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Restaurant Brands announces Taco Bell rollout as Mexican takeover documents posted

on Thursday 13 December 2018 in Gainz, Restaurant Brands, Sectors, Securities – NZ

Restaurant Brands NZ Ltd announced plans on Tuesday to roll out over 60 Taco Bell restaurants in Australia & New Zealand as directors said they would sell their shares to prospective new 75% owner of the listed company, Finaccess Capital SA de CV of Mexico.

Restaurant Brands already operates 36 Taco Bell outlets in Guam & Hawaii, and said on Tuesday it had reached agreement with Taco Bell Restaurants Asia Pte Ltd to bring the brand to New Zealand, New South Wales & Canberra next year.

Taco Bell Corp is a subsidiary of Yum! Brands Inc. Its Mexican-inspired quick service restaurants serve made-to-order & customisable meals.

The companies have reached development agreements to build the restaurants between 1 January 2019 & 30 June 2024, providing Restaurant Brands with the right of first offer in relation to the establishment of new Taco Bell restaurants in the 3 territories.

Restaurant Brands group chief executive Russel Creedy said these agreements weren’t conditional upon the completion of the current partial takeover offer.

He said the company expected to fund construction from internally generated cashflows. The Guam & Hawaiian outlets contributed $19.4 million to group earnings before interest, tax, depreciation & amortisation in the 2018 financial year. However, Mr Creedy said it would take several years for the brand to make a significant contribution from the Australian & New Zealand markets.

He added: “Bringing the Taco Bell brand to this part of the world aligns with our strategy of focusing on global tier one brands in markets we understand. We know from our experience in Hawaii & Guam that Taco Bell is a top tier brand backed by excellent franchise systems.”

Restaurant Brands is a corporate franchisee which specialises in managing multi-site branded food retail chains. It’s listed on the NZX & the ASX and has annual sales of about $740 million. As of November, it had 283 stores: 94 KFC MZ, 61 KFC Australia, 29 Pizza Hut NZ, 18 Carl’s Jr, 36 Taco Bell Hawaii, 45 Pizza Hut Hawaii. 

The takeover offer

Restaurant Brands’ board signed a pre-bid agreement with Finaccess Capital on 26 November for Finaccess subsidiary Global Valar SL to make a partial takeover offer to acquire up to 75% of Restaurant Brands’ shares at $9.45 cash/share.

Finaccess sent its offer document to Restaurant Brands on Monday, along with Restaurant Brands’ target company statement and an independent advisor’s report prepared by Grant Samuel Ltd.

Grant Samuel has assessed the value of Restaurant Brands shares at $8.15-8.92, including a premium for control. As the offer is above that valuation range, Restaurant Brands’ board unanimously recommended accepting it, in the absence of an unmatched superior proposal.

The biggest holding, 8.52%, is held by interests associated with Australian director Stephen Copulos, who’s agreed to accept the partial takeover for all those shares.

Grant Samuel said the offer price represented a 24.3% premium over the closing price of $7.60 on 17 October, the last day before Restaurant Brands announced Global Valar’s indicative proposal to make the offer, and a 23.1% premium over the New Zealand volume-weighted average price for the previous 6 months.

Links:
Offer document
Target company statement
Grupo FinAccess
Restaurant Brands

Earlier story:
30 October 2018: Updated: Restaurant Brands completes Starbucks sale, working on FinAccess offer

Attribution: Company release, offer documents.

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Updated: Restaurant Brands completes Starbucks sale, working on FinAccess offer

on Tuesday 30 October 2018 in Gainz, Restaurant Brands, Sectors, Securities – NZ

Published 25 October 2018, FinAccess offer price corrected 30 October 2018:
Restaurant Brands NZ Ltd said yesterday it had completed the sale of its Starbucks Coffee business to Tahua Capital Ltd.

Restaurant Brands, which specialises in fast-food & café retail, was also confronted with an offer last Thursday for 75% of its shares from Finaccess Capital SA de CV, which Restaurant Brands said it was working through.

