RBD - Restaurant Brands

[Snoopy]

Jeez RBD closes at $15,00

Is that an all time high?

Might get to $20.00 by end of next year

Yes 15 bucks is definitely an all time closing high, even if it was below the intraday high of $15.12. I had another look at that FY2020 RBD report today. Except in New Zealand, the only territory where all RBD stores were completely closed for 5 weeks, the figures would suggest that RBD was otherwise powering ahead through Covid-19. Even in NZ, EBITDA as a percentage of sales held steady over the year.

The Hawaiian result was particularly impressive, with sales up 6.5% with two fewer restaurants in operation (7.7% same store growth). Pizza Hut was the star, with Hawaiians resonating with the 'no touch contact-less delivery' rolled out with curbside delivery. The demise of 7 old style dine in restaurants, replaced with kiosk style stores, was a bonus. Did you know the largest Pizza Hut operator in the USA, 'NPC International' went into Chapter 11 bankruptcy last year? Although 950 of those Pizza Hut restaurants bounced back under new ownership, by Rynn Restaurant Group, 300 Pizza Hut stores were lost, primarily 'dine in units'. The shift from Pizza Hut dine ins to delcos, with hindsight looks like it really started in New Zealand, under RBD twenty or so years ago. This, and the pre-emptive restaurant refurbishment programs at KFC restaurants makes 'our Russel' a real 'poster boy' for master franchise holder 'YUM Restaurants' globally.

Australian same store sales were up 2%, despite Covid-19 restrictions.

The Californian crew performed 'well above expectations' and should perform better with fewer Covid-19 restrictions. What is more the FY2020 year contained only four months contribution from them. So even if group sales are static for FY2021, that will mean an 8% rise in EBITDA for the whole RBD group just from twelve months of Californian ownership! I am pretty sure I know why they did so well too. Just look at that picture on p18 and p189 of AR2020. I reckon the whole senior management team over in California have been hypnotized. They are totally convinced that 'our Russel' is the reincarnation of 'The Colonel' and will do anything for him.

The biggest thing I can see that has changed since the 'Global Valar S.L.' taking control, is the rise and rise of delivery, especially at KFC, coupled with the improvement in on line ordering apps. Delivery was mostly from third party labour like 'Uber eats' and I am picking much of that trade is incremental. Can RBD keep up their run rate? I wouldn't bet against them! However at a share price of $15 we are looking at a backwards looking PE, annualised for the Californian acquisition, of over 30. Not cheap, but then I have said that for a few years now.

SNOOPY

discl: happy holder of my residual post takeover shareholding, but not adding more at today's prices.

[winner69]

Jeez RBD closes at $15,00

Is that an all time high?

Might get to $20.00 by end of next year

Jeez RBD closes a few cents off 16 bucks

Might get to 20 bucks THIS YEAR …..not end of next year

[Rawz]

Jeez RBD closes a few cents off 16 bucks

Might get to 20 bucks THIS YEAR …..not end of next year

$9m traded today.
SP fairly high now. Happy to hold but not buying at these levels.. $10m shy of a $2b company. Who would have thought. Credit to management

[Snoopy]

Jeez RBD closes a few cents off 16 bucks

A 40% rise in share price this year does seem excessive. Unless that Taco Bell really takes off in NZ, It is interesting to read the reviews for the newest NZ store in Christchurch. Still a 30 minute wait in the car to get served as of last week, which was two weeks after opening!

https://www.google.com/search?channe...9985d7f3a55e,1,,,

Quite a few 'five star' and 'one star' experiences. So it seems to be polarising which isn't entirely bad news. As long as there is enough demand from a steady core of highly satisfied customers Taco Bell should do well in Christchurch

Might get to 20 bucks THIS YEAR …..not end of next year

You know what to do to make it happen Winner. Give up those Oysters and Chips and get down to that new up market KFC city store in Courtenay Place instead. Bring all those bowling club mates of yours to get them excited. One quarter pack and one RBD share from Sharsies. What a combo!

