RBD - Restaurant Brands

[POSSUM THE CAT]

Winner 69 does that mean that their fall has been only 8.5% if this is the case they would have increased their market share but still going down gurgler

[Nitaa]

According to the 'Sharechat' charts the price two years ago was $1.10.

Actually you are right Macdunk. I was looking at the one year chart where the share price was 80c a year ago. It is now 86c and add to that the 6.5c of dividends received over the last 12 months makes a total of 92.5c. That is a 15.6% return after tax. Not too shabby at all, and it beats you Australian cash holdings which is of course the main thing :-).

Come to think of it though, even though I was looking at the wrong chart, the two year return is still -7.5% per year. I think I might still be right! Is there any NZX retail share out there that has performed 'better' over the most recent two year period?

SNOOPYYour post is suggesting the same scenario as some beggar saying in Zimbabwe, i am richer than Bill Gates. I just made $100b in one day.

Snoppy. At what point will you say that "Snoppy was wrong"?

I know you love stocks that pay divies but at what price? Unless someone buys out RBD how can this stock go any other way?

[duncan macgregor]

Your post is suggesting the same scenario as some beggar saying in Zimbabwe, i am richer than Bill Gates. I just made $100b in one day.

Snoppy. At what point will you say that "Snoppy was wrong"?

I know you love stocks that pay divies but at what price? Unless someone buys out RBD how can this stock go any other way? NITA, I take it my mate SNOOPY is on holiday in Australia so i will answer for him. Snoopy will never say he is wrong and sell out. He buys more of the same to average down giving him a cheaper average entry price. he accumulates to his losses each time he gets it wrong.
I had some young visitors last friday so told them it was take aways for dinner. I thought out of morbid curiousity to get them KFC just to test their reaction. They all wanted Macdonalds but i told them KFC was better.
The general opinion was that it was YUCK.
I myself thought it was putrid even although i liked the coldslaw and finished up only eating that and the mashed potatoes. The chicken tasted like boiled crow the young visitors made me promise never to go there again. Macdunk

[Onthemoney]

Had KFC for the first time the other day - the chicken was rubbish. Tried Pizza Hut with the rugby the other weekend - thick base with no topping. I will stick to Spagalimis Pizza.

[BRICKS]

NITA, I take it my mate SNOOPY is on holiday in Australia so i will answer for him. Snoopy will never say he is wrong and sell out. He buys more of the same to average down giving him a cheaper average entry price. he accumulates to his losses each time he gets it wrong.
I had some young visitors last friday so told them it was take aways for dinner. I thought out of morbid curiousity to get them KFC just to test their reaction. They all wanted Macdonalds but i told them KFC was better.
The general opinion was that it was YUCK.
I myself thought it was putrid even although i liked the coldslaw and finished up only eating that and the mashed potatoes. The chicken tasted like boiled crow the young visitors made me promise never to go there again. Macdunk

AFTER all that you should have had DUCK... Quack..

[minimoke]

Maybe this is.

http://www.smh.com.au/news/national/starbucks-axes-partners/2008/07/29/1217097227287.html

So that’s 73% of Australian stores closing within five days!

[Dr_Who]

So that’s 73% of Australian stores closing within five days!

This must have a significant implications for the NZ stores. So, RBD has Pizza hut and Starbucks which are dogs. Only thing worth anything in the RBD stable is KFC.

[lakedaemonian]

What I find significant with the massive closure of Australian Starbucks is that the incredibly strong Aussie dollar would surely be a beacon of good news to a weak US Dollar based Starbucks....assuming any money was being made?

Historically, global US based companies like McDonalds and Coca-Cola(and I would have thought Starbucks) have been investment havens for a weakening US Dollar and weakening US economy as they all have incredibly strong, vibrant, and growing foreign(Non-US) markets.

Australia is about as insulated as you can get globally from the various economic and financial woes the globe is facing with its immense commodity wealth and diversified economic base.......if Starbucks is pulling the pin the level of my confusion in attemtping to understand what is going on has sunk to an even darker shade of opaque :)

[BRICKS]

YOU cant compare USA, AUS to NZ mainly by size, So whats wrong in Oz coffee cafes are rare
and the population don't go to these places because its to dam Hot but they are in the mid city locations with 80 odd for AUS you would not see them and shutting 61 is a wipe out leaving about 7 in each capital but the one at Sydney Airport dose a roaring trade.

Rents in AU you cant believe so it is NO surprise to see them GO.

NZ they may trim but will not shut DOWN..

[POSSUM THE CAT]

Dr Who to best of my knowledge Starbucks are company owned (Yum Brands) in Australia and NZ is a franchise & Yum Brands gets an income even if RBD is going down the tubes

[minimoke]

Further evidence of a downturn?

Maybe the nations increased wealth has seen the masses develop a palate for finer foods like Indian or Mexican – or even long sandwiches – rather than the Dominoes and KFC fat laden cr%p.

[Deev8]

Maybe the nations increased wealth has seen the masses develop a palate for finer foods Perhaps ...

Would you like foie gras with that sir?

[BRICKS]

Perhaps ...

Would you like foie gras with that sir?

WHEN do they send us the next DIV..

[Dr_Who]

RBD should buyout Nandos and grow it nationwide. Nandos chickens are the best. BBQ chicken with yummy hot mexican sauce.

The strategy should be to sell off Pissa Hut and Stardust. Buy Nandos so they can have a monopoly on the chicken market. KFC is lower end and Nandos mid level market.

At the moment the only winner RBD have in their stable is KFC. Both Pissa Hut and Stardust are dogs.

[Toddy]

RBD should buyout Nandos and grow it nationwide. Nandos chickens are the best. BBQ chicken with yummy hot mexican sauce.

The strategy should be to sell off Pissa Hut and Stardust. Buy Nandos so they can have a monopoly on the chicken market. KFC is lower end and Nandos mid level market.

At the moment the only winner RBD have in their stable is KFC. Both Pissa Hut and Stardust are dogs.

I investigated the Nandos model long before it came to NZ. I concluded that it would be too difficult to build a critical mass in NZ due to the price. Maybe Auckland and Wellington, but elsewhere, forget it.

They have found a way around the pricing though, at the Tauranga (Bayfair) Nandos they leave a choice off the menu in the combo's i.e they are shorting their customers without the customers actually knowing it.

KFC is a winner, especially in these tough times when a family can buy a bucket of chicken for less than a bottle of milk, plus bread and a block of cheese.

[Nitaa]

I investigated the Nandos model long before it came to NZ. I concluded that it would be too difficult to build a critical mass in NZ due to the price. Maybe Auckland and Wellington, but elsewhere, forget it.

They have found a way around the pricing though, at the Tauranga (Bayfair) Nandos they leave a choice off the menu in the combo's i.e they are shorting their customers without the customers actually knowing it.

KFC is a winner, especially in these tough times when a family can buy a bucket of chicken for less than a bottle of milk, plus bread and a block of cheese.And they get a litre of oil thrown in for free

[BRICKS]

And they get a litre of oil thrown in for free

YOUR the first down on Saturday mornings to get your supplies..

[Toddy]

And they get a litre of oil thrown in for free

Shoosh, you might be onto something here.

[Dr_Who]

YOUR the first down on Saturday mornings to get your supplies..

I actually bought some KFC this week to test out the RBD market. Funny how during the drive through I was thinking about you BRICKS. ... LOL. Nothing sexual, purely financial. I just wanted to contribute to the revenue and help out the sp.

[BRICKS]

I actually bought some KFC this week to test out the RBD market. Funny how during the drive through I was thinking about you BRICKS. ... LOL. Nothing sexual, purely financial. I just wanted to contribute to the revenue and help out the sp.

FOLLOW me and you will GO along way, but off to Oz on TUESDAY leaving NZ till Xmas 2008.

[Snoopy]

Dr Who to best of my knowledge Starbucks are company owned (Yum Brands) in Australia and NZ is a franchise & Yum Brands gets an income even if RBD is going down the tubes

Correct Possum, bar one small detail. The parent company (master franchise holder) for Starbucks is actually called Starbucks and they are based in Seattle USA. The Starbucks operation is nothing to do with Pizza Hut or KFC or YUM Brands (the master franchise holder of those latter two brands).

Oh and the bit about RBD 'going down the tubes'. When they start making an operational loss get back to me. You need to get real.

SNOOPY

[Snoopy]

What I find significant with the massive closure of Australian Starbucks is that the incredibly strong Aussie dollar would surely be a beacon of good news to a weak US Dollar based Starbucks....assuming any money was being made?

Historically, global US based companies like McDonalds and Coca-Cola (and I would have thought Starbucks) have been investment havens for a weakening US Dollar and weakening US economy as they all have incredibly strong, vibrant, and growing foreign(Non-US) markets.

Australia is about as insulated as you can get globally from the various economic and financial woes the globe is facing with its immense commodity wealth and diversified economic base.......if Starbucks is pulling the pin the level of my confusion in attemting to understand what is going on has sunk to an even darker shade of opaque :)

This HeraldSun article of July 30th 2008 has more on the financials

http://www.news.com.au/heraldsun/story/0,21985,24100000-664,00.html

and in particular this bit:

---------

Its Australian operation relies on huge loans from its parent company in the US.

Despite opening five new stores and selling $64 million worth of coffee and food in Australia last year, it posted a net loss of $36 million.

That was a $9 million bigger hole than the previous year.

--------

I think that lightens the 'opaqueness' lakedaemonian. Specifically:

1/ Starbucks are not making any money in Australia. In fact they are losing staggering amounts of money. I had to do a double take when I saw those figures. A $36m loss on only $64m in sales! This isn't a slow bleed to death. It is more like a massacre with 'General Starbucks' having replaced 'General Custer'. No wonder the US based management have acted.

2/ The expansion into Australia was debt funded from the US. So the Oz market is not globally insulated as you presumed. It is entirely funded from US debt. And you know what has happened to credit 'over there'.

Some more comparative figures between Oz and NZ are telling.

Average Annual Sales Per Store:

Oz: $A64m/84 stores = $A0.761m per Store

NZ: $NZ33m/44 stores = $NZ0.750m per Store

Those figures are surprisingly similar. Yet NZ Starbucks lost $NZ 0.5m last year (my after tax estimate after building in head office costs) verses an $A36m loss in Australia! All I can deduce is that costs in Australia are completely out of control.

Starbucks US management have decided the only way the Starbucks model can work in Australia is in the super high population density cities of Sydney, Melbourne and Brisbane.

Except if the brand is brought to New Zealand where the business model can successfully run in much smaller cities through superior management :-). That really shows how world class the Starbucks operation run by RBD really is....

SNOOPY

discl: hold RBD

PS The only downside for RBD shareholders is, the master franchise company in Seattle doesn't look to be in any state to buy out the Starbucks franchisee in *this* country anytime soon.

[Snoopy]

RBD should buyout Nandos and grow it nationwide. Nandos chickens are the best. BBQ chicken with yummy hot mexican sauce.


Anyone know what happened to the Nando's at Paraparaumu? It was in the old Pizza Hut building which last time I was visiting seemed to be having the roof removed. Meanwhile the neighbouring KFC was continuing to go well.

SNOOPY

[Snoopy]

I know a young lady who works behind the counter at KFC. She has been complaining that they are cutting her hours, and those of other staff. Anecdotal evidence they are not doing so well?


Or evidence that the tough talking Van Arkel is living up to his word and his lieutenants are carefully matching supply to demand? I remember being at my brother's over last Christmas and persuading him to order a late Pizza lunch at around 2:30pm. He rang the Pizza Hut order line. But was told the local shop didn't open until later (4pm IIRC).



Also, I've just received in the mail a Dominoes voucher offering large pizzas at 4.90.. This is about as cheap as i've ever seen them, I think. Further evidence of a downturn?
hiawatha

I got a $4.90 offer from Dominos too, through the mailbox. But the $4.90 model can only be hawaiian, is only available on Sunday and only at selected stores AND there is a 10% surcharge on public holidays. AND the coupon looks like it has a short shelf life, about two weeks. The 'regular' coupon price on the same leaflet is $7.90.

SNOOPY

[Snoopy]

Yum brands (im a holder) Came out with a very good result today , they are the owners of KFC taco bell and pizza hut and a few other high profile brands. They are achieving massive growth in china.

There was one dark cloud in their result

"Meanwhile, operating profit in the U.S. fell by 12 percent to $168 million, which the company blamed mainly on commodity inflation along with weak sales and profit results at KFC."

Looks like its not just here that KFC is under pressure

Ratkin, KFC's after tax profits grew by over 20% (by my spreadsheet) this year in New Zealand. The other RBD franchises may be 'under pressure', but KFC most certainly is not!

SNOOPY

[Snoopy]

That 9% fall BNZ economist Tony Alexander mentioned relates to the takeaways sector in the Retail Trade Survey from Stats NZ .... ie all takeaway outlets

He made no mention of RBD but as several have pointed out KFC and PH have a large share of this sector so total sector performance is some guide as to how RBD are and will do .... but the RBD will say that they are gaining share in the sector

RBD are expecting a decrease in sales as they progessively close their Red Roof Pizza Hut dine in restaurants. RBD do not release a breakdown of sales betwen their takeaway stores and their red roof restaurants. So I think we can assume Pizza Hut restaurant sales will be caught up in the takeaway food statistics. A decrease in sales can be a good thing if those restaurants that were closed were losing money.

A decrease in takeaway sales does not necessarily imply a decrease in profits. Indeed with Pizza Hut the sales decrease is planned for, and should be profit enhancing for RBD.

SNOOPY

[Snoopy]

Snoopy wrote:
"I have a bone to pick with you Bricks (or should that be a stone?)

WILL YOU PLEASE QUIT BUYING RBD SHARES!

I am waiting for the price to go lower into my buy zone, willing it down, down, down and it never does get there. So just quit buying will you!

Funnily enough for all the flack we have taken over the years Bricks, over the last two years RBD shareholders have done quite well as the rest of the retail market has melted down around them. Who would have thought two years ago that RBD would turn into the best (NZX) retail investment of all!

But in more bad news for my buying program, RBD was up another 2c today. Arrrgh!"

It looks like you have your wish Snoopy.


Yes I had a buy order in before I left for Aussie a month ago at 80c, but pulled it before I flew out. So I was quite happy to buy a few more today at 76c. If the price goes lower I will buy still more shares so long as the fundamentals remain sound.

It was interesting to hear Rod Duke today on the divergent performance of his Briscoe general merchandise stores and the Rebel Sports stores. The Rebel Sport stores were hit far worse with the retail downturn, because what they sell makes up discretionary spending.
Just in case no-one noticed, food is not a discretionary item.

I can't see any rational reason why the share price of RBD has gone from 90c to 76c in just over a month. The only reasons I can think of are a general lack of buyer interest in all fringe shares (because RBD has dropped out of the NZX 50), some rub off from the Starbucks closures in Australia (which will have no effect on the New Zealand Starbucks operation), and a general perception that RBD 'are not doing well' which is not true. Operational profits are forecast to increase this year, and RBD will be one of the few retailers to be in this situation.

If things go on like this I guess I will just keep buying shares until (eventually) I own the entire company. Then I will close down RBD head office, put the store managers on decent profit share incentive schemes and the company will be away. It should be easy to run the company myself. All I will need is to establish an Auckland presence, even a lease on a bedsitter on the North Shore should suffice! I will keep the forum posted on my 'takeover progress' ;-P.

SNOOPY

discl: hold RBD, topped up today.

[CAM]

"food is not a discretionary item"

correct......but takeaway food is possibly...I would hardly call pizza a necessity.
But I get your point. Shouldn't be hit as hard as retail stocks.
I remember from an economics class many years ago that spend on things like ice cream (along with luncheon) went up in tough times because it was an affordable "luxury". Maybe takeaway foods are the same in this day in age.

p.s. good luck with your takeover efforts!!
I think the best spot for a drive through takeaway is Te Kuiti

[Snow Leopard]

Exactly 5 years ago Restaurant Brands closed at $1.30.
Unless I have missed a share split or something then in the intermediate 5 years one would have received 42c (10c, 10c, 10c, 5.5c & 6.5c) in dividends and your shares closed today at 75c.

Interestingly enough Mainfreight closed at $1.30 each as well.
You would have received 84c in dividends (6.5c, 6.5c, 12c, 15c + 28c special, 18c) and your shares closed today at $6.89.

regards
Paper Tiger

[Nitaa]

Snoops. You gonna be right one of these days. You remind me of exactly the way Bel... did during Felex. Virtually owned 5 8ths of stuff all.

Good luck all the same

[Snoopy]

"food is not a discretionary item"

correct......but takeaway food is possibly...I would hardly call pizza a necessity.
But I get your point. Shouldn't be hit as hard as retail stocks.


Years ago small rural towns revolved around the local grocery store and the country garage. These days rural folk regularly make trips to the big smoke to stock up on food, and reliability and extended service distances of modern cars (plus the need for a computer to service them) have drvien many rural garages to the wall.

Take a look between the boarded up facades on the main street of rural New Zealand these days and you will find two constants. Every small town, without fail, has its own hairdressing salon and pizza parlour. Coiffure and chips. Welcome to the new definition of 'necessity'.

