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  1. #1191
    Legend Balance's Avatar
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    $1.06 and stock has dried up.

    Next target - $2.00.

    And it will reach there.

  2. #1192
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    Aah yes, I remember the talk of here comes $3.00 - many years ago (when it was at $2.20). If only I'd sold then.................

  3. #1193
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    Quote Originally Posted by Balance View Post
    $1.06 and stock has dried up.

    Next target - $2.00.

    And it will reach there.
    On what basis?

  4. #1194
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    Quote Originally Posted by biker View Post
    On what basis?

    It will take the market to wake up to the massive turnaround happening in RBD as the market has been disappointed so often in the past. The market and RBD's sp hav been reacting to ever improving results as they are announced.

    The smart money has been buying before the results.
    Last edited by Balance; 26-06-2009 at 08:19 AM.

  5. #1195
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    Arrow Pizza hut fix..

    WELL with a notice out today it appears that RBD will run PH for another 10 + 10 years
    Sell any thing that`s not making a profit get a smaller chain to boot this is profit talk
    and good to hear after all these years of down hill so the wheel has turned for the better
    even W69 mite even BUY ,yet..

  6. #1196
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    Arrow Yum, yum..

    Quote Originally Posted by BRICKS View Post
    WELL with a notice out today it appears that RBD will run PH for another 10 + 10 years
    Sell any thing that`s not making a profit get a smaller chain to boot this is profit talk
    and good to hear after all these years of down hill so the wheel has turned for the better
    even W69 mite even BUY ,yet..
    WELL W69 today is PAY day.. YUM, YUM..

  7. #1197
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    Quote Originally Posted by Balance View Post
    $1.06 and stock has dried up.
    Buying demand by index mangers as they scramble for shares as RBD rockets back into the NZX50? 1st July was the RBD index inclusion date.

    This change was notified some time in advance, but how long do index mangers have to get their house in order? Anyone know?

    Next target - $2.00.

    And it will reach there.
    To put some 'balance' back into this thread, a few brokers are now listing RBD as an 'outperform'. But where were they when the share was trading at 80c and below?

    I have just updated my Warren Buffet style overview of RBD on the other channel. The unfortunate trend is the better KFC looks, the worse Pizza Hut looks. Pizza Hut's real (after administrative overhead) performance was a $9m loss in FY2009, or nearly $7m if you ignore the goodwill writedowns. Whichever way you look at things though, Pizza Hut losses are running at record highs.

    My 'divisional analysis' requires certain assumptions about the way head office expenses and interest charges are allocated inside head office across the three opearting divisions. One way of checking how good my allocation assumptions are is to compare the tax that the company really pays to what I calculate it pays. I was in close agreement with the official figures up until FY2006. In 2007 I was out by $2m and by 2009 I was out by $5m (estimated tax paid $8m, actul tax paid $3.3m). One explanation is that the KFC rebuild program began in earnest from FY2006 and that more human and capital resources have been allocated to the KFC rebuild than I have assumed. Nevertheless I believe that my underlying assumption over the long term, that resources allocated should be proportional to business unit turnover, is sound.

    An 'underlying profitability' of $6.5m, or 6.7cps gives PE of 15 using a share price of $1.04.
    $1.04 is probably fair given the improvements that should be possible within the business.
    Eliminating Pizza Hut losses would boost underlying earnings to around $12.6m (13cps) - say five years out. At that point, given the poor record of this company's growth into other markets in the past, I would pick real growth to stop dead.

    I would think KFC NZ alone would justify a 'long term' PE ratio of 11 to 13. So in five years time we might expect a 'fair value' RBD share price of $1.43 to $1.69. That's a nice improvement on today's share price, but still some way short of $2.

    Like you Balance I do believe the RBD share price will get to $2. However there my not be anyone who currently posts on this forum still alive to see that day.

    SNOOPY

    discl: hold RBD 'long term', and now showing a capital profit on my holdings (at long last)
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  8. #1198
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    Chairman expects profit to be around $12m this year. That puts stock on a PER of 8.4 times.

    Turnaround of PH should boost profit to at least $15m year after. Then, there's a couple of new businesses RBD is exploring to launch into the market - bought on EBITDA multiple of 5 times.

    Market will get excited and put stock on PER of 14 times to price in growth prospects, strong cash flow and defensive profile. Stock is at $2.00 plus.

    Heck, nobody gave the stock a chance of seeing $1.00 again last year.

  9. #1199
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    Quote Originally Posted by Balance View Post
    Chairman expects profit to be around $12m this year. That puts stock on a PER of 8.4 times.
    That is $12m *excluding one off items* Balance. Now ordinarily I would agree with you and forget about these 'one off items' as not being relevant to the ongoing business plan. However, in 2007 there was a one off Pizza Hut NZ goodwill write off of $1.142m.

    In 2008 there was a 'one off' Pizza Hut NZ goodwill write off of $1.187m.
    In 2009 there was a 'one off' Pizza Hut NZ goodwill write off of $3.698m.

    No further 'one off' write offs are anticpated, provided total PH sales grow between 2.8 and 4% per year for 2010-2012. Management are assuming reduced operating expenses going forwards. Total first quarterly sales for 1Q2010 Pizza Hut were up 2.4% on the prior year to $15.5 million. But annualise that figure and you get sales of $62m which is down another 4% on last years absolutely disastrous figures!

    The projected growth figures take into account the closing of 8 red roof restaurants and 3 delcos. So with Pizza Hut outlets dropping from 93 to 82 over the next three years, same store outlet sales will need to grow between 3.2 and 4.5 percent per year every year for the next three years.

    Balance, do you still want to bet against there being another 'one off' write off Pizza Hut NZ goodwill in FY2010?

    Turnaround of PH should boost profit to at least $15m year after.
    The 'turnround' has been going to happen since June 2006 after returns first dropped. For FY2005, EDITDA for Pizza Hut ws $13.63m. For FY2009 $2.77m. Pizza Hut has a huge mountain to climb.

    Then, there's a couple of new businesses RBD is exploring to launch into the market - bought on EBITDA multiple of 5 times.
    Please tell us more! What new businesses?

    nobody gave the stock a chance of seeing $1.00 again last year.
    Bricks and I were buying, even if no-one else was.

    SNOOPY
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  10. #1200
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    RBD can write-off all the goodwill of KFC and PH for all the market cares.

    What's the real value of goodwill?

    As for other businesses - plenty out there now that RBD is rid of its problem child. I guess the risk is that RBD does another PH Victoria.

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