RBD - Restaurant Brands

[winner69]

Which one is it Timesurfer? And what were the issues with service? I am sure directors would be happy to know. One store does not make a company and historically levels of service have been low at RBD stores yet they still keep churning out great profits and dividends.

There is a saying that ones business is only as good as its worst employee

Or in this case maybe RBD is only as good as it’s worst store

But as long as that worst store doesn’t get worser I’ll hold

[Rep]

Like the question around Carl's Jnr. I also don't understand why they are constantly closing Star Buck stores. The one in Auckland CBD metro was so busy all the time and they closed it.

As noted in the third quarter sales release in December 2016:

“...end of lease closure of the Aotea Square store in Auckland.”

Even if a store is busy it doesn’t mean it’s immune to costs or indeed the end of the lease.

[blackcap]

Thanks, we all know Taco Bell will eventually get here, do they know when that would be?

Not for a while was the answer at the AGM. "Not soon". "It takes time to introduce a new brand, it takes patience".
Taco Bell are also cautious about entering new markets.

[blackcap]

Cheers for that.

Seriously though, they are looking to expand into L.A., how difficult do they see the market there, and will the prices support the margins they are looking to achieve?
With Carl's Jnr, continuing sales seems to be an issue, is this due to marketing, or price point?, and what are their plans to remedy this?
Cheers

They acknowledged that Carls Jnr was difficult but emphasised patience and that it takes time for a totally new brand to be ingrained. They do believe in the Flavor Profile and Carls Jnr. Also said that they got some of their store placements wrong but were looking to rectify that. Not going to cut it just yet as they believe it will work, they have changed the menu, sizing etc and encouraging to see EBITDA doubled from last year to $2m but obviously still not good enough. Carl's Jnr may be coming to Wellington sometime soon.

Hawai has taught them and they have learned a lot and that will help with a potential move to Western USA. Directors did stress they would look to acquire a potential KFC or Taco Bell, sticking to what they know etc.

KFC Wellington, Courtney place opening soon!

[LAC]

Thanks blackcap for the updates, much appreciated.

What was on offer for refreshments this year....

[blackcap]

Thanks blackcap for the updates, much appreciated.

What was on offer for refreshments this year....

Well yes I had more questions, but during another persons questions some in the crowd started getting rather heated "hurry up we are here for lunch" type of rhetoric. So I thought better of it and asked the questions personally post meeting. Um there were slices of pizza and unlimited amounts of KFC chicken. (no chips unfortunately) (and plenty of coffee too but not sure if that was starbucks)

[Timesurfer]

Hi Blackcap,

I fully agree, that it is probably not a reflection on the whole company and I originally bought in because I like the direction they are heading globally. However, I got hungry for better returns so moved my meager shareholding to other companies (which may or may not be performing better!).

Not sure I should publically slam a particular store, but it was in the top of the South Island. There were only 2 customers infront of me, and it took ages to get served as they got one of the orders in front of me wrong, one of the drive though orders also came in wrong while I was standing there.
The quality of the food was not great, with the chicken very greasy but the batter very dry and hard (as mentioned by someone else), and the potatoe and gravy was mostly flour and water, the chips were cold. Just generally the food was not handled well and the floor was a mess.

Perhaps I am just getting fussy with my food in my old age, I know other people that love to eat there.

[winner69]

Thanks blackcap

Obviously $43m/$45m profit F19 not cutting for punters with shareprice down nearly 2% today

It’ll recover though and be back over 8 bucks soon

[blackcap]

Thanks blackcap

Obviously $43m/$45m profit F19 not cutting for punters with shareprice down nearly 2% today

It’ll recover though and be back over 8 bucks soon

The directors did come out too and say they were targeting $1b sales (a $1 billion company) was there thing and then later the chair started talking about $1.5b. I asked the directors later that growth and sales is all good, but please keep in mind that as a S/H I am only really interested in EPS. With EPS currently at 29 cents the $8 may look a bit toppy. One of the directors was not so concerned about EPS, he was all about the growth, another I talked to was a lot more circumspect about EPS accretion being important when evaluating any potential acquisition, be it synergy potential or other.

[jg8512]

Thanks blackcap

Obviously $43m/$45m profit F19 not cutting for punters with shareprice down nearly 2% today

It’ll recover though and be back over 8 bucks soon

while the guidance was a little under expectations (of $46m) - I think that might just be good expectations management - some of the commentary was very positive. eg

"the company has never been stronger. "

" We have a very clear strategy for growth, we have executed the first phase of that strategy and we are poised for further expansion"

the billion dollar revenue target, and the plans for $1.5 billion, which Blackcap mentions.

Given the strong cash flows the business generates, I think plenty of that growth should enhance eps. the Hawaii etc acquisition provides the platform for strong eps growth imho, as they can improve trading (as they did on the NZ KFC stores thru store redevelopment) and add new stores at low incremental cost financed from operating cash flow (as they are doing in the Aus KFC chain)