That offer, at $9.45/share (originally written as $4.95/share) $4.95/share, was a non-binding indicative approach, which didn’t constitute a takeover notice pursuant to the Takeovers Code. As the price is subject to adjustment for any dividend, Restaurant Brands’ board resolved not to declare an interim dividend at the moment.

Restaurant Brands sold the fixed assets & stock of its Starbucks business to NZ-owned Tahua Capital for up to $4.4 million (subject to settlement adjustments for, among other things, the value of stock on hand at completion). Tahua’s owners, experienced in retail & multi-site hospitality businesses, established the company specifically to acquire the Starbucks NZ assets.

The bidder for 75% of Restaurant Brands, Finaccess Capital, has investments in the casual dining & quick service restaurant sector and in real estate in about 20 countries in Europe & Asia. Its current major investments in public companies include a controlling interest in European casual dining & quick service restaurant operator AmRest and a minority interest in Spanish real estate business Inmobiliaria Colonial.

Finaccess Capital is part of Grupo Finaccess, which holds assets in Mexico, the US, Europe & Asia and offers clients a portfolio of financial, operative & investment services.

Restaurant Brands said that, as of February [how could a board justify its existence when it presents 8-month-old details!], it had 314 stores: 94 KFC NZ, 61 KFC Australia, 36 Pizza Hut NZ, 22 Starbucks (now sold), 19 Carl’s Jr, 37 Taco Bell Hawaii & 45 Pizza Hut Hawaii stores.

Link:
Group Finaccess

Attribution: Company releases.

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Propbd on Q Th4Jun15 – Licensing, empowering communities, erosion; Restaurant Brands sales up; building stats; panel change

on Thursday 4 June 2015 in Apartments, Building consents, CBD and fringe, Coast, Construction, Environment, Gainz, Land use, Market, Processing, propbd on Q, Resource management, Restaurant Brands, Sectors, Securities – NZ

3 units sell at Ray White auction
A productive forward-looking day at the council
Restaurant Brands lifts quarterly sales 14.7%
Stories online – building completions, hearing panel change

5.03pm:
3 units sell at Ray White auction

3 of the 5 apartments taken to auction at Ray White City Apartments today were sold under the hammer. Auction results:

Alpha, 17 Vogel Lane, unit 1104, sold for $419,000, sales agent Krister Samuel
Madison, 145 Symonds St, unit 207, sold for $287,000, Mitch Agnew & Damian Piggin
Portland Tower, 62 Queen St, unit 7B, no bid, Mitch Agnew & Damian Piggin
City Zone, 11 Liverpool St, unit 1308, sold for $330,000, Damian Piggin & Daniel Horrobin
Emily Apartments (ex-Four Seasons), 22 Emily Place, unit 4F, passed in at $370,000, Gillian Gibson

A productive forward-looking day at the council

Auckland Council had a productive day on 3 issues at its regional strategy & policy committee – licensing, the new empowered communities approach to providing community services and coastal erosion.

I’ll have more on these topics tomorrow, but the basics are outlined below.

When you look at the outline on these topics below, you’d most likely think it wasn’t at all productive, more like a sea of reports & plans to work out what action to take.

The productive element is that here was a council committee thinking forwards, focused (most of the time) on what needed to be done, becoming aware of how communities could be harmed when change was badly handled, looking for positive outcomes.

Licensing

The committee had 3 options before it on the structure for the district licensing committee, in a review agreed when the present structure was chosen in August 2013:

  • Retain the existing structure
  • Retain the existing structure but reduce the number of commissioners & members from October 2016, when the present committee contracts expire, and
  • Reorganise into a locally based model aligned with local board boundaries, similar to the 9 clustered committees model proposed in 2013.

Although a number of committee members still voted for option 3 and others supported the sentiment, it was seen as impractical if some committees were inundated with applications and others had little to do.

2 local board representatives, Otara-Papatoetoe chair Fa’anana Eleso Collins and Mangere-Otahuhu member Nick Bakulich, spoke in favour of less intimidating formality and a need for localised panels & police involvement.

