesting decision though. More KFC is really just a scale and reliable cashflow story, rather than a growth story. Maybe this is an admission that bringing a new brand successfully into NZ is difficult given the issues they are having with Carls Jr.

[Balance]

If you look at the NZ business, an investment in more KFC's is definitely more worthwhile than Pizza Huts. I also wonder what the KFC's look like and whether a transformation project like they did in NZ would give further profitable results.

It is an interesting decision though. More KFC is really just a scale and reliable cashflow story, rather than a growth story. Maybe this is an admission that bringing a new brand successfully into NZ is difficult given the issues they are having with Carls Jr.

Anything the Aussies sell and their own corporate kind do not want to buy, avoid.

The landscape in Australia is littered with the corpses and casualties of NZ companies making investments there - Telecom (twice), Air NZ, Fletcher Challenge, Warehouse, Equiticorp, Chase, Tower, RBD, BNZ, NZI etc etc etc.

[winner69]

Balance - the market loves it - share price up to $4.60 and more to come.

Hope it gets o $5 in next month - good time to sell I reckon

[Balance]

Balance - the market loves it - share price up to $4.60 and more to come.

Hope it gets o $5 in next month - good time to sell I reckon

Not surprising - same thing happened last time round with KFC. Likewise when WHS announced its foray into Australia, WHS sp hit an all time high.

[winner69]

I calculate 11% eps accretive in FY17. Is it really worth it for the risk of going into Aussie. Remember the unsuccessful Pizza Hut foray?




Current FY16
Fy17 forecast
aus
proforma
proforma fy17
accretion


sales








EBITDA
52.8
58.1
15
67.8
73.1



Operating profit (EBIT)
35.2
40.5

45.2
48.73333333



Interest
1.2
0.2

3.3
2.9



Pre-Tax Profit (EBT)
34
40.3

41.9
45.8



tax
8.8
12.3

11.93694
13.0568



NPAT
25.2
28

29.9
32.8



Debt
14.9
5

82.9
73



Market cap
410.1
410.1

430.1
430.1



EV
425.0
415.1

513.0
503.1



EV/EBIT
12.1
10.2

11.3
10.3



eps
0.257
0.286

0.291
0.318
11.30%


pe
16.27
14.65

14.39
13.16




Good stuff there noodles. Helpful and saved me time and effort

(You do good stuff and it would look really professional from a presentation point f view if you were a little more consistent with how many decimal points you use. Just trying to help - no offence intended mate)

[noodles]

Good stuff there noodles. Helpful and saved me time and effort

(You do good stuff and it would look really professional from a presentation point f view if you were a little more consistent with how many decimal points you use. Just trying to help - no offence intended mate)
Thanks for the constructive feedback. Updated here.




Current FY16
Fy17 forecast
aus
proforma fy16
proforma fy17
accretion


sales








EBITDA
52.8
58.1
15
67.8
73.1



Operating profit (EBIT)
35.2
40.5

45.2
48.7



Interest
1.2
0.2

3.3
2.9



Pre-Tax Profit (EBT)
34
40.3

41.9
45.8



tax
8.8
12.3

11.9
13.1



NPAT
25.2
28

29.9
32.8



Debt
14.9
5

82.9
73



Market cap
450.2
450.2

470.2
470.2



EV
465.1
455.2

553.1
543.2



EV/EBIT
13.2
11.2

12.2
11.1



eps
0.257
0.286

0.291
0.318
11.30%


pe
17.87
16.08

15.80
14.45

[percy]

RBD was a very poor company.A lot of CEOs who promised a lot and all failed to deliver.
What a difference Russel Creedy has made.
I am sure he will work his skills in Australia as well as he has done in NZ.
RBD also has a very strong board.

[Raz]

Balance - the market loves it - share price up to $4.60 and more to come.

Hope it gets o $5 in next month - good time to sell I reckon

Agree, will be watching closely....timing for on an exit.

[Lewylewylewy]

These will increaseA bit more when the deal goes through, though it's sounding like an almost certainty.

Side note, it's a questionable move buying into Oz right now with all that's going on. I imagine that's why he's selling. That's not too say it's a bad move to buy, if you can weather potentially troubles times...

I remember in economics school they spoke of some types of business thriving during recessions, listing fast food as one of them. Apparently people lose their jobs, get depressed and can't be bothered to cook, but can't afford more than takeout. Having said that, economic theory based on the past is all baloney these days.

[Lewylewylewy]

PS: are you staying with RBD long term Percy or are you taking the opportunity to exit too?

[percy]

PS: are you staying with RBD long term Percy or are you taking the opportunity to exit too?

While Russel Creedy is there I will stay.
I see no reason to sell.
I really think when you find a really well run business you are best to hang on to it.
Over the next 10 years or so, I expect RBD will keep growing and keep paying increasing dividends.
The sector does reward the good players.
I also think logistics pay an increasing important part in RBD business.Supply chain management is very clever.
So the fundamentals in Australia are the same as NZ,good sites,good staff training,good promotion,good logistics.
I see RBD's management quickly getting on top of any areas of concern and they may infact gain better supply deals.
As I pointed out previously Creedy is well supported by excellent staff and a very strong board.

[Balance]

While Russel Creedy is there I will stay.
I see no reason to sell.
I really think when you find a really well run business you are best to hang on to it.
Over the next 10 years or so, I expect RBD will keep growing and keep paying increasing dividends.
The sector does reward the good players.
I also think logistics pay an increasing important part in RBD business.Supply chain management is very clever.
So the fundamentals in Australia are the same as NZ,good sites,good staff training,good promotion,good logistics.
I see RBD's management quickly getting on top of any areas of concern and they may infact gain better supply deals.
As I pointed out previously Creedy is well supported by excellent staff and a very strong board.


Percy, I hear that all the time - this time will be different when companies go over to Australia.

Have heard it from Telecom (twice), Air NZ, Tower, Zintel, Just Water, Warehouse etc and now, RBD (second time).

I would be cautious because Australia is a huge market and the companies over there have a different mindset than those from NZ. They play to win at ALL cost and they play in the international arena. That's why Australia have international companies like News Corp, BHP, NAB etc.

NZ companies are like 15 year old kids thinking they can play in the ARL.

Only way to play the game is to hire Australians as rough and as ruthless as their competitors to play in that market. It can be done as THL has shown.

But I would be cautious.

[noodles]

While Russel Creedy is there I will stay.
I see no reason to sell.
I really think when you find a really well run business you are best to hang on to it.
Over the next 10 years or so, I expect RBD will keep growing and keep paying increasing dividends.
The sector does reward the good players.
I also think logistics pay an increasing important part in RBD business.Supply chain management is very clever.
So the fundamentals in Australia are the same as NZ,good sites,good staff training,good promotion,good logistics.
I see RBD's management quickly getting on top of any areas of concern and they may infact gain better supply deals.
As I pointed out previously Creedy is well supported by excellent staff and a very strong board.

Have a listen to this percy. It is quite interesting.

There are lots of independent franchises on the east coast. There is an implication that these can be moped up. So there may be a roll-up play here.

http://www.radionz.co.nz/national/programmes/businessnews/audio/201791858/restaurant-brands-to-buy-large-nsw-kfc-franchise-for-a$82-point-4m (http://www.radionz.co.nz/national/programmes/businessnews/audio/201791858/restaurant-brands-to-buy-large-nsw-kfc-franchise-for-a$82-point-4m)

[percy]

Percy, I hear that all the time - this time will be different when companies go over to Australia.

Have heard it from Telecom (twice), Air NZ, Tower, Zintel, Just Water, Warehouse etc and now, RBD (second time).

I would be cautious because Australia is a huge market and the companies over there have a different mindset than those from NZ. They play to win at ALL cost and they play in the international arena. That's why Australia have international companies like News Corp, BHP, NAB etc.

NZ companies are like 15 year old kids thinking they can play in the ARL.

Only way to play the game is to hire Australians as rough and as ruthless as their competitors to play in that market. It can be done as THL has shown.

But I would be cautious.

Yes you are spot on [as usual].
Caution.
Yet I think Glaxo started in Palmerston North.Graeme Heart started in Auckland,Ebos started in ChCh,Trilogy started somewhere in NZ.AWK is doing very well outside NZ.
Russel Creedy is South African.They seam to do well anywhere.
Also I think RBD have their NZ operations running very well,so management can focus on Australia,should they need too.
The upside,or opportunity, makes the risks worth taking.
Noodles thanks for the link.Certainly good to know they are buying a well run business,rather than a turnaround problem.

[RGR367]

If it was another try at launching another try on a baked bread franchise, I would be wary. But fried chicken it is so I'm all in. It just unfortunate that I don't have much now after selling most then close at 4.50. As said previously, this just don't stop on giving you something good :t_up:

[Balance]

Yes you are spot on [as usual].
Caution.
Yet I think Glaxo started in Palmerston North.Graeme Heart started in Auckland,Ebos started in ChCh,Trilogy started somewhere in NZ.AWK is doing very well outside NZ.
Russel Creedy is South African.They seam to do well anywhere.
Also I think RBD have their NZ operations running very well,so management can focus on Australia,should they need too.
The upside,or opportunity, makes the risks worth taking.
Noodles thanks for the link.Certainly good to know they are buying a well run business,rather than a turnaround problem.

Good points, Percy.

Let's wish them well and there's some skin in the game from the the vendors who are taking 5m RBD shares. Like to know if there's a lock in period however.

We need NZ companies to do well when they venture overseas so NZ does not keep squandering billions of dollars in overseas misadventures.

[janner]

Good points, Percy.