SNOOPY

[Sideshow Bob]

RBD Q2 Sales Announcement - NZX, New Zealand’s Exchange

BD Q2 Sales Announcement

29/7/2021, 1:29 pmMKTUPDTE29 July 2021
ASX/NZX

Restaurant Brands Delivers Solid Sales Growth for the Second Quarter

Restaurant Brands’ total sales for the second quarter to 30 June 2021 were $280.9 million, an increase of 53.3% (including trading from its California acquisition last year).

The increase in sales of $97.6 million was as a result of a recovery from prior year’s COVID-19 trading restrictions (including Government-mandated COVID-19 store closures in April in New Zealand), coupled with the inclusion of trading for the California acquisition, 11 additional stores in Australia, and strong same store sales growth in all regions.

COVID-19 continues to impact the business, resulting in a higher mix of drive through and delivery sales in all markets.
Total year to date sales were $540.6 million, an increase of 41.0% on the prior year (including the California acquisition).

Company owned store numbers were up by 60 on the equivalent period last year to 350, primarily as a result of the acquisition of 69 stores in California in September 2020.

New Zealand

Second quarter sales for New Zealand were $124.1 million, an increase of $47.5 million or 61.9% on a total basis and 14.0% on a same store basis.

KFC, Pizza Hut and Carl’s Jr. all showed solid same store growth, whilst the newly opened Taco Bell stores continue to trade at expected levels.

Total year to date sales were $239.3 million, an increase in total of 37.0% on the prior year and 12.5% on a same store basis
The comparative total sales growth was assisted by the loss of four weeks of trading in April last year as a result of Government-mandated COVID-19 store closures, which resulted in lost sales of approximately $33 million in the quarter.

Store numbers decreased by four during the quarter to 132, with the sale of six Pizza Hut stores to independent franchisees partly offset by the opening of two new stores (KFC Takanini and Taco Bell Eastgate, Christchurch).

Australia
Second quarter sales for Australia were $A60.7 million ($NZ64.9 million), an increase of 32.9% in total, primarily due to reduced COVID-19 trading restrictions, new store openings late last year and store acquisition activity.

Same store sales were up 9.5% (local currency), with drive-through store sales continuing to grow strongly; however mall and in-line inner city store sales have yet to recover to pre-COVID-19 levels.

Total year to date sales were $A114.8 million ($NZ123.0 million), an increase of 21.6% on a total basis on the prior year and 5.2% on a same store basis.
Store numbers increased by one during the quarter to 76, following the opening of a new Taco Bell store in Green Square, Sydney. Compared with the prior year they were up 11 with acquisitions (five stores) and new store builds (six stores).

Hawaii

Second quarter sales in Hawaii were $US37.2 million ($NZ51.9 million), an increase of 4.7% on a total basis and 10.1% on a same store basis (local currency). Sales in $NZ were lower due to the 15% appreciation of the New Zealand dollar compared to the prior year second quarter.

Pizza Hut continues to respond well to the increased demand for home delivery. The small downturn last year in Taco Bell sales has reversed following some lifting of COVID-19 restrictions.

Total year to date sales were $US72.7 million ($NZ101.0 million), an increase of 5.7% on a total basis on the prior year and 9.9% on a same store basis.
Store numbers remained steady during the quarter at 73 stores.

California

Second quarter sales were $US28.7 million ($NZ40.1 million), up on both prior year levels and pre-purchase expectations.
Total year to date sales were $US55.2 million ($NZ77.3 million).

Store numbers remain unchanged from the 69 stores acquired in September 2020.

Half Year Results
The company expects to release its half year trading results on 24 August 2021.

Authorised by:
Russel Creedy Grant Ellis

[Sideshow Bob]

Onwards and upwards....!!