Cllr Alf Filipaina said when option 3 was rejected: “What we’re saying is, let the problems in the south continue. We’re now getting feedback from our local boards saying it is not working for us, our communities are hurting. I understand about the quasi-judicial format we have, but it’s about our communities.”

The majority agreed to retain the existing structure and the whole committee supported more work being done on how to capture improvements outlined in the review. The committee will get another report on that in August.

Empowering communities

The council’s budget committee approved the empowered communities approach on 7 May as part of the long-term plan, but local boards were concerned the new model would be introduced with no funding for boards in the first year to make it work.

The regional strategy & policy committee endorsed implementing the new model with a couple of additions. One was that progress against outcomes, structures & operation of the model would be reviewed & reported back to the committee in February & July 2016. The other was to support more funding to deliver locally driven initiatives being considered as part of the 2016-17 annual plan.

Erosion

Coastal erosion sprang to prominence last month when the council looked at what to do at Orewa Beach, where erosion has been a frequent problem and recently carved away long stretches of sand & bank.

Council chief engineer Sarah Sinclair gave the regional strategy & policy committee an update today on a multi-pronged approach – climatic impacts, managing the coastline, prioritised asset management, development controls, coastal compartment plans, a citizen science initiative, exemplar projects and budget planning.

She said a political workshop on work plans would be held in August, and the committee would get a report in October on workshop outcomes.

Restaurant Brands lifts quarterly sales 14.7%

Restaurant Brands NZ Ltd increased total sales by 14.7% ($11.4 million) to $89.1 million in the first quarter (the 12 weeks to 25 May).

KFC contributed $7.5 million. Carl’s Jr contributed $4.4 million, mostly from higher store numbers after the company acquired 7 Auckland-based Carl’s Jr stores.

Same-store sales were up 7.6%, led by 9.8% for KFC and 8.9% for Starbucks Coffee. Pizza Hut was slightly down at 0.5% and Carl’s Jr was down 5.2%.

Stories online – building completions, hearing panel change

Building work up 19% nationally for year, Auckland quieter in March quarter

Update – panel change: Panels appointed to hear Queens Wharf artwork & Takapuna boating hub applications, plus others

Attribution: Company release, Statistics NZ, council.

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2 listed companies introduce quite different CEO incentive plans

on Tuesday 29 July 2014 in Gainz, Restaurant Brands, Sanford, Sectors, Securities – NZ

2 NZX-listed companies, Sanford Ltd & Restaurant Brands NZ Ltd, introduced the latest in executive incentive plans yesterday.

The 2 schemes are markedly different from each other. Sanford’s matches earnings against the cost of capital while Restaurant Brands’ has a share price target.

The Sanford scheme looks long-termish (5 years), but the company hasn’t mentioned what happens after the first payout period. The Restaurant Brands scheme gives the chief executive 3 years to achieve the target, with a big one-off prize for success – not really a long-term incentive, although it might take him some time to ramp the share price up through better operations.

The Sanford long-term incentive plan is based on lifting the underlying operating profit to a set percentage of the company’s weighted average cost of capital. In contrast, the typical property sector incentive of the past (and for some, present) was based on lifting gross assets.

This new scheme works in shareholders’ interests by raising profit over costs, whereas the property sector scheme had no relationship to shareholder interests.

Sanford chairman Jeff Todd said the objective of the incentive plan for its chief executive, Volker Kuntzsch, was to offer performance share rights for progressively improving Sanford’s underlying operating profit to a level approximating 130% of its weighted average cost of capital over a 5-year period.

To start the scheme, Sanford has granted Mr Kuntzsch 53,097 performance share rights, each entitling him to one ordinary share in Sanford on exercise. For him to exercise these rights:

  • Sanford’s average return on funds for the 2014, 2015 & 2016 financial years must achieve certain predetermined levels in relation to the 5-year objective, and
  • Mr Kuntzsch must remain employed by Sanford for 3 years.

Mr Kuntzsch won’t have to pay anything when these shares are allotted to him. Mr Todd said the benefits provided under the plan were capped at 30% of Mr Kuntzsch’s fixed annual remuneration, which was set at market levels.

