And there she goes. This is another gem identified by Robbo. Next stop $1.50.
cheers
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And there she goes. This is another gem identified by Robbo. Next stop $1.50.
cheers
Sell side disappearing, RFG finally seems to be ready for some action[:p]
Still grossly undervalued though at PE of 10[:0]
hehehe, more media coverage;) I'm sure the announcement of dividends (6.25c per share) will make heaps of investors interested too!
http://www.qbr.com.au/index.cfm?stor...p=displaystory
Retail Food Group bolsters full-year sales + profit forecasts
Thursday 30 November 2006
Retail food brand franchisor Retail Food Group has upgraded its full-year new store opening target after confirming that it expects to almost achieve its original full-year forecast in the first six months of this financial year.
The company has originally forecast that it would open 25 new Donut King and bb’s café outlets this financial year, but confirmed at this week’s AGM that it now plans to open 35 new outlets. Retail Food Group expects to have 284 Donut King and 69 bb’s café outlets at June 30, 2007.
CEO Tony Alford says the new store openings achieved in the first half of this financial year had been the most significant in the company’s history.
"The continued proliferation of franchised outlets is a result of the company’s long-standing policy to manage outlet growth in a consistent, sustainable and conservative manner," he says.
"Donut King outlet growth is expected across all states this financial year, with the majority in Queensland and New South Wales where the company has historically experienced strong and consistent growth in outlet numbers.
"At the same time, the rationalisation and repositioning program for bb’s café was substantially completed during the last financial year, with the company now looking forward to a conservative and sustainable growth phase."
Alford adds that the company is confident of achieving all its forecasts this financial year, in particular network sales growth to increase by 9.5% to $156.7 million and an EBIT result of $11.75 million.
The company’s FY2007 financial forecast did not factor in the benefits of the additional 10 outlets expected to be commissioned during the financial year as well as the potential upside to be delivered from the commissioning this financial year of the central manufacturing facility and coffee roasting joint venture as well as the undertaking of its other growth strategies.
"Based on the network sales growth achieved in the first quarter of this financial year, we are confident of achieving this forecast. In the September quarter, network sales increased 2.03% for bb’s café and 6.6% for Donut King.
"We are also pleased to report that the average weekly sales and average transaction value continue to trend positively for both systems," he says.
wahh? is that a real or anticipated dividend announcement, tommy?
Source:Quote:
quote:Originally posted by senor guacamole
wahh? is that a real or anticipated dividend announcement, tommy?
http://www.gcbulletin.com.au/article..._business.html
"Mr Cowley said Retail Food Group was on target to pay its forecast dividend of 6.25c a share this financial year."
Bloody good dividend if you ask me, but not sure if it is fully franked. I never buy a stock for the sake of dividends, but an added bonus doesn't hurt either:)
Fully franked and was forecast in the prospectus.
Thanx halebop for da clarification!Quote:
quote:Originally posted by Halebop
Fully franked and was forecast in the prospectus.
Finally RFG is trading above the float price ($1) after a good five months... glad I bought heaps at the low 80c, I don't think we'll ever see the stock that cheap again[:I]
Considering that even PFL (Patties Food) floated at a premium, the lack of interest in RFG over the past few months has been astonishing. .. perhaps sugar-laden donuts aren't sweet and sexy enough these days for many health-conscious, obesity-battling investors (oops, politically-correct term may be "weight-challenged investors") who prefer blaming fast food for their poor lifestyle choices[}:)]
It would be very interesting to see how they expand into Asia, as there are many valuable lessons to be learnt from the likes of Mister Donut which operates very successully in Japan and other Asian countries (Mister Donut is now owned by Dunkin Donuts but retains its brand still in Asia). The key to success for food businesses in Asia is adapting to local tastes without sticking to the original menu offerings. Mister Donut even offers yum-cha in Japan!
Hi Tommy, great example of success in Asia with Mr Donut, and also how they've had to adapt their menu to local tastes. Had never heard of that outfit before.
Chinese cakes and bread are terrible. No donuts at all. Market opportunity? Hard to tell!
On milkshakes, which RFG sells, there are a number of low quality milk or powdered milk drinks. Iced Coffee (at McDonalds) is very popular...but obviously a foreign concept. I bought an iced coffee from one McDonalds, where instead of keeping the coffee cold (and cream on top) they made the coffee piping hot and the cream melted and got all mixed in together [xx(]. They assured me this was how an iced coffee was meant to be made!
The problem for RFG making milkshakes would be where to get the milk from; in China they generally use powdered milk. If RFG outlets provided real milk in their milkshakes, could be a big hit.
Errrr, anyway, back to the figures.
I noticed that average weekly sales (AWS) are lagging forecasts. This has been made up for by a substantial increase in the number of outlets.
Not sure how they calculated AWS...did it include or exclude all these new stores?
Also concerned at talk of "offsetting" weaker consumer spending on doughnuts with increased franchise establishment fees revenue which implies no increase in forecast NPAT is warranted.
Hi Oneup,
In regards to Mister Donut, well I lived in many countries so know more about local businesses in Asia than the average aussie investor:)
RFG would be stupid not to take a leaf or two out of Mister Donut's successful business model in Asia (actually I need to correct the above post because I think Dunkin Donuts no longer has a stake in Mister Donut's Asian operations, I think it is now operated by Japanese cleaning products/services company Duskin in Japan and joint ventures in other countries if my memory is correct.)
For example check out their menu:
http://www.misterdonut.jp/menu/index.html
http://www.misterdonut.ph/op-otherdelights.htm
http://www.misterdonut.com.tw/..%5Cproduct%5Cindex.htm
More info:
http://www.answers.com/topic/mister-donut
http://www.misterdonut.ph/misterdonutphilippines.htm
http://www.misterdonut.com.tw/
If Donut King is to expand into developing countries like China, India and Indonesia, then supply of food ingredients may be the key as you highlighted... but that can't be too difficult considering that they seem to be very good at supply chain management. I would be more worried about their menu content and pricing, and their target demographics (marketing and branding strategy).
Ensuring consistent, good quality supply would probably be more difficult in countries like South Korea and Japan where customers are super-critical of inconsistent product/service quality, not to mention the high costs that cannot be passed on to consumers in the form of high price necessarily due to cut throat competition!
I will also look into the average weekly sales figures, BTW what was the forecast?? I'm having trouble finding it...
Hi Tommy, I didn't mean to suggest that raw ingredients sourcing is the key. However it is likely a much bigger issue than in Australia/NZ. I recall McDonalds was forced to set up its own beef farms in India or somewhere, just to make sure it could sell safe beef and to international standards.
I would imagine pricing and creating demand as you say will be of paramount importance.