ANd Westpac/BT added 2m. Hopefully todays rise continues.
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This is taken from their website KJ but of course all dependant on continued profits and cashflow. Not sure yet how rollout of Carl Jr's will affect this:
Restaurant Brands has no fixed distribution policy. In the year to February 28, 2011 the company
paid out out 64% of net profit after tax in dividends. The Board of Directors intends to increase
the pay-out to shareholders as long as profitability and free cash flow continues to grow and the
company can satisfy requirements to reinvest in the business.
Getting close to FY announcement-with no profit update in the market you would think that the coy must be fairly close to the $20m number.Have been out for sometime but it may be time to get back in.
DISC: HOLD
I'm struggling to reconcile the following:
From the Press Release:
Group non-trading charges of $2.3 million ($2.0 million in 2011) included a pro rata write off of goodwill following Pizza Hut store disposals ($1.5 million), Pizza Hut and Starbucks Coffee store closure costs (mainly fixed asset write offs) of $0.6 million and KFC transformation write offs of $0.2 million.
Non-trading from the financial statements
KFC – $118k
Pizza Hut – $2,110k
Starbucks – $88k
TOTAL – $2,316k
Note that the $2,316k does reconcile with the consolidated income statement at the end of the press release.
Haven't been right the way though the financials as I generally start with "non-trading".
OK now I've got it...
The goodwill DISPOSAL is $1,518k, the write off is $1,326k, so I think they got this wrong, should have had $1.3m.
Other store closure costs are $597k, so this is correct.
Looks like the $0.2 million figure is just a balancing item since they confused the goodwill write-off...
Overall, probably not a major ...
Just reflecting a bit on my four year old post of 20-02-2008. RBD did recover from their Victorian -er- adventure. It was around four years ago that I was last in Victoria and South Australia and I have to report just coming back to NZ again after a brief March 2012 visit. It looks like the KFC operators in SA and VIC have very much adopted the RBD refurbishment model. Almost all KFC stores that I saw look like they had been plucked straight from the RBD refurbishment program in New Zealand.
KFC in Oz also seems to be promoting their food at less junky through a 'goodification' TV advertising campaign. Shots of KFC workers being sent out to organic farms to chase chickens and then sitting down to a KFC fry up of the same. The TV campaign looked more effective than the way I have just described it.
And what happened to Pizza Hut? From my very superficial eye about, they seems to have virtually disappeared in the visibility stakes. One or two modest looking takeaway outlets sited as they continue to take a battering from Dominos....
SNOOPY
Pizza Hut continues to be an unmitigated disaster, average store turnover is now $600,000 to $650,000. Pizza Hut makes an EBIT loss.
Starbucks... unexciting, small, contributes to management/head office costs.
KFC continues to be the stand out performer (though slightly down in the current financial year).
I think Carl's Jr has some potential, kiwi's lover burgers, burgers are cheap to make (vs sale price), and the Carls Jr offering seems a good fit in the market. But I'm guessing the roll-out will be a 4 to 5 year process; so little impact on value (either positive or negative) in the short term.
When they hock off a Pizza Hut store to a private owner do tey collect any ongoing franchise fees from thr new owner
If so where does this shoe in the accounts .... anybody know
Hocking off something making a loss .... but still clipping the ticket on the way through for use of the name should be +ve for RBD .... yes?
Not sure with Pizza Hut specifically but generally with a franchise, the purchaser pays an upfront fee, plus training if required. Then they pay ~8-10% of turnover being split between franchise fee and advertising (ie. advertising is done by the franchiser, not the franchisee).
Winner the reason that certain Pizza Huts are being sold is that RBD management have the view those business units cannot be profitable under the RBD corporate model. When a PH is sold off by RBD, then RBD wipes its hand of it and the new owner pays any franchise fees due to YUM directly.
However with a national chain like this there is a single NZ nationwide marketing umbrella that covers all NZ PH outlets. I believe that RBD does control this. So some of those YUM franchise fees will find their way back into RBD coffers as a way for those new franchisees to pay their share of the nationwide advertising costs.
The answer to your question is yes there should be some ongoing economies of advertising scale benefits to RBD as a result of these new franchisees pumping up the RBD marketing department. I suspect it will show up under that catchall header 'other income'.
Nevertheless the real benefits once a PH is sold will flow mainly to master franchise holder YUM, not RBD.
SNOOPY
Thanks for that Snoops ... hadn't thought of the franchise reverting back to YUM .... so I won't be looking to find out out how much fees RBD might have been collecting
Yum Brands used to charge franchise fee of approx 10% of gross turnover.
I thought that their FY result was a bit disappointing.
The coy needs to be a bit more accurate when releasing information or folk will stop taking them seriously.
(1) NP for the year-20m-wrong!
(2) Second Half profit would would be no worse than same period last yr-wrong!
In fact there is a worrying trend developing:
2011
First Half NPAT 13.9m
Sec Half 11.2m
2012
F Half 8.6m
S Half 9.8m
While I like the coy for its Div yield I hope that they can make a go of CARL- P Hut & Starbucks are nothing to get excited about.
If the Carls Brand is going to be so great perhaps they should convert all their Pizza Hutt stores in Carl Juniors?
I presume YUM won't let them.
There would be big write offs involved but that might be better than continuing to flog an almost dead horse just because they have to...
RBD must be the most frustrating stock to follow if growth is what poeple want .... growth is non existent .... but the likes of Snoopy have the right appraoch to make money out of RBD .... just hold long term collect the divies and don't worry about the quarterly sales or the annual profits .... waste of time
Chart below is RBD revenues over the last 10 years .... everything they have done .... bought, closed, revamped, expanded etc .... and still where they were 10 years ago ... a $300m company (even 3% pa growth would have it a $400m company by now!!)
Maybe obe should keep an eye on performance. Du Pont came up with an interesting ratio and interestingly the RBD shareprice follows this ratio pretty well. RBD did well on most measures from 2008-2011 but 2012 has seen the three things that the Du Pont ratio measures fall back a bit .... like operating efficiencies (profit margin) is down ..... asset use (sales per asset) is not as good .... and financial leverage is a bit worse (increasing shareholder equiyt without growing the business)
Wouldn't want to see these trends continuing .... but then the likes of Snoopy will still be doing OK as he collects his divies year after year
Those PH store contracts are renewed on a ten year basis emearg. So it would take some time for RBD to roll out of their contracts. Also most of those PH premeses are rented off independent landlords. They might have to agree on changes to their lease. Furthermore I think YUM would have some restrictive trade agreement about turning their visible site into the competition. I recall some shareholder putting the question to RBD management about ditching KFC and setting up their own chicken brand when the multimillion dollar ten year concept costs were up for renegotiation and this is where I seem to recall the restraint of trade clause coming out.
I am not sure PH is dead. I can't see why it couldn't do as well as Dominos is doing, if the concept is appropriately managed. But short of head hunting Don Rae from Domino's Australia, I am not sure where RBD can look for their Pizza management talent.
SNOOPY
Going by the bun fight between Western Australian frachisee and Yum Brands,Yum Brands have restraint of trade clauses,and in Western Australia they are refusing to renew franchise agreements for existing stores.
and even with this they can't make money
http://www.nzherald.co.nz/nz/news/ar...ectid=10797343
Probably claim they are doing a public service by keeping boy racers off the street!