Maybe you could use it as a signature.Quote:
quote:Originally posted by duncan macgregor
YESTERDAYS MAN.[:o)]macdunk
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Maybe you could use it as a signature.Quote:
quote:Originally posted by duncan macgregor
YESTERDAYS MAN.[:o)]macdunk
There was no hindsight at the time or now or perhaps you have misunderstood my post? They could not afford the combination of Eagle Boys, Real Estate and dividends. It seems only the 10 cent dividend was considered a certainty? Perhaps they had already decided that the dividend was the only factor supporting the share price? Is so, they should have considered the bigger picture of "why"?Quote:
quote:Originally posted by hiawatha
"Hindsight" is obviously a valuable thing. Though property values seem to have increased since the decision to sell and lease back was taken they could not have certain at the time that this would happen. Indeed property values may have fallen. On the eve of launching a risky venture into Australia it was probably good risk management to pass the property risk over to someone else.
There aren't many CEO positions where the honeymoon period would extend beyond 12 months. That Jim Collier couldn't get the company firing is not a good enough reason for Vicky Salmon to also fail. The strategic decisions that have tripped them up like acquisitions and dividends are set at board level in any case, so Vicki Salmon had as much input in this regard as Jim Collier.Quote:
quote:Originally posted by hiawatha
You mention Vicky Salmon "falling on her sword". However Ms Salmon was not CEO at the time these decisions were taken, and the former CEO, Craig whatsisname, has left.
hiawatha
Now RBD find themselves in the position where to get the KFC stores firing, they have to spend $800,000 per unit - the "Radical transformation". The radical transformation doesn't include a rethink of capital management - where dividends must be paid for from the 88 KFC stores, an average of $110,000 after tax ($164,000 pretax) per store per annum. It is not clear to me (nor the market, quite obviously) that they are or will earn a return on this transformation. Higher profits are not enough if the store must be revamped again in 8 years. The profits must exceed the cost and life of investment and be sustainable too. An $800,000 investment doesn't fix fundamental issues like inadequate service and a core product that is 3 decades too late. Numerous competitors have taken advantage of this already as RBD's takeout market share continues on its moribund way.
...although KFC have undoubtedly been under-invested-in over the last few years thanks to low profits and high dividends, why does "radical transformation" cost $800,000? This is an aggregate $70m across the KFC stores. For each $100,000 saved off the cost of "radical transformation", shareholders would be saved $8.8m - close to a whole years dividend. It smacks of the old property developer solution to problems - build your way out of it. I wonder if they tested a less radical $500,000 or $300,000 fix, if results would be materially different?
The problem is to remain current, stores need regular reinvestment. When I was involved in such things, the accepted standard in the USA where this is a science, is typically around 7 years in most FMCG categories (Ranging from Fast Food to Supermarkets). So that $800k needs to be paid back very quickly before its "Yesterday once more".
WELL you better get down there first thing tomorrow and drop all your non shares on the NZX front door step.. [8D]Quote:
quote:Originally posted by Halebop
There was no hindsight at the time or now or perhaps you have misunderstood my post? They could not afford the combination of Eagle Boys, Real Estate and dividends. It seems only the 10 cent dividend was considered a certainty? Perhaps they had already decided that the dividend was the only factor supporting the share price? Is so, they should have considered the bigger picture of "why"?Quote:
quote:Originally posted by hiawatha
"Hindsight" is obviously a valuable thing. Though property values seem to have increased since the decision to sell and lease back was taken they could not have certain at the time that this would happen. Indeed property values may have fallen. On the eve of launching a risky venture into Australia it was probably good risk management to pass the property risk over to someone else.
