Restaurant Brands plots future

By Phil Boeyen, ShareChat Business News Editor

Thursday 16th May 2002

Restaurant Brands (NZSE: RBD) is likely to add a new fast food brand within the next few years according to CEO Jim Collier.

Speaking at the annual meeting on Thursday Mr Collier told shareholders that there is an opportunity to add a fourth brand to Restaurant Brands stable that could be developed in both New Zealand and Australia.

"We will take this new brand development at a measured pace, but it would be reasonable to see us add a new brand within the next 2-3 years," he said.

Mr Collier did not say what that brand may be although there has been speculation in the market for some time that the company might introduce the Mexican fast food franchise Taco Bell to New Zealand.

Mr Collier's comments were backed up by RBD chairman, Bill Falconer, who said that the Eagle Boys acquisition has given the company confidence in its ability to bring a major acquisition into its systems and culture.

Shareholders were also told that the company intends investing a significant amount of capital into refurbishing its core KFC outlets in the near future.

"You may have noticed that the exterior of some KFC restaurants is looking tired. We are well aware of this and to ensure that our outlets remain competitive we will refurbish the exterior of a large portion of KFC outlets over the next 6 months," said Mr Collier.

Another strategy that shareholders will be focusing on is RBD's foray into the Australian market through the purchase of 51 Pizza Hut outlets in Victoria.

Mr Collier says the Australian business represents a turnaround opportunity and the company has "characterised it as the worst house in the best street."

"The business was owned by under capitalised and over geared small franchisees who struggled when retail conditions in Australia became difficult after the introduction of GST in 2000.

"The opportunity is that Pizza Hut market share in Victoria is well below other Australian states. Victoria represents 24% of the Australian population but only 11% of Australian Pizza Hut sales. Said another way, Pizza Hut market share in Victoria is estimated at 15% versus 35% in New South Wales."

Mr Collier says the turnaround will take at least a year but it expects the business will be cash positive at store level in the first year and will be contributing positively to earnings from year two onwards.

Comments from our readers

No comments yet