lmao......
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Maybe a partial answer here Bricks?
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Number, class, and type of securities: 166,198 ordinary shares
(119,798 on 15th April 2009;
46,400 on 17th April 2009) :
Owner Name of registered holder of those securities: Diab Investments NZ Limited D.
4: Consideration paid for acquisition:5:
15th April 2009 88 cents
17th April 2009 91 cents
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Interesting to see Diab buying *after* the big share price run up. He must consider that for those in for the long term, RBD is still a a good buy at 90c. Of course being a director, he would have been forbidden from buying shares until after the formal announcement of the RBD annual results on April 8th 2009.
On an associated subject, anyone catch 'the Independent' article during the week about the transformation of Pizza Hut in Australia with the intoduction of pasta to the menu? A couple of the stores were even rebranded 'Pasta Hut' for a while. Market leader Dominos in Australia are now struggling to catch up with their own range of pasta products. A solution for the New Zealand Pizza Hut business as well perhaps?
SNOOPY
discl: hold RBD
AMP shares in RBD were sold down to a number of investors, including one of NZ's shrewdest investors. Just need to get a shareholding register to see the before and after placement shareholders.
Directors get criticized for selling shares but when they buy, they are accused of insider trading? Investors shopuld consider following them.
I did, at 63 cents.
Watch next announcement from RBD in next 2 weeks - it will be a goody! A biggie!
The announcement in the next two weeks relates to renegotiation of the franchise fees for half of the Pizza Hut chain, Balance. That has already been well signalled.
Van Arkel has already signalled they might look at selling away some of that network to independent franchisees. But the NZ market is already saturated with Hell Pizza and Domino franchisees wanting to get out. So where are the buyers for all those Pizza Hut stores going to come from? Since we are putting all of the wild cards on the table how about this? YUM are to buy back the Pizza Hut franchise from RBD and operate it in house! A similar thing happened in the UK, in calendar year 2006. From the YUM annual report of that year, page 4:
"I was particularly pleased to announnce that we purchased the remaining 50% interest in 544 Pizza Hut Restaurants in the United Kingdom from Whitbread plc. Pizza Hut is the leader in casual dining in the U.K., which has historically been one of our strongest markets. While KFC is very strong and profitable in the UK, Pizza Hut has had some challenges in recent years with our joint venture structure, and we are confident we will be able to right the ship. We have already established a new management team that's bringing new energy to the business."
Right, we have established that YUM taking a whole swag of Pizza Hut restaurants back in house is not unprecedented. But equally well I think they would only do that if Pizza Hut was in desperate trouble. Arguably in New Zealand Pizza Hut is in this position. We will never know what goes on behind closed doors in these franchise negotiations. But did Creedy/Van Arkel threaten to pull the plug on half of the Pizza Hut chain if YUM wouldn't come to the party in some way? I certainly hope they did play hard ball. For although Creedy and Van Arkel may be tough negotiators, so are YUM.
We long term shareholders remember well the 'great deal' that YUM did selling the Victorian Pizza Hut deal to RBD a few years ago, sweetened as it came out years later with a commitment to more advertising support for RBD. RBD definitely came out second best there. So I will be watching any new deal that RBD has come to with YUM very closely.
The problem as I see it is that if RBD do get out of Pizza Hut, they will have to write off some $20m in goodwill. That will approximately halve their total net assets to something like $20m, while doing nothing for their debt which remains at around $100m. I know such an asset write off would be 'on paper' and not affect the cashflows of the company. But even so, secured bank loans are up for review again in 2010 - which suddenly is next year! So I think a capital raising for RBD might be on the cards, before they 'need' to do something about it.
I bring this up because amidst the euphoria of RBD being one of the best performing shares on the NZ market, some forget about the downside risks. And in the interests of 'Balance', I haven't.
SNOOPY
discl: hold RBD
Snoopy, matey, not sure where you got your numbers from.
Balance sheet from latest report show - net debt at $33.6m (not $100m). Banks are now falling over themselves to lend to RBD. Goodwill totals $23.6m. No breakdown but PH cannot be more than half that. Meanwhile, goodwill on KFC can be restated higher if allowed as the chooks are definitely flying out the door.
Announcement is imminent and imvho, will also show PH turning a profit and that's why insiders (legally) have been buying.
Happy holder and buying more.
I have to admit to being lazy balance by just pulling last years annual report off the shelf and pulling out some rough numbers. So I will have another (closer) look at my figures.
Fair call on my bluster Balance!
Not sure what report you mean Balance. The April 8th 2009 stock exchange profit announcement for FY2009 does not contain a balance sheet.Quote:
Balance sheet from latest report show - net debt at $33.6m (not $100m).
