RBD - Restaurant Brands

[winner69]

quote:Originally posted by hiawatha

[quote

In an ideal world, all profits would be paid as dividends, and additional capital needed, raised in the capital markets.

..... and if this happened in the case of RBD what returns would the providers of the additional capital get? Zilch .....as all the profits have gone to pay a divie to the existing shareholders

[Halebop]

quote:Originally posted by hiawatha

But if there is it is certainly not due to "low profits and high dividends". The profits earned have obviously been sufficient to cover the dividends.

Profits paid dividends and nothing was left for the stores that generated those profits. Now RBD borrows to relicense the fried chicken rights. Borrows to refit the stores. Borrows to expand the coffee shop foot print.

Its about sustainability and a road map to their future...

Reported profits since 1997: $96.5m
Dividends Paid since 1997: $81m (84% of profits)
Net Retentions since 1997: $15.5m (16% of Profits)
"Growth" Capex (in excess of depreciation): $38.9m
Additional Acquisitions: $43m
Funded by: Selling real estate, reduced working capital and increased borrowings

How do they keep funding this? At what point are these investments, so far an extra $82m not counting the opportunity cost, going to contribute to increased profits? RBD's absolute profit is lower yet their asset base in ever higher. Profits are lower whichever metric you use - return on equity, return on assets, dollars, EBIT margins. Australia is not their only problem.

quote:Originally posted by hiawatha

And where in the financing rulebook does it say that new investment must be met out of profits? The opposite is true I would have thought. In an ideal world, all profits would be paid as dividends, and additional capital needed, raised in the capital markets. Shareholders who wanted their share of profits "ploughed back" could subscribe to a drip scheme.

That must be in the financial rulebook chapter entitled: "Dilution, the road to riches".

There is a very simple set of rules that covers borrowing, profits, cash flow, timing and flexibility. It is called math. So far it's something like Math 10, RBD Nil. Buffet's weighing machine has spoken.

quote:Originally posted by hiawatha

Everyone agrees that their entrance into the Australian pizza market was a bad move and that it has damaged the company. But to conclude from that that their financing methods are at fault is non sequitur.
hiawatha

Really?

So what reserves are they calling on to ensure the completion of the 50 store expansion of the coffee chain? The "radical transformation" of the chicken stores? The turnaround of the pizza business? Dividends have had as big a part to play in the "radical rundown" of this company as their inability to pick the competitive vacuum created by Eagle Boys, their inability to read the Victorian pizza market, their inability to lift the share price, their inability to sustain return on equity, their inability to sustain return on assets, their inability to do anything to sustain anything a rational investor might look for when risking their hard earned capital.

This is TEL all over again, proving the lie that modern capital "efficiency" models fail to address that anyone else could with common sense physics and hands on business nous. While RBD fanboys defend the indefensible, this company continues to gobble shareholder wealth in the same manner the RBD's competitors have gobbled their market share. Without honest criticism, how does this fix itself? The rationale for RBD has been defended on this forum for literally years while the company itself proves its detractors and other rationalists right with frightening monotony.

The new chairman at leasts presents a glimmer of hope but RBD has delivered many glimmers wit

[winner69]

quote:Originally posted by hiawatha

quote:..... and if this happened in the case of RBD what returns would the providers of the additional capital get? Zilch .....as all the profits have gone to pay a divie to the existing shareholders

If additional capital is raised for investment there would, or should, be an increase in profits out of which extra dividends could be paid. Otherwise there is no point in raising capital and investing it.

So you agree with halebop then ..... that paragraph of yours is wxactly what halebop has been saying ..... and in RBDs case the should has never happened

[Halebop]

[quote]quote:Originally posted by hiawatha

This is not at all what halebop has been saying. halebop seems to be blaming all of RBD's problems on the paying out of most of its profits as dividends. But what have dividends got to do with the misreading of Eagle Boys situation and the misreading of the Victoria pizza market?
hiawatha

No. I was linking the shortcomings of strategy (Board) with the shortcomings operations (Management). There were a litany of disasters recorded in my post(s), not all of which can be attributed to the CEO(s). Dividends are however a very controllable factor with a very predictable cost. They have been costing this company strategically and operationally for quite some time. I'd accept the argument that the saving grace of dividends is at least shareholders get to spend them instead of management. Not a great rationale to prompt investment though.

[winner69]

One certainity is that YUM! and Starbucks Inc get their $20M odd every year ..... but YUM! might be a bit worried their bit is not increasing

[Bling_Bling]

I totally agree with all you doomsday preachers of KFC. And yes it is a dog run by a bunch of useless board of directors who should ultimately be responsible for RBDs failures in the past and present.

It is time for the board to do the right thing and let RBD go to the highest bidder.

No more looking at fundamentals, lets geton with the sale! FFS!

[manuka]

Even Pizza Huts name is out of date.... One Red Dog, Hell Pizza. What about some fresh ideas? Maybe like celebrity pizza's. Or maybe take the easy way and sell.

[BRICKS]

quote:Originally posted by manuka

Even Pizza Huts name is out of date.... One Red Dog, Hell Pizza. What about some fresh ideas? Maybe like celebrity pizza's. Or maybe take the easy way and sell.

KIWI`s do not like pizza`s that much so with any/many competition makes a big chain with overheads that's large would be better out so they should SELL to small operators and move on with the parts that do PAY.. [8D]

[Bling_Bling]

quote:Originally posted by hiawatha

quote:I totally agree with all you doomsday preachers of KFC. And yes it is a dog run by a bunch of useless board of directors who should ultimately be responsible for RBDs failures in the past and present.

It is time for the board to do the right thing and let RBD go to the highest bidder.

No more looking at fundamentals, lets geton with the sale! FFS!

I don't think selling the lot is a good idea (unless they get a good price, of course). However, if they could somehow flick off Pizza Hut and keep the rest, they might be getting somewhere. Otherwise I think PH needs some serious thought.
hiawatha

I would dump my holding on the market if the directors decide to keep the operations and not sell. The board is a bunch of useless idiots. Time for them to go also.

[BRICKS]

quote:Originally posted by Bling_Bling

quote:Originally posted by hiawatha

quote:I totally agree with all you doomsday preachers of KFC. And yes it is a dog run by a bunch of useless board of directors who should ultimately be responsible for RBDs failures in the past and present.

It is time for the board to do the right thing and let RBD go to the highest bidder.

No more looking at fundamentals, lets geton with the sale! FFS!

I don't think selling the lot is a good idea (unless they get a good price, of course). However, if they could somehow flick off Pizza Hut and keep the rest, they might be getting somewhere. Otherwise I think PH needs some serious thought.
hiawatha

I would dump my holding on the market if the directors decide to keep the operations and not sell. The board is a bunch of useless idiots. Time for them to go also.

O NO Bling not the whole 100 shares , Go KFC for dinner.. [8D]