Restaurant Brands Half Year Financial Results 2021 - NZX, New Zealand’s Exchange

Restaurant Brands Half Year Financial Results 2021

24/8/2021, 9:08 amHALFYRDirectors’ Report to Shareholders

For the six months ended 30 June 2021
(1H 2021)

Key Highlights

($NZm) 1H 2021 1H 2020 Change ($) Change (%)
Total Group sales 540.6 383.4 +157.2 +41.0
Group NPAT (reported) 34.5 11.2 +23.3 +208.0
• Total Group sales for the six months to 30 June 2021 (1H 2021) were $540.6 million, up $157.2 million on the previous half year (1H 2020). This is the result of the inclusion of the California business in 2021 and the adverse impact of COVID-19 in 2020.
• Net Profit after Tax for 1H 2021 was $34.5 million (27.66 cents per share), up $23.3 million on 1H 2020. The current result includes recognition of $11.4 million of loan forgiveness under the US Paycheck Protection Program (PPP).
• Brand EBITDA before G&A was up $26.5 million to $89.9 million, of which $12.7 million came from the inclusion of a maiden profit from the new California division. The comparison was enhanced by the effect of COVID-19 store closures in New Zealand in the 1H 2020 result*.

Group Operating Results

Directors are pleased to report that Restaurant Brands New Zealand Limited (RBD) has earned a Group Net Profit after Tax (NPAT) of $34.5 million for the six months ended 30 June 2021 (1H 2021). This is up $23.3 million on the last half-year’s reported result. Although the company continues to face challenges from COVID-19 the operating results have remained strong across all divisions.
The result includes $77.3 million in sales and $12.7 million of brand EBITDA from the newly acquired California division.

This, combined with the adverse effect of COVID-19 on the 1H 2020 results, compromises the opportunity for direct comparisons between the two half years’ reported results. Comparisons at a reported profit level are further distorted by the recognition of $11.4 million ($US8.1 million) in relation to the PPP loan drawn down last year at the beginning of the COVID-19 pandemic, that was forgiven during the period.

After adjusting for the PPP loan, the underlying NPAT would be $23.1 million, up $11.9 million. This increase is due to rolling over the adverse effect of COVID-19 on the 1H 2020 results, the addition of the new Californian business and the strong trading results in the current year.

Total store sales hit a new high of $540.6 million, up $157.2 million or 41.0% on 1H 2020, thanks to the inclusion of $77.3 million in sales from the California business (acquired in September 2020). Very strong same store sales growth from the other divisions also contributed.

Combined brand EBITDA at $89.9 million was up $26.5 million (41.7%) on 1H 2020*, with the increase arising from strong sales growth in the current year, a $12.7 million contribution from the California division and the COVID-19 impact on the prior year’s results.

Restaurant Brands’ store numbers now total 350, up 60 on the 1H 2020 – again largely due to the inclusion of 69 stores in California. This is partly offset, however, by the sale of New Zealand Pizza Hut stores to independent franchisees. There are now 132 RBD-owned stores in New Zealand, 73 in Hawaii, 69 in California and 76 stores in Australia.
*Including government grant of $22.1 million in 1H 2020.

New Zealand Operations

New Zealand store sales were $239.3 million, up $64.7 million or 37.0% on 1H 2020. Particularly strong sales in KFC and Carl’s Jr. made an impact here, as well as rolling the five week COVID-19 lockdown in 1H 2020 (an estimated $40.0 million in lost sales). Same store sales were up a healthy 12.5%.

EBITDA was $43.1 million, a $9.5 million or 28.3% increase on 1H 2020 as a result of the strong store sales performance and rolling the five week store closure in the June 2020 result*. EBITDA margin at 18.0% was slightly softer on prior year with some cost pressures and the mix of less profitable Taco Bell brand sales as this business continues to build.
Actual 26 weeks 30 June 2021

Actual 26 weeks 30 June 2020 Change ($) Change (%) Store sales ($NZm)
239.3 174.6 +64.7 +37.0
EBITDA ($NZm) 43.1 33.6* +9.5 +28.3
EBITDA as a % of Sales 18.0 19.2
Store Numbers 132 150
*Including government grant of $22.1 million in 1H 2020.

The result has been led by another strong performance from KFC combined with Carl’s Jr. where sales continue to grow through both the delivery and store channels. At this stage, Taco Bell contributes only a small proportion of the New Zealand business sales with the five stores opened to date continuing to track in line with expectations.