We need NZ companies to do well when they venture overseas so NZ does not keep squandering billions of dollars in overseas misadventures.

Amen to that.. ...

[Lewylewylewy]

This is why I love this forum, good sharing and wise words. Thanks all.

[winner69]

Good points, Percy.

Let's wish them well and there's some skin in the game from the the vendors who are taking 5m RBD shares. Like to know if there's a lock in period however.

We need NZ companies to do well when they venture overseas so NZ does not keep squandering billions of dollars in overseas misadventures.

They mentioned the new shares in escrow for a year

Mr Copulos gets $21m of shares (worth more now) and what's left after debt repaid - wonder how much that is

Probably no need to sell, esp if collecting Directors fees as well.

[winner69]

Hey Balance - see Fisher been increasing their stake in RBD of late

They pretty clever eh


.......or was it just good luck?

[winner69]

That Copulos guy was once a big shareholder and director of Collins Foods ...and quite an active one as well.

Looks like his activism resulted in the Chairman calling quits (slightly disappointed in his/company performance Copulos was) has subsequently sold down his shareholding.

Described as a renegade shareholder in some quarters - no holds barred, no prisoners taken etc

No doubt his relationship with Van Arkel and Creedy will be a lot better

Ps. Correction made

[winner69]

Store Ebitda margins in NSW about 15% - in NZ they are about 20%

Prob reflects a more competitive market(?) and room for improvement once we teach them how to do it better(?)

[Rep]

That Copulos guy was once a big shareholder and director of Collins Foods ...and quite an active one as well.

Looks like his activism resulted in the Chairman calling quits (slightly disappointed in his/company performance Copulos was) has subsequently sold down his shareholding.

Described as a renegade shareholder in some quarters - no holds barred, no prisoners taken etc

No doubt his relationship with Falconer and Creedy will be a lot better

Winner, Bill Falconer hasn't been involved as a director of Restaurant Brands for at least 10 years. Russel Creedy was appointed after Ted Van Arkel became the Chairman after Bill retired.

[Rep]

Store Ebitda margins in NSW about 15% - in NZ they are about 20%

Prob reflects a more competitive market(?) and room for improvement once we teach them how to do it better(?)

Australian labour costs are generally higher even with youth rates due to Super, payroll taxes, wage awards and lower labour productivity.

[winner69]

Winner, Bill Falconer hasn't been involved as a director of Restaurant Brands for at least 10 years. Russel Creedy was appointed after Ted Van Arkel became the Chairman after Bill retired.

Yes. You are correct. Corrected my post

I get my Teds and Bills mixed up some time

At least I didn't say Vicki by mistake

[Balance]

Yes. You are correct. Corrected my post

I get my Teds and Bills mixed up some time

At least I didn't say Vicki by mistake

Vicki - now THAT is a blast from the past!

I remember listening to her at a presentation and she was pasted from what was obviously from a big night before. The rest as they say is history!

[Rep]

Vicki - now THAT is a blast from the past!

I remember listening to her at a presentation and she was pasted from what was obviously from a big night before. The rest as they say is history!

http://edenpark.co.nz/about/eden-park-trust

Vicki currently a trustee - until appointment of Guy Ngata had been the acting CEO.

[winner69]

Have we got to $5 yet?

[percy]

Have we got to $5 yet?

Yes.
Achieved at 16.04 today.

[Rep]

$5.15 today

This interesting piece of news as well - RBD has franchised off the Gisborne Carl's Jr.

http://gisborneherald.co.nz/localnews/2258083-135/carls-jnr-has-sold

[winner69]

$5.15 today

This interesting piece of news as well - RBD has franchised off the Gisborne Carl's Jr.

http://gisborneherald.co.nz/localnews/2258083-135/carls-jnr-has-sold

Was thinking of selling at $5 but will leave thinking about it to $6 i reckon

[BIRMANBOY]

Greed is just so unbecoming W:p and looking at the chart one would say in a couple of years $6 could well be $7
Was thinking of selling at $5 but will leave thinking about it to $6 i reckon.
[QUOTE=winner69;615761]Was thinking of selling at $5 but will leave thinking about it to $6 i reckon

[IAK]

Restaurant Brands profit flat, but Australian purchase expected to be a boost.... http://www.stuff.co.nz/business/industries/78910218/restaurant-brands-profit-flat-but-australian-purchase-expected-to-be-a-boost

[winner69]

Greed is just so unbecoming W:p and looking at the chart one would say in a couple of years $6 could well be $7[QUOTE=winner69;615761]Was thinking of selling at $5 but will leave thinking about it to $6 i reckon.

Nothing like greasy chicken to keep The Cats Whiskers happy

[winner69]

Restaurant Brands profit flat, but Australian purchase expected to be a boost.... http://www.stuff.co.nz/business/industries/78910218/restaurant-brands-profit-flat-but-australian-purchase-expected-to-be-a-boost

Really up 12% though

One less week this year

[Snoopy]

Really up 12% though

One less week this year

Winner, in my year there are 52 weeks. So that means the real profit is up (1-(52/53))= 2%, not 12%! However, remember the FY2016 result should contain most of Sir Russel's $1m cash bonus after tax. Hopefully we don't need to repeat that in FY2017 to keep him! So maybe your 12% closer to the mark after all?

SNOOPY

PS Surprised you are still here? I thought your charts flicked you out of RBD some time ago?

[winner69]

Winner, in my year there are 52 weeks. So that means the real profit is up (1-(52/53))= 2%, not 12%! However, remember the FY2016 result should contain most of Sir Russel's $1m cash bonus after tax. Hopefully we don't need to repeat that in FY2017 to keep him! So maybe your 12% closer to the mark after all?

SNOOPY

PS Surprised you are still here? I thought your charts flicked you out of RBD some time ago?

They said like for like was +12% and did mention that hand out to Russel

[Joshuatree]

New Zealand's Restaurant Brands buys Stephen Copulos ... (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ved=0ahUKEwiNhfrwlLDMAhXGq5QKHTmNBSAQFggxMAY&url=http%3A%2F%2Fwww.smh.com.au%2Fbusiness%2Fretai l%2Fnew-zealands-restaurant-brands-buys-stephen-copulos-kfc-franchisees-20160303-gna67c.html&usg=AFQjCNHudGBDd_sgLUaVbKwFrHNvct5X_g&sig2=kQL-zEovspTmiBRr-2rYdA)
Stephen Copulos - Biography (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=12&ved=0ahUKEwiNhfrwlLDMAhXGq5QKHTmNBSAQFghMMAs&url=http%3A%2F%2Fwww.4-traders.com%2Fbusiness-leaders%2FStephen-Copulos-06YNDZ-E%2Fbiography%2F&usg=AFQjCNHVKH6uvB5hqX5hZLT0GU3ZrYq7uA&sig2=2bbOtjoNnAsm3K6ckTiiSg)

I have shares in CAS (not a recco;in the red)which Copulos owns re 20% in and is chairman of

[alliswell]

Hi,

I dont hold shares in this, though just have a question,...does anyone know whats going on with Napier's KFC?,...for about 6 months now, all I've heard are complaints after complaints, I went yesterday,(around 3pm) only to find it was "drive through only",..which from what I've heard is common...I couldnt be bothered so got back in my car and went somewhere else,..also they run out of stuff,...they have been out of potato and gravy since Thursday,...is it lack of staff, when they have to close the restaurant,and have drive through only? and poor management to run out of stuff????

[JayRiggs]

I believe for any fast food place, if they have to do any sort of maintenance whether it be building or equipment, then they keep the drive thru open. I've seen this for McDonalds quite alot.
Of all the fast food joints, KFC run out of stuff the most. At the various times I've ordered at KFCs the past few years, they've run out of potato gravy, salads, burger buns and wraps.

[alliswell]

thanks, though this one has just up graded around Sept last yr,just seems to happen a lot from what I've heard

[RGR367]

Happens every now and then too at Porirua store so you have to be early, before 7:30 pm on Thursdays or Fridays especially when there's a big Rugby game in the telly or in the stadium.

disc: no longer a shareholder as of today. Just sold my last bundle on it for $5.25 having accummulated them when they were almost free give aways at less than a dollar :p

[blackcap]

Happens every now and then too at Porirua store so you have to be early, before 7:30 pm on Thursdays or Fridays especially when there's a big Rugby game in the telly or in the stadium.

disc: no longer a shareholder as of today. Just sold my last bundle on it for $5.25 having accummulated them when they were almost free give aways at less than a dollar :p

Well done. I too have some from IPO times, some more at under a $ and some that I have bought recently at the $3 mark. But seriously considering getting rid of them at this $5 plus mark. Anyone else think they are too extended? Where is growth coming from ?

[Snoopy]

Where is growth coming from ?


1/ Bedding down and further expansion of their KFC acquisition in Australia.
2/ Carl's Junior gaining scale in NZ such trhat it makes real profits, not just at EBITDA level.

SNOOPY

discl: still holding

[blackcap]

1/ Bedding down and further expansion of their KFC acquisition in Australia.
2/ Carl's Junior gaining scale in NZ such trhat it makes real profits, not just at EBITDA level.

SNOOPY

discl: still holding

Sure that I do understand... just not the PE > 20

PE over 20 needs some real sustained growth etc to justify price. That is why I am considering getting out....

[Snoopy]

Sure that I do understand... just not the PE > 20

PE over 20 needs some real sustained growth etc to justify price. That is why I am considering getting out....


The PE of 20 is similar to what some power companies trade on. One might say the reasons are similar too.

1/ Established business models, with sustainable cashflow
2/ To some extent recession resistant. People still need power and will trade down from a more expensive meal out to a takeaway in a time of recession.
3/ Both bricks and mortor operations unlilkely to have serious new era internet competition.
4/ Share yield supported by the very low bank term deposit rates.

