Forum Archive Index - September 2000

["G.P.Thompson" <gp.thompson@bitworks.co.nz>]

Good points Dskul
The main driver for RBD product would appear to me to be disposable income.
Right now I have somewhat less due to rising fuel prices and I can tell you
I am subconsciously cutting back on travel and unnecessary expenditure such
as eating out.  Cobb and Co will only be a bargain if RBD can a) provide the
same service for less or b) increase the total market size somehow as a
result of the acquisition. Such a sale will be of dubious benefit IMHO.
GPT
----- Original Message -----
From: "dskul deisel" <bennie64@yahoo.com>
To: <sharechat@sharechat.co.nz>
Sent: Sunday, September 03, 2000 1:20 PM
Subject: [sharechat] RBD it's a Rear Breed of Dog


> I totally agree that RBD is a sell at current prices.
>
> Those trying to ramp this share should be ashamed.
>
> It has very little upside potential.Why? Firstly the
> market is capped so their sales aren't going anywhere
> startling.  Secondly the pizza market has a low
> barrier to entry, so RBD will be continually battling
> the latest Italiano start up, or challenging
> McDonalds.  Thirdly their business model requires huge
> investment in upgrades, fit-outs, and competitor
> acquisitions and this destroys shareholder value.
>
> Any budding entrepreneur can set up a Dial a Dinos
> operation, and so just when RBD think that their
> margins are ok along comes a new entrant and sloggs
> them.  Their response is to buy them out and then try
> and restore their margins ( Remember when Pizza Hutt
> charged $20.00 per pizza?).  This requires investment
> to recover what use to be RBD's customers. The spin
> from the company is that they are establishing a
> platform for growth but in reality they are re
> -establishing their platform.  They are simply running
> up a slippery slope!
>
> It's also true that they can't their concepts outside
> NZ.  So sales are capped. They only have a market of
> 3.8 million.
>
> By owning the capital of the business they are tied to
> a business model that requires high levels of capital
> for reinvestment.  To release shareholder value this
> company needs to adopt a different business model,
> otherwise it will simply keep on turning in
> lack-lusture profit results and keep repeating the
> same PR lines.
>
> Disclosure I buy the products but not the shares.
>
>
> --- Mark Hubbard <mhubbard@es.co.nz> wrote:
> > On 2 Sep 2000, at 17:15, rebecca bibby wrote:
> >
> >
> > > P.S.  Reliable sources inform me RBD is a bargain
> > so get in before others do.
> > > Emails of support strongly advised and welcomed.
> >
> >
> >
> > RBD is a great cash cow, which almost always seems
> > to trade at
> > a discount to its true worth (which its currently
> > doing). I suspect
> > the major trouble with it is, although it has lovely
> > cashflows you
> > can bank on, its not really IMO a growth stock.
> > There is not that
> > many ways it can substantially increase revenues -
> > and it is a pure
> > NZ domestic operator. Thus nothing 'spectacular'
> > will happen to its
> > price.
> >
> > The last time I purchased it I sold half my
> > shareholding at $1.64 for
> > a nice gain (treating that part like a trading
> > stock). The other half I
> > have kept simply for its dividend, as its a great
> > yield. Also good is
> > the dividend reinvestment plan. I'll let my
> > remaining shareholding
> > just tick way, with my total shareholding rising
> > with each dividend.
> > Thus, my opinion would be, its not a stock you'll
> > get rich quickly on
> > by any means, but its lower risk (compared to growth
> > stocks), and
> > good yield, might give good balance for a lifelong
> > portfolio.
> >
> > My 2 cents worth.
> >
> > Cheers Mark (Taking a bit of a bath on ASX at the
> > moment).
> >
> > Discl:
> >
> > Hold: NZSE: RBD, APT, RYM, NUF, CGB (have been
> > building in
> > this).  ASX: NIX (will build when I see what price
> > settles on), CSB,
> > BRZ (a big disappointment to date), UCR, and yes,
> > still those WAL.
> >
> >
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