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  1. #2521
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    Quote Originally Posted by Balance View Post
    PER of 18 to 20 is more appropriate for the company until it proves that it can grow double digit earnings rate again.

    So $6.00 to $6.70 should be where it settles.

    Closed at $9.20 today.

  2. #2522
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    Received my free meal voucher in the mail today. 2 pieces of chicken, a drink, chips and a potato and gravy. Being a practical joker I have color copied the voucher and I am going to attempt to pass this off at my local store. Some of the youngsters that work there are not the smartest tool in the box so it will be interesting to see if it works. On another note, I am surprised by the continued high price of RBD, so it is possible that the Mexicans have a good deal. I am not yet convinced, time will tell.

  3. #2523
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    Quote Originally Posted by blackcap View Post
    Received my free meal voucher in the mail today. 2 pieces of chicken, a drink, chips and a potato and gravy. Being a practical joker I have color copied the voucher and I am going to attempt to pass this off at my local store. Some of the youngsters that work there are not the smartest tool in the box so it will be interesting to see if it works. On another note, I am surprised by the continued high price of RBD, so it is possible that the Mexicans have a good deal. I am not yet convinced, time will tell.
    Careful blackcap. I hear Mexican prisons aren't as nice as ours here in Nueva Zealandia

  4. #2524
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    Quote Originally Posted by blackcap View Post
    I am surprised by the continued high price of RBD, so it is possible that the Mexicans have a good deal. I am not yet convinced, time will tell.
    I am surprised too blackcap, and the incremental return on equity exercise (below) I did in January still stands.

    Quote Originally Posted by Snoopy View Post
    EOFY2016 Change EOFY2018
    Normalised Earnings {A} $24.207m $40.361m
    No. of Shares {B} 102.871m 123.629m
    eps {A}/{B} 23.53c +9.12c {D} 32.65c
    Owner Equity {C} $75.617m $210,608m
    Owner Equity per share {C}/{B} 74c +96c {E} $1.70
    Return on Incremental Equity / Share {D}/{E} +9.5%

    The return on the new funds from the 2016 cash issue still looks mediocre.

    I still retain the balance of my own shares that I did not sell into the offer. I have resisted the temptation to build that shareholding up again. 'Rationally' I suppose I should have sold the balance at $9. But people aren't keen to let go of winning investments. And if people like me aren't willing to sell, those wanting in have to pay a high price. The law of supply and demand at work?

    Quote Originally Posted by blackcap View Post
    Received my free meal voucher in the mail today. 2 pieces of chicken, a drink, chips and a potato and gravy. Being a practical joker I have color copied the voucher and I am going to attempt to pass this off at my local store. Some of the youngsters that work there are not the smartest tool in the box so it will be interesting to see if it works.
    And the point of such a practical joke is what? To get some green recruit into trouble? I hope that if your 'experiment' works, you will quickly come clean and produce the real voucher. That would at least be of use to shareholders!

    For what it is worth, when presenting my 'shareholder KFC Card" to my local KFC in the past, they have always been looked at very carefully.

    SNOOPY
    Last edited by Snoopy; 15-08-2019 at 09:22 PM.
    To be free or not to be free. That is the cash-flow question....

  5. #2525
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    Quote Originally Posted by blackcap View Post
    Received my free meal voucher in the mail today. 2 pieces of chicken, a drink, chips and a potato and gravy. Being a practical joker I have color copied the voucher and I am going to attempt to pass this off at my local store. Some of the youngsters that work there are not the smartest tool in the box so it will be interesting to see if it works. On another note, I am surprised by the continued high price of RBD, so it is possible that the Mexicans have a good deal. I am not yet convinced, time will tell.
    That is pretty denigrating of the staff that work in a business in which you have stake.

    So you want to manipulate people you consider to be gullible?

    Is your ruse even cost-effective? You would need quite a decent printer for a start and the sort of paper they use for vouchers...plus a journey to your local restaurant. After doing all that you may not be successful with the possibility that a complaint could be levied with the local constabulary - Not to mention the waste of time and lack of meal.