SNOOPY

[duncan macgregor]

Glad to see you wake up to the reality of constant change SNOOPY. Macdonalds woke up to this fact years ago targeting their market to the very young who demand to be taken there. KFC started off with its secret recipee, which was a great success, but it died of old age, they never changed it. The model A ford was also a great success at that time, but we dont drive them any more. The share market is in constant change so why would you invest in some outdated unwanted product?. You have to learn to move on if Macdonalds dont keep up with constant change they will follow KFC down the gurgler. Macdunk

[Onthemoney]

Okay quarterly announcement soon. I note new Pizza Hut menu - very simplistic and certainly heading in the right direction for the simplistic consumers of their absolute rubbish product.

Anyway I predict more of the same. Same store sales down for Pizza Hut... comments about new menu strategy and new marketing only just kicking in (same comments for past 5 years remember the gourmet range etc and the pizza mutt strategy). We are working hard to turn the brand around. Down 9% on same store level.

KFC continuing growth particularly in refitted stores. Plus 2-3 % on same store level.

Starbucks - static turnover and move to close stores that are bastardising others turnover. No growth.

Talk about increased cost pressure particular with commodity linked products cheese etc. Continual wage pressure etc. Directors and management working hard for the success of the 3 brands.... Well what else would you expect.... We are confident with current strategy in today's difficult environment and are looking forward to a respectable end year result.....

Blah Blah same old I say....

[BRICKS]

Okay quarterly announcement soon. I note new Pizza Hut menu - very simplistic and certainly heading in the right direction for the simplistic consumers of their absolute rubbish product.

Anyway I predict more of the same. Same store sales down for Pizza Hut... comments about new menu strategy and new marketing only just kicking in (same comments for past 5 years remember the gourmet range etc and the pizza mutt strategy). We are working hard to turn the brand around. Down 9% on same store level.

KFC continuing growth particularly in refitted stores. Plus 2-3 % on same store level.

Starbucks - static turnover and move to close stores that are bastardising others turnover. No growth.

Talk about increased cost pressure particular with commodity linked products cheese etc. Continual wage pressure etc. Directors and management working hard for the success of the 3 brands.... Well what else would you expect.... We are confident with current strategy in today's difficult environment and are looking forward to a respectable end year result.....

Blah Blah same old I say....

YER and keep making money for the HOLDERS..

[Stranger_Danger]

Snoopy said :-

"If things go on like this I guess I will just keep buying shares until (eventually) I own the entire company. Then I will close down RBD head office, put the store managers on decent profit share incentive schemes and the company will be away. It should be easy to run the company myself. All I will need is to establish an Auckland presence, even a lease on a bedsitter on the North Shore should suffice! I will keep the forum posted on my 'takeover progress' ;-P."

See, what I can can't figure out is why RBD don't do the above *now*.

I believe that - at some stage - the NZ Pizza stores will be on the market and (just for fun) have asked myself how I would go about turning them around.

If you walk into the stores, it is very hard to spot the manager - the staff are as disinterested as each other.

In certain stores, it is even possible to observe staff taking money from the till while you are waiting for your pizza!

They need to work out how to get the best bits of the franchise model whilst continuing to own the stores. It *is* possible. Clearly, there is no incentive at this stage for anyone to care. In these circumstances, winners resign for greener pastures. Losers remain.

They need a major cleanout - starting at the top.

A business can only treat its customers with contempt for so long.

Anyone tried Kelly, the "new automated ordering system" ? I'm quite sure they'll be calling Kelly new in 10 years time, thus is the general apathy with which the place is run.

Anyone figured out how to ask Kelly for BBQ sauce yet and have it happen reliably? I haven't. Managed to give Kelly a name different to the one they have attached to the phone number? I haven't.

Completely coincidental *cough* with them ironing out the bugs with Kelly, I note answering times in the call centre have gone down *hugely*. Previously, you got a near instant answer.

The last 3 times I have called, twice I gave up on humans and went to Kelly. The last time I gave up all together and called Domino's instead. Twice since then I've gone to Domino's.

I walk to pick up the order. Domino's is twice the distance. I don't think the pizza is better. All that has driven me there is contempt from RBD.

Have the calls go straight to the stores. Fire the loser staff and managers. Provide training and incentives to the potential winners. Introduce profit share contracts that allow potential winner managers to enjoy some of the benefits of franchising (store level control, meaningful share of the proceeds) without the downsides (mortgaging the house when house prices are falling). Continue to own the store. Make the manager own the day to day and make it worth his while.

Create incentive for the manager to engage with the community. Give out pizza slices at local rugby if you have to. You're competing against a big Australian co but you're looking more like a disinterested corporate than they are! Get interested.

Maybe -just maybe - when the chance to renew with YUM comes up, wonder where it is worth it. Where is the value in the Pizza Hut brand? Sure RBD haven't destroyed much of that value? What does Pizza Hut mean? The best pizza? A long call centre wait? What you order when you can't afford to spring for Hell? Hanging up on Kelly?

Perhaps when battling a large AU listed company they could find a way to brand that says "we're kiwi", "we're in your neighbourhood", "our service rules".

Kiwibank has done an A++ job of this.

Of course, talk is cheap - you then gotta back it up. Which takes us back to a flat corporate structure and empowered local managers with incentive.

I *want* to be an RBD customer. I *want* to be an RBD shareholder.

Until there is *some* evidence that this business is not run by a pet rock, I find it hard to be the former and impossible to be the latter.

[Dr_Who]

They need a major cleanout - starting at the top.



Have to agree there.

A complete change on board level. Get rid of Pizza Hut. Put more time and advertising into Starbucks. Continue with existing plan for KFC. Look to bring in a new and exciting chain to NZ.

Now, where can I find enough capital to buy 19.99% of RBD?

[Onthemoney]

RBD used to have the rights to this food franchise in NZ not too sure whether they still do though....

[winner69]

Snoopy ..... that is so so mean of you only offering 61 for the those shares the poor buggers want to sell .... and then did you have a spurt of genrosity and offer to take some for 65

You must be enjoying this

[minimoke]

...and new marketing only just kicking in
Got the mailer in the post today and haven’t figured out yet how to read the secret code. But the lure of winning a pizza to drag me down to the store isn’t a big enough incentive.

[minimoke]

Now, where can I find enough capital to buy 19.99% of RBD?
On their current trajectory you won’t have to wait long before that loose change in your back pocket will do it.

[Onthemoney]

65 cents the announcement has been pre-empted.....

[brettdale]

Have to agree there.

A complete change on board level. Get rid of Pizza Hut. Put more time and advertising into Starbucks. Continue with existing plan for KFC. Look to bring in a new and exciting chain to NZ.

Now, where can I find enough capital to buy 19.99% of RBD?

Couldn't agree more, Pizza Hut has to go, KFC should stay and another franchise bought in? Maybe a place like Fuddruckers like they have in the states.

[Onthemoney]

Tick....tock...tick....tock....

[brettdale]

Will Pizza Hutt be gone by the end of next year?

[Deev8]

An interesting comment this week from Domino's in the UK. They said that they were benefiting from the consumer slowdown as customers chose to order takeaways rather than eat out.

Domino's benefits from downturn (http://www.hemscott.com/news/comment-archive/item.do?id=56748)

[Dr_Who]

An interesting comment this week from Domino's in the UK. They said that they were benefiting from the consumer slowdown as customers chose to order takeaways rather than eat out.

Domino's benefits from downturn (http://www.hemscott.com/news/comment-archive/item.do?id=56748)

Yeah, I ve noticed that the good food courts with good authentic food in Auckland are still very busy. The expensive restaurants will not survive throu this recession.

[Dr_Who]

BD
09/10/2008
HALFYR

REL: 0948 HRS Restaurant Brands New Zealand Limited

HALFYR: RBD: Restaurant Brands Half Year Results Announcement

Directors' Report to Shareholders
For the Half Year ended 8 September 2008

Key Points

Net Profit after Tax for the half year (excluding non trading items) was $4.6
million (14.7% down on prior year). Reported profit (including non trading
items) was $2.4 million, down 47.3% on prior year.

Total revenues of $162.5 million were 1.1% down on prior year, but same store
sales were up 0.9% for the half, with KFC continuing to be the growth driver.

Non-trading items of $3.2 million largely comprised an impairment charge of
$2.5 million to the carrying value of goodwill on the Pizza Hut New Zealand
business.

Margins were impacted by continuing pressures on input costs with all three
brands producing lower contributions than prior year.

Directors have declared a fully imputed interim dividend of 3.0 cents per
ordinary share payable on 21 November 2008, the same level as last year.

[duncan macgregor]

i total agree with this. It has been there problem for years.

This group is the biggest dog on the stock exchange. I use to own and was luck enough to get out at 1.70$.

There marketing is a joke, there service is terrible, they would be better to turn them into
fast paced drive throughs and then they could get away with the pimple people and the bad service.

Lets face it no one goes to KFC to sit in the restraunt part do they, unless they want to catch a disease. They are grot.

This company will be 70c within 2yrs.

LMFM That was two and a half years ago. You got that prediction almost right. Would you care to give another prediction of where the sp will be in another two years time. Even i being one of the harshest critics of this company thought the downtrend might have been less than it is. They have very little to lose now, after selling their properties in the good times, to pay rent in the bad times, then blow it on an overseas working holiday. Macdunk

[BRICKS]

That was two and a half years ago. You got that prediction almost right. Would you care to give another prediction of where the sp will be in another two years time. Even i being one of the harshest critics of this company thought the downtrend might have been less than it is. They have very little to lose now, after selling their properties in the good times, to pay rent in the bad times, then blow it on an overseas working holiday. Macdunk

I note the 3 cent div date is 21 NOV 2008 pay ay, Mc Duck do you know the EX date..

Thanks Quack,, Quack..

[duncan macgregor]

I note the 3 cent div date is 21 NOV 2008 pay ay, Mc Duck do you know the EX date..

Thanks Quack,, Quack.. On register at 5pm 7th of nov. Macduck

[Deev8]

Thanks Quack,, Quack..http://www.huffingtonpost.com/theblog/archive/Lame%20Duck%206.jpg

[BRICKS]

http://www.huffingtonpost.com/theblog/archive/Lame%20Duck%206.jpg

ALL ways wanted to know what Mc Duck looked like note the KFC..

[POSSUM THE CAT]

7 cents if it is still in existence in 2 years time and Bricks might own 90%

[BRICKS]

7 cents if it is still in existence in 2 years time and Bricks might own 90%

CAT do look like the Mc Duck picture too, as you QUACK like HIM..

[winner69]

See last weeks NBR had reports that Van Arkel had approached the government to nationalise RBD through the injection of new capital via preference shares that would take preference over ordinary shares in the case of liquidation. Of course these government owned shares would not have voting rights but it is understood that is a matter of contention Apparently Russell Creedy was doing all he could to keep KFC separate from the bailout plan

Last weeks NBR -- grab a copy for the full report

[minimoke]

See last weeks NBR had reports that Van Arkel had approached the government to nationalise RBD through the injection of new capital...
I’ve heard that John Key doesn’t want this to be a political issue and that both he and Helen Clark should sit down and take a bipartisan approach. Clark has denied – it looks like Parakura Horomia has been involved with this and been keeping Gerry Brownlie up to date. Hard to know where the Greens stand. On one hand they have sustainable chicken farming – on the other hand KFC food labelling could be a bit better. I’m not sure why KFC would be kept separate – its an iconic brand which has fed thousands of New Zealanders . Its rumoured that there are more servings of KFC than travellers through AIA or passenger bookings on Kiwrail.

[winner69]

That would explain why the Health Minister Annette King is quite keen on the idea. She says its a win win situation for everyone ... "shareholders recoup their investment via a certain fall in future hospital costs' ..... even though she would not be drawn on whther she would close the operation down to reduce obesity levels.

[minimoke]

Maybe there’s a hidden message in Jeanette Fitzsimmons press release today: “"There are individual policies where we (the Greens) agree with the National Party, for example they helped us stop a law that would take away control of dietary supplements and they want to see more of the NZ Super Fund invested in New Zealand.”

[Dr_Who]

That would explain why the Health Minister Annette King is quite keen on the idea. She says its a win win situation for everyone ... "shareholders recoup their investment via a certain fall in future hospital costs' ..... even though she would not be drawn on whther she would close the operation down to reduce obesity levels.

Surely, there must be far more important issues for the politicians to concentrate on than KFC!!!! FFS!! What a bunch of BS! :confused:

Hot and tasty is back... yummm.

[BRICKS]

http://www.huffingtonpost.com/theblog/archive/Lame%20Duck%206.jpg

The government would never BUY into KFC just look at the Mc Duck face when I told HIM..

[winner69]

I was wondering if the article was a windup until these quotes made me think it really is true ..... 'proposed plan was another example of the nanny state gone mad' .... and a pizza lover 'I've been eating pizzas since my uni days - how could they have let the business get to this state'

Veteren financial commentator Bernard Hickey was also quoted as saying the markets 'were running scared' and went on to say 'I have never seen more disgraceful financial management'

Shoeshine from NBR spelt out the crisis as 'Its what everyone else in the fast business already knows - pizza is a game for mom and dad size operators. The emporer has no competitive clothes. It is time to shut down the hapless, and now boring, annual saga'

Shut them down ... no way said the protesters outside the RBD HQ. Protesters included Weldon who didn't want to see another company disappear from the NZX and a handful of Restuarant Brand shareholders who have averaged down over the last couple of years.

Were you there Snoopy?

[macduffy]

Yes, great kiwi icons such as Kentucky Fried Chicken and Colonel Sanders deserve government support and protection in the same way as received by Air New Zealand, Tranz (NZ) Rail and Auckland Airport.

I feel a lot of Tui ads coming on!


;)

[Snoopy]

Snoopy ..... that is so so mean of you only offering 61 for the those shares the poor buggers want to sell .... and then did you have a spurt of generosity and offer to take some for 65

You must be enjoying this


You are painting a flattering picture of me Winner. Yes I am in the market for RBD shares. So my slow takeover plan is proceeding. But my top offer price today was only 60c. Got all the shares I was after too.

I was quite impressed with the half year result. Good to see growth in KFC and Starbucks in these tough times. 'Pizza Hut' still resembles an outside dunny - but that was not news to me. The dividend is being maintained. The P.E. is now under 7, and gross dividend yield is around 15%, with a dividend payment imminent!

Interesting to see Dominos in the U.K. doing so well, and trading on a P.E. of 17. With a change in sentiment that would be equivalent to RBD shares trading at $1.46, with no increase in Restaurant Brands earnings! The comparison offers an interesting window as to what might be possible, should RBD be seen to get their act together.

SNOOPY

discl: hold RBD

[duncan macgregor]

I'd still say a rise of under 2% is just as likely to be noise than anything significant



I'm not so sure RBD ever *has* traded with the rest of the market!

Both Phaedrus and Macdunk have pointed out to me several times that RBD didn't really take part in the market rally over the last two years. Largely I suspect because the market decided it was a 'zero growth' share. That is the negative way to look at RBD.

On the positive side a 'zero growth' share will not go down in price either, unless the outlook for the business deteriorates significantly. Management forecasts 'steady as she goes', and so sails the share price - even in a falling market.

SNOOPY They might not take part in any rally SNOOPY but they certainly follow the market down. Interesting to see you still convinced your right and the market wrong by buying more. Macdunk

[Dr_Who]

You cant compare Dominos with Pizza Hut. Both have difference business models and Dominos is eating PH alive. The main concern with RBD is that they lack a strategic plan for growth. PH and Starbucks are dying ducks. The only winner they have in the portofolio is KFC. If a competitive chicken chains comes into NZ KFC maybe history also.

[minimoke]

So was Pizza Hutt really closed on Monday. There was this odd ad in the paper that I couldn’t be bothered figuring out (so the ad defeated its purpose) but it gave me the impression the PH wasn’t open on a statutory holiday. Any major fast food business that cannot accrue enough holiday pay throughout the year to stay open on a public holiday is sailing very close to the wind.

[BRICKS]

So was Pizza Hutt really closed on Monday. There was this odd ad in the paper that I couldn’t be bothered figuring out (so the ad defeated its purpose) but it gave me the impression the PH wasn’t open on a statutory holiday. Any major fast food business that cannot accrue enough holiday pay throughout the year to stay open on a public holiday is sailing very close to the wind.

IF Pizza Hutt was SOLD we would not have to READ all stories over & over and the moaning
along with the DUCK quacking like mad how ever investor is STUPID except the DUCK..
{ Photo of DUCK not included } , RBD [bargain]..

[duncan macgregor]

Please all rise for this session of the Sharechat internet court, Judge Mick 100 presiding.

The defendent, Snoopy, is here to answer the following question

"Before you decide to hold or buy more shares in a company whose shareprice is plumetting in value - eg, restarant brands
Ask your self this question:"

"Is there a possibility that my decision making process is being affected by 'escaslation of commitment'?"

"So how about it Snoopy? Are you suffering from escalation of commitment?"

---------

A fair question Judge Mick. Now please allow me to present my evidence.

I am a foundation shareholder of RBD. I acquired my first shares in June 1997 at an effective $2.03. In March 1998 I purchased some more at an equivalent price of $1.29. I have made several purchases in subsequent periods, priced as follows: September 1998 62c (equivalent), February 2000 $1.20 (equivalent) and another batch at $1.18 (equivalent). More purchases were made in September 2000 at $1.14, March 2002 at $2.08, July 2002 at $1.71, September 2003 at $1.25, September 2004 at $1.26, December 2004 at $1.26, March 2005 at $1.29, July 2005 at $1.60, October 2005 at $1.30 and finally later in that same month at $1.24. My weighted average purchase price is $1.26. My weighted average share holding time is 2.5 years. (That's because most of my holding has been bought in the last couple of years, during the time RBD has suffered from the most derision on this forum.)

