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Daily Share Chat: Restaurant Brands

By Jenny Ruth

Monday 2nd November 2009

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 Jenny Ruth

Restaurant Brands' KFC store transformation program "continues to deliver extraordinary returns," says Macquarie Equities analyst Warren Doak.

The average increase in sales in the first year of a transformed store is 19%, he says. That, and an acceleration of the program, coupled with new menu offerings and new store openings, are expected to underpin strong same-store sales growth for at least the next three years," Doak says.

"Management's focus is now unashamedly 100% on the core KFC business with management expressing great confidence in the medium-term outlook."

Doak says his forecasts are very conservative relative to management guidance but, even so, Restaurant Brands "continues to trade on remarkably undemanding valuation multiples."

He is expecting net profit, excluding non-trading items, will come in at $16.9 million for the year ending February 28, a 39.5% increase on the previous year.

Doak says the Pizza Hut chain showed a marked improvement in operating performance in the first half but the company remains committed to a controlled sell-down.

The Starbucks chain proved to be the most economy-sensitive brand and its first-half performance was disappointing. "A new management team and a renewed focus on core operations is expected to underpin an improved second-half performance." Doak has a $1.70 per share 12 month price target.


BROKER CALL:  Macquarie Equities rate Restaurant Brands as outperform.

 

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Get quotes for Restaurant Brands NZ Limited Ordinary Sh (RBD)
NZX Annoucements for RBD
30 Aug 2010 ALLOT: RBD: Issue of New Securities
27 Jul 2010 ALLOT: RBD: Issue of New Securities
6 Jul 2010 ALLOT: RBD: Issue of New Securities
1 Jul 2010 MEETING: RBD: Results of Resolutions at Annual Shareholders Meeting
1 Jul 2010 ADDRESS: RBD: Chairman's Address
1 Jul 2010 ADDRESS: RBD: Chief Executive's Address
25 Jun 2010 SSH: RBD: SSH Notice (Milford Asset Management Limited)
1 Jun 2010 QUARTER: RBD: Restaurant Brands' First Quarter Sales
25 May 2010 ANNREP: RBD: Annual Report Provided
24 May 2010 ALLOT: RBD: Issue of New Securities
14 May 2010 ALLOT: RBD: Issue of New Securities
14 May 2010 RELINT: RBD: Disclosure of Relevant Interests by Directors and Officers
8 Apr 2010 RELINT: RBD: Ongoing Disclosure Notice (Russel Creedy)
7 Apr 2010 FLLYR: RBD: Restaurant Brands Full Year Results Announcement
6 Apr 2010 ALLOT: RBD: Issue of New Securities
12 Mar 2010 ALLOT: RBD: Issue of New Securities
9 Mar 2010 ALLOT: RBD: Issue of New Securities
5 Mar 2010 QUARTER: RBD: Restaurant Brands Fourth Quarter Sales
4 Mar 2010 FORECAST: RBD: Profit Upgrade Announcement
28 Jan 2010 SSH: RBD: Beginning to have SSH (Milford Asset Management Limited)
7 Jan 2010 ALLOT: RBD: Issue of New Securities
 
Restaurant Brands NZ Limited Ordinary Shares

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RBD $2.48 +2
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Price when article published: $1.48

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