  6. #2526
    percy
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    Quote Originally Posted by blackcap View Post
    Received my free meal voucher in the mail today. 2 pieces of chicken, a drink, chips and a potato and gravy. Being a practical joker I have color copied the voucher and I am going to attempt to pass this off at my local store. Some of the youngsters that work there are not the smartest tool in the box so it will be interesting to see if it works. On another note, I am surprised by the continued high price of RBD, so it is possible that the Mexicans have a good deal. I am not yet convinced, time will tell.
    If I send you my address would you mind sending me half a dozen copies.
    I am more than happy to pay post and printing costs..................................lol.

  7. #2527
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    Quote Originally Posted by Bjauck View Post
    That is pretty denigrating of the staff that work in a business in which you have stake.

    So you want to manipulate people you consider to be gullible?

    Is your ruse even cost-effective? You would need quite a decent printer for a start and the sort of paper they use for vouchers...plus a journey to your local restaurant. After doing all that you may not be successful with the possibility that a complaint could be levied with the local constabulary - Not to mention the waste of time and lack of meal.
    Bjauk, its a practical joke, a ruse, do not get so upset. I am not out to defraud RBD, I am a shareholder afterall. If it works once, I will inform staff and management and have a bit of a laugh about it. I do know on past occasions that staff look at the vouchers all funny and often not sure what to do. There are plenty of KFC vouchers that you need to print from your pc (standard ones) and as such the need for a good printer is non essential. I just color printed on my $50 printer and that should do the trick.

    Percy, if it works, I will send you a bunch

    Chanchay, I take on board the Mexican jail warning. Thank you!

  8. #2528
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    Quote Originally Posted by Snoopy View Post
    Anyway, I don't want to be too critical of Russel as generally I think he is an outstanding chief executive, even if I don't agree with every decision he makes. I do expect the RBD share price to drop after the offer is complete, although not by as much as some think. But I wouldn't be surprised if in twelve months time the price of those remaining shares is north of $9.45.
    Following my March 2019 post, the remaining shares are trading at $9.45 already! I have to admit I am stunned as there has been no real strategic news following on from the closing of the takeover offer at an effective price of $8.89 (my post 2439). Big announcements expected at the upcoming AGM? I am also surprised that RBD is hanging onto its position in the NZX50 now that 75% of the shares are locked up. I am still hanging on to the balance of my shares post the takeover.

    Feeling a bit guilty now with my campaign to convince shareholders that the share price would fall substantially post takeover. But I don't retract any of my analysis that lead me to that decision. Maybe it is just a case of the market behaving in mysterious ways over the short term?

    SNOOPY
    Last edited by Snoopy; 20-06-2019 at 10:51 AM.
    To be free or not to be free. That is the cash-flow question....

  9. #2529
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    Good recent trading update and 9.52 at close today. Now the share price is above the recent partial takeover price. Used one of the shareholder vouches today. Didn't particularly like the KFC but it was good to see the outlet very busy!

  10. #2530
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    Another article today in stuff about RBD I introducing Taco Bell to NZAU soon. Starting with 2 stores then 60 over the next 5yrs. Interesting that almost all comments have been negative to the idea - no one seems to like taco bell that much, and don't see them competing against existing mexican stores very well.
    Wondering whether RBD might be shoving money down a large drain?

  11. #2531
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    Quote Originally Posted by Jonboyz View Post
    Another article today in stuff about RBD I introducing Taco Bell to NZAU soon. Starting with 2 stores then 60 over the next 5yrs. Interesting that almost all comments have been negative to the idea - no one seems to like taco bell that much, and don't see them competing against existing mexican stores very well.
    Wondering whether RBD might be shoving money down a large drain?
    It remains to be see seen how Taco Bell will work in Australasia. It has been a success in Hawaii and is growing strongly in that market. For Year 2020 the effect of the roll out of Taco Bell in Australasia is not expected to make a material difference to financial performance. RBD have shown with the dropping of the Starbucks franchise and care taken with the Carl Juniors roll out that they will modify plans if that is called for.