Based on a market price of $1.33 I have made an average capital gain of 2.5cps per year held. The current net yield is 10cps, or 12.5cps if we add the annualised capital gain. That gives a gross yield annual return of 13.8%. Now, I'm not going to claim that is a fantastic return, although it is double what you would earn in the bank. But I do see that return as more than satisfactory, given the conservative nature of the underlying investment.

Some people see successful investment, in the cricket analogy, as a process of hitting as many sixes as you can. Personally I prefer a technique which gets less headlines but over the long term can be just as rewarding if not more so (because you are taking less risks). I refer to the 'pushing for singles' method. Just go about your job quietly clocking up the runs and keeping the scoreboard ticking over.

Being an investor in RBD won't score you many bonus swoons at cocktail parties. But it's a great investment to put your mother into. That's because my quoted returns are IMO, quite sustainable - even if the business doesn't grow at all! That's why RBD should be a core holding of any income based portfolio. For this whole century, RBD has had a consistent dividend income record that puts *all* the listed property trusts to shame.

As for the 'plummeting share price', there has been no long term plummet since 1998, since the inital fall from grace after the IPO. The share price today is more or less what it was in 1998. Since RBD have paid out nearly all of their profits as dividends since then, this is to be expected.

The case for investment, since 1998 has always been based on dividend yield. Investing in this company from a dividend perspective makes as much sense in 2006 as it did in 1998 and virtually every year in between. Therefore I reject the 'escalation of commitment' argument. If you look at 'new' investment in RBD in 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005 and 2006 it has made huge sense every year, for eight different annually discrete reasons.

RBD, highly profitable, highly reliable and proven as a sound investment for every year of this century. Judge Mick, I rest my case.

SNOOPY

discl: hold RBD, and very satisfied with the investment performance. Now that RBD is 60c even BRICKS must see the folly of this fundamental averaging down investment style. The duck season is upon us are you a sitting duck Bricks or have you learned something?. Macdunk

[BRICKS]

Now that RBD is 60c even BRICKS must see the folly of this fundamental averaging down investment style. The duck season is upon us are you a sitting duck Bricks or have you learned something?. Macdunk

HOW can BRICKS be mistaken as a DUCK if you cant tell a brick from a duck you need a visit
to KFC for study worse still they could make a KFD ..

[Snoopy]

Interesting to see you still convinced your right and the market wrong by buying more. Macdunk


Macdunk, my purchases are part of a carefully controlled 'thrust into retail' strategy. Why retail? Because it is liable to be the worst performing sector over the next twelve months. Everyone knows that which is why prices in that sector have been hammered down. And now is the best time to take advantage of that negative market sentiment.

The retail market is a contiuum of 'consumable essentials' to 'big ticket discretionary spending'. The most essential consumable is food. It doesn't matter what happens in the economy. People still have to eat. Also RBD is a cash business. RBD don't have to worry about people not paying for their pizza on account! So IMO from a global ongoing business perspective, RBD is low risk.

There are of course operational issues at RBD. But that is why the shareprice is discounted so heavily. Indeed it was the spoof NBR article that finally made me decide to purchase. For that meant the business was being rated as a joke, and was not being analyzed seriously by 'the market'.

I have made a mistake in my 'thrust into retail' strategy. I was assuming a one in five year business downturn, and it appears we could be headed for something rather worse. However, the response to my mistake is not to buy less retail shares. It is to spend the money I was planning to spend on more conservative retail prospects, until the timing of any retail recovery becomes clearer. At that point I will stop buying RBD and start buying TUA which is up towards the big ticket end of the spending continuum.

So why not wait until the share price turns before investing? Well the first leg of any recovery is always the safest. And I cannot earn anywhere near the amount from cash in the bank as I can from RBD shares, for as I said previously:

"The case for investment, since 1998 has always been based on dividend yield."

My investments are always made from a forward looking perspective, and there is no difference with yesterday's one into RBD.

SNOOPY

[Deev8]

You cant compare Dominos with Pizza Hut. I would say that comparing two companies in a similar line of business - they both sell pizza - could be quite useful.

[Snoopy]

My purchases are part of a carefully controlled 'thrust into retail' strategy. Why retail? Because it is liable to be the worst performing sector over the next twelve months. Everyone knows that which is why prices in that sector have been hammered down. And now is the best time to take advantage of that negative market sentiment.

The retail market is a contiuum of 'consumable essentials' to 'big ticket discretionary spending'. The most essential consumable is food. It doesn't matter what happens in the economy. People still have to eat. Also RBD is a cash business. RBD don't have to worry about people not paying for their pizza on account! So IMO from a global ongoing business perspective, RBD is low risk.

So why not wait until the share price turns before investing? Well the first leg of any recovery is always the safest. And I cannot earn anywhere near the amount from cash in the bank as I can from RBD shares.


Bad news for the retail sector today:

Pumpkin Patch predicting further declines in sales....

Hallensteins delaying the move of their purchasing centre to Australia.....

So I have taken the opportunity to pick up another helping of Restaurant Brands shares - my biggest ever buy up in terms of number of shares (if not in dollars).

That's because I decide how much money I want to spend well in advance. And if the share price goes down in the interim, I just buy more shares on the day. That is how 'value averaging' works - to make sure you buy more shares when the price is low and fewer shares when the price is higher.

RBD is the one retail share where the MD is not talking gloom and doom. In fact MD Russel 'One L' Creedy bought up big last month to the tune of 50,000 shares.

At 60c per share, the price I bought at today, and with an annual dividend payment of 6cps, this equates to a gross dividend yield of 15%. With the reserve bank indicative rate tipped to fall to 5.5% next week that income gap is in my judgement starting to become irresistable to the income investor.

I don't often make specific predictions. But I think the RBD price will hit 80c before this summer ends.

SNOOPY

discl: hold RBD

[Dr_Who]

Hey Snoopy, do you think the div is sustainable for the next 2 years?

Are you gonna file a SSH soon? LOL

[duncan macgregor]

I'd still say a rise of under 2% is just as likely to be noise than anything significant



I'm not so sure RBD ever *has* traded with the rest of the market!

Both Phaedrus and Macdunk have pointed out to me several times that RBD didn't really take part in the market rally over the last two years. Largely I suspect because the market decided it was a 'zero growth' share. That is the negative way to look at RBD.

On the positive side a 'zero growth' share will not go down in price either, unless the outlook for the business deteriorates significantly. Management forecasts 'steady as she goes', and so sails the share price - even in a falling market.

SNOOPY SNOOPY a little extract to remind you of the risk you take chasing dividends ignoring the downtrending share price. I think the share price was double what it is today when you wrote that. Macdunk

[Snoopy]

Hey Snoopy, do you think the div is sustainable for the next 2 years?


There may be some more write downs in goodwill associated with Pizza Hut. But these will be 'non cash writedowns' and will not affect the ability of RBD to pay dividends from their ongoing business. So yes, I think the dividend payments are sustainable.

Helpful to the industry, I think, will be new PM John Key's decision to cancel the traditional 'Christmas at Bellamys' in favour of pizza and beer on the parliamentary front grounds. Granted there is no guarantee he will buy those pizzas from Pizza Hut. But you can imagine the headlines if he goes to the opposition? "Key goes to Hell" or "Dominos descend on Key" would both be PR nightmares! So who do you think has the necessary production capacity in Wellington to fulfill such a bulk pizza order?

All in all, I think this will be a very astute PR exercise by Key - as well as having obvious flow ons for Pizza Hut. It will be a very public way to show Key's support for the private sector, while empasising his status as 'a man of the people'. Criticisim from the opposition? Contacts have told me that a number of former cabinet Labour Ministers are looking at supplementing their now reduced salaires with other income. Both David Benson Pope and would you believe Michael Cullen are in negotiation to 'take private' two Pizza Hut outlets in Dunedin. In the case of Cullen, still being a list MP, it would be a simple matter to convert his former electorial office into a PH delco as the paint is the right colour already!

All this means that Key's prospective 'end of year bash' is unlikely to be criticised by the Labour party. Even the Greens won't be able to say much because RBD is a fully NZ owned company (in line with 'buy kiwi made') and the boxes the pizzas come in will be fully recyclable!

SNOOPY

discl: hold RBD, LNN

[BRICKS]

EVEN though 7 stores where closed the turnover and sales up 8%. Love that KFC,
still growing all except the share price but the Dividends are SAFE cant say that
for to many other NZ companies..

[Dr_Who]

Good work.

I see McDs is doing very well in the US with revenues up. I guess everyone is going for fast and cheap food in a recession.

[Deev8]

EVEN though 7 stores where closed the turnover and sales up 8%.

I think that sales were up 0.8% rather than 8% - that's still up, but not quite as impressive.

Restaurant Brands Third Quarter Sales Announcement (http://www.nzx.com/markets/NZSX/RBD/announcements/4787267) says
Restaurant Brands’ total sales across the company’s three brands for the third quarter (12 weeks ended 1 December 2008) were $69.6 million, an increase of 0.8% on the equivalent period last year.

[BRICKS]

I think that sales were up 0.8% rather than 8% - that's still up, but not quite as impressive.

Restaurant Brands Third Quarter Sales Announcement (http://www.nzx.com/markets/NZSX/RBD/announcements/4787267) says
Restaurant Brands’ total sales across the company’s three brands for the third quarter (12 weeks ended 1 December 2008) were $69.6 million, an increase of 0.8% on the equivalent period last year.

STILL up and making Money..

[minimoke]

I think that sales were up 0.8% rather than 8% - that's still up, but not quite as impressive.

September quarter inflation running at 5.1% and they increased $ sales by 0.8% suggesting volume is down and profits likely to follow. The sales figures are probably the good news.

[Snoopy]

STILL up and making Money..

Anyone see the NBR article on 19th December? The parent franchise company of Burger King and Hell Pizza in NZ, TPF Restaurants, is looking to sell both assets.

Burger King has "long been losing money as it struggles to find a market niche between the low end and gourmet food chains."

I must admit I never knew that. Always thought BK was profitable in N.Z.

Meanwhile TPF has been in trouble with the Hell Pizza master franchise creators for cheapening the brand.

"Earlier this year the company sent a memo entitled 'Improving Gross Profit Through Pizza Topping Standardisation'. to stores, telling franchisees to reduce toppings by 10-255 to boost margins , at the same time as it announced a price rise."

"The order to cut toppings was cancelled after complaints from Hell Systems, the company started by Hell founders Callum Davies, Warren Powell and Stu McMullin who sold the master licence to TPF for about $15m in 2006."

The article goes on to say that the licence was sold on the proviso that certain quality standards were maintained and that TPFs memo advice threatened to tarnish the brand image as Hell Pizza looked to international expansion.

Meanwhile the price of RBD shares has jumped significantly in the last few weeks on no news. Perhaps the private equity companies who have been running the ruler over their competitors now realise how undervalued RBD is? I am picking an RBD share price of 80c by the end of this summer.

SNOOPY

discl: hold RBD

[shasta]

Anyone see the NBR article on 19th December? The parent franchise company of Burger King and Hell Pizza in NZ, TPF Restaurants, is looking to sell both assets.

Burger King has "long been losing money as it struggles to find a market niche between the low end and gourmet food chains."

I must admit I never knew that. Always thought BK was profitable in N.Z.

Meanwhile TPF has been in trouble with the Hell Pizza master franchise creators for cheapening the brand.

"Earlier this year the company sent a memo entitled 'Improving Gross Profit Through Pizza Topping Standardisation'. to stores, telling franchisees to reduce toppings by 10-255 to boost margins , at the same time as it announced a price rise."

"The order to cut toppings was cancelled after complaints from Hell Systems, the company started by Hell founders Callum Davies, Warren Powell and Stu McMullin who sold the master licence to TPF for about $15m in 2006."

The article goes on to say that the licence was sold on the proviso that certain quality standards were maintained and that TPFs memo advice threatened to tarnish the brand image as Hell Pizza looked to international expansion.

Meanwhile the price of RBD shares has jumped significantly in the last few weeks on no news. Perhaps the private equity companies who have been running the ruler over their competitors now realise how undervalued RBD is? I am picking an RBD share price of 80c by the end of this summer.

SNOOPY

discl: hold RBD

Snoopy

I see the KFC in Manners Mall Wellington has closed...

Any issues with leasing, selling off franchises etc?

As far as i know that leaves the Wellington CBD, with just the one on Kent Terrace?

[lakedaemonian]

I'm surprised as well that Burger King isn't profitable.

I'm actually finding that hard to believe......I was of the thought that, anecdotally, Burger King had far more remaining growth potential in NZ than McDonald's...even factoring in the McCafe growth potential.

On the pizza side of the house, it would be interesting to learn what pricing the franchisor is getting for cheese. I'm of the opinion that they may still be paying quite high cheese prices as they do not seem to have dropped with the dairy payouts.

I still wouldn't touch this company with a barge pole at the moment as I think it has room to move lower in 2009 and into 2010.....but I do think your concept of there being a "fortune at the bottom of the pyramid" is a valid one....in fact there's a great book on that topic :)

[Stranger_Danger]

Snoopy,

Out of interest, have you ever had a good look at ASX listed DMP?

To me, Domino's passes the "sniff test" - in my view, at store level they are clearly beating the pants off RBD.

They are well run by an experienced team - with significant shareholdings - and whilst not as "cheap" as RBD, I see them as fundamentally a lot "cheaper" as you are getting a rapidly expanding quality business, rather than a dying relic run by salary jocks with bugger all skin in the game (ie Pizza Hut).

I realise that RBD is more than just pizza, but I wonder if you've considered DMP for the fast food part of your portfolio?

Personally, the difference between the Domino's stores and Pizza Hut stores that I see (delivery times, is the pizza hot?, is the store clean?, do the staff care?) is night and day which is why I continually pass on RBD, no matter how "cheap" it is.

[Snoopy]

Snoopy

I see the KFC in Manners Mall Wellington has closed...

Any issues with leasing, selling off franchises etc?

As far as i know that leaves the Wellington CBD, with just the one on Kent Terrace?


Shasta, RBD has a stated policy of closing unprofitable stores. Apparently Wainuiomata in 'outer Wellington' was closed. I thought that odd because I considered that suburb would reflect the demographic target market of KFC quite well. I suppose it is 'cooler' to cruise into nearby Lower Hutt to pick up your KFC now?

No idea whether Manner's Mall was profitable for RBD or not. RBD may just not be happy with a new rent deal the landlord has put on the table. Or they may have found a better site nearby. It does seem odd to leave only one KFC within the Wellington CBD. Nevertheless in Christchurch KFC only have one store - within the four avenues - at the top of the High Street Mall a block away from Cathedral Square. So perhaps that is de rigeur for City centres these day?

SNOOPY

[shasta]

Shasta, RBD has a stated policy of closing unprofitable stores. Apparently Wainuiomata in 'outer Wellington' was closed. I thought that odd because I considered that suburb would reflect the demographic target market of KFC quite well. I suppose it is 'cooler' to cruise into nearby Lower Hutt to pick up your KFC now?

No idea whether Manner's Mall was profitable for RBD or not. RBD may just not be happy with a new rent deal the landlord has put on the table. Or they may have found a better site nearby. It does seem odd to leave only one KFC within the Wellington CBD. Nevertheless in Christchurch KFC only have one store - within the four avenues - at the top of the High Street Mall a block away from Cathedral Square. So perhaps that is de rigeur for City centres these day?

SNOOPY

Im not sure Lower Hutt could ever be considered "cool", even compared to Wainui! :eek:

Manners mall is in a prime location but there is MacDonalds & Burger King on the same block.

I havent had KFC since Shrewd Crude came up to Wellington, & before that god knows.

Must say though i did get Pizza Hut delivered a while back, & was very impressed.

[Snoopy]

Out of interest, have you ever had a good look at ASX listed DMP?

To me, Domino's passes the "sniff test"

They are well run by an experienced team - with significant shareholdings - and whilst not as "cheap" as RBD, I see them as fundamentally a lot "cheaper" as you are getting a rapidly expanding quality business, rather than a dying relic run by salary jocks with bugger all skin in the game (ie Pizza Hut).

Personally, the difference between the Domino's stores and Pizza Hut stores that I see (delivery times, is the pizza hot?, is the store clean?, do the staff care?) is night and day which is why I continually pass on RBD, no matter how "cheap" it is.


I understand where you are coming from Stranger Danger. The counter point to your argument is to ask at what price point RBD *does* become cheap enough. 60c obviously didn't do it for you, so what about 50c? 40c?..20c? Provided the company is still making a profit it *has* to be cheap enough at some point, provided RBD don't start to run out of capital for reinvesting in the business (which isn't happening). In hindsight you could say that 'the market' found the company cheap enough at 60c- even if you didn't-, given the known business risks.

People ask where the growth is going to come from within RBD. Well, if a store is losing money, all you have to do is close it. Perverse as it may sound, in financial terms that is growth. And it would seem RBD still have some of these 'growth' opportunities available.