I understand your unease blackcap, as a PE of 20 is high. But if you sold where do you go for an alternative recession resistant income return? Answer that question and I might sell a few RBD myself! In the meantime I am happy on the share registar right here.

SNOOPY

[winner69]

The squiggly line on the chart still seems to be heading upwards

Surely thats the only measure of 'value' - not these PE things

[blackcap]

The PE of 20 is similar to what some power companies trade on. One might say the reasons are similar too.

1/ Established business models, with sustainable cashflow
2/ To some extent recession resistant. People still need power and will trade down from a more expensive meal out to a takeaway in a time of recession.
3/ Both bricks and mortor operations unlilkely to have serious new era internet competition.
4/ Share yield supported by the very low bank term deposit rates.

I understand your unease blackcap, as a PE of 20 is high. But if you sold where do you go for an alternative recession resistant income return? Answer that question and I might sell a few RBD myself! In the meantime I am happy on the share registar right here.

SNOOPY

Hi Snoopy,

How about TNR... PE of 10 but with the following characteristics that you mentioned?

1/ Established business models, with sustainable cashflow
2/ To some extent recession resistant. People still need cars and will trade down for a less expensiove model in times of recession. Loans may do better then as well.
3/ Both operations unlilkely to have serious new era internet competition. (or Trade me would have taken it by now.)
4/ Share yield supported by the very low bank term deposit rates.


I would rather buy TNR at a PE of 10 and div yeild of 6% (give or take) with superior growth prospects, than RBD with a PE of 20. Although that said, I still do hold the RBD as Winner has so succinctly pointed out that the squiggly line still seems to be going in the right direction. I just question how much longer.

[Snoopy]

A new KFC will be opening in the Christchurch eastern suburbs soon. Also two ‘Carl’s Junior’ outlets will be built in Christchurch this year, the first being at the old clock tower site in Hornby.


As Christchurch Westies will know (or maybe they won't, because it opened so quietly), the first Carl's Junior Store in the South Island opened at the Bush Inn Centre, beating Hornby by a few weeks. A coupon leaflet arrived in the mail yesterday. So I took the opportunity to make my first ever visit to a Carl's Junior (for lunch).

I wasn't quite sure what I ordered from the picture. What came was 'pulled pork' on a bed of potato "thingies" (round double layer potato slices with holes in them, with a barbecue seasoning and cheese and sauce on top). My coupon gave me a drink too so I chose L&P, without ice.

Big mistake on my part! The drink came first and the sugar shock was would have floored even the fast food faithful. Did we really invent that drink in Paeroa? Or is the stuff you buy now a Coca Cola corruption of the original? Or maybe the person who put the syrup into the bulk mixer confused tablespoons and teaspoons? Just make sure if you order L&P, you order ice to make it palatable!

Was pleasantly surprised to see the target demographic ('hungry young men') wasn't really working. OK I tell a lie. A group of four hungry young punks came in just as I was leaving. But the majority of the customers looked 30+, with just as many hungry(ish) young(ish) women as men at the table. I reckon one or two of those customers might have even started their age with a 5! All good for shareholders though. Happy to see a broad demographic of customers. There was music blaring out, but it wasn't headbanging enough to clear the site of oldies. Those high back American milkbar style benches muffle the background noise. So you can have a conversation if you want. Plus there is the option to sit outside at the high bench on a nice day too.

The food? I'll go back one day soon and try a burger. But my pulled pork platter, was flavoursome and distinctive, served hot with minimal delay, even if you wouldn't serve such a concoction at a cardiologists convention. Ok I did strike a relatively quiet time. And I now admit that I smuggled in a home grown salad to balance off the all American taste. Not big enough to avoid a heart attack. But big enough to ensure I made it home before any cardiac arrest.

[menu note: Not sure if replacing the burger buns with lettuce leaves quite cuts it as the official healthy menu option. Has any customer ever ordered that?]

The service was pleasant and efficient. What is more the staff had initiative. If they weren't busy behind the counter they were out the front of the restaurant cleaning up. Top marks to the store manager.

I happened to walk out past the Burgerfuel competition that sits in the same shop row. It wasn't quite as busy. But when the novelty of Carl's wears off, the Upper Riccarton Arena will make a fascinating contest.

SNOOPY

[Lewylewylewy]

The squiggly line is a funny one because it is both cause and effect. It's increase is the effect of success and potential success (which is the cause), but it causes a trend which has the effect of an increase. ;)

The line goes up recently because the potential success abroad is massive. This could become a multi bagger due to recent activity...

[Snoopy]

Hi Snoopy,

How about TNR... PE of 10 but with the following characteristics that you mentioned?


I do have a very few TNR blackcap. Yes I agree they deserve a look. But being a finance company there is trade off between profit and the quality and resilience of the loan book to consider. At least with RBD we don't have to worry about finance. It's a cash business!

SNOOPY

[Lewylewylewy]

I don't think anything like the full value of the international status had been priced in yet, if anyone is looking for a new investment.

... Of course buying now would be a confidence vote that they're can make the new operation work. If it goes well, I think it could be a 2x bagger.

Worth investigating...

[BIRMANBOY]

Ah the ever optimistic investor...buy high and sell higher. Hopefully. There must be easier ways of investing than this, surely?
I don't think anything like the full value of the international status had been priced in yet, if anyone is looking for a new investment.

... Of course buying now would be a confidence vote that they're can make the new operation work. If it goes well, I think it could be a 2x bagger.

Worth investigating...

[Lewylewylewy]

Ha-ha :)

Are they high though? Dividend yield is good and PE isn't too bad. They've just opened up business in a whole new (larger) country. It is a little optimistic, as I mentioned it would be a vote of confidence that they could perform in their new venture... But if they can do there what they've done be here, I see them being worth double.

I guess time will tell if I'm wrong, it usually does :)

[BIRMANBOY]

Well good on you for being a futurist of the most proactive nature and undoubtedly you have been blessed with a sunny disposition...you must be a joy to be around.:p However surely investing is about trying to minimize the unknowns and wot ifs and trying to zone in on areas that have a higher likelihood of succeeding? The very important first phrase most investors usually learn is "Buy low and sell high". Buying at the moment surely is counter intuitive to this? However there still seem to be people buying so God bless them and their belief. I have done extremely well out of this share so wish it well but it seems to me that time comes along eventually for even old friends to be cut loose. As for your points ...
"Are they high though? Yes SP historic highs
" Dividend yield is good and PE isn't too bad." No DY is low and PE is high.
"They've just opened up business in a whole new (larger) country." Well good luck on that...OZ has buried many NZ entities although international brands will fare better no doubt.
Ha-ha :)

Are they high though? Dividend yield is good and PE isn't too bad. They've just opened up business in a whole new (larger) country. It is a little optimistic, as I mentioned it would be a vote of confidence that they could perform in their new venture... But if they can do there what they've done be here, I see them being worth double.

I guess time will tell if I'm wrong, it usually does :)

[Lewylewylewy]

Lol, well thanks for being the Ying to my yang. We will see how it goes.

[Rep]

"They've just opened up business in a whole new (larger) country." Well good luck on that...OZ has buried many NZ entities although international brands will fare better no doubt.

RBD have a very large fetid corpse buried in the state just south of NSW that was associated with an international brand that they thought they understood. RBD filled a very large pissoir of money - with the proceeds of the sale and leaseback of the NZ KFC sites they owned - and flushed it away in Victoria with only a very bad hangover and a lot of debt from buying a bunch of Pizza Hut Restaurants that bled money in more ugly ways than a bullfight.

There is little question that they have what looks to be a well operated acquisition in QSR Pty and makes sense for Coupolos join the board along with presumably an earnings based contingent payment.

But what works in NZ doesn't necessarily work across the ditch - as a number of NZ entities have learned.... expensively.

Russel will be extremely aware of this - he was on the management team when it crossed the Tasman last time.

[Sideshow Bob]

http://www.stuff.co.nz/national/80506860/shortstaffed-kfc-workers-under-pressure-but-its-hard-to-get-a-job-there

not good in Marlborough City KFC

[Bjauck]

Steve Braunias gives Carl's Jr Lincoln Rd 9/10.
http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=11654004

[albundy29]

More importantly just got the RBD annual report in the mail.

What gives - no voucher for chicken and chips or any of their products, as we have had in previous years.

My return on investment ( previously dividends + food) has just dropped.

[dobby41]

My return on investment ( previously dividends + food) has just dropped.

And your health maybe better.

[Bjauck]

And your health maybe better.
It depends on where and what they eat instead...

[blackcap]

More importantly just got the RBD annual report in the mail.

What gives - no voucher for chicken and chips or any of their products, as we have had in previous years.

My return on investment ( previously dividends + food) has just dropped.

Aw shucks, there goes my cunning plan when I split my holding amongst entities. Oh well have had a bit of profit from this strategy. No need to hold the small holdings, better consolidate and sell some at these prices :)

[kura]

Aw shucks, there goes my cunning plan when I split my holding amongst entities. Oh well have had a bit of profit from this strategy. No need to hold the small holdings, better consolidate and sell some at these prices :)

Yes, I also miss the free voucher !

Will also mention that about 10 years ago, a friend was doing an advanced tax paper as part of his law degree, had an assignment to comment on the RBD free burger & chips voucher for shareholders.

Think it was technically taxable, but have no idea how IRD would extract it's pound of flesh !

