Forum Archive Index - January 2001

["nick" <acummin@es.co.nz>]

             Restaurant brands finally appears to have been recognised

as a good quality high yield stock. Available for so long at around a

dollar a share , the price has now risen steadily to around 1.40.

        The dividend yield is still very attractive and is likely to grow

in the next couple of years. Despite the cost of buying out eagle boys

 the dividend in effect has increased and paved the way for further

 increases in future.

         The aquisition of eagle boys was questioned by many, they argued

that another competitor would immediatly spring up and it would be

impossible for RBD to corner the pizza market.  The good news is that RBD

appear to have done just that.  They are introducing a new low cost pizza,

while at the same time being able to keep the price of standard pizzas up

due to the lack of competition.  The addition of drink sales is sure to cement

pizza hut as the number one choice in the takeaway market.

 Note they are going to be selling energy drinks, V ? could be some tie in

with Frucor.

             RBD detractors like to point to the lack of growth prospects for

the company. This i believe is a mistake. Starbucks is in a strong growth phase

which will continue for several years, pizza hut too while not spectacular

will grow slowly over the same time period.  There is also talk of them

introducing Taco bell, a mexican style chain (nachos) very popular in europe

as any of you who of been on OE will know (earls court).

  Taco bell is currently being trialed in australia and RBD are watching them

closely.

          Current holders of RBD (at lower prices )  should be very happy

those not currently shareholders may look at the current price and think

they have mssed the boat.  I would say that for the very short term maybe,

but anybody looking for a safe investment with a good dividend yield

and prospects of good medium to longterm capital gain could do a lot

worse than invest in Restaurant brands,  the outlook for the company looks

very positive

              Disclosure hold restaurant brands  bought at 1.09 and 1.00

 

  nick