DMP operate a different largely franchise model. It stands to reason that -on average- the people who own the stores as managers on site will look after them better than some manager in head office Auckland. That doesn't mean the corporate pizza model *cannot* work of course - just that it is harder to make it work. Nevertheless there are anecdotally scores of pizza store individual operators looking to exit the industry.

Personally I have never had problems with delivery times with either Pizza Hutt or Dominos. Also I have never had problems with how hot the pizzas are, although it must be said I usually pick up my own. Pizza Hutt in Upper Riccarton have a warming oven where they stick the Pizzas after they have been cooked. Dominos in Addington IIRC do not.

To answer your question on DMP directly, yes I have looked at it. I turned it down mainly because of their track record not being long enough. I don't think we know how DMP will handle a recession and there is still a growth premium priced into the share (or was when I last looked, admittedly a year or so ago). I haven't taken DMP off the radar and will look again. But I saw better income prospects with RBD and better growth prospects with YUM (RBD's parent master franchise holder lised in the USA). So that is where I put my money.

SNOOPY

[Nitaa]

Snoppy. You do not get growth from closing stores. You may increase bottom line but you reduce your revenues.

60 to 70 cps seems about rght for this stock at the mo imo

[fungus pudding]

Snoppy. You do not get growth from closing stores. You may increase bottom line but you reduce your revenues.

60 to 70 cps seems about rght for this stock at the mo imo


If every $1 of turnover costs $1.05 then the best thing you can do is reduce revenue - pronto.

[Nitaa]

If every $1 of turnover costs $1.05 then the best thing you can do is reduce revenue - pronto.Firstly, can the store be turned around?

My previous post is what i was implying. i.e comment about increasing the "bottom line"?

[Snoopy]

Snoopy. You do not get growth from closing stores. You may increase bottom line but you reduce your revenues.


Profit growth is what I am after Nita. I understand what you are saying about revenue growth. RBD press releases dwelt on revenue growth for years as their profit shrunk away.
There is a term for seeking (revenue) growth at any price. It is called 'the institutional imperative', beloved by managers who want to make their own jobs more important. Generally it is a successful mechanism for transferring wealth from long suffering shareholders to senior managers. I for one am glad that RBD have ceased to move down that path.

SNOOPY

[Snoopy]

60 to 70 cps seems about rght for this stock at the mo imo


Touched 70c today Nita, and closed steady at 69c. All in all not a bad performance with the market as a whole down some 50 odd points.

I guess some of you will be mystified as to what is happening, when there has been no obvious sudden improvement in the underlying business performance.

RBD debt at the half year (30th August) was $40.8m. We learn on page 53 of the FY2008 annual report that almost all the loans are at a floating interest rate (at balance date 9.22%) and that these arrangements are not up for renegotiation until 2010. That gives an annual interest bill of some $3.8m. But floating interst rates have dropped massively since 29th February 2008. So I am guessing that after tax the ongoing RBD profit has been lifted by $NZ1.8m because of interest falls alone. Of course not all of this will flow through immediately (FY ending 28th February 2009) because interest rates have been gradually falling throughout the year. But it does look very good for next year, with interest rates likely to stay at these lower levels. All else being equal, this interest rate decline alone will represent a 17% after tax profit rise for the company (based on RBD's declared normalised profit of $11m in FY2008).

Also come 31st August 2008, RBD completed their $35m store transformation project promises to YUM. I suspect the store transformations will continue, but they will be slower on RBD's terms, not YUM's. This all helps the cashflow.

Of course I am not picking a 17% profit rise for RBD for FY2009, because the interest savings will be offset by rising costs. But I do think there is a very good chance that they will at least hold their operating profit this year, and thre is an even better chance that dividends will not be cut going forward from here.

Even at 70c , this equates to a gross income yield of nearly 14%. With term deposit rates at the bank down to about 5%, this 14% yield is way, way too high, even given the business risks. So I'm sticking to my prediction of RBD getting to 80c by the end of the summer. The RBD share price was only 60c when I first made that prediction. So we already half way there.

SNOOPY

discl: hold RBD

[The BOWMAN]

SNOOPY, pretty valid point. Never thought about that myself.

[Snoopy]

60 to 70 cps seems about rght for this stock at the mo imo


AMP do not agree with you Nita. Their entire holding of 9.269m shares were sold on market today at the measly price of 57c. Is that an all time low? AMP have been holding since 2002 so have crystallized a multi million dollar loss here. The main cornerstone shareholder gone overnight has to be big news. Particularly so when last time they were involved in RBD, AMP did quite well - riding the price up from around 90c to $1.60 or so IIRC.

I guess the real question is, have AMP made another good call? Or is it the buyer of those shares that has got the bargain? I wonder who the buyer was? (no it wasn't me!)

SNOOPY

discl: hold RBD

[Dr_Who]

I am also interested to find out who the buyer is. Did it go to one buyer or was it a placement spread to lots of clients?

Maybe AMP pumped up the sp and got a broker to place the shares to their private client?

[BRICKS]

THIS is a position that a big move with 19 million RBD traded in the last two days there is
change just to about to happen and they got it cheep so who is out there surprise us
you never know could be that take over we all have talked about but its time like this it better on the inside than on the OUTER..

[Snoopy]

THIS is a position that a big move with 19 million RBD traded in the last two days there is change just to about to happen and they got it cheep so who is out there surprise us you never know could be that take over we all have talked about but its time like this it better on the inside than on the OUTER..


I agree Bricks in principle. But where do you get your 'shares traded' numbers from? I saw the 9.269m shares from AMP go through the market on Thursday as an 'off market' trade plus IIRC a few hundred thousand more (?). Then around 700,000 shares went through the market on Friday. That is around 10m shares traded - significant, very significant - but way short of the 19m shares you are claiming was traded. The difference is of course that 19m shares basically means a takeover offer is required, probably next week, under the NZ takeovers code (if all those shares went to one buyer). Whereas buying 10m shares does not trigger such an offer. Are you sure that your figures are right?

SNOOPY

[winner69]

And it doesn't look like the 9 million went to one purchaser as that would have triggered a SSH notice .... either for a new substantial shareholder or one increasing it shareholding by 1% or more

Unless not everything is disclosed .... and that wouldn't surprise me either

[BRICKS]

I agree Bricks in principle. But where do you get your 'shares traded' numbers from? I saw the 9.269m shares from AMP go through the market on Thursday as an 'off market' trade plus IIRC a few hundred thousand more (?). Then around 700,000 shares went through the market on Friday. That is around 10m shares traded - significant, very significant - but way short of the 19m shares you are claiming was traded. The difference is of course that 19m shares basically means a takeover offer is required, probably next week, under the NZ takeovers code (if all those shares went to one buyer). Whereas buying 10m shares does not trigger such an offer. Are you sure that your figures are right?

SNOOPY

SO the numbers who cares millions have traded that means change they only have to notify when they hit +5% and then not straight away don't worry it will come out in the washing 69 still looking on the outside..

[Snoopy]

And it doesn't look like the 9 million went to one purchaser as that would have triggered a SSH notice .... either for a new substantial shareholder or one increasing it shareholding by 1% or more

Unless not everything is disclosed .... and that wouldn't surprise me either


It is possible the near 10% shareholding has been split up. Personally I think it is more likely that the new substantial shareholder (if they exist) has not got around to notifying the market yet. As Bricks says they will have to notify the market 'in time'. Not sure what that time limit is until the NZX policing hounds are set on them. A month? Anyone know?

SNOOPY

[winner69]

Have to assume that the 9 mill shares odd get shared around a few holders .... no SSH since

[BRICKS]

JUST read about KFC world wide is going gang busters and back at headquarters in USA stated that in Britain they will build another 300 stores and train 9,000 chicken chef`s
[what ever that is] and happy to do it, now back home NO notice about the AMP sale
but i think they upwards of 12 months to notify so with this all going on and not that many good things to buy that is SAFE "BRICKS" may resume buying RBD..

[Snoopy]

JUST read about KFC world wide is going gang busters and back at headquarters in USA stated that in Britain they will build another 300 stores and train 9,000 chicken chef`s
[what ever that is] and happy to do it, now back home NO notice about the AMP sale
but i think they upwards of 12 months to notify so with this all going on and not that many good things to buy that is SAFE "BRICKS" may resume buying RBD..

Bricks whatever is happening in the UK market will not help RBD. If you really want to benefit from the worldwide expansion of KFC, I suggest you buy YUM Brands (NYSX listed).

We won't have to wait twelve months to find out where those AMP RBD shares went because the RBD annual report will be due around May.

Nevertheless you do have to be careful what you buy in this market. I have gone back to the old chesnut of shares with relatively inelastic revenues (like utilities and food companies) who have their debt situation well under control.

I have done a sweep of the NZX listed shares and the share that keeps coming to the top of my buy list is RBD. Perhaps we won't see much growth. But that 15% yield I think is incredible with bank deposit rates now below 5%. RBD is about the only retailer that hasn't made a major profit downgrade. Try as I might to find a better retail investment, I can't do it.

Just to prove I haven't got stars in my eyes I am aware of the ongoing negotiations with YUM regarding Pizza Hut franchise renewals. I know that YUM won't be keen to lose half the Pizza Hut chain which could happen if RBD does not renew the big tranche of franchises in 2010. I guess the big unknown is whether YUM can force RBD into a slow and painful exit from Pizza Hut N.Z. as happened in Victoria. The problem is now, what private operator in sensible mind would lay out big dollars to buy a PH Franchise off RBD? And what bank would lend to them? I believe both Chairman Van Arkel and CEO Russel Creedy are the men to talk tough on these franchise renewal deals. 'Roll over and giggle' is no longer an acceptable renegotiation stance in my view. The latest quarterly sales should be out soon, but really until we know the outcome of these Pizza Hut negotiations the medium term profitability of Pizza Hut is uncertain.

Not uncertain enough to put me off investing though. I bought a few more RBD shares last week when the buy order I handed to my broker seven weeks ago was finally acted on!

SNOOPY

discl: hold RBD, YUM

[BRICKS]

Bricks whatever is happening in the UK market will not help RBD. If you really want to benefit from the worldwide expansion of KFC, I suggest you buy YUM Brands (NYSX listed).
-----------------
ONLY stated what HQ, stated knowing it did not assist NZ but the trend is world wide
only yesterday on our ABC news McDonald's is to open 27 ,2009 and 79 the year later
that tells you something..
-----------------

We won't have to wait twelve months to find out where those AMP RBD shares went because the RBD annual report will be due around May.

-----------------
RIGHT
-----------------
Nevertheless you do have to be careful what you buy in this market. I have gone back to the old chestnut of shares with relatively inelastic revenues (like utilities and food companies) who have their debt situation well under control.

I have done a sweep of the NZX listed shares and the share that keeps coming to the top of my buy list is RBD. Perhaps we won't see much growth. But that 15% yield I think is incredible with bank deposit rates now below 5%. RBD is about the only retailer that hasn't made a major profit downgrade. Try as I might to find a better retail investment, I can't do it.

---------------------
BANK deposits in AU have gone underground savings accounts .5% and DEP`s less than 4%
if a slight div reduction did occur which it wont still very GOOD..
---------------------

Just to prove I haven't got stars in my eyes I am aware of the ongoing negotiations with YUM regarding Pizza Hut franchise renewals. I know that YUM won't be keen to lose half the Pizza Hut chain which could happen if RBD does not renew the big tranche of franchises in 2010. I guess the big unknown is whether YUM can force RBD into a slow and painful exit from Pizza Hut N.Z. as happened in Victoria. The problem is now, what private operator in sensible mind would lay out big dollars to buy a PH Franchise off RBD? And what bank would lend to them? I believe both Chairman Van Arkel and CEO Russel Creedy are the men to talk tough on these franchise renewal deals. 'Roll over and giggle' is no longer an acceptable renegotiation stance in my view. The latest quarterly sales should be out soon, but really until we know the outcome of these Pizza Hut negotiations the medium term profitability of Pizza Hut is uncertain.

---------------
PIZZA like water will find its own level as long as the NZ board don't get great ideas
again..
----------------

Not uncertain enough to put me off investing though. I bought a few more RBD shares last week when the buy order I handed to my broker seven weeks ago was finally acted on!

---------------
yer right its a BUY..

----------------
SNOOPY

discl: hold RBD, YUM

HAVE to say this again because it wont send its a BUY,, Regards BRICKS..

[Balance]

A profit upgrade! IN this kind of environment? This stock is gonna rock tomorrow?

[BRICKS]

A profit upgrade! IN this kind of environment? This stock is gonna rock tomorrow?

IT could have not happen to a better STOCK, good on you KFC..

[Balance]

Watch those tubs of KFC fly out of the door as the economic downturn bites deeper and harder. Best value for money.

[Stranger_Danger]

Starting to look solid. Awww how cute, Snoopy and Phaedrus could be in the same stock soon.

[fungus pudding]

Watch those tubs of KFC fly out of the door as the economic downturn bites deeper and harder. Best value for money.


Obviously you are talking about the shares. You couldn't possibly mean the chicken.

[Balance]

Obviously you are talking about the shares. You couldn't possibly mean the chicken.

Best value for money = filling = tasty, fat, greasy, deep-fried.

[Snoopy]

Have to assume that the 9 mill shares odd get shared around a few holders .... no SSH since


Well we know one outfit that wasn't a buyer. SSH notice posted today that Tower had reduced their shareholding below 5%. I must admit I hadn't even registered the fact that Tower had a 5%+ stake. Looking back at the SSH announcements I see they only declared their position on September 18th 2008. Still Tower haven't fully sold out yet, retaining 4.2% of RBD shares. Looks like they sold out of RBD at about the price they bought in at.

The price is holding up at around 70c though. And am I right in saying that turnover has been higher than normal since AMP dumped their stake at the start of February?

SNOOPY

[BRICKS]

Well we know one outfit that wasn't a buyer. SSH notice posted today that Tower had reduced their shareholding below 5%. I must admit I hadn't even registered the fact that Tower had a 5%+ stake. Looking back at the SSH announcements I see they only declared their position on September 18th 2008. Still Tower haven't fully sold out yet, retaining 4.2% of RBD shares. Looks like they sold out of RBD at about the price they bought in at.

The price is holding up at around 70c though. And am I right in saying that turnover has been higher than normal since AMP dumped their stake at the start of February?

SNOOPY

YES today was a smoke screen Tower swings NO real power, but your right about the turnover it seems constant and a slow build so the CAT is not out of the bag YET..

[Nitaa]

YES today was a smoke screen Tower swings NO real powerWhats that mean?

[Phaedrus]

Am I right in saying that turnover has been higher than normal since AMP dumped their stake at the start of February?

You sure are, Snoopy.

Total volume in 28 trading days since the dump:- 5,477,852

Total volume in 28 trading days before the dump:- 2,444,189

Chart supplied on request (if needed)

[Snoopy]

RBD at 80 cents.

Those KFC sure are flying out the door.


I have to admit I got this one wrong. I was sure the share price would stall at the 80c level. But as of this morning a bid of 83c will be needed to dislodge shares from existing shareholder's hands! A gain of 38% in a little over a month while the rest of the market goes down is not a performance any seasoned investor can ignore. It certainly shows the concept of 'investment caution zones' where all investment decisions are put on hold while the broad market slides in a new light. The fact is, there are always shares that are going to do well even in a bear market. It just takes a little more work to find them.

Of course there are other shareholders, like those who have recently added themselves to the Nuplex share register, who have done even better. But from my perspective, investing in Nuplex would have been a huge gamble, and in comparative terms an investment in RBD was near to 'downside risk free'. Why do I say that? RBD has an outlook of strongly growing underlying profits coupled with steadily reducing debt, as the debt is paid down out of those profits. The strongly growing profits would only have been obvious to those who looked behind the headlines which reflected the Pizza Hut problems (that is where doing your homework comes in). Nuplex OTOH, was looking at sharply reduced profits and was crippled with debt and at the mercy of its bankers. A more chalk and cheese situation is something that is difficult to imagine.

I dubbed 2008 'the year of retail', as that is where I saw the best investment opportunities arising. The market hammered retail shares in anticipation of sharply reduced retail profits. What surprised me was that although we have a number of smart retail operators in New Zealand, I couldn't make an investment case that would be better than buying more RBD shares. So my newly allocated 'retail investment capital' all went into buying more RBD shares. Increasing my RBD holding by 40% didn't do anything for diversifying my portfolio. But it sure impacted on my returns. And all this from a company with a culture of management mediocrity!

There will be plenty of my critics who will be wearing an omlette balaclava over RBD. I don't want to dwell on this as even at 82c I am still 20c under my all time average purchase price - even if dividends over the years put me well ahead. But perhaps now you can all see how poorly informed you all were in viewing RBD as a candidate for inevitable bankruptcy. In fact, it is the way that RBD has survived so many years of mismangement that shows how incredibly strong this underlying company is. Let's see what else new train driver Chairman Ted van Arkel can extract from his new charge. Please move right away from the platform while the new conductor, CEO Russel Creedy blows his whistle. We are on a roll. Next stop is $1 per share.

SNOOPY

discl: hold RBD

[Snoopy]

Like KFC flies like its sp but not Homestead Chicken which is awful.


Not surprising as didn't Homestead Chicken get bought out twenty or more years ago? Try cleaning out your refrigerator more often Balance!

