Forum Archive Index - March 2000

[Nigel McCarter <n.mccarter@clear.net.nz>]

Comparison of Restaurant Brands (RBD) and Advantage (ADV)

Given the current debate, I thought it might be fun to contrast these two.
Advantage figures are estimates based on doubling the Operating statement
for the half year. RBD is based on the latest annual report.  Dollar
figures in 000s



Measure                                                         RBD     ADV
Current Share Price                                     $1.34   $4.90
Share price change since November 1999          $1.34   $2.30
                                                        0%      113%
Revenue                                         217,037 57,770
After Tax Profit                                        13,007          4,200
Profit Margin                                           6.0 %   7.3 %
EPS (cents per share)                           15.3    8.8
PE ratio                                                8.8     54.4
PS ratio                                                0.5     4.0
Return on Total assets                          14.6%   -
Return on Shareholders equity                   47.6    17.8
Dividends                                               7.9 %   0%
Imputation                                              33%     0%
Return less tax                                 7.9%    79%


The two spreadsheets are my standard method of looking at company finances.
 Try playing around with the left hand columns, for share price . revenue
or profits and see what happens to the PE, PS and total return.  At current
share prices, profit has to increase to $12,000,000 before the PE ratio
drops to under 20 at current price levels.  (the market average for value
companies) and  Revenue has to treble before the PS ratio drops below 2.0
which is about average for well run companies with good growth prospects.

Which just about illustrates the difference between short term trading for
capital gain, and long term holding for value.  Sooner or later, the share
prices of RBD will rise because it is growing, but when?  Your guess is as
good as mine.

RBD.xls

Nigel McCarter
Safety Management and Information Services Ltd
Box 23 019 Hamilton
Phone 64 7 858 2429 Fax 64 858 2689
Mobile 02 212 4901