Forum Archive Index - March 2003

["winner69 ." <wwinner69@hotmail.com>]

>From Snoopy's post - KFC makes 79% of profits, Pizza Hut 17% and Starbucks 
3.9%.

Disagree - IMHO all RBD's profit comes from KFC with Pizza Hut and Starbucks 
contributing nothing (at best).

RBD report the EBITDA figures like you quoted Snoopy - a store concept 
EBITDA, which carries no general or admin expenses. Goodness knows what is 
included in these admin and general costs but they are significant.

Take these EBITDA margins (as a percentage of sales) for the last half year 
- KFC 17.0% Pizza Hut 12.9% Starbucks 11.0% and Pizza Hut Victoria -4,2%

All the other costs (admin, general, interest, depreciation, amortisation 
and tax) RBD incurred were 11.0% of sales

Only RBD really know how these costs would be apportioned across the 
concepts (did ask RBD once but they would not provide the information) but 
if we apportion them by sales it means the profit margins for the last half 
year were - KFC 6.0% Pizza Hut 1.9% Starbucks breakeven and Victoria down 
the gurgler -15,2%

Apportioning by sales probably is 'unfair' to KFC (they have the same number 
of stores as Pizza Hut in NZ but twice the sales) and as such 'favourable' 
to Pizza Hut.

In addition a large chunk of the goodwill and fixed assets carried by RBD 
relates to new stores from the Eagle Boys and Victoria purchases along with 
the new(ish) Starbucks stores - meaning these concepts should get a higher 
apportionment.

Loose way of looking at the profitability of each concept but the only 
conclusion I can make is that Pizza Hut in NZ loses money, Starbucks 
probably loses money as well and Victoria definitely loses money.

This would mean that KFC makes all of RBDs profits (actually in excess of 
100% if the other concepts lose money)

Bit sad really - the future of RBD in the hands of concepts that probably 
don't make any money at the moment while the concept that makes all its 
profits is getting near saturation (quote Snoopy) and is going through the 
process of an expensive(?) and much needed upgrade


Anybody else thought of it this way?

I'd like to hear if others have any idea what the real profitability of each 
concept is.












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