SNOOPY

[Phaedrus]

As a "Buy and Hold" candidate, RBD has performed exceptionally poorly. A quick glance at the long-term chart on page 83 shows the long downtrend in gruesome detail. Regardless of dividends, this stock has been a losing proposition for years.

Take a look at this, though. RBD's average daily volume is about 100,000 shares. Every so often, RBD volume abruptly increases - a lot. For the purposes of this exercise, a Volume spike is defined as any daily volume over about 1.8 million shares. Such spikes are marked by blue bars at the top of the chart. The idea here is to buy when a spike forms after a downtrend and Sell when a spike forms after an uptrend. Because many of you do not have access to the market during the day, the returns and entry/exit points shown here are based on buying or selling the day AFTER the signal. Following these signals would have given a compound return of almost 500% in just 4 trades over 12 years. Plus any dividends, of course! This, on a stock that is worth a mere fraction of what it was way back in 1997!

See how this absurdly simple "system" kept you out of RBD for years at a time as the downtrend ground inexorably on. (There were no volume spikes from mid 2005 right through to the end of 2008, for example). Interesting eh?

The latest huge volume spike flagged an excellent 65 cent entry point into RBD. At well over 9 million, this spike was RBD's third largest ever.

http://h1.ripway.com/78963/RBD41.gif

[The BOWMAN]

Phaedrus, this is quite interesting. Looks like I need to look into the volumn a lot more. Waiting to offload the small package I've got.

[BRICKS]

BUT my information did not come from you or NZ, but what you said was very good deduction and common sense, well done. mine came else where and cant disclose
in total just say i told you use it for what you LIKE..

YOUR last comment sounds just like mine the $1.00 BIT..

[Corporate]

Well I had KFC last night for the first time in about 7 years and I was actually quite impressed. The cleanliness of the restaurant, the service and the food, were all good.

I was just in for a snack before hitting town and had a snack deal thing....One chicken drum stick and chips for the bargin price of $3.

The only thing that let it down was that the chips didn't have that chicken salt taste I remembered and is so often talked about.

[BRICKS]

Well I had KFC last night for the first time in about 7 years and I was actually quite impressed. The cleanliness of the restaurant, the service and the food, were all good.

I was just in for a snack before hitting town and had a snack deal thing....One chicken drum stick and chips for the bargin price of $3.

The only thing that let it down was that the chips didn't have that chicken salt taste I remembered and is so often talked about.

ALL you got to do is ASK.. they have alot of CUSTOMERS..

[Nitaa]

ALL you got to do is ASK.. they have alot of CUSTOMERS..It would probabvly be better if they offered. "try out delicious tasting chicken flavoured chips at no extra cost". Something like that anyway.

[BRICKS]

It would probabvly be better if they offered. "try out delicious tasting chicken flavoured chips at no extra cost". Something like that anyway.

COST did not come into it all your got to do is ASK ever..

[Nitaa]

COST did not come into it Isnt that what i said?

What i am getting at bricks is if a company has something specfial to offer that people might like then they should promote it. All the staff have to do is spend 3 seconds mentioning it while they ring it up on the till.

[Grimy]

Don't they only have the chicken taste if they've been hanging around too long?! I've never heard of it as an option.
As an aside, the share price has only started going up since I've started buying Pizzas again. I didn't think 6 pizzas at $6 each would make such a difference!

[BRICKS]

Don't they only have the chicken taste if they've been hanging around too long?! I've never heard of it as an option.
As an aside, the share price has only started going up since I've started buying Pizzas again. I didn't think 6 pizzas at $6 each would make such a difference!

SHARE PRICE prediction is $1.00 your $36 dollars is now in the till it all helps, Hope
you had a good time eating myself don't eat Pizzas but that dose not matter if you want to be part of the action get your SHARE..

[Snoopy]

See how this absurdly simple "system" kept you out of RBD for years at a time as the downtrend ground inexorably on. (There were no volume spikes from mid 2005 right through to the end of 2008, for example). Interesting eh?


Apparently we have a very simple system here which if followed would have produced a near 500% return just by following three simple 'single indicator' rules.

Volume spike after a downtrend = BUY
Volume spike after an uptrend = SELL
Volume spike when in a trading range= IGNORE

The question of interest here is is not

'How did the hypothetical historical trader do'?

But

'Could the real trader take advantage of this single simple indicator system in real time'?

Take a look at that first trade, where our trader made 63% on his invested money. It is true that large volume spikes in trading volume are often good confirmation statistics for trend traders. It turned out that the first large volume spike marked a new uptrend beginning. But think of the alternative scenario. If the stock price had paused and moved downwards on another leg, that volume jump could equally well be seen as the starting point of a new downtrend, with the 'smart money' bailing out. I think even those with modest mathematical skills will appreciate that a 'pattern' cannot be extrapolated from a single data point.

Even the very simplest pattern (a straight line) requires at least two data points, a beginning point and an end point. Even then such a pattern is tentative until it can be confirmed with a third data point.

Moving back to our example then, our 'volume pattern rule' would only be confirmed as having some value after the third volume spike data point. Don't get me wrong, I am not saying that no real trader could have made trades 1 (63% profit), 2 (56% profit) or 3 (48% profit). Just that no real trader would have made these trades based on the simple three rule system that Phaedrus has outlined. And that it would take until this time to gain sufficient market data to ensure the 'three rule theory' could be verified by back testing.

That leaves the latest and ongoing share price rise in which our trader bought in at 65c and is ongoing as the share price rose to 86c today as the only real time trade that this simple 'three rule system' could take credit for. That gain so far amounts to 36%, which is a far cry from the near 500% that our hypothetical historical trader made.

Still 36% in just a few weeks is a gain not to be sneezed at and is certainly superior to the buy and hold investor who if holding RBD now would have endured the share price slide from the equivalent of $2 to just 86c. This buy and hold negative return has naturally enough been offset by dividends over the years summing to 95cps. IOW the dividends paid per share are higher than the market valuation of the company that is left. Clearly then no serious long term analysis of RBD can ignore dividends, as some who I group as the 'dividend deniers' claim.

But where does this simple 'three rule RBD system' leave us? So far it stacks up quite well against 'buy and hold', even if real returns are likely far less than the 500% claimed. But then who is advocating buy and hold at all costs? In fact such a strategy is just another, albeit very crude, market timing strategy where at some point in the future you assume the company will be worth more than at float time.

Alternatively, the strategy that I use can be best summed up as a 'value averaging strategy'. In simple terms this means ignoring the market completely, but having an investment budget so that you feed in smallish equal dollar amounts into your favourite share(s) every six months (for example). When the share price is low your fixed dollar investment will buy more shares. When the share price is high those fixed dollars will buy less. Thus over time most of your shares will be bought at lower prices without having to predict or rely on the direction of the market.

SNOOPY

[duncan macgregor]

SNOOPY, There is none as blind as those that refuse to see. You have a lot of learning to do my friend, open your mind to reality before you go under. Why you persist in your fundamental stupidity blind to the reality of an ever changing market is beyond me. If your analysis was worth anything surely you should have got rid of this dog whose share price is still playing catch up over the last decade. Macdunk

[glennj]

I'm not a holder of this stock and never have been but duncan's post prompted me to have a quick look at recent performance, check a few ratios etc. Current reality is that this stock has been one of the strongest performers on the NZ market! Both in FA & TA terms it's not a dog at the moment and hasn't been in the recent past.

[Balance]

Company bringing forward its reporting date.

Yet another great sign are things are 'clucking' along.

[BRICKS]

SNOOPY, There is none as blind as those that refuse to see. You have a lot of learning to do my friend, open your mind to reality before you go under. Why you persist in your fundamental stupidity blind to the reality of an ever changing market is beyond me. If your analysis was worth anything surely you should have got rid of this dog whose share price is still playing catch up over the last decade. Macdunk

WELL it goes like this $309 million revenue a 7 cent DIV and rising profits down the TRACK..

Some DOG..

[Snoopy]

Current reality is that this stock has been one of the strongest performers on the NZ market!


Restaurant Brands result out today. Usually it is a question of 'buy the rumour sell the fact' with these upbeat profit results. Yet with Restaurant Brands the share price continues to climb on the announcement!

The dividend increase in a climate of dividend cuts was I think the unexpected bonus. On an ongoing basis an annual dividend of 7cps represents a gross yield of 12% based on an RBD share price of 87c. That makes the share still cheap, or does it?

Both the Starbucks and Pizza Hut results were worse than I expected. Also no detail about this deal with YUM regarding the future of Pizza Hut. There has been a full year impairment write off of Pizza Hut goodwill totalling $3.7m. But that still leaves $16.4m of PH goodwill on the books. That doesn't gel with a business unit that I have calculated is losing nearly $9m per year, once all of those extraneous overheads are apportioned.

As for 'evaluating some (Pizza Hut store) sales to independent franchisees', does that sound realistic in this business climate? Master franchiser YUM are known for playing hard ball, so how well will tough talking Ted and 'Rocky' Russel stand up to them? According to today's release, in a month we will know the result of this bout.

Staying on the sidelines for now, but may be back with my cheque book in a month or so.

SNOOPY

discl: hold RBD

[BRICKS]

WE will call it a draw we posted at the exact time, Right a 12% yield try getting that at a bank or finance company just before it goes broke but not RBD people will not stop eating
and drinking coffee even if its only to wash the chicken down the way a head is clear so if the mob don't buy that's there fault as long as they keep sending the div`s the better..

Don'T forget you cant BUY this type of stock in Australia this a NZ special..

[Snoopy]

Right a 12% yield try getting that at a bank or finance company just before it goes broke but not RBD people will not stop eating and drinking coffee even if its only to wash the chicken down

Bad news Bricks. The yield just dropped to 11%.

The good news is that is because the share price is now 91c! I always expected RBD to 'come right', but not as fast as this. At 91c the market capitalisation of the company is now $88.4m.

Question: How high does the market cap have to go before RBD is once again back into the NZX50? At that point we should see another round of buying, this time from the index fund managers.

SNOOPY

[STRAT]

thinking of rbd, whatever happened to bongo 66?
sure hope he didn't blow up and bust with frustration at his beloved rbd...and hes baaaack :eek:


http://www.*************forum.com/

http://www.*************nz.blogspot.com/

[Deev8]

If your analysis was worth anything surely you should have got rid of this dog Is Macdunk advocating the sale of an uptrending share? On of the few uptrending shares in the NZ market.

http://ichart.europe.yahoo.com/c/6m/r/rbd.nz

[Phaedrus]

Duncan, once a dog doesn't necessarily mean always a dog! Circumstances change and no uptrend or downtrend lasts forever. RBD's recent enormous volume spike gave us all a "heads-up" for this stock. Some would have bought RBD on that alone, although it is not good practice to act on the basis of a single indicator. Not long after, however, the former resistance at 69 cents was overcome and RBD was in an uptrend. Then came the break of a trendline that had been unbroken for years. The long OBV trendline was next to be broken and a day later longterm oscillators fired off "Buy" signals - again, for the first time in literally years.

There is money to be made in this market, Dunc. Some really good short-term opportunities have been presenting themselves - regardless of what the long-term outlook may be. With due caution and a defined exit strategy there is no reason not to be dabbling. There is such a thing as being too cautious!

http://h1.ripway.com/78963/RBD414.gif

[BRICKS]

THAT large spike was the AMP 9% and as yet not been answered to the market what a
situation no one except the owners , KNOWS so why don't the PUBLIC..

[Nitaa]

THAT large spike was the AMP 9% and as yet not been answered to the market what a
situation no one except the owners , KNOWS so why don't the PUBLIC..Huh... explain?

[BRICKS]

Huh... explain?

JUST try harder to keep up..

[Nitaa]

JUST try harder to keep up..
lmao......

[Snoopy]

THAT large spike was the AMP 9% and as yet not been answered to the market what a situation no one except the owners , KNOWS so why don't the PUBLIC..


Maybe a partial answer here Bricks?

---------

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

---------

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

[Balance]

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.

[BRICKS]

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.

NZ has a SHREWDEST INVESTOR ? Love to know his NAME..

[Balance]

NZ has a SHREWDEST INVESTOR ? Love to know his NAME..

One of ..., matey. Easy enough to get from going to the share registry - it's public information.

LOL ..... I love how the Australians talk up their directors and investors over the years .... Allco, MFS, ABC, James Packer. Oxiana etc.... billions down the gurgle.

[Balance]

Watch next announcement from RBD in next 2 weeks - it will be a goody! A biggie!

[Snoopy]

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]

NZ has a SHREWDEST INVESTOR ? Love to know his NAME..


I reckon Balance is referring to you Bricks, 'the solid rock at the bottom of the wall'. After all even Graeme Hart lost a billion or so last year. And what with your gains last year on Mr Chips, now followed up by RBD, you must be right up there :-)

SNOOPY

[BRICKS]

Watch next announcement from RBD in next 2 weeks - it will be a goody! A biggie!

AT Paraparaumu store its standing room only at lunch time now the volume has grown
if this is so add all other stores increase and its call MOTZA..

Thanks Snoopy, make my head turn but remember RBD is still selling Mr Chips in store
so they are not far AWAY..

[Balance]

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.



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]

Snoopy, matey, not sure where you got your numbers from.


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!



Balance sheet from latest report show - net debt at $33.6m (not $100m).


Not sure what report you mean Balance. The April 8th 2009 stock exchange profit announcement for FY2009 does not contain a balance sheet.

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'.



Banks are now falling over themselves to lend to RBD. Goodwill totals $23.6m.


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:

$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.



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.


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.

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.



Announcement is imminent and imvho, will also show PH turning a profit and that's why insiders (legally) have been buying.


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?
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'.

[winner69]

Not sure what report you mean Balance. The April 8th 2009 stock exchange profit announcement for FY2009 does not contain a balance sheet.



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

[Balance]

Better still, simply go to RBD''s website. All the infor is there.

Cheers.

[winner69]

Balance .... just the NZX filing appear quicker than waiting for RBD to put them up on their website

[Balance]

Balance .... just the NZX filing appear quicker than waiting for RBD to put them up on their website

Agreed.

In this case, for benefit of Snoopy as we are so far past date when reported.

[Snoopy]

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.



Liabilities as at 28-02-2009 look to me to be close to $61.7m.


Actual liabilities $64.0m

"Bank debt was down by $8.2 million with closing bank debt of $34.3 million." is still right



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.


Correcting the figures

$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!



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.


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:

"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

[Balance]

Director keep buying and moping up stock.

$1.00 very soon.

Dis. Bought some more.

[Balance]

The chickens sure are tasty!

96 cents and 4 cents away from $1.00. Director buying with ears pinned back. Expecting good news?

[Balance]

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.

[Snoopy]

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


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

[fungus pudding]

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!


Your worry meter should register the minute you spot waffle terminology such as 'will provide a positive way forward........'.

[Snoopy]

Spotted an advertisement on TV tonight announcing the imminent foray by Pizza Hut into the supply of pasta dishes.
hiawatha


I wonder if Danny Diab is behind that? The idea has worked in Sydney. Will it be a goer in New Zealand? There isn't another fast food pasta chain operating nationally. But then again how long does it take to prepare two minute noodles in your own kitchen?

SNOOPY

[fungus pudding]

I wonder if Danny Diab is behind that? The idea has worked in Sydney. Will it be a goer in New Zealand? There isn't another fast food pasta chain operating nationally. But then again how long does it take to prepare two minute noodles in your own kitchen?

SNOOPY


Two minutes.

[Balance]

Two minutes.

That's like comparing instant coffee at home to freshly made flat-white at a cafe.

[BRICKS]

MY spies tell me the new 4 square pizza is going great guns and has put more customers back into the Kapiti Road shop , Paraparaumu been one off the worst but now back to LIFE..

[Balance]

Well, it happens tomorrow ... pastahut.

Will be a real winner in times like now - variety, tasty and above all, filling.

Bring it on!

[The Doctor]

if New Lynn KFC is any guide,they are creaming it...cars backed up thru the drive in every evening!

[Balance]

if New Lynn KFC is any guide,they are creaming it...cars backed up thru the drive in every evening!

Sadly, it is the staple food of the lower socio-economic groups and KFC is not exactly healthy. High fat content however means it's very filling and very tasty.

Was told by an airport staff that the latest export from NZ to the Islands is KFC - frozen in polythene boxes to be warmed up on the other side. $250 per pack and they cannot get enough of it over there ... now why didn't I think of that as a business idea!

Pasta to the Islands next?

[Grimy]

if New Lynn KFC is any guide,they are creaming it...cars backed up thru the drive in every evening!

That's probably because it's usually so grotty inside. It's a shame as it is a revamped store, but always cold and messy inside.

[Grimy]

Was told by an airport staff that the latest export from NZ to the Islands is KFC - frozen in polythene boxes to be warmed up on the other side.

I don't think it's all that new. I used to work in Otahuhu until a couple of years ago and boxes were flying (excuse the pun) out the door to the Islands from the KFC there. And when lining up to check in at the airport half the luggage on the plane to Rarotonga is KFC. And why not? A nice piece of KFC is great.

[Balance]

I don't think it's all that new. I used to work in Otahuhu until a couple of years ago and boxes were flying (excuse the pun) out the door to the Islands from the KFC there. And when lining up to check in at the airport half the luggage on the plane to Rarotonga is KFC. And why not? A nice piece of KFC is great.