[kura]

Yay, got my free lunch voucher in mail today (came with AGM notice )

- 2 pcs chicken
- chips
- potato & gravy
- drink

[Snoopy]

Yay, got my free lunch voucher in mail today (came with AGM notice )

- 2 pcs chicken
- chips
- potato & gravy
- drink

While you guys are filling your bellies, did you notice the intent to raise dirctors fees by 18% in the AGM notice?

The strategic pay report suggested
"The suggested new fees are at or above market median levels but still below upper quartile levels."

The directors then take the 'high ground' saying their own request for a pay increase is at the bottom end of Strategic pay' recommendation.

But taken together, the directors are asking to be paid above average just below the upper quartile. IMO this is excessive. Most of the thinking for Restaurant Brands is actually done by the master franchise holders in the USA. An RBD director requires a 'below average' skillset and should be remunerated accordingly.

These are the guys that offered our Russel a $1m 'long term' bonus based only on share price performance that he was able to cash in within months of it being granted. Nothing about outperforming a peer group of companies. Improving profitability of the company not a separate consideration? Where did $1m come from? And what is the next 'long term' incentive? $1m for next year?

No denying that Russel has done a good job. But he is already very well remunerated for that

The brief summary in the AGM notice said there was full copy of the Strategic Pay report on the RBD website. Anyone able to find it?

SNOOPY

[Beagle]

Yay, got my free lunch voucher in mail today (came with AGM notice )

- 2 pcs chicken
- chips
- potato & gravy
- drink

And people are trying to tell me on the AIR thread that shareholders perks are dead / useless / inappropriate.

[Baa_Baa]

And people are trying to tell me on the AIR thread that shareholders perks are dead / useless / inappropriate.

Giving the shareholders an annual heart attack on a plate is quite different from investing $21,000 to get a few discounted air miles.

;)

[Lewylewylewy]

It's really a bad time to ask for a party rise. Better to do so after the success of new operations.

[silverblizzard888]

Do financial institutions with million dollar holdings also get one voucher? I wonder who they give it to X)

[kura]

Yes, one voucher per shareholder (regardless of number of shares held )

Rather than wondering what Insto's do with their vouchers, the more interesting question is what IRD do with their 33% of total vouchers issued.

[Rep]

The brief summary in the AGM notice said there was full copy of the Strategic Pay report on the RBD website. Anyone able to find it?
SNOOPY

http://restaurantbrands.co.nz/files/documents/annual_shareholders_meeting/2016/restaurant-brands-board-rem-report-2016/

[Snoopy]

Yes, one voucher per shareholder (regardless of number of shares held )


I used my voucher at my local KFC tonight. Got in the door to find the 'hot n spicy' chicken being spruiked on the board out side was 20c extra per piece. What the? Just as well I am happy with standard chicken! Tried the raspberry fizzy drink for the first time. Let's just say I won't be going out and buying my own cans of raspberry soda any time soon! Service was pretty good, although I don't think the underling on the front desk had seen a sharehodler voucher before. At any rate the shift supervisor sorted him out!

When did KFC do away with their 'eat in' trays? Everyone seemed to be eating out of brown KFC paper bags. The food was good though, and cleanliness was up to scratch. Mind you, it was early in the night!

SNOOPY

[LAC]

I used my voucher at my local KFC tonight. Got in the door to find the 'hot n spicy' chicken being spruiked on the board out side was 20c extra per piece. What the? Just as well I am happy with standard chicken! Tried the raspberry fizzy drink for the first time. Let's just say I won't be going out and buying my own cans of raspberry soda any time soon! Service was pretty good, although I don't think the underling on the front desk had seen a sharehodler voucher before. At any rate the shift supervisor sorted him out!

When did KFC do away with their 'eat in' trays? Everyone seemed to be eating out of brown KFC paper bags. The food was good though, and cleanliness was up to scratch. Mind you, it was early in the night!

SNOOPY

I like KFC as my monthly greasy fried fix but a few weeks ago was treated by a friend to Texas chicken. I have read a whole heap on FB regarding people saying nothing beats KFC etc. etc. but please try them if you can and let me know your honest opinion. (not their sides as I think they useless but just their spicy chicken).
RBD holder but am a little concerned with the competition.

[Rep]

I like KFC as my monthly greasy fried fix but a few weeks ago was treated by a friend to Texas chicken. I have read a whole heap on FB regarding people saying nothing beats KFC etc. etc. but please try them if you can and let me know your honest opinion. (not their sides as I think they useless but just their spicy chicken).
RBD holder but am a little concerned with the competition.

Hmmm - no website, no marketing to speak of and a plan to build 20 stores here... TM first registered in 2013 and not a store until December 2015... not a great start.

[Snoopy]

http://restaurantbrands.co.nz/files/documents/annual_shareholders_meeting/2016/restaurant-brands-board-rem-report-2016/

Thanks for the link. Still can't find it on the website myself.

This report suggests that RBD directors will not be overpaid, except in terms of assets under management. Most of the value of RBD is in the IP of the brands, or more correctly RBD's licence to use that IP which is in general owned by US based master franchisors. This means that RBD is inherently 'light on hard assets'. So it is no surprise that directors are overpaid in comparative terms by this asset measure.

Stephen Copulos, in his previous gig as a director of Collins Food Group in Australia, seems to have been on roughly $A90k per year. So maybe $NZ65k for the directors role in RBD NZ is not out of the question? There does seem to be a desire to generally refresh the board. So having had my grizzle, and not withstanding the realtively weak performance of the outgoing board members, I am prepared to support the increase in director fee motion.

I will be watching the performance of the directors going forwards from here like a hawk though!

SNOOPY

[Rep]

Thanks for the link. Still can't find it on the website myself.


SNOOPY

http://www.restaurantbrands.co.nz/share-price-graph/annual-shareholders-meeting/

In the Restaurant Brands website under Corporate Info, Select "Annual Shareholders Meeting" and it will be listed under the 2016 heading

[Harvey Specter]

Spent my voucher yesterday - not sure if I should be unhappy with the slow service, or happy that the line was out the door.

[Bjauck]

Spent my voucher yesterday - not sure if I should be unhappy with the slow service, or happy that the line was out the door.

I have enjoyed the food previously. I live in outer Auckland, however it would cost me almost as much in travel costs to the nearest restaurant as the value of the voucher. I would prefer a bit of a bigger cash dividend instead or for RBD to make a donation to a foodbank instead.

[Rep]

I have enjoyed the food previously. I live in outer Auckland, however it would cost me almost as much in travel costs to the nearest restaurant as the value of the voucher. I would prefer a bit of a bigger cash dividend instead or for RBD to make a donation to a foodbank instead.

I have previously won vouchers for Subway which I have donated to the Auckland City Mission, I am sure that Diane Robertson would be more than happy to receive it even it is used to the benefit for the many volunteers who work tirelessly for the Mission.

[Bjauck]

I have previously won vouchers for Subway which I have donated to the Auckland City Mission, I am sure that Diane Robertson would be more than happy to receive it even it is used to the benefit for the many volunteers who work tirelessly for the Mission. Good idea - as no other purchase is required to redeem the offer.

[winner69]

Pretty solid quarterly sales numbers

Carl's Jnr beginning to look like a long term 'work in progress' story - not setting the world on fire

[silverblizzard888]

Pretty solid quarterly sales numbers

Carl's Jnr beginning to look like a long term 'work in progress' story - not setting the world on fire

Yeah it has the chance to add to a significant portion in sales over time, given Pizza Hut and Starbucks have either declined or remained stagnant, RBD kind of needed a boost from an alternative and looks like Carls Junior if done right have the potential to add significantly over time. One hopes not to rely too heavily on KFC.

[winner69]

Hawaii and Guam here we come
https://www.nzx.com/files/attachments/246652.pdf

RBD spreading it's wings

Is Yum! itself the ultimate target?

[LAC]

Hawaii here we come

RBD spreading it's wings

Is Yum! itself the ultimate target?
Im liking today's announcements. Hope they introduce a few Taco Bells stores here in NZ in the years to come.

[winner69]

More mundane matters that will e overlooked with the excitement of Hawaii

H1 revenues up 22% on pcp but cash flows and profit about the same ......hmmm

[Balance]

More mundane matters that will e overlooked with the excitement of Hawaii

H1 revenues up 22% on pcp but cash flows and profit about the same ......hmmm

Pizza hut?

Back to the future for RBD - will the company cross the valley of death once more?

[Stranger_Danger]

Hawaii and Guam here we come
https://www.nzx.com/files/attachments/246652.pdf

RBD spreading it's wings

Is Yum! itself the ultimate target?

Nah, they're gonna try and "do a Domino's". If you apply Domino's valuation metrics to RBD's figures, you can see the appeal, but I suspect the end result would be the same as every NZ tech co seeing the appeal in Xero's valuation metrics....

[Rep]

Hawaii and Guam here we come
https://www.nzx.com/files/attachments/246652.pdf

RBD spreading it's wings

Is Yum! itself the ultimate target?

To quote The Castle "Tell him he's dreaming..."
Yum! Brands Market Cap is over USD 30 billion, RBD about NZD 0.6 billion although at one stage it was a steal at NZD 55 million when geniuses at Tower decided to quit their 10% holding at the rock bottom of the share price slide. That $5.5 million sale proceeds would be worth over $56 million and counting with all the dividends since.

Personally don't see the synergies of running businesses in Guam, Saipan and Hawaii out of Central Park, Ellerslie - buying into QSR they at least had someone with a proven record, who'd run the business staying on and skin in the game with script and cash. I haven't sold a share in my portfolio yet but it's now on my watchlist - despite it having demonstrated reasonably good management for the last six or seven years.

Perhaps Russel would like Star Alliance Gold Elite status now?

