RBD - Restaurant Brands Ltd

[Bongo666]

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http://www.restaurantbrands.co.nz

[utopian201]

Bongo666 : The slide in fortune for this company continues. Sales results for the last quarter tell the picture. Pizza Hut down by 13% and Starbucks and KFC barely keeping place with inflation. I see Tower snapped up some shares at the beginning of the month though.

RBD management say the current economic downturn will be good for Pizza Hut and they forecast a profit that may match one they made 6-7 years ago.

What do you RBD shareholders think?

"Pizza Hut down by 13% and Starbucks and KFC barely keeping place with inflation. I see Tower snapped up some shares at the beginning of the month though.

RBD management say the current economic downturn will be good for Pizza Hut"

Late last year Danny Diab increased his holding as well. There was also that Australian guy who wanted to buy over 20% of RBD, but he got caught up in Opes Prime.

How would an economic down turn be good for Pizza hut though? There is intense competition from Hell and Domino...

[Bongo666]

Utopian, it seems RBD management think that due to the tough competition in the NZ pizza market it will sort out the wheat from the chaff and leave more room for the good operators. It seems PH management think they are one of the good operators. We shall soon see

[utopian201]

Oh I just read that link more closely

"The retail pizza market was undergoing a "shakeout", with some Pizza Hut competitors closing, particularly in Auckland and Christchurch."

I'm guessing RBD think the economic downturn will affect them less...

[moe]

Perhaps a dowturn would be good for Pizza Hut as RBD doesn't soley relie on Pizza for its earnings.

While things are tough in the tight pizza market, RBD will still be able to tick over revenue through their other markets (KFC, Coffee etc). Whereas the smaller players have got little support from elsewhere thus driving them out of business. Once the weaker players are gone and the economy takes a turn for the good, things look better for Pizza Hut....perhaps??

disc-don't hold

[utopian201]

I'm sure you've all read the releases. RBD is prepared to cease Pizza Hut operations if it doesn't pick up the pace. This will bring more favourable conditions with Yum brands when it comes to renewing the licenses.

[Bongo666]

Hi Utope, can you elaborate on what you mean by This will bring more favourable conditions with Yum brands when it comes to renewing the licenses.

I have been advocating that RBD should have ditched Pizza Hut for years. Ditto Starbucks in my opinion.

[utopian201]

[quote="Bongo666"]Hi Utope, can you elaborate on what you mean by This will bring more favourable conditions with Yum brands when it comes to renewing the licenses.

I forgot to post this reply, i had saved as a draft instead!

I meant it by what was included in the chairman's address:
"Our relationship with Yum! is sound -- after all we pay them royalties of
$16.6 million a year on our Pizza Hut and KFC sales -- but as we come up to
the renewal of the majority of our Pizza Hut New Zealand franchises in 2010
there is room for renegotiating our Pizza Hut arrangements. Our current
agreements with Yum do not recognise the true nature of the New Zealand pizza
market where consumer tastes have changed and where there has been a 250%
increase in the number of branded pizza outlets in the past five years."

That is, if Pizza hut was ditched, that part of Yum would no longer have a presence in NZ

[Bongo666]

Cheers Utope, I'm 99.99% clear now.

B

[utopian201]

Hi
Just read your post here:
http://shareinvestornz.blogspot.com/200 ... lying.html

I'm a bit skeptical as to whether increasing sales through expensive store refurbishments is a good idea. RBD no longer own their stores so if I think about it, the only asset backing is the brand and a few kitchen utensils. They are basically spending large amounts of capital expediture modernising someone else's asset. I mean, in 10 years time, does this mean they are going to refurbish the lot again? It doesn't seem very sustainable.

Some people also think Pizza Hut will be ditched soon. I don't even know what 'Pizza Hut' means as a brand anymore. Well actually I think of it as a bit of a cut rate Dominos, which isn't good at all!

Perhaps with lower interest rates, the dividend yield will cause the share price to stop its long term downtrend.

[Bongo666]

I don't know about that.

The share price currently languishes at an all-time low and given current market sentiment I doubt very much there will be any sustaned upside to the share price any time soon.

If the share price gets any cheaper though it will be a takeover opportunity.

[utopian201]

Reported profit for this is down 47% from last year. I predict the share price is now only being held up by the dividend, with new lows to come once it has been paid.

[CEMENT]

BUT noted the locals are still eating buckets of KFC..

[Bongo666]

BUT noted the locals are still eating buckets of KFC..

Ironically even though this company has done badly over the last 10 years as a listed entity, it should do OK during the recession.

[Bongo666]

Good lord this company has done well over the last few months. Is it the calm before the storm?