Sounds like the trend has accelerated as I am told it's unbelievable the quantity being 'exported'. That Ted Van Arkle is a good operator and know how to maximise an opportunity. He made a huge success of Foodtown/Countdown and looks like he is going to do the same with RBD. Amazing what a difference good management can do. Lucky it wasn't sold to private equity a couple of years ago.

Here's to having pasta this week!

[Anna Naum]

Looks like Hell is going to get back to being proper competition for Pizza Hutt.....

Warren Powell, Callum Davies and Stu McMullin, who first opened Hell Pizza in 2003, have bought the New Zealand franchise back from the local owners of Burger King.

[BRICKS]

Looks like Hell is going to get back to being proper competition for Pizza Hutt.....

Warren Powell, Callum Davies and Stu McMullin, who first opened Hell Pizza in 2003, have bought the New Zealand franchise back from the local owners of Burger King.

AND why did Burger King sell because its headed out the front door just the same as
BK in Australia.. HELL is NO match for PIZZA HUT..

[Balance]

Hell Pizza operates in a different market segment from PH.

Watch PH take back market share when the stores are franchised out.

[The BOWMAN]

Hell Pizza operates in a different market segment from PH.


I disagree. When my kids want some pizza, I'll go to Hell because the Pizza is better. But if there was no Hell close by, I'll have to go to Pizza Hut. Just because they are priced differently doesn't mean they compete in the different market segments.

[Anna Naum]

Hell Pizza operates in a different market segment from PH.

Watch PH take back market share when the stores are franchised out.

Balance, could you explain further about the difference in Pizza markets please.

[BRICKS]

I disagree. When my kids want some pizza, I'll go to Hell because the Pizza is better. But if there was no Hell close by, I'll have to go to Pizza Hut. Just because they are priced differently doesn't mean they compete in the different market segments.

AND all your saying is a matter of choice so Pizza Hut has more stores than Hell so
you already know the WINNER..

[Nitaa]

AND all your saying is a matter of choice so Pizza Hut has more stores than Hell so
you already know the WINNER..except quantity doesnt always make quality. In sales who has what market share? eg dominos and all the other main players

[biker]

Just tried one of the pasta dishes. Only two available at the moment. Chicken and mushroom or meatballs and cheese and only in the $17.99, serves four, size.

VERY nice! Prefer it to pizza. Should be a goer I'd say, and my local store said last night there seemed to be a bit of 'pasta for the ladies and pizza for the blokes' going on. Hopefully the result will be increased sales all round.

Nice one Mr Diab. I Hope the shares he continues to buy look cheap from further down the road.

[The BOWMAN]

AND all your saying is a matter of choice so Pizza Hut has more stores than Hell so
you already know the WINNER..

Sign... Thought you could do better.

[Snoopy]

Just tried one of the pasta dishes. Only two available at the moment. Chicken and mushroom or meatballs and cheese and only in the $17.99, serves four, size.

VERY nice! Prefer it to pizza. Should be a goer I'd say, and my local store said last night there seemed to be a bit of 'pasta for the ladies and pizza for the blokes' going on. Hopefully the result will be increased sales all round.

Nice one Mr Diab. I Hope the shares he continues to buy look cheap from further down the road.

Hello from London, where I have sampled the UK 'Pasta Hut'. Obviously a very different product as all the Pizzza Huts here seem to be restaurants. Ordered a salmon pasta, which was penne pasta in a white sauce with a layer of grilled cheese on top served with a small side salad and bread. Not bad and two out of the ten customers who came in while I was there ordered the pasta and no pizza.

SNOOPY

[Anna Naum]

From todays Herald article about the Hell lads and why they think things went wrong at Hell/what they are going to do to get back on top.

www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10572743

[Anna Naum]

From Australia.

http://www.smh.com.au/lifestyle/lifematters/would-you-like-pizza-with-your-salt-20090518-bcpb.html

Would you like pizza with your salt?

MORE than 90 per cent of pizzas sold by takeaway chains and supermarkets contain levels of salt so high they are a danger to health, a report has found.

A survey of salt levels in 115 takeaway pizzas produced by Pizza Hut, Domino's and Eagle Boys found more than two-thirds contained double the daily recommended amount of salt for an adult.

The pizza with the highest sodium was Pizza Hut's BBQ Meat Lovers, which contained 13 grams of salt - 327 per cent of an adult's recommended daily amount.

[BRICKS]

From Australia.

http://www.smh.com.au/lifestyle/lifematters/would-you-like-pizza-with-your-salt-20090518-bcpb.html

Would you like pizza with your salt?

MORE than 90 per cent of pizzas sold by takeaway chains and supermarkets contain levels of salt so high they are a danger to health, a report has found.

A survey of salt levels in 115 takeaway pizzas produced by Pizza Hut, Domino's and Eagle Boys found more than two-thirds contained double the daily recommended amount of salt for an adult.

The pizza with the highest sodium was Pizza Hut's BBQ Meat Lovers, which contained 13 grams of salt - 327 per cent of an adult's recommended daily amount.

WHO cares as there is salt in every food cooked not as if it was one lump of 13 grams
of salt ready to grab you ,, Wash down with RED wine.. that will do the TRICK..

[Scuffer]

the salt makes ya wanna buy a bottle of coke to go with ya pizza :eek:

[Nitaa]

the salt makes ya wanna buy a bottle of coke to go with ya pizza :eek:I noticed Maccas have incresaed their salt levels in their products and not just their chips. Taste great but not good for you.

[Dr_Who]

Tried their pasta last night, not too bad. In fact, it is quite nice for a fast food joint.

[thomaswlg]

i think that it would be best to buy shares in fast food restaurants as they will probably recover the fastest and people are buying more of them because they do not wanna spend at expensive places

[Balance]

Tried their pasta last night, not too bad. In fact, it is quite nice for a fast food joint.

Definitely value for money. For $17.90, a large serving of pasta plus bread plus free garlic bread. Watch Lower Hutt and Porirua PH take off!

[BRICKS]

i think that it would be best to buy shares in fast food restaurants as they will probably recover the fastest and people are buying more of them because they do not wanna spend at expensive places

WELL young thomas your up and writing keep it up and also BUY the SHARE
for you RBD is a STARTER..

[Balance]

$1.06 and stock has dried up.

Next target - $2.00.

And it will reach there.

[Grimy]

Aah yes, I remember the talk of here comes $3.00 - many years ago (when it was at $2.20). If only I'd sold then.................

[biker]

$1.06 and stock has dried up.

Next target - $2.00.

And it will reach there.

On what basis?

[Balance]

On what basis?


It will take the market to wake up to the massive turnaround happening in RBD as the market has been disappointed so often in the past. The market and RBD's sp hav been reacting to ever improving results as they are announced.

The smart money has been buying before the results.

[BRICKS]

WELL with a notice out today it appears that RBD will run PH for another 10 + 10 years
Sell any thing that`s not making a profit get a smaller chain to boot this is profit talk
and good to hear after all these years of down hill so the wheel has turned for the better
even W69 mite even BUY ,yet..

[BRICKS]

WELL with a notice out today it appears that RBD will run PH for another 10 + 10 years
Sell any thing that`s not making a profit get a smaller chain to boot this is profit talk
and good to hear after all these years of down hill so the wheel has turned for the better
even W69 mite even BUY ,yet..

WELL W69 today is PAY day.. YUM, YUM..

[Snoopy]

$1.06 and stock has dried up.


Buying demand by index mangers as they scramble for shares as RBD rockets back into the NZX50? 1st July was the RBD index inclusion date.

This change was notified some time in advance, but how long do index mangers have to get their house in order? Anyone know?



Next target - $2.00.

And it will reach there.


To put some 'balance' back into this thread, a few brokers are now listing RBD as an 'outperform'. But where were they when the share was trading at 80c and below?

I have just updated my Warren Buffet style overview of RBD on the other channel. The unfortunate trend is the better KFC looks, the worse Pizza Hut looks. Pizza Hut's real (after administrative overhead) performance was a $9m loss in FY2009, or nearly $7m if you ignore the goodwill writedowns. Whichever way you look at things though, Pizza Hut losses are running at record highs.

My 'divisional analysis' requires certain assumptions about the way head office expenses and interest charges are allocated inside head office across the three opearting divisions. One way of checking how good my allocation assumptions are is to compare the tax that the company really pays to what I calculate it pays. I was in close agreement with the official figures up until FY2006. In 2007 I was out by $2m and by 2009 I was out by $5m (estimated tax paid $8m, actul tax paid $3.3m). One explanation is that the KFC rebuild program began in earnest from FY2006 and that more human and capital resources have been allocated to the KFC rebuild than I have assumed. Nevertheless I believe that my underlying assumption over the long term, that resources allocated should be proportional to business unit turnover, is sound.

An 'underlying profitability' of $6.5m, or 6.7cps gives PE of 15 using a share price of $1.04.
$1.04 is probably fair given the improvements that should be possible within the business.
Eliminating Pizza Hut losses would boost underlying earnings to around $12.6m (13cps) - say five years out. At that point, given the poor record of this company's growth into other markets in the past, I would pick real growth to stop dead.

I would think KFC NZ alone would justify a 'long term' PE ratio of 11 to 13. So in five years time we might expect a 'fair value' RBD share price of $1.43 to $1.69. That's a nice improvement on today's share price, but still some way short of $2.

Like you Balance I do believe the RBD share price will get to $2. However there my not be anyone who currently posts on this forum still alive to see that day.

SNOOPY

discl: hold RBD 'long term', and now showing a capital profit on my holdings (at long last)

[Balance]

Chairman expects profit to be around $12m this year. That puts stock on a PER of 8.4 times.

Turnaround of PH should boost profit to at least $15m year after. Then, there's a couple of new businesses RBD is exploring to launch into the market - bought on EBITDA multiple of 5 times.

Market will get excited and put stock on PER of 14 times to price in growth prospects, strong cash flow and defensive profile. Stock is at $2.00 plus.

Heck, nobody gave the stock a chance of seeing $1.00 again last year.

[Snoopy]

Chairman expects profit to be around $12m this year. That puts stock on a PER of 8.4 times.


That is $12m *excluding one off items* Balance. Now ordinarily I would agree with you and forget about these 'one off items' as not being relevant to the ongoing business plan. However, in 2007 there was a one off Pizza Hut NZ goodwill write off of $1.142m.

In 2008 there was a 'one off' Pizza Hut NZ goodwill write off of $1.187m.
In 2009 there was a 'one off' Pizza Hut NZ goodwill write off of $3.698m.

No further 'one off' write offs are anticpated, provided total PH sales grow between 2.8 and 4% per year for 2010-2012. Management are assuming reduced operating expenses going forwards. Total first quarterly sales for 1Q2010 Pizza Hut were up 2.4% on the prior year to $15.5 million. But annualise that figure and you get sales of $62m which is down another 4% on last years absolutely disastrous figures!

The projected growth figures take into account the closing of 8 red roof restaurants and 3 delcos. So with Pizza Hut outlets dropping from 93 to 82 over the next three years, same store outlet sales will need to grow between 3.2 and 4.5 percent per year every year for the next three years.

Balance, do you still want to bet against there being another 'one off' write off Pizza Hut NZ goodwill in FY2010?



Turnaround of PH should boost profit to at least $15m year after.


The 'turnround' has been going to happen since June 2006 after returns first dropped. For FY2005, EDITDA for Pizza Hut ws $13.63m. For FY2009 $2.77m. Pizza Hut has a huge mountain to climb.



Then, there's a couple of new businesses RBD is exploring to launch into the market - bought on EBITDA multiple of 5 times.


Please tell us more! What new businesses?



nobody gave the stock a chance of seeing $1.00 again last year.


Bricks and I were buying, even if no-one else was.

SNOOPY

[Balance]

RBD can write-off all the goodwill of KFC and PH for all the market cares.

What's the real value of goodwill?

As for other businesses - plenty out there now that RBD is rid of its problem child. I guess the risk is that RBD does another PH Victoria.

[moimoi]

Taco Bell would be good one i reckon.

[Snoopy]

RBD can write-off all the goodwill of KFC and PH for all the market cares.

What's the real value of goodwill?


In the year 2000 RBD Balance Sheet, the goodwill listed as a result of the Eagle Boys acquisition was $23.186m. That goodwill rose out of the laying out of real money, of *my* money (for I was shareholder back then) so RBD could buy the leases and burn the logos of some 50 Eagle Boys stores.

Whatever the real value of goodwill is now, it was cold hard cash then. And it still hurts now to see that cash frittered away.

Everyone is allowed to make mistakes, as without mistakes you don't learn. But when RBD writes off their investment in PH Victoria, then PH New Zealand and (soon?) Starbucks NZ one has to ask the question. What has mangement learned? And exactly what expertise are mangement bringing to these businesses?



As for other businesses - plenty out there now that RBD is rid of its problem child. I guess the risk is that RBD does another PH Victoria.


And you know why RBD got into Pizza Hut Victoria don't you? Becuse of their success in managing Pizza Hut New Zealand! Their real success was in eliminating a whole chain of retail competition in NZ with one stroke. Once real competition reemerged though, the flakiness of RBD mangement was exposed for all to see.

SNOOPY

[Snoopy]

Taco Bell would be good one i reckon.


Taco Bell has been mentioned as a possibility before, back in the Jim Collier days(?)

However back then, mangement decided to run with the Starbucks concept for their third arm instead. I wonder if that decision will prove a mistake?

I have done quite bit of reading on Taco Bell, mainly because I am a YUM (the parent master franchise holder) shareholder. The interesting thing is, in the United States, Taco Bell has more outlets than KFC. Yet outside the USA, Taco Bell is outnumbered by KFC in a ratio of 50:1. And Taco Bell has had plenty of time to grow overseas, as they were first franchised 45 years ago.

Taco Bell is listed as the market leader in the 'Mexican Quick Service Restaurant' sector. Does that mean Taco Bell owes its existence to millions of Mexicans coming over the border?

I am left wondering if Taco Bell can be made to work in another country. Wasn't there a Taco Bell in Sydney a few years ago? What happened to that? Are there any in Mexico?
How do they compare with 'real' Mexican food outlets?

SNOOPY

[moimoi]

Taco Bell are a similar format to BK and McDonalds, its takeaway food, but its mexican.

They were a very cheap meal. There is a mexican place on Victoria St in Auckland that has been there 20 years or so. The decor doesn't appear to have changed and its been packed every time i have been there. It just makes me wonder if cheap and cheerful mexican food could go quite well here.

[BRICKS]

Taco Bell are a similar format to BK and McDonalds, its takeaway food, but its mexican.

They were a very cheap meal. There is a mexican place on Victoria St in Auckland that has been there 20 years or so. The decor doesn't appear to have changed and its been packed every time i have been there. It just makes me wonder if cheap and cheerful mexican food could go quite well here.

NO new arm for RBD just when the company seems to becoming good we don't need
Mexican food or Indian curry STAY with what we got,, PLEASE NOTE the population of NZ;

4,313,746 work it OUT..

[Snoopy]

In my home town back in the states (population of 13.5K), there is a shop that contains a KFC, Pizza Hut, & Taco Bell.

There is only 1 service counter, from which you can order from any of the three menus.


To give people some idea of how big your home town is Yankiwi, it is similar in size to Levin (population 15k). I stand to be corrected here, but I think Levin has a KFC and a Pizza Hut as two separate stand alone units. I have read about the 'multibrand' units that operate in the USA. As at year end 2008 there are 4629 such units, but only 40 of those offer food from three concepts.

For me the NZ version of multibranding (those shops that sell fish and chips and burgers for instance) is a turn off. I tend to think that outlets that try to do too much end up doing mediocre job of everything. What is your opinion of how multibranding works in your home town Yankiwi? Do you think it would work for Restaurant Brands in New Zealand?

SNOOPY

[winner69]

Your old mate Bongo rates RBD a buy and says at least a 'dollar and a half'

He's also glad that they finally listened to him and going to hock off some the Puzza Hut stores .... something he told them do years ago when he had a significant shareholding

Thought you would like to know that Snoopy

[Snoopy]

NO new arm for RBD just when the company seems to becoming good we don't need
Mexican food or Indian curry STAY with what we got,, PLEASE NOTE the population of NZ;

4,313,746 work it OUT..


In my view Taco Bell would be a competitor for those largely Greek Souvlaki places that serve Pita bread wraps, with carved spit meat of your choice. There are certainly plenty of those about. Am I correct that Taco Bell serves up mince in a hard corn chip style shells? If that is so, it does sound like a second rate option.

I once thought of opening a Somali takeway outlet as an antidote to the high fat western takeaways. I would have served up only white rice and not much of it. When customers inevitably complained I would have told them to be thankful for what little they got. Maybe Mexican's are similarly grateful for Taco Bell?

SNOOPY

[Snoopy]

Your old mate Bongo rates RBD a buy and says at least a 'dollar and a half'

He's also glad that they finally listened to him and going to hock off some the Puzza Hut stores .... something he told them do years ago when he had a significant shareholding

Thought you would like to know that Snoopy


It is all very well rating RBD as a buy. But has Bongo bought any? And have any of Bongos investments in other retailers been as successful as my own investment in RBD in particular or retail in NZ in general over the years?

I am a true long term investor in RBD, having been on the share register since the company listed in June 1997 (albeit in a small way). I bought the shares not to 'get rich quick', but for income. Over the years I have built up my shareholding a lot, with what I would call judicious buying. My overall capital gain over that time has been, wait for it, nothing. Any time soon I expect Phaedrus to pop up with a long term chart to show what a failed investment this has been. However, if you look at the dividends that have been paid over the years you will find a rather different picture.