[Snow Leopard]

Not a share that has ever particularly appealed to me and my experiences of eating in Taco Bell in the days when I worked in California were discouraging.

But putting those negative influences aside and still the Tiger senses danger !

So first that bit of NSW and now Hawaii, Guam and Saipan, the latter I have to admit I had to search Google Maps to find.

Suspect the board is going through the classic business is running well, top of the share price cycle, lets do something stupid instead of concentrating on the company they already have phase.

A few years before I will know if I am right.

Best Wishes
Paper Tiger

[winner69]

Instos liked the offer - $5.15 a great price

Still a lottery though as to what bonus one might get if one doesn't participate in the Retail Offer

[malus]

Instos liked the offer - $5.15 a great price

Still a lottery though as to what bonus one might get if one doesn't participate in the Retail Offer

Yes indeed Winner and decision needs to be taken by 5pm 16 Nov! Will likely participate and go for the "long term" ride watching financial results carefully as these offshore investments settle:mellow:

[winner69]

Dominos on fire in ANZ - These results give us confidence to upgrade our guidance for Australia and New Zealand same-store sales, with +12-14 per cent growth expected this year

Pizza Hut NZ definitely not achieving these sort of growth rates

[h2so4]

Dominos on fire in ANZ - These results give us confidence to upgrade our guidance for Australia and New Zealand same-store sales, with +12-14 per cent growth expected this year

Pizza Hut NZ definitely not achieving these sort of growth rates

Ha!
RBD aims to hold 25 Pizza Hutt stores over the next two years.
They currently hold 45.

[h2so4]

........on the other hand last year Dominoes reported they added 184 new stores and acquired another 302.

[Rep]

........on the other hand last year Dominoes reported they added 184 new stores and acquired another 302.
That's across seven countries across Europe, Japan, Australia and NZ so not quite like for like

[macduffy]

How do RBD's Pizza Hut stores stack up profiitwise against their KFC stores - on a per store basis?

[winner69]

How do RBD's Pizza Hut stores stack up profiitwise against their KFC stores - on a per store basis?

I think you know?

Pizza Hut not much
KFC heaps (relative to PH)

1/2 announcement

[macduffy]

OK, winner, I was being a bit lazy!
:blush:

I knew in general terms but didn't know the actual numbers. Makes one wonder though why RBD isn't pursuing KFC businesses but then maybe they're not cheap enough - for a reason.

[Rep]

I think you know?

Pizza Hut not much
KFC heaps (relative to PH)

1/2 announcement

(Sigh... )for FY16 Annual Return
Adjusted EBITDA return on assets for KFC was 55%
Adjusted EBITDA return on assets for Pizza Hut was 29%
(Adjusted EBITDA being Concept EBITDA less G&A at brand level but before Support Office costs)

So yes the average PH store is less profitable but less costly to build... yes the return is only about half of a KFC but I would be happy with 29% return on segment assets.

Pursuing investment in buying more KFCs presumes that someone will sell them to you and at what multiple... the higher the multiple then the greater the level of goodwill you will pay for...

[h2so4]

That's across seven countries across Europe, Japan, Australia and NZ so not quite like for like

Well can we say one is growing and the other shrinking or do we need to measure the size of the pizza?

[Snoopy]

Instos liked the offer - $5.15 a great price

Still a lottery though as to what bonus one might get if one doesn't participate in the Retail Offer

The RBD lottery result came in this morning. The instos bought the remainder of the retail offer at $4.90. That represents a 20c premium for those small shareholders who did not take up their rights at $4.70. Surprisingly (to me) this was a lot of people. Only $26m of the $94m offered to small shareholders was taken up (just 28%). Effectively those shareholders who did not take up the offer have elected to sell their shares for $4.90, when equivalent shares, pre issue, had been able to be sold in the mid $5.50 bracket on market for several months.

Directors must be disappointed at the apparent 'thumbs down' given by small shareholders to their pacific expansion plans.

SNOOPY

[Rep]

The RBD lottery result came in this morning. The instos bought the remainder of the retail offer at $4.90. That represents a 20c premium for those small shareholders who did not take up their rights at $4.70. Surprisingly (to me) this was a lot of people. Only $26m of the $94m offered to small shareholders was taken up (just 28%). Effectively those shareholders who did not take up the offer have elected to sell their shares for $4.90, when equivalent shares, pre issue, had been able to be sold in the mid $5.50 bracket on market for several months.

Directors must be disappointed at the apparent 'thumbs down' given by small shareholders to their pacific expansion plans.

SNOOPY

I'm not sure you can say categorically it was a thumbs down... Alternatively:


Some of the small shareholders based on the initial book build for the institutions may have thought they were in for a 45 cent windfall based on the relatively small amount of shares available from the institutional offer and decided they'd just pocket the windfall right now;
Some didn't want to stump up with the $4.70 per share to increase their share holdings by 19.4%;
Some didn't understand the offer and just did nothing with the notices*;


There are a lot of shares out there with folk who invest on auto-pilot, they don't even open the letters from the share registry, never appoint a proxy and simply see the dividends appear in the account if they are lucky (you'd be surprised how many divvy cheques get returned with "gone no address" - I can only imagine how many of the AECT divvy cheques that never get deposited).

If you don't think that's possible then have a look at some of the old Annual Reports and see what happened to some of the employee share options - there were quite a few that were never exercised despite being well into the money.

[Bjauck]

..Directors must be disappointed at the apparent 'thumbs down' given by small shareholders to their pacific expansion plans.

SNOOPY

Maybe it was also a case of the issue coinciding with Trumpophobia?

[Rep]

Maybe it was also a case of the issue coinciding with Trumpophobia?

Possibly - although I'd observe that the SP this morning is $5.10, if the retail shareholders had taken up the $4.70 offer they'd be able to offload the shares they received for a 40 cent premium this morning instead of what they got through the rights offer of 20 cents. The insto's who went through the retail bookbuild will be marking to market and taking a nice gain to their KS and funds if the price holds up and the retail shareholders who took up the offer will be reasonably happy they took a punt and got rewarded for being proactive.

[h2so4]

http://www.nytimes.com/2016/08/26/dining/is-this-the-top-secret-kfc-recipe.html?_r=0

Is this the secret recipe?

[iceman]

Herald reporting closure of Carl's Jr store in Otahuhu as it is no longer financially viable. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11779625

[winner69]

Herald reporting closure of Carl's Jr store in Otahuhu as it is no longer financially viable. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11779625

Hope it's not the 1st of many! Now they done the exercise there must be a hit list - improve quickly or out

How much to set one of these up?

Was this one of many they purchased from Fosgren?

[Beagle]

Herald reporting closure of Carl's Jr store in Otahuhu as it is no longer financially viable. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11779625

I predict Avondale will be next. At first the customer service and attitude of the staff was fantastic and the chips were piping hot every time and the burgers great but their consistent inability over the last 18 months or so to serve hot fresh chips has annoyed me to the point I am extremely reluctant to go back. When I do there's hardly anyone there so the message has clearly got out that staff are simply not interested in decent service standards. Unless management learn that people don't want soft lukewarm fries and don't want to see heaps of others people's used wrappers on tables that aren't cleaned promptly the chain will struggle. I prefer Wendy's for their more reasonable prices, fresh good quality burgers, better attitude by service staff, cleaner tables, hotter fries e,t,c,
Don't start me about the grease and general unhealthiness of eating KFC.

[Snoopy]

Hope it's not the 1st of many! Now they done the exercise there must be a hit list - improve quickly or out

How much to set one of these up?

Was this one of many they purchased from Fosgren?


I am guessing the answer to your last question is 'yes'. That's because IME, Restaurant Brands tend to operate their unprofitable stores until the lease is up, then close them. The leases would not have expired yet on any RBD company built store.

To set up a new build store from scratch I am sure costs over one million. But Carl's Junior as a chain is not profitable, once all those head office costs are apportioned. So closing down the loss making arms will be good for the RBD bottom line. The market likes the closure anyway. RBD up 6c in a weak market as I write this. Perhaps only selling the store to Veritas as a good franchise turnaround story would have brought a more favourable reaction?

SNOOPY

[winner69]

I am guessing the answer to your last question is 'yes'. That's because IME, Restaurant Brands tend to operate their unprofitable stores until the lease is up, then close them. The leases woudl not have expired yet on any RBD company built store.

To set up a new build store from scratch I am sure costs over one million. But Carl's Junior as a chain is not profitable, once all those head office costs are apportioned. So closing down the loss making arms will be good for the RBD bottom line. The market likes the closure anyway. RBD up 6c in a weak market as I write this. Perhaps only selling the store to Veritas as a good franchise turnaround story would have brought a more favourable reaction?

SNOOPY

Looking back Otahuhu was a new store which RBD developed. Opened in late 2013 being RBD Q3. (Some substantial closure costs then?)

Since the initial razzamataz for the last year or so Carl's Jnr stores have averaged $36,000 per week (plus or minus a few hundred). Maybe some growing while others decline.

How sustainable are 7 day a week stores doing ~$1.8m pa?

Could be becoming a bit if a problem for RBD?

[winner69]

Snoopy - Carls barely breakeven at Concept EBITDA level and then there's over $3.0m annual depreciation and other HQ costs.

Concept assets $26m last accounts (book value) so your $1m per store setup might be a bit light.

I'm getting worried ...but small fry in big picture anyway

[Raz]

The CJ on Church corner, Christchurch is on another level of grossness..will run it lease out also me thinks.

[Snoopy]

As Christchurch Westies will know (or maybe they won't, because it opened so quietly), the first Carl's Junior Store in the South Island opened at the Bush Inn Centre, beating Hornby by a few weeks. A coupon leaflet arrived in the mail yesterday. So I took the opportunity to make my first ever visit to a Carl's Junior (for lunch).

