I think you know?
Pizza Hut not much
KFC heaps (relative to PH)
1/2 announcement
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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.
(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...
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.
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.
http://www.nytimes.com/2016/08/26/di...cipe.html?_r=0
Is this the secret recipe?
Herald reporting closure of Carl's Jr store in Otahuhu as it is no longer financially viable. http://www.nzherald.co.nz/business/n...ectid=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.
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
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?
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
The CJ on Church corner, Christchurch is on another level of grossness..will run it lease out also me thinks.
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
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