Operating profit for the NZ division (excluding the effect of NZ IFRS 16) was $28.7 million (up 68.5%).
The Pizza Hut sub-franchising process continued with seven stores sold to independent franchise operators and two new stores opened by independent franchisees over the first half year taking the total number of stores in the wider Pizza Hut network to 105. The effect of these franchisee store sales on total RBD owned store numbers was offset by one new KFC store opening in Takanini, Auckland, and the fifth Taco Bell store (first in the South Island) opening in the Eastgate Shopping Centre, Christchurch. Both are trading ahead of expectations.

The KFC Takanini store that opened in April 2021 incorporates a range of innovations that improve sustainability, including use of solar panels and energy efficient water heating. Customer experience is also enhanced through new features such as a dual lane drive-thru and a separate click & collect area.

An additional four Taco Bell stores and two KFC stores are expected to open before the end of the year.
KFC is proud to be celebrating its 50th anniversary in New Zealand with the first store having opened in Royal Oak, Auckland in 1971.

Australia Operations

In $NZ terms the Australian business contributed total sales of $NZ123.0 million (up 24.1%), a store EBITDA of $NZ16.3 million (up 37.9%) and operating profit (excluding the effect of NZ IFRS 16) of $NZ5.6 million (up 106.3%).

In $A terms total sales in Australia were $A114.8 million, up $A20.4 million (or 21.6%) on last year, primarily due to the acquisition of five additional KFC stores in February 2021, the effect of additional store openings, and solid same store sales growth (up 5.2 % for the half year).

Actual 26 weeks 30 June 2021 Actual 26 weeks 30 June 2020 Change ($) Change (%)
Sales ($Am)
114.8 94.4 +20.4 +21.6
Store EBITDA ($Am) 15.2 11.3 +4.0 +35.3
EBITDA as a % of Sales 13.3 11.9
Store Numbers 76 65

Australian operations continue to face challenges with COVID-19 lockdowns. These restrictions have adversely impacted dine-in sales across the network and many of the mall and in-line city store sales are operating below pre-COVID-19 levels. During the initial COVID-19 lockdown restrictions the Australian business successfully expanded home delivery services and generated further growth in KFC mobile ordering. Both initiatives continue to drive strong sales growth through these channels. With continued investment in existing stores in the portfolio and a particular emphasis on driving workplace safety, operational excellence and digital innovation that enhances customer experience the business has succeeded in mitigating some of the impact of the current COVID-19 restrictions.

Store EBITDA margins of $A15.2 million (13.3% of sales) were up $A4.0 million or 35.3% on last year. Although store EBITDA is up on last year this is primarily due to the increase in sales from store acquisitions and new store openings. There remain underlying cost challenges from COVID-19 as well as initial set up costs of operating Taco Bell as we look to scale the business.
Store numbers continue to grow through both new builds and acquisitions. Five KFC stores were acquired in North Sydney early in the half year and one new Taco Bell opened in Green Square Sydney. This store produced record opening day transactions this year for the entire Asia Pacific region. Four more new Taco Bells are scheduled to open by the end of the year. Two Taco Bell and three KFC stores also opened in 2H 2020.

Hawaii Operations

Total sales in Hawaii for the period were $US72.7 million with store level EBITDA of $US11.6 million (15.8% of sales).
In $NZ terms the Hawaiian operations contributed $NZ101.0 million in revenues, $NZ16.0 million in EBITDA and an operating profit (excluding the effect of NZ IFRS 16) of $NZ19.3 million for the period. This result includes $11.4 million ($US8.1 million) in relation to the PPP loan drawn down at the onset of the COVID-19 pandemic last year, that was forgiven in June 2021.