However, it does say:
"Bank debt was down by $8.2 million with closing bank debt of $34.3 million."
which is down from last year's $42.5m (note 16, FY2008 report).
However there will be other liabilities as well. Other liabilities include trade creditors, other creditors and accruals, employee entitlements and indirect and other taxes. Last year that lot amounted to an extra $27.4m.
When a company is evaluated by banks they look at *all* the company's debts, not just the bank loans. So total liabilities as at 28-02-2009 look to me to be close to $61.7m. Further Balance, you should note that eventually *all* of these liabilities have to be paid or refinanced, not just the 'net liabilities'.
We also learn that total assets are now valued at $101.3m. So if we take my figure of total liabilities as correct and your figure, Balance, of goodwill as being correct, that leaves total net tangible assets of:Quote:
Banks are now falling over themselves to lend to RBD. Goodwill totals $23.6m.
$101.3m - $23.6m - $61.7 = $16m
If the goodwill is written off, $16m becomes the net total assets. Stacked up against debts of $61.7m, that would not put RBD in a strong capital position.
There *is* a breakdown of goodwill Balance, on p49 of the FY2008 Annual Report. There you can see total goodwill listed at $21.49m, of which 98.3% relates to Pizza Hut. Furthermore that $20.14m relates only to that part of the Pizza Hut business on which the franchise agreements are being renegotiated right now, because *those* Pizza Huts are the Pizza Huts that once formed the Eagle Boys chain in New Zealand that was purchased lock stock and barrel by Restaurant Brands.Quote:
No breakdown (of goodwill) but PH cannot be more than half that. Meanwhile, goodwill on KFC can be restated higher if allowed as the chooks are definitely flying out the door.
From your comments Balance, I think you have a fundamental misunderstanding of what goodwill is. Goodwill appears on the balance sheet of a company when that company purchases an asset at a higher price than the building blocks of that asset would sell for on the open market. That sounds a bit technical, so let's try a more real example.
Suppose I open "Snoopy's Fast Fouls" fried chicken shop. I spend $500,000 on a block of land and build a dine in restaurant for $1m. A couple of years down the track RBD decides to buy me out to turn it into a KFC and pays me $2m. The difference between the value of my business on the books -$1.5m- and what RBD paid me - $2m- is goodwill that will appear on the purchaser's books. In this case $0.5m.
You might rightly ask, why would RBD pay me $2m when they could build their own equivalent restaurant for $1.5m? Several reasons. First of all good sites, on busy streets with good access are not always easy to get. In buying an existing restaurant RBD would circumvent any planning issues plus obtain the good site thay wanted. RBD would also be buying my customer base, those regulars who come in week after week. That would negate the need to spend lots of promotional money battling it out in a highly competitive market to win customers from other businesses. Thus while the $0.5m in goodwill is intangible in a techical sense, it is very real to RBD because as a result of purchasing my business, RBD are purchasing an income stream over and above the bricks and mortar that I built.
Goodwill can only appear on the books of a business as a result of one business buying another. Thus your statement, Balance, that:
"goodwill on KFC can be restated higher if allowed as the chooks are definitely flying out the door."
could not be more wrong. It is absolutely 100% incorrect.
Of course this may be a moot point because banks are more concerned with cashflows, and goodwill does not affect cashflow. But generally banks will consider a company's cashflow *and* its capital position. There is no argument from me on RBD's cashflow position Balance - it is good. But I do think my point about RBD's capital position - if that goodwill is written off - is valid.
Balance, RBD have already announced their FY2009 annual results (to 29th February) and Pizza Hut is not only making losses, it is making EBIT losses. So your assertion that the upcoming announcement will show Pizza Hut making a profit means that RBD will have to declare that serious mistakes were made in last months announcement. Furthermore for current year guidance, we will have to wait until the end of May before the first quarter of the new year's sales figures are recorded, let alone released. It is impossible for me to conceive that Pizza Hut will be trumpeted as making a profit within the next fortnight in these circumstances. In fact the retired George Bush announcing he is now going to live on Mars is IMO more likely than what you are predicting. Are you sure you are not suffering from a little irrational exhuberance, Balance, as regards your shareholding in RBD?Quote:
Announcement is imminent and imvho, will also show PH turning a profit and that's why insiders (legally) have been buying.
Don't get me wrong, I think you will do well. But I don't think the sky is a blue as you make it out to be.
SNOOPY
discl: a fellow RBD shareholder, but not willing to buy more until after 'the announcement'.