There aren't many CEO positions where the honeymoon period would extend beyond 12 months. That Jim Collier couldn't get the company firing is not a good enough reason for Vicky Salmon to also fail. The strategic decisions that have tripped them up like acquisitions and dividends are set at board level in any case, so Vicki Salmon had as much input in this regard as Jim Collier.Quote:
quote:Originally posted by hiawatha
You mention Vicky Salmon "falling on her sword". However Ms Salmon was not CEO at the time these decisions were taken, and the former CEO, Craig whatsisname, has left.
hiawatha
Now RBD find themselves in the position where to get the KFC stores firing, they have to spend $800,000 per unit - the "Radical transformation". The radical transformation doesn't include a rethink of capital management - where dividends must be paid for from the 88 KFC stores, an average of $110,000 after tax ($164,000 pretax) per store per annum. It is not clear to me (nor the market, quite obviously) that they are or will earn a return on this transformation. Higher profits are not enough if the store must be revamped again in 8 years. The profits must exceed the cost and life of investment and be sustainable too. An $800,000 investment doesn't fix fundamental issues like inadequate service and a core product that is 3 decades too late. Numerous competitors have taken advantage of this already as RBD's takeout market share continues on its moribund way.
The 'transformed' Kent Tce Wgtn one is really rocking though
There is a song about that one as well. DOWN THE OLD KENT ROAD.[:o)][:o)]:D:D Sorry bricks and HIAWATHA your sense of humour must be at an all time low by now. macdunkQuote:
quote:Originally posted by winner69
The 'transformed' Kent Tce Wgtn one is really rocking though
Isn't OLD KENT RD one of the cheapo sites in Monolopy ...... maybe an omen
Better to ask bricks he would be up on that sort of thing.:D:DmacdunkQuote:
quote:Originally posted by winner69
Isn't OLD KENT RD one of the cheapo sites in Monolopy ...... maybe an omen
Mind you commercial properties in that part of Wellington have gone up 50% plus in the last 2 years
JUST GREAT.. [8D]Quote:
quote:Originally posted by Deev8
Maybe you could use it as a signature.Quote:
quote:Originally posted by duncan macgregor
YESTERDAYS MAN.[:o)]macdrunk
Quote:
quote:Originally posted by hiawatha
[quote
In an ideal world, all profits would be paid as dividends, and additional capital needed, raised in the capital markets.
..... and if this happened in the case of RBD what returns would the providers of the additional capital get? Zilch .....as all the profits have gone to pay a divie to the existing shareholders
Profits paid dividends and nothing was left for the stores that generated those profits. Now RBD borrows to relicense the fried chicken rights. Borrows to refit the stores. Borrows to expand the coffee shop foot print.Quote:
quote:Originally posted by hiawatha
But if there is it is certainly not due to "low profits and high dividends". The profits earned have obviously been sufficient to cover the dividends.
Its about sustainability and a road map to their future...
Reported profits since 1997: $96.5m
Dividends Paid since 1997: $81m (84% of profits)
Net Retentions since 1997: $15.5m (16% of Profits)
"Growth" Capex (in excess of depreciation): $38.9m
Additional Acquisitions: $43m
Funded by: Selling real estate, reduced working capital and increased borrowings
How do they keep funding this? At what point are these investments, so far an extra $82m not counting the opportunity cost, going to contribute to increased profits? RBD's absolute profit is lower yet their asset base in ever higher. Profits are lower whichever metric you use - return on equity, return on assets, dollars, EBIT margins. Australia is not their only problem.
That must be in the financial rulebook chapter entitled: "Dilution, the road to riches".Quote:
quote:Originally posted by hiawatha
And where in the financing rulebook does it say that new investment must be met out of profits? The opposite is true I would have thought. In an ideal world, all profits would be paid as dividends, and additional capital needed, raised in the capital markets. Shareholders who wanted their share of profits "ploughed back" could subscribe to a drip scheme.
There is a very simple set of rules that covers borrowing, profits, cash flow, timing and flexibility. It is called math. So far it's something like Math 10, RBD Nil. Buffet's weighing machine has spoken.
Really?Quote:
quote:Originally posted by hiawatha
Everyone agrees that their entrance into the Australian pizza market was a bad move and that it has damaged the company. But to conclude from that that their financing methods are at fault is non sequitur.
hiawatha
So what reserves are they calling on to ensure the completion of the 50 store expansion of the coffee chain? The "radical transformation" of the chicken stores? The turnaround of the pizza business? Dividends have had as big a part to play in the "radical rundown" of this company as their inability to pick the competitive vacuum created by Eagle Boys, their inability to read the Victorian pizza market, their inability to lift the share price, their inability to sustain return on equity, their inability to sustain return on assets, their inability to do anything to sustain anything a rational investor might look for when risking their hard earned capital.