  12. #2532
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    Default BT2/ INCREASING EARNINGS PER SHARE TREND (one setback allowed) [perspective 2019]

    Quote Originally Posted by Snoopy View Post
    I have used the net profit after tax, excluding non-trading items for the purpose of this comparison. Non trading items include those associated with store closures and sales transformation costs and insurance payments. These are omitted because they obscure how the business is performing on the ground.

    Net Profit/No.of Shares

    2014: $18.863m /97.871m = 19.3cps
    2015: $22.523m /97.871m = 23.0cps
    2016: $24.207m /102.871m = 23.5cps
    2017: $30.567m /122.843m = 24.9cps
    2018: $40.361m /123.629m = 32.7cps


    Conclusion: Pass Test
    I have used the net profit after tax, excluding non-trading items for the purpose of this comparison. Non trading items include those associated with store closures and sales transformation costs and insurance payments. These are omitted because they obscure how the business is performing on the ground.

    Net Profit/No.of Shares

    2015: $22.523m /97.871m = 23.0cps
    2016: $24.207m /102.871m = 23.5cps
    2017: $30.567m /122.843m = 24.9cps
    2018: $40.361m /123.629m = 32.7cps
    2019: $42.181m /124.758m = 33.8cps


    Conclusion: Pass Test

    SNOOPY
    To be free or not to be free. That is the cash-flow question....

  13. #2533
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    Default BT3/ RETURN ON EQUITY (at least 15% for 5 years) [perspective 2019]

    Quote Originally Posted by Snoopy View Post
    Net Profit excl. non trading / Shareholder Equity EOFY

    2014: $18.863m / $64.656m = 29.2%
    2015: $22.523m / $71.210m = 31.6%
    2016: $24.207m / $75.617m = 32.3%
    2017: $30.567m / $192.059m = 15.9%
    2018: $40.361m / $201.608m = 20.0%

    Conclusion: Pass Test

    PS For comparative trend purposes the annualized latest half year ROE is as follows:

    HY2019: ($21.853m x2) / $217.075m = 20.1%
    Net Profit excl. non trading / Shareholder Equity EOFY

    2015: $22.523m / $71.210m = 31.6%
    2016: $24.207m / $75.617m = 32.3%
    2017: $30.567m / $192.059m = 15.9%
    2018: $40.361m / $201.608m = 20.0%
    2019: $42.181m / $224.670m = 18.8%

    Conclusion: Pass Test

    SNOOPY
    To be free or not to be free. That is the cash-flow question....

  14. #2534
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    Default BT4/ Ability to raise margins at above the rate of inflation [perspective 2019]

    Quote Originally Posted by Snoopy View Post
    This is the net profit, excluding non-trading items, divided by the total sales for the year. Note that in a change from the 2015 perspective I am now including 'other revenue' as part of the representative ongoing revenue of the company. This is because the largest part of other revenue is money received from YUM to act as master franchise holder for Pizza Hut in New Zealand. And this is a revenue stream that will be ongoing

    2014: $18.863m / $330.399m = 5.7%
    2015: $22.523m / $372.803m = 6.0%
    2016: $24.207m / $404.095m = 6.0%
    2017: $30.567m / $517.549m = 5.9%
    2018: $40.361m / $766.289m = 5.3%

    Conclusion: Fail Test
    This is the net profit, excluding non-trading items, divided by the total sales for the year. I am now including 'other revenue' as part of the representative ongoing revenue of the company. This is because the largest part of other revenue is money received from YUM to act as master franchise holder for Pizza Hut in New Zealand. And this is a revenue stream that will be ongoing

    2015: $22.523m / $372.803m = 6.0%
    2016: $24.207m / $404.095m = 6.0%
    2017: $30.567m / $517.549m = 5.9%
    2018: $40.361m / $766.289m = 5.3%
    2019: $42.181m / $824.915m = 5.1%

    With this statistic either staying still or going backwards there is only one conclusion I can make.

