Yes 15 bucks is definitely an all time closing high, even if it was below the intraday high of $15.12. I had another look at that FY2020 RBD report today. Except in New Zealand, the only territory where all RBD stores were completely closed for 5 weeks, the figures would suggest that RBD was otherwise powering ahead through Covid-19. Even in NZ, EBITDA as a percentage of sales held steady over the year.
The Hawaiian result was particularly impressive, with sales up 6.5% with two fewer restaurants in operation (7.7% same store growth). Pizza Hut was the star, with Hawaiians resonating with the 'no touch contact-less delivery' rolled out with curbside delivery. The demise of 7 old style dine in restaurants, replaced with kiosk style stores, was a bonus. Did you know the largest Pizza Hut operator in the USA, 'NPC International' went into Chapter 11 bankruptcy last year? Although 950 of those Pizza Hut restaurants bounced back under new ownership, by Rynn Restaurant Group, 300 Pizza Hut stores were lost, primarily 'dine in units'. The shift from Pizza Hut dine ins to delcos, with hindsight looks like it really started in New Zealand, under RBD twenty or so years ago. This, and the pre-emptive restaurant refurbishment programs at KFC restaurants makes 'our Russel' a real 'poster boy' for master franchise holder 'YUM Restaurants' globally.
Australian same store sales were up 2%, despite Covid-19 restrictions.
The Californian crew performed 'well above expectations' and should perform better with fewer Covid-19 restrictions. What is more the FY2020 year contained only four months contribution from them. So even if group sales are static for FY2021, that will mean an 8% rise in EBITDA for the whole RBD group just from twelve months of Californian ownership! I am pretty sure I know why they did so well too. Just look at that picture on p18 and p189 of AR2020. I reckon the whole senior management team over in California have been hypnotized. They are totally convinced that 'our Russel' is the reincarnation of 'The Colonel' and will do anything for him.
The biggest thing I can see that has changed since the 'Global Valar S.L.' taking control, is the rise and rise of delivery, especially at KFC, coupled with the improvement in on line ordering apps. Delivery was mostly from third party labour like 'Uber eats' and I am picking much of that trade is incremental. Can RBD keep up their run rate? I wouldn't bet against them! However at a share price of $15 we are looking at a backwards looking PE, annualised for the Californian acquisition, of over 30. Not cheap, but then I have said that for a few years now.
SNOOPY
discl: happy holder of my residual post takeover shareholding, but not adding more at today's prices.