Dividends since listing have totalled 96c per share, including the effect of the 1:12 bonus issue on 30th March 2000. We can therefore look at the average compounding return aover those twelve years as follows:

($1.02)(1+i)^12=($1.02+$0.96)

This gives an average compounding return of 5.7% after tax or 8.5% before tax - all of it due to dividends in my case. This is a good result which has been achieved despite the fiasco of the RBD expansion into Australia, and in more recent times the huge problems with Pizza Hut in New Zealand.

Of course those shareholders who bought in at the float at today's equivalent price of $2.03 - the literal buy and hold brigade- will not be doing so well. The secret to investing in RBD for me has been buying when the price is low and people cannot see the underlying strength of the business above the raft of negative news.

Over the last twelve years my overall 'retail investment strategy' in NZ has been surprisingly focused. Before I first held RBD I held no retail shares on the NZX at all. For a while I became a WHS shareholder too. But I sold out after the Australian expansion failed (for a nice little profit it must be said) into the Foodstuffs takeover offer at $5. Over the subsequent months I carefully reinvested that capital into RBD as well.

Overall then my time with RBD has been a roller-coaster ride with more down times than up times, yet I have come out well ahead. Therein lies a lesson to the 'dividend denying' out there.

SNOOPY

discl: Have held RBD for 12 years over which time the share has grown from my smallest NZX investment, to the point today (boosted by the partial share price recovery over the last few months) to my largest NZX investment.

[Phaedrus]

I am a true long term investor in RBD, having been on the share register since the company listed in June 1997. My overall capital gain over that time has been, wait for it, nothing. Well, there it is again Snoopy. Another 10 - 12 year "investment" for zero capital gain - this, in spite of RBD having risen over 70% recently. It is painfully obvious that you are doing something wrong.


Any time soon I expect Phaedrus to pop up with a long term chart to show what a failed investment this has been.Failed is such a strong word Snoopy. I would prefer to categorize it as a very poor investment. Especially when you compare it to the average market gains of about 100%, over this period.


However, if you look at the dividends that have been paid over the years you will find a rather different picture.'Fraid not. RBD has been in a long-term downtrend for the last 8 years, and has a confirmed trendline in place. Over this extended period of time it has fallen an average of 15 cents/year - notwithstanding the recent 70% rise! A dividend of around 8 cents/year is not enough compensation for such capital destruction.

http://h1.ripway.com/78963/RBD816.gif


The secret to investing in RBD for me has been buying when the price is low.I don't think too many people would be interested in emulating your "secret", Snoopy! You also need to be able to sell when the price is high. Buying is only half the story.


Overall then my time with RBD has been a roller-coaster ride with more down times than up times...See that? Right there is the main reason for Snoopy's conspicuous lack of success. "More down times than up times"? Folks, that's called a DOWNTREND. You don't want to be buying (or holding) downtrending stocks - whatever their dividend yield! Why fight the market?


I have held RBD for 12 years over which time the share has grown from my smallest NZX investment, to the point today to my largest NZX investment.People, read that statement carefully. This is PRECISELY what happens when you "average down" and it is the other reason for Snoopy's woeful underperformance. This undesirable state of affairs is the logical consequence of continually adding to a losing investment, of buying more of a downtrending stock as the price progressively falls. YOUR WORST INVESTMENT BECOMES YOUR BIGGEST INVESTMENT. This is the exact opposite of what you want. Your largest investment should be your BEST. This occurs quite naturally as a logical result of following the old rule "Cut your losers and let your winners run".

When your biggest investment has returned zero capital growth in 12 years, something is FUNDAMENTALLY wrong.

[Zito]

I agree with you Phaedrus, especially with respect to your largest investment being your best by 'natural selection'. Always cut your losers.

I note that RBD is respecting its long-term trendline linearly on your chart rather than the oft-drawn logarithmic trendline. This indicates to me that the trendline is falling at a greater average percentage from one year to the next.

If it was a log chart...am I correct in thinking (because I haven't checked for myself yet) that the price action is even further away from the trendline than it appears on the chart above? Why would anybody bother with it.

All this talk about Pizza Hut, KFC, blah blah blah is a waste of time when one look at a chart like this tells you all you need to know about whether it is a good investment.

NO.

[emearg]

Some people on this site are long term investors and tend to hold a share once bought. Others buy and sell actively and are traders.

People compare the results obtained like they are comparing apples with apples.

The one thing none of the traders mention is that they are liable to pay tax on their gains. Liable is the key word here. If they don't declare the income then they won't pay it. But if the IRD look at their earnings then they will end up paying it plus plenty more in penalties.

Remember, the buyers intention is what matters to the IRD, not how long you hold a share. If you bought a share with the intention of trading it, then even if you hold it for five years the IRD expects tax to be paid on any gain.

It would be good to see more accurate comparisions being made by the participants of these forums.

[BRICKS]

Some people on this site are long term investors and tend to hold a share once bought. Others buy and sell actively and are traders.

People compare the results obtained like they are comparing apples with apples.

The one thing none of the traders mention is that they are liable to pay tax on their gains. Liable is the key word here. If they don't declare the income then they won't pay it. But if the IRD look at their earnings then they will end up paying it plus plenty more in penalties.

Remember, the buyers intention is what matters to the IRD, not how long you hold a share. If you bought a share with the intention of trading it, then even if you hold it for five years the IRD expects tax to be paid on any gain.

It would be good to see more accurate comparisions being made by the participants of these forums.

Never worry about other peoples TAX payments just worry about your OWN..

[Snoopy]

Well, there it is again Snoopy. Another 10 - 12 year "investment" for zero capital gain - this, in spite of RBD having risen over 70% recently. It is painfully obvious that you are doing something wrong.

Failed is such a strong word Snoopy. I would prefer to categorize it as a very poor investment. Especially when you compare it to the average market gains of about 100%, over this period.


Phaedrus the NZX50 is a gross index that includes dividends. You have to add on the dividends to get a comparable result. So my gains have actually been 94% (or 100% in round figures). More or less the same as the index. Not 'zero' as you claim.



'Fraid not. RBD has been in a long-term downtrend for the last 8 years, and has a confirmed trendline in place. Over this extended period of time it has fallen an average of 15 cents/year - notwithstanding the recent 70% rise! A dividend of around 8 cents/year is not enough compensation for such capital destruction.


You have set up a straw man Phaedrus. The capital loss of buying twelve years ago while just waiting and collecting dividends is not a sufficient reward - Quite right. But that is not what I would recommend. And that is not what I did.



People, read that statement carefully. This is PRECISELY what happens when you "average down" and it is the other reason for Snoopy's woeful underperformance. This undesirable state of affairs is the logical consequence of continually adding to a losing investment, of buying more of a downtrending stock as the price progressively falls. YOUR WORST INVESTMENT BECOMES YOUR BIGGEST INVESTMENT. This is the exact opposite of what you want. Your largest investment should be your BEST. This occurs quite naturally as a logical result of following the old rule "Cut your losers and let your winners run".


"Your largest investment should be your BEST." Sorry I can't agree with that Phaedrus. As a long term investor I am always working towards a balanced position, not a skewed one.
So I am always looking to add to my worst investment before topping up my best.

I notice you are speaking as though there are only 'good' and 'bad' investments Phaedrus. For a long term investor this distinction is not the way investments are defined. There are plenty of good investments out there that I wouldn't touch because they are poor value. Likewise there are 'bad' investments out there that I seek because the market has discounted them out of all proportion to their actual 'badness'. If my biggest investment is also my best, then this is a potentially dangerous situation. Such an investment becomes vulnerable to the double investment risk of earnings reduction and earnings multiple reduction. Long term investment is all about balancing relative value. Not seeking out the 'good' and the 'bad'.



When your biggest investment has returned zero capital growth in 12 years, something is FUNDAMENTALLY wrong.


It is not all about capital growth Phaedrus, it is about total returns. You can't just continue to ignore dividends. As shown in this case this has lead you to a massive error of judgement. Your view is that I have made nothing in the last twelve years, when simply adding up the dividend returns means that the sum of dividend returns has actually been 94%. A huge difference which you refuse to acknowledge.

The main reason for the lack of market capital growth of RBD Phaedrus is that:

1/when the company listed in 1997 is because it was floated with a puffed up PE multiple.
2/ when a company pays out almost all of its operational earnings as dividends (as RBD did until two years ago) you would not expect the price to rise.

There has been no significant underperformance here Phaedrus.

A return of 5.7% after tax compounding return will turn $1000 into

1000(1+0.057)^12= $1945 after twelve years, such is the power of compounding

On average that equates to an annual return of $1945/12= $162.08 per year.

That means that if you wanted to get that same return at the bank, you would have to look for a bank blackboard one year return rate of 16.2% -after tax. Or 24% before tax (assuming a tax rate of 33%). How many banks do you know year in year out that have offered a return like that?

My investment in RBD has done exactly what I went into it for. It has paid a good regular income over twelve years and outperformed the banks *significantly*. Sure my capital has not grown, but neither has it shrunk. This is exactly what you would expect from an analagous bank term deposit in fact. You need to look at your measuring stick Phaedrus, if you think a performance like that is poor.

SNOOPY

[Snoopy]

There has been no significant underperformance here Phaedrus.

A return of 5.7% after tax compounding return will turn $1000 into

1000(1+0.057)^12= $1945 after twelve years, such is the power of compounding

On average that equates to an annual return of $1945/12= $162.08 per year.

That means that if you wanted to get that same return at the bank, you would have to look for a bank blackboard one year return rate of 16.2% -after tax. Or 24% before tax (assuming a tax rate of 33%). How many banks do you know year in year out that have offered a return like that?


Before anyone else picks me up on these calculations, I should point out that in my attempt to simplify the maths in calculating my returns, the figures above do not tell the correct story.

Income investors in RBD at any one time are considering what the yield is at the time they make their investment. This is not the same working out an average yield by summing the income over the whole investment period and dividing by the time of the whole investment period as I have done above. The instantaneous yield changes both with the prevailing share price and the actual dividend paid out. If we now look at an investor who invested on 30th September each year, the actal yield achieved over the subsequent twelve months was as follows:

Year, RBD Share Price 30th Sept, Dividend, Net Yield, Gross yield, Typical Bank rate

1997: $2.37, 3c, 1.3%, 1.9%, 6.5%
1998: $0.80, 7.5c, 9.4%, 14.0%, 6.5%
1999: $1.30, 10.25c, 8.0%, 11.9%, 5.5%
2000: $1.14, 9.0c, 7.9%, 11.8%, 7.0%
2001: $1.56, 8.0c, 5.1%, 7.7%, 5.5%
2002: $1.72, 9.0c, 5.2%, 7.8%, 5.2%
2003: $1.25, 9.0c, 7.2%, 10.7%, 4.9%
2004: $1.29, 9.0c, 7.0%, 10.4%, 5.6%
2005: $1.40, 9.0c, 6.4%, 9.6%, 6.25%
2006: $1.08, 5.5c, 5.1%, 7.6%, 7.0%
2007: $0.87, 6.5c, 7.5%, 11.1%, 8.0%
2008: $0.65, 7.0c, 10.8%, 16.0%, 7.75%

The second to last figure in each row is the return that should be compared to prevailing term deposits, the last figure in each row. As you can see in all years bar the first (1997), there has been a big advantage in investing in RBD instead of in the bank. (Forget that 24% equivalent figure in my last post).

The numbers are different but the conclusion is not altered. If you can invest in RBD using whatever method you choose - and retain your capital as I have done-, this has been a very successful investment over the years.

SNOOPY

[moimoi]

Hi Snoopy,

Any idea what inflation has averaged at over your 12 year time frame.?

cheers
Moi.

[Lego_Man]

I'm not going near this argument, but Snoopy will also have enjoyed tax advantages from not having his capital gains taxed.

[Zito]

The point that is often missed is that using technical entry/exit points does not necessarily a trader make.

It is quite possible to use TA and be a long-term holder of a stock in much the same way that Snoopy has with RBD. Just because you use TA to time your entry and exit points does not mean that you are automatically tax liable. You could have held FBU continuously for 4 years using TA entry and exit from 2003-2007, collecting both dividends and capital gain along the way.

[Snoopy]

Hi Snoopy,

Any idea what inflation has averaged at over your 12 year time frame.?

cheers
Moi.


Yes. Exactly the same amount as if I had just put my RBD money in the bank. :-P

SNOOPY

[Snoopy]

Well I can say the FA/TA debate has now come in to perspective for me. :o

Am I correct in thinking the following?

Snoopy & the other FA crowd compare their earnings to a bank deposit.


I don't speak for the 'other FA crowd' Yankiwi, only myself.

Generally I would compare my New Zealand sharemarket investment performance to an NZX index. However, that part of my portfolio they I have invested in for 'income' I would tend to compare to a bank term deposit. RBD has always been an 'income investment' for me.

SNOOPY

[Snoopy]

I'm not going near this argument, but Snoopy will also have enjoyed tax advantages from not having his capital gains taxed.


Not in this case Lego Man. My average entry price was $1.02. As I write this the market price is $1.02. I haven't made any capital gains, so my 'saving' in 'capital gains tax' (trading income tax) is nil.

A trader who has made some trade profits along the way (if there is such a person) will be ahead on a capital basis. Because the fact that they have paid tax on capital gains over and above trading costs indicates that they have actually made a capital profit. And any capital profit is better than none. (Except that is if being out of RBD means that you have missed out on the greater benefits of the dividends that the 'buy and hold' investor has banked by just doing nothing.) Clear as mud yet?

SNOOPY

[Jay]

I'm not going near this argument, but Snoopy will also have enjoyed tax advantages from not having his capital gains taxed.

That is because he has not made any. :rolleyes:
Simple example:
Has a $1.00 earns 30c
Tax 10c say
Result = capital now $1.20

Snoopy's capital still $1.00

[Phaedrus]

Snoopy is of course not the only one with the unfortunate penchant for "investing" in downtrending stocks. Click here (http://www.sharetrader.co.nz/showthread.php?p=246222)to view a particularly cruel illustration of this practice in action. Different stock. Different punter. Same problem.

We are covering old ground here. Periodically I pull Snoopy's tail by highlighting the negative effects of his ignoring prevailing market sentiment when timing his stock purchases. Click Here (http://www.sharetrader.co.nz/showthread.php?p=140798&highlight=$6#post140798)to see how little our respective stances have changed since last time!

Snoopy is obviously quite happy with his system and content with the results he is achieving. I guess there can never be consensus when our aims are totally different. Mine is to maximise capital gain and his is to maximise dividend yield. Each to his own, eh?

[duncan macgregor]

We all invest for the exact same reason, and that is to increase our wealth at a higher rate than bank interest. If we get fixated with dividends, completely ignoring the share price downtrend, then that is being straight out stupid. The market in general follows great trends in both directions, from over priced to under priced. Regardless if you are a FA expert or not, it is completely unwise to hold shares in prolonged downtrends. The market always appears to know before the facts become general knowledge.
This raises the question of market trend being more important than fundamental analysis.
Farm service companies always lag behind farm gate prices, so why not study farm gate prices before making your buy or sell decision. I can tell for instance what time of day to buy or sell my mining shares simply by looking at the previous nights price charts.
Nickel goes up five pc buy on opening, nickel goes down five pc sell on opening. The company as long as it is a good solid company will follow the price level of the commodoty so why study the fundamentals. The market in general will rise or fall regardless of individual company fundamentals making it a very risky place for FA investors. Macdunk

[STRAT]

RBD, unfortunately, doesn't sell nickel. And I doubt whether there is much correlation between chicken prices, assuming one could ascertain what they were, and RBD's share price.
hiawathaI always knew that stuff on Pizza hut Pizzas and in KFC wasnt real chicken :D

[Lego_Man]

We all invest for the exact same reason, and that is to increase our wealth at a higher rate than bank interest.

I thought it was to get rich or die trying

[BRICKS]

BRICKS says to all the OLD knockers of KFC eat your words and watch Snoopy head for
the bank with a smile on his face,, Its the Mr Chips days all over again a large DIV increase should follow and just keep building in the years to come as in the past this is STOCK..

[Snoopy]

BRICKS says to all the OLD knockers of KFC eat your words and watch Snoopy head for the bank with a smile on his face,, Its the Mr Chips days all over again a large DIV increase should follow and just keep building in the years to come as in the past this is STOCK..

This one has taken patience, hasn't it Bricks. But after years of share price declines, it looks like the payoff is happening in a big hurry, over a matter of months. Of course the share price declines do not matter if you are prepared to buy on the dips and pocket those dividends, which have remained at a steady 11% or so yield, as the 'penalty cost' for holding an apparent non-performer.

The RBD share price recovery has been much faster than I would have expected. So it is just as well I wasn't trying to 'time the market' with my RBD share purchases.

The tragedy is those 'smart traders' who have ridden the share price rise from 70c to just over a dollar will have sold out over the last month or so as the share price stagnated and dropped below the hypothetical trend line. Thus not only will they be facing a capital gain tax bill. They will have missed today's quantum share price leap. Sad, but that is what happens when you don't have any fundamental understanding of the underlying value of the businessess that you own and are only concerned with what other people think: that mysterious 'smart money' contingent. In this internet age, the small investor is no longer at the disadvantage they once were, regarding access to information. But of course to take advantage of this information, this requires you to read those NZX releases yourself and do your own homework. And that is all too much effort for those who think they deserve to gain something for nothing, by riding on the coat tails of the 'smart money'.

