RBD - Restaurant Brands

[winner69]

Has Russel earned his million bucks bonus yet

Wasn't it 40 days over 4 bucks or something

[bull....]

Since mid 2011 (4.5 years ago) , when CKF was first mentioned, the RBD share price has gone from $2.50 to $4.35. Over that time fully imputed dividends of 76cps have been paid. So the compounding rate of return for RBD over that period has been:

$2.50(1+r)^4.5=($4.35+S0.76) => (1+r)^4.5 = 2.044 => r=0.172

This is a compounding annual rate of return of 17.2%.

So not too shabby: a total return of over 100% (204.4% -100% =104.4%) for the period. Not sure what the equivalent figure for Collins is as you haven't told us what the dividends from Collins were over the period (remember ther are no imputation credits for NZ investors though - they pay NZ tax on any Collins dividends). Collins returns may even be a little better.

But given the currency risk, and execution risk from the unproven Collins managment team (looked at through 2011 eyes) I am very happy that I kept all my RBD cash together and did not diversify into Collins. Congratulations to those who took the risk and did well with CKF though.

SNOOPY

yes restaurant brands has been a great performer no doubt about it, my point was you made more money from Collins in the same time frame as I posted - post 1955 90% return from Collins in that time frame + divs and currency , rbd 15% + divs for the same time frame

[Snoopy]

yes restaurant brands has been a great performer no doubt about it, my point was you made more money from Collins in the same time frame as I posted - post 1955 90% return from Collins in that time frame + divs and currency , rbd 15% + divs for the same time frame

So Collins is up 90% since 15th February 2015? Ah well, good on shareholders who took that ride. Over more years the outperformance (if any) against RBD is perhaps not so good. I think we can both agree that generally both have been more than satisfactory investments over more recent times.

SNOOPY

[jetski1999]

RBD has both ends of the market covered, if the down turn comes people will go for the cheaper option for takeaways and buy more pizza's if not KFC and carls will do well

[Lewylewylewy]

Is this share close to peaking, or do people expect to see continued performance in line with historical gains?

[Snoopy]

Is this share close to peaking, or do people expect to see continued performance in line with historical gains?

As a shareholder I would say the best growth years are over. There will be a big one off charge this year in recognition of Russel's $1m - after tax - bonus. Operationally everything is coming together in a most favourable way. KFC is going better than ever. Even dear old Starbucks is looking better. And most of the low hanging fruit from the Pizza Hut turnaround and sell down are picked.

So I predict a steady dividend , increasing in line with inflation. That means no big share price gains. But the dividend yield would suggest no great share price falls either. I intend to continue to hold.

Growth over and above inflation will depend on how the roll out of Carl's Junior goes, and any new food chains management decide to develop. Management's record in this regard is patchy.

SNOOPY

[LAC]

As a shareholder I would say the best growth years are over. There will be a big one off charge this year in recognition of Russel's $1m - after tax - bonus. Operationally everything is coming together in a most favourable way. KFC is going better than ever. Even dear old Starbucks is looking better. And most of the low hanging fruit from the Pizza Hut turnaround and sell down are picked.

So I predict a steady dividend , increasing in line with inflation. That means no big share price gains. But the dividend yield would suggest no great share price falls either. I intend to continue to hold.

Growth over and above inflation will depend on how the roll out of Carl's Junior goes, and any new food chains management decide to develop. Management's record in this regard is patchy.

SNOOPY

I read somewhere that they had the rights for Taco Bell, can you confirm?

[Raz]

Taco Bell is very good product & process...amazed it never has come here...

[Harvey Specter]

I read somewhere that they had the rights for Taco Bell, can you confirm?

I just through they had first right of refusal, so effectively a blocking interest.

[Snoopy]

I just through they had first right of refusal, so effectively a blocking interest.

Pizza Hut, KFC and Taco Bell are all master franchise brands owned by YUM foods in the USA. Restaurant Brands were set up with a strong position in KFC and Pizza Hut already established in New Zealand. Come franchise renewal time, YUM I think it is fair to say become rather unhappy with RBD's performance in NZ. IIRC there was talk of letting RBD continue to hold the PH and KFC franchises for another ten years, but without the previously expected right of further renewal. This wake up call was enough to galvanise RBD management into action. They embarked on a nationwide project of KFC refurbishment (only now approaching completion) and Pizza Hut transformation from a dine in restaurant chain,with takeaway option, to a takeaway deli style chain only. In recent years RBD has become more of a darling of master franchise holder YUM, pointing the way for how to turn around other overseas markets.

Before RBD took on Carl's Junior, they were actively evaluating Taco Bell. At last year's AGM, Chairman Ted said that Taco Bell was again under consideration for NZ. However, I am not sure that Taco Bell is a 'natural' for downunder. The Taco Bell brand lasted eight years in Australia before it was pulled in 2005. Thus I regard Taco Bell as not the potential cash cow in NZ that some see. I am sure a couple of restaurants could be made to work in Auckland. But that hardly justifies the cost of setting up a national chain.

It is probably politically a good move for YUM to see that RBD keeps reevaluating Taco Bell. I don't think YUM wants to upset RBD these days. And if YUM farmed out Taco Bell to another operator, Russel and Ted might get upset. I sincerely hope that Taco Bell does not come to NZ,as RBD does not need the distraction, whether they end up operating Taco Bell in New Zealand or someone else is the operator. All in all, I think Harvey's comment that 'RBD has first right of refusal', is probably the best way of thinking about it. But the best outcome, I believe, for RBD will be if Taco Bell does not come here.

SNOOPY