The other novelty is that, whereas most executive share schemes pay out with dilutive newly issued shares, Sanford will establish a trust which will acquire shares on market to meet the share obligations under the plan.

Mr Todd said Mr Kuntzsch had agreed that, following exercise of the performance share rights and for so long as he remained employed by Sanford, he would only sell the number of shares necessary to satisfy his tax obligations on exercise of the performance share rights, unless the board of directors specifically agreed otherwise.

Restaurant Brands’ board announced its incentive scheme for chief executive Russel Creedy after completing a review of his remuneration package.

Under the terms of the scheme if, in the 2-year period starting on 25 July 2015, Restaurant Brands’ closing share price is at or exceeds $4 for 40 consecutive trading days, Mr Creedy will be paid a one-off $1 million net cash bonus. He has to stay for the next 6 months to get it.

The share price hasn’t been anywhere near $4 lately. Back at the end of July 2012 it was at $2.12, and in May last year it went over $3. Since then it’s meandered in a 65c range, hitting $3.34 in June, dropping back to $3.14 last Friday. Today it picked up 6c to $3.20.

There are enough sub-clauses in the Restaurant Brands plan to make a payout – or non-payout – contentious enough for the company & its No 1 employee to spend the $1 million arguing over what should be taken into account.

Mr Creedy will be entitled to payment of the bonus if a full takeover offer (or analogous transaction) is successful at or above $4/share during the 2-year assessment period, but again, he has to stay on for the next 6 months (subject to certain exceptions).

The board may exclude or adjust closing share prices if it considers it necessary to “fairly & equitably address any exceptional or unusual circumstances”. In addition, the board must make any adjustments to the scheme which it considers necessary to fairly & equitably take into account certain corporate actions such as variations to Restaurant Brands’ share capital and material business acquisitions or sales.

Attribution: Company releases.

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67% lift for Restaurant Brands trading result

on Thursday 4 March 2010 in Restaurant Brands

Published 4 March 2010

Restaurant Brands Ltd said today its trading result for the year to 28 February would be 67% higher than the previous year, the result of a combination of stronger-than-expected trading over the last quarter (especially from its KFC stores) & the successful resolution of a pricing review with a major supplier.

 

Chief executive Russel Creedy said Restaurant Brands anticipated its full-year net profit after tax (excluding non-trading items) would be in the vicinity of $19.5 million (20c/share), representing  a $7.8 million (67%) improvement. The company will release its results on Wednesday 7 April. Want to comment? Go to the forum.

 

Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Bid for Restaurant Brands falls through

on Wednesday 12 October 2005 in Restaurant Brands

Published: 11 October 2005


Restaurant Brands NZ Ltd said today the takeover by a subsidiary of CVC Asia Pacific Ltd was off.



The market reaction was a 13c drop in the share price, which closed at $1.27 – down 1c on the price before the bid was announced.


The conditional takeover offer by NZ Restaurant Holdings Ltd was announced on 14 June. The offer price of $1.65/share was a 29% premium on the last sale price of $1.28.CVC Asia Pacific is owned by a joint venture between Citigroup & CVC Capital Partners of Europe, which calls itself an independent buyout firm although some research suggests it’s part of Citigroup, the CVC standing originally for Citigroup Venture Capital.


Restaurant Brands chairman Bill Falconer said subsidiary making the bid had advised it couldn’t reach agreement on a number of commercial terms with Yum Restaurants International, the franchisor of the KFC & Pizza Hut brands.”NZ Restaurant Holdings, as a condition of filing the formal offer, had requested a number of additional undertakings from Yum Restaurants International in respect of the terms of the franchise agreements which would apply under CVC ownership.”Mr Falconer said these discussions between CVC & Yum didn’t affect the current franchise agreements for Restaurant Brands, which have been in place since 1997.