This is TEL all over again, proving the lie that modern capital "efficiency" models fail to address that anyone else could with common sense physics and hands on business nous. While RBD fanboys defend the indefensible, this company continues to gobble shareholder wealth in the same manner the RBD's competitors have gobbled their market share. Without honest criticism, how does this fix itself? The rationale for RBD has been defended on this forum for literally years while the company itself proves its detractors and other rationalists right with frightening monotony.
The new chairman at leasts presents a glimmer of hope but RBD has delivered many glimmers wit
So you agree with halebop then ..... that paragraph of yours is wxactly what halebop has been saying ..... and in RBDs case the should has never happenedQuote:
quote:Originally posted by hiawatha
If additional capital is raised for investment there would, or should, be an increase in profits out of which extra dividends could be paid. Otherwise there is no point in raising capital and investing it.Quote:
quote:..... and if this happened in the case of RBD what returns would the providers of the additional capital get? Zilch .....as all the profits have gone to pay a divie to the existing shareholders
[quote]quote:Originally posted by hiawatha
No. I was linking the shortcomings of strategy (Board) with the shortcomings operations (Management). There were a litany of disasters recorded in my post(s), not all of which can be attributed to the CEO(s). Dividends are however a very controllable factor with a very predictable cost. They have been costing this company strategically and operationally for quite some time. I'd accept the argument that the saving grace of dividends is at least shareholders get to spend them instead of management. Not a great rationale to prompt investment though.Quote:
This is not at all what halebop has been saying. halebop seems to be blaming all of RBD's problems on the paying out of most of its profits as dividends. But what have dividends got to do with the misreading of Eagle Boys situation and the misreading of the Victoria pizza market?
hiawatha
One certainity is that YUM! and Starbucks Inc get their $20M odd every year ..... but YUM! might be a bit worried their bit is not increasing
I totally agree with all you doomsday preachers of KFC. And yes it is a dog run by a bunch of useless board of directors who should ultimately be responsible for RBDs failures in the past and present.
It is time for the board to do the right thing and let RBD go to the highest bidder.
No more looking at fundamentals, lets geton with the sale! FFS!
Even Pizza Huts name is out of date.... One Red Dog, Hell Pizza. What about some fresh ideas? Maybe like celebrity pizza's. Or maybe take the easy way and sell.
KIWI`s do not like pizza`s that much so with any/many competition makes a big chain with overheads that's large would be better out so they should SELL to small operators and move on with the parts that do PAY.. [8D]Quote:
quote:Originally posted by manuka
Even Pizza Huts name is out of date.... One Red Dog, Hell Pizza. What about some fresh ideas? Maybe like celebrity pizza's. Or maybe take the easy way and sell.
I would dump my holding on the market if the directors decide to keep the operations and not sell. The board is a bunch of useless idiots. Time for them to go also.Quote:
quote:Originally posted by hiawatha
I don't think selling the lot is a good idea (unless they get a good price, of course). However, if they could somehow flick off Pizza Hut and keep the rest, they might be getting somewhere. Otherwise I think PH needs some serious thought.Quote:
quote:I totally agree with all you doomsday preachers of KFC. And yes it is a dog run by a bunch of useless board of directors who should ultimately be responsible for RBDs failures in the past and present.
It is time for the board to do the right thing and let RBD go to the highest bidder.
No more looking at fundamentals, lets geton with the sale! FFS!
hiawatha
O NO Bling not the whole 100 shares , Go KFC for dinner.. [8D]Quote:
quote:Originally posted by Bling_Bling
I would dump my holding on the market if the directors decide to keep the operations and not sell. The board is a bunch of useless idiots. Time for them to go also.Quote:
quote:Originally posted by hiawatha
I don't think selling the lot is a good idea (unless they get a good price, of course). However, if they could somehow flick off Pizza Hut and keep the rest, they might be getting somewhere. Otherwise I think PH needs some serious thought.Quote:
quote:I totally agree with all you doomsday preachers of KFC. And yes it is a dog run by a bunch of useless board of directors who should ultimately be responsible for RBDs failures in the past and present.
It is time for the board to do the right thing and let RBD go to the highest bidder.
No more looking at fundamentals, lets geton with the sale! FFS!
hiawatha