Snoopy ..... all half year stuff including financial accounts are on NZX website ..... not part of the public announcement but as attachments
You can view for free if you sign up to My NZX at nzx.com
balance sheet looks like this
Group
Note 2009
$'000
Non-current assets
Property, plant and equipment 71,794
Investments in subsidiaries -
Intangible assets 24,689
Total non-current assets 96,483
Current assets
Inventories 2,098
Other receivables 1,689
Income tax receivable -
Cash and cash equivalents 787
Assets classified as held for sale -
Total current assets 574
Total assets 101,057
Equity
Share capital 25,622
Reserves 148
Retained earnings 11,292
Total equity 37,062
Non-current liabilities
Provisions and deferred income 4,091
Loans and finance leases 34,414
Deferred tax liability 359
Total non-current liabilities 38,864
Current liabilities
Bank overdraft -
Income tax payable 751
Loans and finance leases 285
Creditors and accruals 22,121
Provisions and deferred income 1,617
Amounts payable to subsidiary companies -
Liabilities associated with assets classified as held for sale 7 357
Total current liabilities 131
Total liabilities 63,995
Total equity and liabilities 101,057
Better still, simply go to RBD''s website. All the infor is there.
Cheers.
Balance .... just the NZX filing appear quicker than waiting for RBD to put them up on their website
Thanks Winner for ferreting out those updated 2009 figures for me. I use stocknessmonster as my main internet source of company news and generally wait until the printed report hits my hot little paws before diving into the real nitty gritty. Obviously stockness are a bit shy on NZX detail. Incidentally those latest results are the *full* year results for RBD, the end of year balance date having changed to the end of February some years ago.
Actual liabilities $64.0mQuote:
Liabilities as at 28-02-2009 look to me to be close to $61.7m.
"Bank debt was down by $8.2 million with closing bank debt of $34.3 million." is still right
Correcting the figuresQuote:
So if we take my figure of total liabilities as correct and your figure, Balance, of goodwill as being correct, that leaves total net tangible assets of:
$101.3m-$23.6m-$61.7m = $16m
If the goodwill is written off, $16m becomes the net total assets. Stacked up against debts of $61.7m, that would not put RBD in a strong capital position.
$101.3m-$24.7m-$64.0m= $12.6m of tangible assets. That is compared to $64m in liabilities. So the updated 2009 figures show that the net debt to tangible asset ratios are even worse than I thought!
Updated results have not changed my opinion on RBD capital risk Balance. In fact they have strengthened it. From p49 of the FY2008 annual report, here is the bit that has me particularly worried when calculating the value of that goodwill of Pizza Hut New Zealand on the books:Quote:
There *is* a breakdown of goodwill Balance, on p49 of the FY2008 Annual Report. There you can see total goodwill listed at $21.49m, of which 98.3% relates to Pizza Hut. Furthermore that $20.14m relates only to that part of the Pizza Hut business on which the franchise agreements are being renegotiated right now.,
I do think my point about RBD's capital position - if that goodwill is written off - is valid.
"Cashflows were projected on a three year strategic business plan as approved by the board of directors. The cash flows were based on sales growth remaining flat year on year for 2008/2009 (actual result was revenue*down* 9.5%), a decrease of 2.9% in 2009/2010 due to store closures (actual result needed will be *growth* of 7.3% to maintain those FY2008 balance sheet goodwill values) and a further 4.5% increase in sales in 2010/2011."
Of course, RBD have already admitted that they won't meet these targets. That is why a further write down of Pizza Hut goodwill totalling nearly $5m in FY2008/2009 has been made.
But I think that even with the current year write downs, RBD are budgeting on strong sales growth for Pizza Hut. Can they deliver? My guess is that they can't and we shareholderrs are looking at more goodwill writedowns this financial year. The announcement on the future outlook of Pizza Hut in the next couple of weeks is going to have to be very bullish, just to 'break even' in accounting terms. In short, I am still worried.
SNOOPY
discl: hold RBD
Director keep buying and moping up stock.
$1.00 very soon.
Dis. Bought some more.
The chickens sure are tasty!
96 cents and 4 cents away from $1.00. Director buying with ears pinned back. Expecting good news?
Director Danny Diab continues to mope up stock - buying shares at over 90 cents probably from institutions who got their shares from AMP at 57 cents - a huge 61% premium.
Who will prove to the clever one then?
Buy when insiders buy and sell out very fast when insiders are trying to get out - refer APX.
This is part of the RBD results release on 8th April
"Franchise Renewals
The company is close to finalising an agreement with Yum that will provide a positive way forward for the Pizza Hut business. An announcement is expected to be made within the next month."
It is now 9th May (more than a month later) and no announcement, so my worry has increased! Unless something comes through within the next few days I predict that tough tackling Ted and rucker Russel have gone down in the scrum and will shortly be escorted off the field by their Mum (or is that YUM?) to have their bloodied noses attended to.
They will have been taught the same lesson that other Pizza Hut franchisees the world over have learned.
"When the negotiations get tough, don't think you can outsmart your Mum (YUM)."
SNOOPY