RBD - Restaurant Brands

[BRICKS]

quote:Originally posted by OneUp

Cobb & Co used to be a great restaurant chain.

Tastes change. Competition intensifies. Not too many Cobb & Cos left now.

Don't assume this will bounce back. The brands are sick (except Starbucks).

THANKS for that.. [8D]

[The Doctor]

quote:Originally posted by OneUp

Cobb & Co used to be a great restaurant chain.

Tastes change. Competition intensifies. Not too many Cobb & Cos left now.

Don't assume this will bounce back. The brands are sick (except Starbucks).

b/s SHED ALL BRANDS except KFC...and you have a great business!

[Scuffer]

Does anyone honestly think that KFC is gonna go the way of Cobb an Co, I suppose Coca Cola could go the same way as well get real.I'm off to kick a can.

[Bling_Bling]

quote:Originally posted by OneUp

Cobb & Co used to be a great restaurant chain.

Tastes change. Competition intensifies. Not too many Cobb & Cos left now.

Don't assume this will bounce back. The brands are sick (except Starbucks).

LOL your analysis is wrong. Cobb & Co was badly run, large debt in a competitive market. KFC is a great brand with little to no competition. Red Rooster is a joke and will fold soon. Starbucks is a great international brand, if only RBD can run it the way it is run overseas. PH is a dog and needs to be sold or closed down.

RBD is a great company in the right hands, but only in the right hands. Great cashflow and great potential to introduce other international brands to NZ.

[Halebop]

Any company is a great company in the right hands but few companies manage to prove a "great" status beyond short bursts of cyclical growth.

I think it is clear from the level of investment KFC is requiring and their historical struggle to lift sales to the rate of inflation that it is hardly in the "optimally operated" category. Even now that sales appear to be responding to investment, growth in profits are still elusive. Not so for growth in debt though.

Don't consign the pizza business to a trade sale so quickly - I doubt the price would give the company much satisfaction. With proper strategy, pizza can deliver good margins. Over time margin management is easier to achieve with pizza toppings than with grain fed chicken, even at sub $10 pizzas. Hell proved the business need not be about price but obviously PH's strategy of staying in the middle by competing at both ends is a dud. Their advertising is not faintly emotive and stinks of middle of the road institutional moderation. I guess middle of the road encapsulates where they find themselves right now - unfortunately bunnies have a poor track record of survival in such locations. Even 2 parts of the unholy marketing trinity (Coke and McDonalds, Disney hasn't yet clicked on) have worked out that their bland and one size fits all institutional offers were tired.

Starbucks is a strange one - demographics are right for it, the offer is adequate, RBD's delivery of the concept is OK (not great but I think it passes) but it just doesn't make much money. This could reflect the terms of their franchise but even if this is so, it would also reflect RBDs ability to screw up strategy and mis-calculate value propositions. If it's not due to a punitive franchise agreement then it reflects their inability to run food service businesses properly. The difficult thing is ascertaining if in-fill unit development will deliver economies of scale or just cannibalise existing sales and prolong low returns.

[nelehdine]

Got some spare cash ....

mmmm ... Restraunt Brands or mix of Macquarie Bank and BHP and News Corp. I don't see the point of investing in a dog business/share trying to be the clever dick who bought at the bottom when there are so many world class businesses to invest in with your NZD worth 91.25c across the ditch ... just doesn't make any sense to me.

[Scuffer]

Good point Nel, are those companies sitting on lows or are you just going for the dividends and projected long term growth.

[nelehdine]

Just buying quality companies at a fair price. As Warren Buffett says in his books "price is what you pay, value is what you get". Just because RBD is trading at about 1/2 recent levels, doesn't mean it's good value yet, likewise just because BHP is almost double its price of 2 years ago doesn't mean it's still not good value ....

[Bling_Bling]

RBD's wealth was destroyed by bad management. All they need to do now is replace management and/or a new owner to turn it around. The right people will make a difference. The fundamentals of the sector RBD is in is still growing at a good rate.

[Rumplestiltskin]

Looking at RBD on a purely statistical basis, it's share price doubled in the 3 months between mid Oct 1998 and mid Jan 1999. It doubled again in the 18 months betweeen Nov 2000 and May 2002 and it gained 60% in the 18 months between Dec 2003 and June 2005.
Timed right it is possible to spin this straw into gold.
I'm dusting off my spinning wheel.