Actual 26 weeks 30 June 2021 Actual 26 weeks 30 June 2020 Change ($) Change (%)
Sales ($USm)
72.7 68.7 +3.9 +5.7
Store EBITDA ($USm) 11.6 10.2 +1.4 +14.0
EBITDA as a % of Sales 15.8 14.8
Store Numbers 73 75

Reported sales are up $US3.9 million with same store sales up 9.9%. Both Taco Bell and Pizza Hut have shown growth on 1H 2020.
Pizza Hut’s resurgence in sales and profitability experienced last year has continued into 2021. As Hawaii struggles through the ongoing pandemic, customer loyalty to a reliable and long-established brand that offers product value has helped to maintain sales momentum. This has been reinforced by enhanced delivery and customer ordering capability with Pizza Hut’s web orders now accounting for more than 60% of total orders taken.

While Pizza Hut’s sales flourished in 2020, Taco Bell’s sales were stagnant under Hawaii’s initial “stay at home” restrictions instituted in early 2020. Sales have subsequently resurged in 2021 with the recovery in tourism arising from Hawaii opening up its economy. Increased deliveries, largely through third party aggregators and digital sales through Taco Bell’s mobile ordering platform also played a large role in sales growth in 2021. Prior to the pandemic, Taco Bell had no presence in the delivery market and nominal digital sales.

Overall store numbers in Hawaii are down by two from 1H 2020 following the closure of three stores late last year as part of the strategy to close some legacy dine-in restaurants. During the past six months one new Pizza Hut store has opened in Pahoa.

California Operations

Total sales in California for the period were $US55.2 million with store level EBITDA of $US9.1 million (16.5% of sales).
In $NZ terms the Californian operations contributed $NZ77.3 million in revenues, $NZ12.7 million in EBITDA and an operating profit (excluding the effect of NZ IFRS 16) of $NZ4.0 million for the period. These results were above expectations at the time of completion of the California acquisition in September 2020.

Actual 26 weeks 30 June 2021 Actual 26 weeks 30 June 2020 Change ($) Change (%)
Sales ($USm)
55.2 n/a n/a n/a
Store EBITDA ($USm) 9.1 n/a n/a n/a
EBITDA as a % of Sales 16.5 n/a
Store Numbers 69 n/a

The second quarter saw record sales levels in California thanks to the launch of the new KFC Chicken Sandwich, coupled with the third round of Federal stimulus and a relaxation in COVID-19 pandemic restrictions. During June, California relaxed many of the pandemic trading restrictions allowing dining rooms to reopen.

Store numbers have remained constant at the acquisition level of 69 stores. One additional KFC store was acquired from an existing franchisee just after balance date.

Corporate & Other

General and administration (G&A) costs were $24.3 million, an increase of $1.6 million on 1H 2020, largely as a result of inclusion of the California division costs. G&A as a % of total revenue was 4.3% which is much closer to the traditional run rate of 4.0% of revenues. This is a reduction from 5.7% in the prior year due to the increase in revenue and the impact of COVID-19 on the 1H 2020 results.

Depreciation charges of $18.8 million for the half year were $3.1 million higher than the prior year. The increase is from the California division charges ($2.1 million) and the continued high level of new store builds and store refurbishments. Depreciation of leased assets is also up $4.9 million to $18.7 million with new leases increasing the right of use asset depreciation.
Financing costs of $17.6 million were up $3.5 million on prior year primarily due to an increase in lease interest of $3.4 million resulting from both new leases and existing leases being extended. Bank interest costs were $3.4 million, $0.2 million lower than prior year with increased debt levels off-set by lower interest rates.

Tax expense was $9.4 million, up $5.4 million due to the higher earnings. The effective tax rate is 21.5%, down from 26.3% last year due to the lower relative level of assessable income in the Hawaii division with the PPP loan forgiveness.

Other Expenses

Other expenses for the half year totalled $1.9 million, an increase of $0.2 million on prior year. This year’s costs included acquisition costs (Australia and California) of $0.7 million and initial one-off costs associated with a new company-wide ERP system ($1.2 million) being introduced. A further $2-3 million is expected to be spent on this project over the balance of this financial year. The entire project is expected to cost in excess of $7 million and will be largely expensed.