An upgraded $15m projected profit over 97m shares on issue equates to earnings of 15.5cps. At $1.20, the projected PE ratio for FY2010 is now under 8. This turnaround has been no surprise to me because it was inevitable once Pizza Hut stopped losing bucket loads of money, even if the rest of the business showed zero growth. Needless to say there is absolutely no chance of me selling any of my RBD shares at a price anywhere near $1.20. And to contemplate selling at 90c or 70c or whatever the share price got to last year just because the share price was going down - as some people on this forum were exhorting me to do - can now be seen for the insanity it was.

SNOOPY

discl: hold RBD (but will not be heading for the bank yet with any of my booty.)

[Phaedrus]

The RBD share price recovery has been much faster than I would have expected. So it is just as well I wasn't trying to 'time the market' with my RBD share purchases.Snoopy, it is because you make no attempt to 'time the market' that your RBD returns have been so abysmal. You ignore market sentiment. You buy in downtrends. You fight the market.


The tragedy is those 'smart traders' who have ridden the share price rise from 70c to just over a dollar will have sold out over the last month or so as the share price stagnated and dropped below the hypothetical trend line. They will have missed today's quantum share price leap. Complete and utter nonsense. Here is an update of the chart posted on page 90. It is quite evident that the indicators that got 'smart traders' into RBD at around 70 cents have NOT triggered ANY Sell signals and are in fact nowhere near signaling any.
RBD was in a steep uptrend then went into a tight $1.00 - $1.06 trading range. Statistically, these break to the upside 70% of the time, so on this basis alone, the odds clearly favoured continuing to hold RBD.


Sad, but that is what happens when you don't have any fundamental understanding of the underlying value of the businessess that you own and are only concerned with what other people think. Snoopy, what really is sad here is the unfortunate fact that your deep fundamental understanding of RBD has not helped you at all - your biggest investment has returned zero capital growth in 12 years! The "other people" you refer to are the market and collectively they know all there is to be known about RBD. What they think really does matter. A lot. Those that ignore market sentiment (like you) pay a heavy price. Those that DO concern themselves with 'what other people think' have made more capital gain from RBD in 7 months than you have made in 12 years.

http://h1.ripway.com/78963/RBD919.gif

[Snoopy]

Snoopy, it is because you make no attempt to 'time the market' that your RBD returns have been so abysmal. You ignore market sentiment. You buy in downtrends. You fight the market.

Snoopy, what really is sad here is the unfortunate fact that your deep fundamental understanding of RBD has not helped you at all - your biggest investment has returned zero capital growth in 12 years!


Last month RBD had given me zero capital growth in twelve years Phaedrus. But now my capital return is +15%. Granted over twelve years that amounts to little more than 1% per year. But add that to the average gross dividend yield of 10% and I have still earned 11.3% gross per year through good times and bad times. That return is not abysmal as you put it. In fact it is slightly better than market returns.

Of course although I haven't tried to time the market, I have taken advantage of the market when prices are low. That 11% return is averaged over twelve years, but my average holding time for RBD is only three years (over which time the company has relatively outperformed), due to most of my investment going into this company in the last couple of years. That means *my* average returns are actually rather better than 11% per annum, when I take into account when I owned most of those shares. So despite not trying to time the market, I did use market timing - after the event, with the RBD share price bashed down - to boost my returns.

To summarize there has been no underperformance from RBD, for me, because I was prepared to buy low when others were not. My total returns have been approximately twice that of putting my money in the bank, which is exactly what I set out to achieve with this income based investment.



Complete and utter nonsense. Here is an update of the chart posted on page 90. It is quite evident that the indicators that got 'smart traders' into RBD at around 70 cents have NOT triggered ANY Sell signals and are in fact nowhere near signaling any.
RBD was in a steep uptrend then went into a tight $1.00 - $1.06 trading range. Statistically, these break to the upside 70% of the time, so on this basis alone, the odds clearly favoured continuing to hold RBD.


Ah so you are still on board Phaedrus! It is good that you didn't just sell on the (steep) trendline break and your indicators have kept you in the game. We might make an investor out of you yet!

SNOOPY

discl: hold RBD

[Snoopy]

BRICKS says to all the OLD knockers of KFC eat your words.
Its the Mr Chips days all over again a large DIV increase should follow and just keep building in the years to come as in the past this is STOCK..

KFC - whoops sorry RBD - continues to march upwards (closed at $1.23 today) despite the market being down since I last posted. Therein lies a lesson for those who refuse to buy anything while the market is trending down. Not all shares slavishly follow the direction of the index.

I am not so sure that a large dividend increase will follow the increase in positive cashflow. The non cash goodwill writedowns will make the balance sheet look sicker and probably hasten the resolve of RBD to pay down debt.

At least the stemming of losses at Pizza Hut takes away the uncertainty around individual branches being saleable. RBD now has a choice with their debt reduction program. They can either sell Pizza Hut branches, or repay debt by diverting the improved cashflow in that direction rather than increasing the dividend (or both). Either way I think RBD will be in a substantially better position two to three years down the track when compared to now, even if sales growth stalls from now on.

SNOOPY

discl: hold RBD

[Dr_Who]

What do you guys think of Hells Pizza going into the lower end pizza sector to compete with Dominos and Pizza Hut? I personally think Hell is making a wrong move that they will regret.

Have to say Pizza Hut's pizza taste better than Dominos.

[Snoopy]

What do you guys think of Hells Pizza going into the lower end pizza sector to compete with Dominos and Pizza Hut? I personally think Hell is making a wrong move that they will regret.


I can't say I have heard of Hell Pizza going downmarket Doc. Do you have a link?
I am surprised as didn't the founders (as master franchise holder) object to cutting quality proposals by the previous owners?

I did a bit of a search and saw on Trademe by chance that Hell Taradale and Hell Whangaparoa are both up for sale. It will be interesting to follow those auctions as an indicator as to how much RBD might get selling individual Pizza Hut stores.

SNOOPY

[BRICKS]

WELL as stated by BRICKS up goes the DIV 50% to 4.5 cents and at this rate could be
10 cent year end , Well we told you all with McDuck with all his Quacking & Quacking
Snoopy take a BOW..

[beacon]

Well deserved Snoopy. And Bricks

[BRICKS]

WELL RBD cracked over $1.50 and climbing is this a $2.00 stock as when it was FLOATED..

SNOOPY`s bow is still coming only thing is he is a very modest PERSON..

[Snoopy]

WELL RBD cracked over $1.50 and climbing is this a $2.00 stock as when it was FLOATED..


Did you see all of those news releases on October 21st Bricks? Russel Creedy the MD buying more shares at $1.37 on the way up. And director and substantial shareholder Danny Diab continuing to purchase too, with some in his latest tranche purchased as high as $1.47. These guys must believe there is a lot more to come from RBD yet! The only reason I won't be purchasing more RBD myself is that I have a full hand already as far as RBD is concerned.

Even at the highest trading price today, $1.56 as I write this, RBD is on a projected PE of little more than ten. Debt has been halved in just six months, without the benefit of any asset sales still to come. I hope RBD doesn't get to $2. If it does, I might have to think about selling some (perish the thought).

What a pity you and I are the only ones who will admit to holding RBD Bricks, after the charts for so long lead many to believe it was going broke. Oh and Phaedrus now holds too I think. But he is keeping a low profile. Still smarting at telling me off for purchasing those RBD shares at around 90c when they were on the way down a couple of years ago I would guess.

When the last of New Zealand's high peaks finally sinks beneath the waves in a combination of global warming induced rising sea levels, earthquakes and tidal waves and the final obituary of this country is written, who will go down as the greatest New Zealander ever?
Will it be Helen Clark for her great United Nations humanitarian works? Sir Ed for his inspirational achievements and difference he made to so many of the mountain people of Nepal? Or will it be the man that has put more bread in New Zealand school lunchboxes than any other person ever? I refer of course to the former 6 year head of Progressive Enterprises supermarkets, the company that sold more loaves of bread to mothers of the nation than any other. And now he is our Chairman of Chicken: the grizzled and great Ted Van Arkel, otherwise known as 'the saviour' (of Restaurant Brands)!

SNOOPY

discl: hold RBD

[macduffy]

Great post, Snoopy!

Havn't felt so inspired for years!

I'm surprised that our techies havn't piled in to that uptrend. Perhaps they have?

;)

[Nitaa]

Did you see all of those news releases on October 21st Bricks? Russel Creedy the MD buying more shares at $1.37 on the way up. And director and substantial shareholder Danny Diab continuing to purchase too, with some in his latest tranche purchased as high as $1.47. These guys must believe there is a lot more to come from RBD yet! The only reason I won't be purchasing more RBD myself is that I have a full hand already as far as RBD is concerned.

Even at the highest trading price today, $1.56 as I write this, RBD is on a projected PE of little more than ten. Debt has been halved in just six months, without the benefit of any asset sales still to come. I hope RBD doesn't get to $2. If it does, I might have to think about selling some (perish the thought).

What a pity you and I are the only ones who will admit to holding RBD Bricks, after the charts for so long lead many to believe it was going broke. Oh and Phaedrus now holds too I think. But he is keeping a low profile. Still smarting at telling me off for purchasing those RBD shares at around 90c when they were on the way down a couple of years ago I would guess.

When the last of New Zealand's high peaks finally sinks beneath the waves in a combination of global warming induced rising sea levels, earthquakes and tidal waves and the final obituary of this country is written, who will go down as the greatest New Zealander ever?
Will it be Helen Clark for her great United Nations humanitarian works? Sir Ed for his inspirational achievements and difference he made to so many of the mountain people of Nepal? Or will it be the man that has put more bread in New Zealand school lunchboxes than any other person ever? I refer of course to the former 6 year head of Progressive Enterprises supermarkets, the company that sold more loaves of bread to mothers of the nation than any other. And now he is our Chairman of Chicken: the grizzled and great Ted Van Arkel, otherwise known as 'the saviour' (of Restaurant Brands)!

SNOOPY

discl: hold RBDVery Touching. Cinderella story in the making no question.

Snoop dog. As more of a FA person myself, even i didnt want to touch RBD (and still dont) but congrats to you and Bricksy. U coped the flak and now many of those that gave it to you are nowhere to be heard.

Well done and may the Cinderella story continue.

[Deev8]

Last month RBD had given me zero capital growth in twelve years Phaedrus. But now my capital return is +15%. Granted over twelve years that amounts to little more than 1% per year. But add that to the average gross dividend yield of 10% and I have still earned 11.3% gross per year through good times and bad times. That return is not abysmal as you put it. In fact it is slightly better than market returns.
My records show that my RBD investment has returned 10.8% per annum after tax since December 2003, which is a similar figure. It may not be a "get rich quick" spectacular type of return, but over a 6 year period it's more than acceptable.

Edit: Using today's closing price rather than last Friday's, it's 12.2% per annum after tax - even better!

[Snoopy]

My records show that my RBD investment has returned 10.8% per annum after tax since December 2003, which is a similar figure. It may not be a "get rich quick" spectacular type of return, but over a 6 year period it's more than acceptable.


RBD closed today at $1.55. So my own total capital gain is now 52%. Over the twelve years I have held that represents a compounding rate of capital growth of 3.5%. Add that to my dividend yield of around 10% and my total anual return has increased to 13.5% (after tax) or something approaching 20%pa before tax. Not spectacular enough for some, but enough to see off the NZX50 now by a useful margin now. And unlike the index, because the dividends have been so high and steady, shareholders have been able to make their own decision as to whether they reinvest their dividends or spend them.

For me this has turned into a model investment, but only because I was prepared to buy and keep buying while the share price was low. The 'buy at the float' and hold investors still won't be popping any wine corks, although even they will have earned around 3.4% per annum before tax. That is a lot better than investing in (any?) finance company.

SNOOPY

[Phaedrus]

What a pity you and I are the only ones who will admit to holding RBD Bricks...Oh and Phaedrus now holds too I think. But he is keeping a low profile. Still smarting at telling me off for purchasing those RBD shares at around 90c when they were on the way down a couple of years ago I would guess.Bad guess, Snoopy! I would have thought that you were the one that was smarting, though! I was very consistent in my disapproval of your averaging down as you "topped up" your RBD holdings at $1.60, $1.30, $1.24 etc etc all the way down. Every so often I would kindly post a chart and gently point out to you that RBD was still in a downtrend. Some charts highlighted the steady capital destruction as RBD's long-term downtrend ground inexorably on. As you said in 2006 "most of my holding has been bought in the last couple of years, during the time RBD has suffered from the most derision on this forum". That would be from me and MacDunk, I guess! It would be good to look back at those charts but unfortunately Ripway has gone down, taking all my old posted charts with it, so these no longer appear on ST. I am now using Photobucket as my web host - I hope they will prove to be more reliable.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/RBD1023.gif


I'm surprised that our techies havn't piled in to that uptrend. Perhaps they have?MacDuffy, where have you been? There have been plenty of RBD charts posted, showing good entry points. Even the most casual glance at a chart should show you that virtually any TA system would have got you into RBD at 65 - 75 cents.

[macduffy]

Hi Phaedrus.

I was referring to the lack of posts to that effect. So the techies were quietly accumulating on the way up?

;)

[Phaedrus]

So the techies were quietly accumulating on the way up?No - that's not what techies do. They buy when there are buy signals.

[Snoopy]

It would be good to look back at those charts but unfortunately Ripway has gone down, taking all my old posted charts with it, so these no longer appear on ST. I am now using Photobucket as my web host - I hope they will prove to be more reliable.


Your charts may not have gone for good Phaedrus

-------

Ripside Interactive, Inc., which includes Villagephotos.com and Imagecave.com has experienced multiple hardware failures, as well as denial of service attacks over the last two weeks. We have made a significant investment in new hardware, replaced multiple devices, load balancers, and we are still having issues with connectivity. We are continuing to work on this issue non-stop and expect to have the problems resolved by Saturday.

------

SNOOPY

[BRICKS]

LOOKING topie and a number comes through so BRICKS bought a few to top of his account
before resume its post UPWARDS.. and as they are cum div is very NICE..

[emearg]

http://www.sharechat.co.nz/article/91ba1e1e/daily-share-chat-restaurant-brands.html

Daily Share Chat: Restaurant Brands

By Jenny Ruth

Restaurant Brands' KFC store transformation program "continues to deliver extraordinary returns," says Macquarie Equities analyst Warren Doak.

The average increase in sales in the first year of a transformed store is 19%, he says. That, and an acceleration of the program, coupled with new menu offerings and new store openings, are expected to underpin strong same-store sales growth for at least the next three years," Doak says.

"Management's focus is now unashamedly 100% on the core KFC business with management expressing great confidence in the medium-term outlook."

Doak says his forecasts are very conservative relative to management guidance but, even so, Restaurant Brands "continues to trade on remarkably undemanding valuation multiples."

He is expecting net profit, excluding non-trading items, will come in at $16.9 million for the year ending February 28, a 39.5% increase on the previous year.

Doak says the Pizza Hut chain showed a marked improvement in operating performance in the first half but the company remains committed to a controlled sell-down.

The Starbucks chain proved to be the most economy-sensitive brand and its first-half performance was disappointing. "A new management team and a renewed focus on core operations is expected to underpin an improved second-half performance." Doak has a $1.70 per share 12 month price target.

BROKER CALL: Macquarie Equities rate Restaurant Brands as outperform

[BRICKS]

ON Saturday night felt like some KFC so over we GO to my surprise chock a block store love this story did a quick mental sum and concluded this is profit so just out tonight profit will be up 50% or 18 cents a share this will mean a 10cent DIVIDEN..

[meesham]

ON Saturday night felt like some KFC so over we GO to my surprise chock a block store love this story did a quick mental sum and concluded this is profit so just out tonight profit will be up 50% or 18 cents a share this will mean a 10cent DIVIDEN..

And look at the price go up this morning. Some people call RBD boring, I'm pretty happy holding a "boring" stock like this.

[Snoopy]

I would have thought that you were the one that was smarting, though! I was very consistent in my disapproval of your averaging down as you "topped up" your RBD holdings at $1.60, $1.30, $1.24 etc etc all the way down. Every so often I would kindly post a chart and gently point out to you that RBD was still in a downtrend. Some charts highlighted the steady capital destruction as RBD's long-term downtrend ground inexorably on.


How things change. The 'capital destruction' referred to here has all been reversed and all of what some would term my 'averaging down' is back in the black! So much for averaging down (even though I hate that term) not working. Buying RBD while it was cheap for me has certainly proved an excellent investment. Yet even at $1.63, RBD is sitting on a PE of 9.3 to 10.5 after yesterday's profit upgrade. So no sign of RBD being overvalued yet, and the dividend yield remains excellent. Mind you, I'm not taking any credit for predicting the RBD share price rise this year. I just selected RBD to rise 'eventually' and have been caught out by the ferocity and pace of what has happened. Of course being 'caught out' when you are heavily invested in RBD already is not such a bad thing.

The most optimistic forecast issued by an independent analyst before yesterday was $1.80. That figure is looking very attainable now.

SNOOPY