    Conclusion: Fail Test

    SNOOPY
    Last edited by Snoopy; 28-07-2019 at 09:52 AM.
    To be free or not to be free. That is the cash-flow question....

  15. #2535
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    Default ROE for Overseas Venture Returns [FY2019 Perspective]

    Quote Originally Posted by Snoopy View Post
    Having posed the above question, I think rather than speculating on what the answer might be, I should 'do the maths' and find out.

    From the Buffettology Workbook, p149

    "We take the per share amount of earnings retained by a business for a certain period of time then compare it to any increase in per share earnings that occurred during the same period"

    In this instance the 'per share earnings retained' has been supplemented by a whole lot of new capital raised with the October 2016 cash issue. So in my judgement it is best to use the change in shareholders equity from the reporting date before the cash issue (EOFY2016) to the end of FY2018. FY2018 was the first full year of operation that included the Hawaiian and most (42) of the Australian KFC acquisition (18 more KFC stores were acquired over FY2018).

    EOFY2016 Change EOFY2018
    Normalised Earnings {A} $24.207m $40.361m
    No. of Shares {B} 102.871m 123.629m
    eps {A}/{B} 23.53c +9.12c {D} 32.65c
    Owner Equity {C} $75.617m $210,608m
    Owner Equity per share {C}/{B} 74c +96c {E} $1.70
    Return on Incremental Equity / Share {D}/{E} +9.5%

    The above should not be too much of a surprise. If the overseas operations are now roughly the size of the NZ business, the ROE before overseas acquisitions was 30% and the ROE after overseas acquisitions was 20%, then it would take a figure that low to bring the average ROE down to 20%. I would also argue that not all of that new capital has been in use all of the time (the capital raised one quarter of the way through the study period and gradually deployed over it).

    I don't know what he generally accepted value of the cost of capital of RBD is these days, But I would guess that 9.5% 'plus a bit' is still above it. I suppose what this means is that real underlying growth for RBD will be much slower going forwards compared to the recent past.
    From the Buffettology Workbook, p149

    "We take the per share amount of earnings retained by a business for a certain period of time then compare it to any increase in per share earnings that occurred during the same period"

    In this instance the 'per share earnings retained' has been supplemented by a whole lot of new capital raised with the October 2016 cash issue. I will use the change in shareholders equity from the reporting date before the cash issue (EOFY2016) to the end of FY2019. The extra year that I have brought into this comparison since my FY2018 perspective includes the Hawaiian acquisition (as before), but also the first full year that included all (61) of the Australian KFC outlets acquired to date.

    EOFY2016 Change EOFY2019
    Normalised Earnings {A} $24.207m $42.181m
    No. of Shares {B} 102.871m 124.758m
    eps {A}/{B} 23.53c +10.28c {D} 33.81c
    Owner Equity {C} $75.617m $224.670m
    Owner Equity per share {C}/{B} 74c +$1.06 {E} $1.80
    Return on Incremental Equity / Share {D}/{E} +9.7%

    The above result is disappointing. RBD has suspended dividends to fund their expansion plans, raising an incremental amount of new capital to add to the cash issue capital. I would argue that the new capital raised in the cash issue in October 2016 has now had sufficient time to be deployed. Yet the return on new capital over our comparative period has barely improved from FY2018 perspective comparison.

    I don't know what the generally accepted value of the cost of capital of RBD is in 2019. But I would guess that 9.7% not far away from it. There must now be doubt as to whether all the new capital being raised is even earning its cost of capital when deployed. This problem is hidden by the extremely strong cost of capital being earned in the legacy New Zealand business.

    SNOOPY
    Last edited by Snoopy; 15-08-2019 at 09:28 PM.
    To be free or not to be free. That is the cash-flow question....

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