RBD - Restaurant Brands

[Lizard]

quote:Originally posted by Lizard

From sales data yesterday, it looks like FY profit will come in before write-downs at approx $10.4m. ie. underlying P/E about 12 at current price ($1.28). However, write-downs of Pizza Hut and commentary on margin squeeze will not help sentiment. Outlook for 2007 looks to me to be for a similar profit ($10.5m underlying). The hard call is on dividends...still possible they will cut to save cash for investment in KFC transformation. Or perhaps they will try to maintain for now and hope to use cash from sale of underperforming PH Aust outlets. 50:50 call - a dividend cut would certainly undermine the shares for a while.

I believe it would be risky to be in these shares at the moment, as there appear to be several negative threats to shareholder sentiment in the form of lower earnings, write-downs, mention of margin squeeze and a possible risk to dividends, with little short term upside likely (barring another takeover offer!).

FY NPAT before write-downs came in at $10.5m. The dividend was preserved - although it could be viewed that debt was increased in order to do so. Snoopy will no doubt prefer to see it as the debt being incurred as an investment in the KFC re-vitalisation. But note they are talking about refurbishment of the remaining 80 KFC stores over the next 2-3 years - seems a larger financial undertaking than the 6 stores refurbished last year. They mention "higher depreciation and interest costs", implying at least some of it comes from additional debt.

[winner69]

So the pizza market growing at 20% pa (see other thread) but poor old Pizza Hut sales down ....
10.6% on a same store basis they say.

RBD are 'responding to this challenging environment with a new brand campaign' seems appropriate that the new ads feature "PIZZA MUT"

Has Vicki finally realised she has a DOG in her stables .... slow on the uptake is this Vicki

[BRICKS]

quote:Originally posted by duncan macgregor

quote:Originally posted by lanenz

I have never been a big fan of RBD. Clearly there are a lot of worse performers in the past. But they are going to be facing some real increases in their expenses. commercial property is becoming a lot more expensive, raw materials must have gone up and soon the minimum wage increase will kick in (im not sure if its this year or next) and that will have a hige impact on operational costs. I dont see any growth unless they diversify and more likely sales will remain static (except in south auckland).

I remember the time that this dog sold its kennel to expand in Australia. I told SNOOPY at the time what a great mistake that was. I wonder SNOOPY now that we are further down the track with hindesight what your views on that are now. macdunk

WOULD be good if you sold your KENNEL and try the same TRICK.. [8D]

[Snow Leopard]

I thought the choice of a mongrel and the pizza MUTT name was a "brave" move.
Perhaps they could not afford Lassie.

[marinesalvor]

is Vicki still there? wow what patient shareholders!

[StainlessSteelRat]

quote:Originally posted by winner69

So the pizza market growing at 20% pa (see other thread) but poor old Pizza Hut sales down ....
10.6% on a same store basis they say.

RBD are 'responding to this challenging environment with a new brand campaign' seems appropriate that the new ads feature "PIZZA MUT"

The ONLY way that Pizza Hut will turn it's operation around is to engage in a bit of honesty. Their headline prices bear only a passing relation to what you actually pay for your order - and people like me are getting highly pissed off at being gyped.

Domino's have deals that are much cheaper, and when they say you'll pay $6.95 a pizza, that's what you pay. But PH by comparison - you order 2 pizza's for $19.95 and end up paying $30!

It'll be a long time before they see the contents of my wallet again.

[StainlessSteelRat]

quote:Originally posted by hiawatha

quote:But PH by comparison - you order 2 pizza's for $19.95 and end up paying $30!

Actually, I find that odd. Why do you end up paying $30.00.

It's the add-ons. $2 for chicken, $2 for stuffed crust, $5 for delivery. I know it seems odd, but i get pissed off with companies who think it's smart to deceive you with small print.

[winner69]

So Pizza Hut sales have declined in 3 of the past 4 years (quote NBR today) ..... because of competition .... and in future competition is going to get a lot tougher.
In the same article 'She (Vicki) declined to comment on other stratgeies the company has up its sleeve to minimise the effects of competition'

Come on Vicki .... be honest ... you don't have any strategies up your sleeve do you .... except watching Pizza Hut profitability (if it is indeed making any money) decline and blaming competitive pressures.

And thats only the Pizza Hut story .... will Vicki react the same way (ie ignore) when Red Rooster actually starts to get some critical mass.

[marinesalvor]

true W69 - Vicki has been short of clues before a desperate board forced her to take the CEO salary and perks

[winner69]

quote:Originally posted by hiawatha

quote:Come on Vicki .... be honest ... you don't have any strategies up your sleeve do you .... except watching Pizza Hut profitability (if it is indeed making any money) decline and blaming competitive pressures.

I think this is unfair. Competition is a fact of life. What do you expect her to do? Get a posse together and run PH's competitors outa town!?
hiawatha

Hiawatha ... surely you WANT Vicki to do something to ensure Pizza Hut at least tries to maintain share ... instead of the "PIZZA MUTT" rolling on its back and submitting to the competitors

Intersting that same article in the NBR asked Vicki whether RBD was going to quit Pizza Hut .... denied of course but wonder what bought that subject up