RBD - Restaurant Brands

[Phaedrus]

RBD is in a longterm downtrend with an unbroken confirmed trendline in place.

Take a look at the On Balance Volume though. See how it has risen over the last 8 months while the price has only tracked sideways? This stock is being slowly accumulated by the little guys.

Look at the QStick indicator. This too has been rising during the 8 months of price stagnation. The Qstick indicator is simply a moving average of the difference between open and close prices (the most important part of a candlestick - the body) Translation :- RBD is having more "Up" days than usual.

Will the support at 80 cents hold?

Could 2008 be the year RBD gives a Buy signal?

[limegreen]

It will be interesting to see what effect higher food prices have on take-away foods.
hiawatha

Article in the Herald a few days back suggesting that especially the high volume low-cost operations suffering with high cheese prices. And there is a lot of cheese on cheap pizzas.

[Snoopy]

SNOOPY when will you ever learn?. When this dog sold its kennel to lease it back to fund a holiday in Australia, the shares shot up to $1-70.
Anyone with half a business brain would have known that was a bad move. You can borrow money cheaper on property than any other means, especially if you borrow money to do up the landlords premises at a million bucks a store.

I don't agree that without the benefit of hindsight the expansion into Victoria was a bad move Macdunk. If you add up the losses incurred by RBD in Victoria over five years, as detailed in my spreadsheet of the four divisions, I come up with:

$9.51m+ $8.01m +$3.29m + $4.05M +$5.80m= $30.66m

of shareholders funds down the drain. Nevertheless that is the sort of money it takes to establish an overseas chain. HLG and MHi have expanded successfully into the Australian market. If the Victoria venture had succeeded then RBD could well be worth $1.70 or more today. But that chapter for RBD is now closed and we have to move on.

Contrary to what you espouse, not owning the premesis you operate from is a common thing for retail store chains. Warehouse, Pumpkin Patch, Hallensteins, Michael Hill - none of these companies own their own stores and it hasn't stopped them from being successful. As for borrowing costs RBD were paying 7.58% last year, which I think compares favourably with mortgage borrowings costs of the time.

SNOOPY

[duncan macgregor]

SNOOPY, I told you at the time long before hindesight as you well know. Infact i was brow beating you so hard at that time i promised to shut up. MHI did it the right way by sticking the toes in the water first, to learn from the amall mistakes then make adjustments. To sell the kennel to lease back is the most stupid thing they could have done. On second thoughts spending millions doing the landlords premises up was equally as dumb. The dumbest thing of the whole lot was failing to get out when it was trending down all the way from $1-70 to 85c without a stop loss. Must correct that again. It was dumber to average down bleating about dividends yapping on about mashed potatoes versus chips.
MACDUNK

[Snoopy]

Another two part question from on the MCH thread, this time from Possum the cat

"Snoopy when does their rights to use the brands expire?"

Every ten years.

"And what is the cost of renewing these rights going to be?"

The rights for KFC have just been renewed as at May 2007 for 2x$NZ2.6m payments. This KFC renewal agreement covers 87 stores, which works out to be a one off cost of around $NZ60,000 per store. The renewal fees for Pizza Hut are I believe similar. 51 stores, the former Eagle Boys chain acquired in one hit, are up for renewal in 2010. That will mean a one off payment from RBD to YUM of some $NZ3m during that year.

"Yum Brands hold all the aces."

YUM brands does not have access to the high profile sites in New Zealand. That is where RBD comes in. But if you think YUM are onto a good thing, you can buy shares in them as well. That's what I did.

SNOOPY

discl: hold RBD, YUM

[Snoopy]

And just another follow up to JMKC

"You talk about "market power". Pizza Hut has ZERO market power (think Dominos, Hell, Tempt)."

An interesting website to keep abreast of the fast food scene in New Zealand is that of the Restaurant Association of New Zealand.

http://www.restaurantnz.co.nz

According to them the takeaway Pizza market was worth $177m in 2007.

As at the end of FY2007 there were 103 Pizza Hut New Zealand outlets, of which 15 were red roof restaurants. So that leaves 88 PH outlets as takeaway delcos. PHNZ total revenue was $79.7m. If we assume the revenue takings from a red roof restaurant are 50% higher than from a delco, and the revenues from our mythical average delco is 'R', then when can calculate the average delco store revenue as follows:

88R +(15x1.5)R= $79.7m => R=$720,000

That means Pizza Hut's 88 takeaway delcos account for some $63.4m in sales. That gives Pizza Hut New Zealand 36% of the takeaway pizza market nationwide. I would say that makes them 'market leader'.

SNOOPY

[winner69]

Snoopy - the numbers from that site you provided a link for a either a load of **** ..... or RBD is a bigger dog than you even give it credit for

Pizza takeaway market might be $177M in 2007 but did you note that 3 years prior in 2004 it was $77m --- the pizza market has grown 130% in those three years

However Pizza Hut sales didn't grow (Still about $80m and i didn't bother try to break it up into delcos etc) ............. MARKET UP 130% AND PIZZA HUT UP 0% MEANS A MASSIVE LOSS OF MARKET SHARE ......... competitors cleaning them out

Hardly what you would expect from a market leader is it ...... or are the numbers a load of ****

[BRICKS]

Snoopy - the numbers from that site you provided a link for a either a load of **** ..... or RBD is a bigger dog than you even give it credit for

Pizza takeaway market might be $177M in 2007 but did you note that 3 years prior in 2004 it was $77m --- the pizza market has grown 130% in those three years

However Pizza Hut sales didn't grow (Still about $80m and i didn't bother try to break it up into delcos etc) ............. MARKET UP 130% AND PIZZA HUT UP 0% MEANS A MASSIVE LOSS OF MARKET SHARE ......... competitors cleaning them out

Hardly what you would expect from a market leader is it ...... or are the numbers a load of ****

WOULD not make much out of your comments either as your a proven non buyer of anything but much finger pointer so the real question is 2008 now will we Buy/Hold/Sell,
as NZ is a very small place and not a real amount of NZX stock choice so as i read some where but now cannot find there are a lot of small people collecting a holding, these are the smart one`s not the people who Yap & Yap..

[Nitaa]

Snoppy, sorry for giving you a hard time but i agree with Winner and Md. You seem insensed on divies but your asset is diminishing day by day.

Its a bit like property investors who are claiming tax benefits but many forget they have to spend $1 to gett 33 cents back. RBD is a bit like as well.

There is basically no growth and margins are getting squeezed. A "sunset" stock that needs to have a radical remodelling.

How is this stock going to turn around under its current format.. it cant.. it needs some drastic changes and thats not to say it wont or cant happen but management seem at a loss on how to stem the flow


discl. dont hold.

[BRICKS]

Snoppy, sorry for giving you a hard time but i agree with Winner and Md. You seem insensed on divies but your asset is diminishing day by day.

Its a bit like property investors who are claiming tax benefits but many forget they have to spend $1 to gett 33 cents back. RBD is a bit like as well.

There is basically no growth and margins are getting squeezed. A "sunset" stock that needs to have a radical remodelling.

How is this stock going to turn around under its current format.. it cant.. it needs some drastic changes and thats not to say it wont or cant happen but management seem at a loss on how to stem the flow


discl. dont hold.

YET again another mouth full hear say and maybe bet the management are up to there necks trying to turn the biz around and if it was easy it would have been done long time ago but at lest Snoopy is coming up with hard facts and the next final will TELL..