I wasn't quite sure what I ordered from the picture. What came was 'pulled pork' on a bed of potato "thingies" (round double layer potato slices with holes in them, with a barbecue seasoning and cheese and sauce on top). My coupon gave me a drink too so I chose L&P, without ice.

Big mistake on my part! The drink came first and the sugar shock was would have floored even the fast food faithful. Did we really invent that drink in Paeroa? Or is the stuff you buy now a Coca Cola corruption of the original? Or maybe the person who put the syrup into the bulk mixer confused tablespoons and teaspoons? Just make sure if you order L&P, you order ice to make it palatable!

Was pleasantly surprised to see the target demographic ('hungry young men') wasn't really working. OK I tell a lie. A group of four hungry young punks came in just as I was leaving. But the majority of the customers looked 30+, with just as many hungry(ish) young(ish) women as men at the table. I reckon one or two of those customers might have even started their age with a 5! All good for shareholders though. Happy to see a broad demographic of customers. There was music blaring out, but it wasn't headbanging enough to clear the site of oldies. Those high back American milkbar style benches muffle the background noise. So you can have a conversation if you want. Plus there is the option to sit outside at the high bench on a nice day too.

The food? I'll go back one day soon and try a burger. But my pulled pork platter, was flavoursome and distinctive, served hot with minimal delay, even if you wouldn't serve such a concoction at a cardiologists convention. Ok I did strike a relatively quiet time. And I now admit that I smuggled in a home grown salad to balance off the all American taste. Not big enough to avoid a heart attack. But big enough to ensure I made it home before any cardiac arrest.

[menu note: Not sure if replacing the burger buns with lettuce leaves quite cuts it as the official healthy menu option. Has any customer ever ordered that?]

The service was pleasant and efficient. What is more the staff had initiative. If they weren't busy behind the counter they were out the front of the restaurant cleaning up. Top marks to the store manager.

I happened to walk out past the Burgerfuel competition that sits in the same shop row. It wasn't quite as busy. But when the novelty of Carl's wears off, the Upper Riccarton Arena will make a fascinating contest.



The CJ on Church corner, Christchurch is on another level of grossness..will run it lease out also me thinks.

Raz can you expnad a bit on your experience? I dare say that neither you or I are in the target demographic for Carl's J. But my experience, quoted above, was obviously rather different to yours.

SNOOPY

discl: hold RBD

[winner69]

At this rate RBD share price will be 6 bucks soon

Hell's bells or whatever

Never seems to go under a long term trend line

[Snow Leopard]

Not a share that has ever particularly appealed to me and my experiences of eating in Taco Bell in the days when I worked in California were discouraging.

But putting those negative influences aside and still the Tiger senses danger !

So first that bit of NSW and now Hawaii, Guam and Saipan, the latter I have to admit I had to search Google Maps to find.

Suspect the board is going through the classic business is running well, top of the share price cycle, lets do something stupid instead of concentrating on the company they already have phase.

A few years before I will know if I am right.

Best Wishes
Paper Tiger


At this rate RBD share price will be 6 bucks soon

Hell's bells or whatever

Never seems to go under a long term trend line

Well a few months later and yes risks abound with this.

Running to their shareholders for urgent new capital last year and then blaming an unexpected Christmas/New Yeat holiday for being late on the deal.

Best Wishes & Happy CNY
Paper Tiger

[Snoopy]

Well a few months later and yes risks abound with this.

Running to their shareholders for urgent new capital last year and then blaming an unexpected Christmas/New Yeat holiday for being late on the deal.



The 'dreaded Pizza Weevil', I am sure refers to RBD's ill fated foray into Victoria, taking over a state franchise that had gone bust. Millions further lost, this time for RBD shareholders, and the relics sold off to private operators was the result. A little bit different this time though. The American Pacific Pizza operations are doing OK, and the successful managment team in those territories remains in place. Plus unlike Victoria, the Pacific is not overrum with expat Italians who make darn fine Pizza which puts anything the Americans do to shame.

I don't particularly like this 'fast track to new capital' system that is now legal in New Zealand that RBD used to raise the cash to buy into the 'American Pacific'. There was something reassuring to me about a period of old school rights trading and discussion in the market. However, although the rights could not be traded, at least they were issued on a pro-rata basis (unlike for example Heartland Bank). That meant that shareholders who did not act still got some benefit.

Being significantly overweight in RBD myself before the capital raising, I took the opportunity to become 'worringly overweight' by taking up all my rights. This has paid off big time for me as the share price regains levels way above the discounted rights price level at which I bought in!

There are certainly causes for concern goiung forwards, with the much vaunted roll out of Carl's Junior in NZ seemingly not going to plan. And I wouldn't necessarily advise buying in at these lofty ( ~$5.60) share price levels. But while the KFC profit generating engine in New Zealand continues to fire, I am happy to hold.

SNOOPY

[Lewylewylewy]

I've got these as a short term hold. Holding until reports come out (which will be very positive, partly due to currency) and people become comfortable with the new growth settled in... Then I will reassess.

I'm undecided if it's a good long term hold. On one hand, I like that fast food will always be prevalent because most people have no taste, no money and are lazy, so it's always a good option. On the other hand, the industry is a bit like a brawl in a pit of mud, and there can be losers. Of course this is balanced by the fact that there are many outlets and a few different brands there - which I like.

Also the dividend is usually a high % :)

[winner69]

.........

Being significantly overweight in RBD myself before the capital raising, I took the opportunity to become 'worringly overweight' by taking up all my rights. This has paid off big time for me as the share price regains levels way above the discounted rights price level at which I bought in!

.......
SNOOPY

Good on you Snoops me old mate

From sub $1 about 8 years ago to close on $6 is pretty good effort eh

Every time I think the party is over and it's time to finally get rid of this dog it has another spurt ....upwards

Maybe the party will end at $10 in 2020 .. who knows

We need to salivate over the chart every now and again don't we Snoops (even tough baa_baa will tell me off for drawing lines on it)

[percy]

Yes I think the old Macquaries,new Hobson, would agree with your $10 in 2020.
In the meantime I will hold,as the share price $5.63, is above both the 100 day EMA $5.22,and the 200 day EMA $5.13..

[Snow Leopard]

{from 4-Aug-2008} Exactly 5 years ago Restaurant Brands closed at $1.30.
Unless I have missed a share split or something then in the intermediate 5 years one would have received 42c (10c, 10c, 10c, 5.5c & 6.5c) in dividends and your shares closed today at 75c.

Interestingly enough Mainfreight closed at $1.30 each as well.
You would have received 84c in dividends (6.5c, 6.5c, 12c, 15c + 28c special, 18c) and your shares closed today at $6.89.

regards
Paper Tiger


Good on you Snoops me old mate

From sub $1 about 8 years ago to close on $6 is pretty good effort eh

Every time I think the party is over and it's time to finally get rid of this dog it has another spurt ....upwards

Maybe the party will end at $10 in 2020 .. who knows

We need to salivate over the chart every now and again don't we Snoops (even tough baa_baa will tell me off for drawing lines on it)

Due to gaps in my data I can give only a partial update.

But over the last 7.5 years (27-Jul-09 to 27-Jan-17) total returns for RBD have been 739% profit as opposed to a mere 469% profit for MFT.

For the gap between 4-Aug-08 and 27-Jul-09 RBD also did significantly (maybe +40% vs -30% ish) better.

But for the entire time-span from 4-Aug-03 to now MFT would be still be the winner.

Best Wishes
Paper Tiger

Disc: own neither

[winner69]

There was a story in the press over weekend about KFC Whangarei (i think) closing because there was no staff. Thought judt the usual media beat up

Last night talk back was alive with KFC horror stories. From North Cape to Bluff punters talking about closed stores, dirty stores, bugs aplenty,****e service and unbelievably running out of chicken.

Made me wonder heck wonder how they sell so much

But Marcus did say share price doing OK so shareholders happy

[percy]

A friend of my wife's half witted son worked [?] at KFC Linwood.Often forgot to go to work, while other times couldn't be bothered.If they rang for him to fill in for some one he wouldn't.[because he had made other arrangements,like watching TV.]
I would think trying to have full rosters of "able workers" on deck would be near impossible.
Maybe they need to employ pensioners.Your mates at the bowling club W69, could use the pay to make up their CVT loses?
Yes I am still holding.

[winner69]

A friend of my wife's half witted son worked [?] at KFC Linwood.Often forgot to go to work, while other times couldn't be bothered.If they rang for him to fill in for some one he wouldn't.[because he had made other arrangements,like watching TV.]
I would think trying to have full rosters of "able workers" on deck would be near impossible.
Maybe they need to employ pensioners.Your mates at the bowling club W69, could use the pay to make up their CVY loses?
Yes I am still holding.

Apparently many McDonald stores have gone the Bunnings way and employing 'older' workers because they are more reliable and have a greater degree of work ethic.


My neighbour and his mates might have to join in one day....still lamenting being sucked into buying shares in the chase for higher yield than term deposits

[LAC]

There is never an excuse for not being able to get good workers, I blame management for that. In 90 days a good management team can tell if a staff member is a good fit for their business or not. Age should not be a factor in the work place, if the best fit for the job is 100 years old so be it. End of the day there are a heap of talented and skilled foreigners looking for the opportunity. I have had family friends who have worked in different stores owned by restaurant brands and it's a management issue when it comes to staffing. They employ anyone as long as they fill a roster and I agree with Percy - family friend shows up to work dressed like a clown and with no sense of time, yet he still stays employed at the store. Many other fast food stores run really well and efficiently with good staff, so no excuses for KFC.