PPP Loan

In March 2020 during the onset of the COVID-19 pandemic the Hawaiian operations received $US8.1 million as a Government loan under the Paycheck Protection Program (a US Government assistance package offered to US businesses affected by the pandemic). In June 2021, the US government approved converting the PPP loan to a government grant. This resulted in $11.4 million in Other Income being recognised in the Consolidated Statement of Comprehensive Income.
NZ IFRS 16

The impact of NZ IFRS 16 on the Group accounts for the half year is a reduction of $4.5 million on after tax operating earnings (1H 2020 impact: $2.8 million).

The Consolidated Statement of Financial Position has right of use assets of $537.8 million, up $26.0 million since December 2020 due to the inclusion of the five newly acquired stores in Australia, various other new stores being opened and lease renewals. Lease liabilities of $623.8 million are also up by $33.4 million reflecting the increase in future lease commitments.
Statements of Cash Flow and Financial Position

Bank debt at the end of the half year was down to $222.3 million compared to $235.6 million at the previous year end. As at 30 June 2021, the Group had bank debt facilities totalling $NZ357.0 million available. Cash and cash equivalents decreased by $8.5 million during the period resulting in net debt reducing by $4.8 million to $195.1 million over the half year.

Operating cash flows were $62.4 million, up $24.5 million on 1H 2020 which is a direct reflection of the strong improvement in trading results vs the prior half year and the added benefit from the California acquisition. Operating cash flows in 1H 2020 also included $22.1 million from the New Zealand wage subsidy.

Net investing cash outflows at $53.2 million, versus $23.9 million in 1H 2020, include the acquisition of stores in Australia for $25.3 million. The underlying spend on new stores as well as refurbishing stores throughout the network is also up by $5.6 million.
COVID-19

The company continues to face challenges in relation to the ongoing COVID-19 pandemic including increased operating costs, continued trading restrictions in some markets and ongoing lockdowns in Australia and on 18 August New Zealand. However, there have been opportunities with increased focus on takeout and delivery channels which have helped produce strong results for this half year. Directors acknowledge the continuing efforts of all staff in helping to deliver such a strong result in what remains challenging circumstances.

Outlook

Despite the impact of COVID-19, store numbers are expected to continue to grow in the second half. New store roll outs for both the KFC and Taco Bell brands will continue in New Zealand and Australia. The Hawaiian market will see another new Taco Bell completed, together with continuing scrape and rebuild refurbishments delivering significant sales growth. A new store development programme is under way in California, with up to three new KFC stores targeted for opening before year end.
The overall business continues to deliver solid results across all geographic markets and this strong performance has carried over into the second half of the year. However, whilst current trading remains strong across all divisions, the prevailing uncertainties with COVID-19, particularly in the Australian and most recently the New Zealand markets make it difficult to provide firm profit guidance.


Authorised by:

Russel Creedy Grant Ellis
CEO CFO
Phone: 525 8710 Phone: 525 8710
ENDS

[Rawz]

Result looks good. To be honest I really don't know due to the trading of the Californian operations.

Sometimes I invest purely based on past track record and management capability. Ill read the annual report each year then that's about it to be fair. It's not a complicated business or model they run. Sell chicken, taco's and pizza. Buy old run down franchises and modernize them.

Anyone follow this more closely and care to share their thoughts?

[Pocket_Eights]

Result looks good. To be honest I really don't know due to the trading of the Californian operations.

Sometimes I invest purely based on past track record and management capability. Ill read the annual report each year then that's about it to be fair. It's not a complicated business or model they run. Sell chicken, taco's and pizza. Buy old run down franchises and modernize them.

Anyone follow this more closely and care to share their thoughts?

I used to follow this quite closely up until the big sell off - It's a good and easy business to understand. With the rest of the country out in L3, should see the surge in KFC sales to offset closure in Auckland.

[ScrappyO]

Bit Annoying that pak n save can sell fast food in Auckland under level 4.

https://www.nzherald.co.nz/lifestyle...USPOUQU7LM7QE/

(Don't hold any RBD)

[peat]

Particularly strong sales in KFC
pg 05 interim report.

THey aint seen nothin yet.