Forum Archive Index - September 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi alec,

>
> Snoopy,
> I am unsure how much power one of their restaurants would use, but as
> a comparison I run two services stations. One 24 hr site has had a
> power increase from $22k pa  to $29k pa over the last 18 months. The
> other 18 hr site has had an increase from $14k pa to $20k pa.
> Different contract times and companies, but it is fair to assume that
> RBD will have had at least a 10% increase in power. I am running
> chillers and air conditioning but my floor area would be smaller than
> theirs. I do have extra lighting costs on the forecourt (approx 8 kwh)
> but don't have the cooking cost of running vats etc. Petrol pumps are
> all pressure systems that consume approx .3kwh over a 24 hr period. I
> think their energy costs will be quite substantial and increases over
> the last 18 months will have taken there toll. Predicted rises will
> also have an impact. 
>

Appreciate your response, as I was really flying blind on my estimate of 
how much energy an RBD store would use.   I don't know of any RBD 
stores that have air conditioning.   They certainly do have their share 
of stand up chillers though.    Cooking, I imagine, would use most of 
their power.  I was guessing that cookers would use a lot of power on 
start up, then use a lower amount of power to retain temperature once 
they got to target temperature.   Then again if most of the cooking is 
done in vats exposed directly to the atmosphere, perhaps not.    
Furthermore, the hours that a restaurant is open, while long, would not 
compare to the opening hours of a garage I would have thought.

I would imagine that RBD is able to negotiate power at favourable 
rates based on some kind of bulk nationwide deal.  Equally well that 
doesn't mean the percentage increase in their bill will be any less than 
the rest of us are stuck with.  If we take your lower figure, a $6,000 
increase and multiply it by 12/18 to take account of the shorter opening 
hours a restaurant would have, that gives a power bill increase of 
$4,000 per restaurant.

Multiply that by 262 restaurants gives a power price increase of 
$1.05million.  Divide by the number of shares on issue (94.815million) 
and you get a net increase in costs of 1.1c per share.   I think that 
sounds more realistic  That comes out as 10% of profits, so it is 
significant.  Whack on another 1c to account for the 'pressure on 
margins'  RBD talk about and you are looking at an annual profit of 9c 
per share for FY2004.     That would no longer cover the dividend.   
Nevertheless companies are loathe to cut dividends if the outlook for 
the following year is so much better.   I'm picking that the strong cash 
flows will mean that the dividend is maintained.    RBD didn't pay out 
all their profits as dividends last year.   Hopefully this means RBD 
retains enough imputation credits to maintain a fully franked dividend 
of 4.5c, even though earnings for the first half of FY2004 may be less 
than that.

SNOOPY




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