Disc: still holding

[winner69]

Should never run out of chicken either

Bad processes - and bad management

But the share price keeps going up so no worries

[Lewylewylewy]

Lol it's not identifying the bad, it's finding the good that's difficult. Have you ever tried recruiting? It's a nightmare of crap applicants. People are useless.

[44wishlists]

Lol it's not identifying the bad, it's finding the good that's difficult.

Absolutely bang on. Finding good and reliable employee in this sector is close to mission impossible.

[artemis]

Lol it's not identifying the bad, it's finding the good that's difficult. Have you ever tried recruiting? It's a nightmare of crap applicants. People are useless.

Agree, I've recruited plenty and not entry level either. Huge pile of CVs - sometimes upwards of 50, and lucky to find two for interview. Problems included - no experience, let along relevant experience, no work permit, really poor English, big CV dates gaps, mates as the only referees.

[Balance]

Lol it's not identifying the bad, it's finding the good that's difficult. Have you ever tried recruiting? It's a nightmare of crap applicants. People are useless.

Good candidates are not going to line up for jobs in the fast food industry.

Minimum wages, flexible hours (dictated by the stores), awful monotonous working environment (especially KFC with all that grease and smell) and no real prospects.

But it is what it is.

[kura]

I'm unemployed & recently went on a WINZ course on how to write a CV.
Relatively few of my fellow course-mates would I consider employing ( if I was still an employer ) , and of those few, they would only be on this course for a few days before being finding a job.
Some were so incensed at having to attend the course they would prefer to suffer a benefit cut rather than have their "valuable" time wasted attending.
There were sadly several course-mates who were genuinely wanting to work, & nice friendly people, however they lacked that spark of "common sense" that made them unemployable.

Disc: Hold RBD, but have no intention of working for them.
I mainly buy their potato & gravy, then take it home to cook my own chicken on BBQ (used to also like their bean salad, wish they would bring it back )

[Rep]

Kura - best of luck with searching for a role, the fact you can explain your personal situation and have some distaste for entitlement probably suggests to me you will find something so keep at it.

On the wider issue, what is happening at KFC and other retail locations is symptomatic of "full employment." We have a labour force participation rate in the low 70s and an unemployment rate of about 5% so it is getting hard to find engaged and/or skilled staff. To fill rosters and vacancies, it's actually really hard to find good people right now. And in a year when the settings for immigration are going to get a look of airplay, some of those roles would have previously been filled with migrants or foreign workers.

To Balance's comment, migrant workers will be happy to have a paying job and get some local experience. They fill a large part of our workforce because they do lineup to work and have certainty of being paid. It's unfortunately often their beachhead into the workforce and it's tough. I've had team members who did pizza deliveries when they got here and now provide decision support - they need a start... but most non migrants consider these jobs and others like them (packing grocery shelves) to be beneath them.

[Lewylewylewy]

These look like good buying to me, at the moment :)

Glad I got our at 5.40. I was a bit disappointed I exited early when they went on to 5.60, but always a good feeling when it drops back. I can see these doing well by the end of the year. I might buy back in after my SUM reaches a price that I'm comfortable selling at (5.50-5.65, maybe?)

[JoeGrogan]

These look like good buying to me, at the moment :)

Glad I got our at 5.40. I was a bit disappointed I exited early when they went on to 5.60, but always a good feeling when it drops back. I can see these doing well by the end of the year. I might buy back in after my SUM reaches a price that I'm comfortable selling at (5.50-5.65, maybe?)

Currently watching with a keen eye, however, it still needs to drop a bit before i will consider pulling the trigger, as the high PE slightly worries me.

[Lewylewylewy]

They've just broken a new market / country. I think the PE is good. Loads of growth potential. I think the only hold back is people's confidence in their ability to operate successfully in a new country. It's a gamble obviously, but if they can prove themselves by the end of the year, the SP will rocket.

Even if it doesn't go well, the dividend is a comforter.

[percy]

A lot of revenue growth,but no eps growth.
I still like them and will continue to hold.
I see more growth opportunities for them,which I hope will lead to eps growth,otherwise there is no point.

[LAC]

A lot of revenue growth,but no eps growth.
I still like them and will continue to hold.
I see more growth opportunities for them,which I hope will lead to eps growth,otherwise there is no point.
The outlook sounds promising though, 40mil NPAT. Will see how it plays out and hold.

[Bjauck]

It can be a trap to buy high yield stocks forgetting the yield may be to compensate high risk. Over the years I have held RBD, it seems to have had more than average price volatility.


...End of the day there are a heap of talented and skilled foreigners looking for the opportunity.... Isn't that a big reason why there is Brexit and Trump now - a suspicion that Business owners and "the haves" trumpet globalism and immigration in order to keep local workers "compliant" and their wages low thereby increasing in society the disparity in wealth and welfare.

Disc: still hold some RBD

[JeremyALD]

I actually quite like the result. They seem to be delivering on their promises and their long term performance is very good. Their products will always be in demand (even if there's a downturn in the economy). I'm recently discovering fast food is often cheaper than cooking at home!!

[Beagle]

I actually quite like the result. They seem to be delivering on their promises and their long term performance is very good. Their products will always be in demand (even if there's a downturn in the economy). I'm recently discovering fast food is often cheaper than cooking at home!!

Don't get too keen on it mate...they haven't asked you if you'd like a side order of clogged arteries yet have they :)

[Lewylewylewy]

.......Doh

[JoeGrogan]

Perhaps some good buying opportunities ahead

[percy]

Perhaps some good buying opportunities ahead

Most probably correct.
Craigs' have a 12 month target share price of $6,with a massive eps growth figure.
Maybe Hawaii has added to the risk of holding RBD.?
So the coming year should be interesting.

[LAC]

Perhaps some good buying opportunities ahead
Dammit, talk about timing, made a purchase at midday and just read about the strike now.

[JoeGrogan]

Most probably correct.
Craigs' have a 12 month target share price of $6,with a massive eps growth figure.
Maybe Hawaii has added to the risk of holding RBD.?
So the coming year should be interesting.

With a $40 million profit estimated next year which could be understated at this point, eps growth is set to be decent. Moreover, if media coverage of the strikes occurring tomorrow bring the SP towards $5, i will certainly be tempted.

[lawson]

I hope they agree to what the union is asking for 10 cents a year over the minimum wage for 3 years so they'll be 30 cents above in 2019 is hardly unreasonable imo

They paid their CEO a million dollar bonus.

If I have to exit this stock a tiny bit under water I'll do it. I have real issues with holding them ethically if they're going to let this come to a strike. Can't they put potato and gravy and coleslaw up 20 cents or something? There must be a way to manage this or a point of compromise that's a better outcome than strikes and a demotivated hostile work-force with zero morale.

[JoeGrogan]

Dammit, talk about timing, made a purchase at midday and just read about the strike now.

Ah bugger thats unfortunate!

[blackcap]

I hope they agree to what the union is asking for 10 cents a year over the minimum wage for 3 years so they'll be 30 cents above in 2019 is hardly unreasonable imo

They paid their CEO a million dollar bonus.

If I have to exit this stock a tiny bit under water I'll do it. I have real issues with holding them ethically if they're going to let this come to a strike. Can't they put potato and gravy and coleslaw up 20 cents or something? There must be a way to manage this or a point of compromise that's a better outcome than strikes and a demotivated hostile work-force with zero morale.

There is however a reason for minimum wage and I would venture that if there was no law such as minimum wage that many of these positions could be filled for $12 per hour and under. So I have little sympathy for those on strike. Just unions being bully's. Hold firm there RBD. On the flip side, 10 cents is not much and could garner some good rather than bad publicity. Although to me that would be the start of a slippery slope....

[lawson]

There is however a reason for minimum wage and I would venture that if there was no law such as minimum wage that many of these positions could be filled for $12 per hour and under. So I have little sympathy for those on strike. Just unions being bully's. Hold firm there RBD. On the flip side, 10 cents is not much and could garner some good rather than bad publicity. Although to me that would be the start of a slippery slope....

Agreed exploitation would be worse without a minimum wage but that doesn't mean the minimum is the maximum that should be paid. I have plenty of sympathy for the working poor - there but for the grace of God.

However the minimum wage went up 50 cents on April 1 so really I agree with you the union is pushing it as staff have just effectively had a govt prescribed pay rise. However, my personal preference is not to invest in companies with industrial relations issues and where the business model, in my view, is based on borderline exploitation of staff who earn a non-living wage so I just exited and swapped into SUM where I am happier with the improved pay conditions for care workers. Fortunately the share price is not down on this news so I didn't have to take a hit.

To each their own. Some won't for example invest in Sky city and that doesn't bother me at all, we just have to decide whether we think we are making a return in a way that sits right with us. I may be missing a big rebound in RBD who knows.

[percy]

Yes each to their own.

[Lewylewylewy]

Strike is turning out to be a load of free advertising. News are telling everyone to get takeout tonight.

[blackcap]

Agreed exploitation would be worse without a minimum wage but that doesn't mean the minimum is the maximum that should be paid. I have plenty of sympathy for the working poor - there but for the grace of God.

Come on, minimum wage in NZ is extremely high by world standards so I have little sympathy. I used to work this type of job when I was a student and did not quibble or moan about minimum wage at all. Was thankful for the opportunity to earn $$ in hours outside my lecture hours and supported myself this way. The unions need to be careful... the more they push for wage increases, the more automation will take away these jobs.
Using the word "exploitation" in a minimum wage example I find offensive. There is no compunction to take the job and if you want more then there is incentive and opportunity enough in this country.

[RGR367]

Strike is turning out to be a load of free advertising. News are telling everyone to get takeout tonight.

Yup. Porirua KFC store was packed with takeaway takers and dine in folks. We're one them :)

disc: no longer a holder

[LAC]

The unions need to be careful... the more they push for wage increases, the more automation will take away these jobs.
.
This is the industry I work in - automation in ICT. I see the fast food industry changing over the next few years, just by the fact the number of automation solutions that businesses have put in place in the IT industry that its going to be piss easy adding the value to mechanical machines and robotics. Just seen automated data centre rack installations being automated by someone thousands of kms away. The fast food industry is going to change and these strikes are going to speed that up if businesses add to their risks of yearly pay strikes.

[artemis]

.... There must be a way to manage this or a point of compromise that's a better outcome than strikes and a demotivated hostile work-force with zero morale.

Why would a company retain a 'demotivated hostile work-force with zero morale' unless absolutely nobody else is available? And even then, employees who fit that profile are a poisoned well, and negatively impact those around them. Thus a net drain and not worth keeping on.

[d.viviani]

wow .....not very sympathetic to the workers here. I am a holder of KFC and wonder why it has come to this.This country holds a flag for the anti worker movement as shown over the years and would rather import low wage workers to keep wages down rather than raise wages. I guess the battle rages on ...... still love that KFC tho ....mmmmm chips and gravy.

[Snoopy]

wow .....not very sympathetic to the workers here. I am a holder of KFC and wonder why it has come to this.This country holds a flag for the anti worker movement as shown over the years and would rather import low wage workers to keep wages down rather than raise wages. I guess the battle rages on.......


The main problem here is that memories are too short on both sides of the protest fence.

Wasn't it only a year ago that Restaurant Brands were the Union's poster boys for getting rid of 'zero hour contracts', and it was McDonalds who bore the brunt of protests?

Then on the management side, I remember then CEO Vicky Salmon crowing about the much higher EBITDA profits which got the unions all excited about pushing for higher wages for workers. Then Salmon had to sheepishly admit that, taking into account the higher head office costs, NPAT had barely moved year on year.

It looks like a repeat PR effort from management again. Yes higher profits are predicted and being crowed about. But the number of shares have gone up with the purchase of overseas assets using new shares, plus a whole lot more shares issued from the 2016 cash issue. So on an 'earnings per share' basis, there is no projected big profit increase with which to pay workers.

Of particular arrogance was the awarding of a $1.5m one off special bonus to CEO Russel Creedy. This method of payment is clearly not in alignment with shareholder interests and an obvious red flag for further union activism. How could the board be so stupid as to think this payment would slip under the radar as reasonable? The only good thing is that most of the board members who inked off the decision are now gone.

SNOOPY

[Lewylewylewy]

Snoopy, completely agree!

I'm all for fairness and ensuring that people are treated well. Unfortunately I don't have the data to be able to calculate if what they are asking for represents business risk (often very profitable companies that have low profit margins on high volume can't afford to increase costs, so the small increase may be unreasonable). On the other hand we have to remember that the jobs we are talking about here are flipping burgers, exactly the example job people give when you talk about minimum wage jobs. It's not a career, it's not something that needs incentivized. It's student labour, temp jobs and something to do if you get made redundant. It's unfortunate that it's unionized.

The thing with wage increases, is that people love them for about 3 weeks, then they forget about them and they feel about their job/pay situation exactly the way they did on the previous wage. It's the same with bonuses.

All that said, I think it's good for the business if there are some long term employees and it would be good to give something back to them to say thanks. The best way to do that is to help them get a better job lol, obviously that's not in the businesses interests.

I think I'd rather have a share scheme / offer in place for employees to cash in on at the end of each year. That way, if anyone does choose to make a career of it, they can have some reward. Also people that aren't there long enough but think they might be can get incentivized without any cost :p Additonally, I think RBD shares are a good way for employees to ensure they have some savings and a good way to manage some of their finances into a better investment than the bank. Exactly what long term low paid workers need.

[hardt]

Snoopy, completely agree!

I'm all for fairness and ensuring that people are treated well. Unfortunately I don't have the data to be able to calculate if what they are asking for represents business risk (often very profitable companies that have low profit margins on high volume can't afford to increase costs, so the small increase may be unreasonable). On the other hand we have to remember that the jobs we are talking about here are flipping burgers, exactly the example job people give when you talk about minimum wage jobs. It's not a career, it's not something that needs incentivized. It's student labour, temp jobs and something to do if you get made redundant. It's unfortunate that it's unionized.

The thing with wage increases, is that people love them for about 3 weeks, then they forget about them and they feel about their job/pay situation exactly the way they did on the previous wage. It's the same with bonuses.

All that said, I think it's good for the business if there are some long term employees and it would be good to give something back to them to say thanks. The best way to do that is to help them get a better job lol, obviously that's not in the businesses interests.

I think I'd rather have a share scheme / offer in place for employees to cash in on at the end of each year. That way, if anyone does choose to make a career of it, they can have some reward. Also people that aren't there long enough but think they might be can get incentivized without any cost :p Additonally, I think RBD shares are a good way for employees to ensure they have some savings and a good way to manage some of their finances into a better investment than the bank. Exactly what long term low paid workers need.

Do you really feel like a single mother with 4 kids on $15 an hour will want or even know what to do with shares in RBD? - A lot people who work for $15/h live paycheque to paycheque.

When low skilled workers attempt to force a profit driven company to raise expenses, be prepared to introduce self check out/ordering machines and lower full time employee numbers...

http://www.zerohedge.com/news/2017-02-27/minimum-wage-massacre-wendys-unleashes-1000-robots-counter-higher-labor-costs

There is plenty of opportunity for RBD to actually lower payroll expenses in future...

[percy]

I sold my RDB yesterday at $5.29,mainly as I did not like their chart..

[Harvey Specter]

I wonder if all those striking workers when into McD's when they were done and saw the computer ordering machines that was doing their job?

If they were struggling to find staff, they would put the rates up. Personally I prefer paying more to create loyalty and reduce staff churn but accept that is only one model.

[JeremyALD]

I sold my RDB yesterday at $5.29,mainly as I did not like their chart..

Chart looks OK to me Percy. What was your main concern?

[Baa_Baa]

Chart looks OK to me Percy. What was your main concern?

Really? Breakdown of an almost two year rising trend line, failure at the 200DMA, a year of repeated failures at around $5.60 resistance. The trusty weekly chart said sell, Percy seems to have spotted it rather well! $5.00 is support also the 400DMA.

Indicators are oversold, so might see a wee rally back to the descending trend line from Jan'17, which is still below the long term rising trend.

8814

[JeremyALD]

Really? Breakdown of an almost two year rising trend line, failure at the 200DMA, a year of repeated failures at around $5.60 resistance. The trusty weekly chart said sell, Percy seems to have spotted it rather well! $5.00 is support also the 400DMA.

Indicators are oversold, so might see a wee rally back to the descending trend line from Jan'17, which is still below the long term rising trend.

8814

Personally I don't really see the problem. It's been around the $5 level for a while bouncing between $5.20 and $5.60. It's not going to rocket past upper resistance levels until they get some wins on the board with their international businesses. The long term chart looks good IMO and I'm not into over reading charts where there's no evident downward trend.

[percy]

Personally I don't really see the problem. It's been around the $5 level for a while bouncing between $5.20 and $5.60. It's not going to rocket past upper resistance levels until they get some wins on the board with their international businesses. The long term chart looks good IMO and I'm not into over reading charts where there's no evident downward trend.

I use a different chart from Baa_Baa's,{Yahoo chart},but it is giving the same signals.
SP $5.25,200 day EMA $5.26 and 100 day EMA is $5.36.So the sp is below both moving averages.Not a good sign.
There was no eps growth,yet the coming year should see plenty of growth.But RBD has gone from being just in NZ, to operations now also in Australia and Hawaii .The Hawaiian operation is Taco Bell which they have no experience with.So potential growth comes with much greater potential risk.
The growth has already been factored into the sp as the PE is at present over 20.
So just a bit risky at present for me.They will remain on my watch list,and I am prepared to pay a higher price, if the growth turns out to be there.

[JeremyALD]

I use a different chart from Baa_Baa's,{Yahoo chart},but it is giving the same signals.
SP $5.25,200 day EMA $5.26 and 100 day EMA is $5.36.So the sp is below both moving averages.Not a good sign.
There was no eps growth,yet the coming year should see plenty of growth.But RBD has gone from being just in NZ, to operations now also in Australia and Hawaii .The Hawaiian operation is Taco Bell which they have no experience with.So potential growth comes with much great potential risk.
The growth has already been factored into the sp as the PE is at present over 20.
So just a bit risky at present for me.They will remain on my watch list,and I am prepared to pay a higher price, if the growth turns out to be there.

Thanks Percy makes sense. Think I'll wait and see what happens up until the next dividend payment :) My sell point would be below $5. I don't have a lot invested so not too worried in movements before then.

[Baa_Baa]

Personally I don't really see the problem. It's been around the $5 level for a while bouncing between $5.20 and $5.60. It's not going to rocket past upper resistance levels until they get some wins on the board with their international businesses. The long term chart looks good IMO and I'm not into over reading charts where there's no evident downward trend.

The very long term trend is certainly solid although the SP is approaching the 5-year rising trend line, around $5.15. It may provide support. Some people act on things on a shorter timeframe, my chart posted is a weekly chart which is fairly conservative, it clearly shows a 6-month downtrend from January and a breakdown through the large MA's that a lot of people take into account.