The Restaurant Brands chairman also said a draft of Grant Samuel’s independent report on the bid wouldn’t be released: “The independent directors announced on 13 July that a first draft of an independent advisor’s report had been received from Grant Samuel. Grant Samuel did not issue a final report as no offer was made. The board decided it was inappropriate to issue the report in its draft, and incomplete, form. In addition, information contained in the report is no longer current. “Ongoing discussions between CVC & the company had been directed towards CVC improving its bid. However, these discussions were overshadowed by the inability of CVC & Yum to reach agreement,” he said. Mr Falconer said while there had been some interest from other parties, Restaurant Brands wasn’t considering any other offers at this stage.The company will release its half-year results on Thursday 13 October.


Earlier story:


14 June 2005: Citibank fund launches Restaurant Brands bid


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

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Citibank fund launches Restaurant Brands bid

on Tuesday 14 June 2005 in Restaurant Brands

Published: 14 June 2005


A Citibank fund made a conditional $1.65/share offer today for Restaurant Brands NZ Ltd. That’s a 29% premium on the last sale price of $1.28.



The offer vehicle is NZ Restaurant Holdings Ltd (incorporated on 10 June, directors Adrian MacKenzie & Joshua McKean).Mr MacKenzie is CVC Asia Pacific Ltd’s managing director for Australia & New Zealand. CVC Asia Pacific is owned by a joint venture between Citigroup & CVC Capital Partners of Europe, which calls itself an independent buyout firm although some research suggests it’s part of Citigroup, the CVC standing originally for Citigroup Venture Capital.


CVC Capital Partners sold Hanimex of Australia to Fletcher Building Ltd in 2002.Restaurant Brands has appointed a committee of independent directors to advise on the offer – Bill Falconer, who’s both company & committee chairman, David Pilkington, Ted Van Arkel & Trevor Hall. Grant Samuel & Associates Ltd will prepare a report on the offer for them.


Mr Falconer said the offer was subject to a number of conditions, including 90% acceptance. NZ Restaurant Holdings also indicated it would need to agree certain commercial matters with franchisors before making its offer because they’re counterparties to key commercial contracts, and would have to be satisfied about ongoing arrangements with key senior staff.Restaurant Brands operates KFC, Pizza Hut & Starbucks Coffee outlets in New Zealand, and Pizza Hut in Victoria. PepsiCo Inc floated the company in 1997.


The offer prices the company at $159.8 million, up 29% on the $124 million market capitalisation when a trading halt was called today.




Websites: Restaurant Brands


CVC Capital Partners


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].

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Restaurant Brands marks time

on Tuesday 14 September 2004 in Restaurant Brands

Restaurant Brands NZ Ltd marked time in the latest quarter (the 16 weeks to 6 September), with total sales down 0.5% to $95.3 million.


Same-store, sales fell 1.4% for the quarter, 0.6% for the year to date.


KFC sales for the quarter fell 2.3% to $52.3 million and were down 1.5% same-store. The chicken chain has 87 stores, down one.


Pizza Hut NZ sales rose 2% to $26.6 million, but were down 3.4% same-store. It opened 3 new delcos, taking is store total to 95.


Starbucks Coffee sales rose 6% to $7.2 million, 5.2% same-store. This chain has 36 stores.


Pizza Hut Victoria sales rose 1.4% to $A8.4 million, 0.7% same-store. It has 51 stores.


Restaurant Brands said KFC sales should continue to improve in the 3rd quarter. Total Pizza Hut sales growth would continue, but new store roll-outs in the 2nd half would affect same-store sales.


The company expected more solid growth from Starbucks, with more store openings.


Margins for all 3 New Zealand chains would be similar or better.

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Restaurant Brands profit chopped 27%

on Wednesday 31 March 2004 in Restaurant Brands

Restaurant Brands NZ Ltd said today net profit after tax for the year to 29 February was $8.1 million – down $3 million (27%) on the previous year’s earnings but in line with expectations.


It was made on sales up 2.2% at $304.6 million.


The company’s brief NZX announcement also said:

KFC sales & margin performance was disappointing during the middle of the year and was the major contributor to the lower profit. KFC achieved ebitda (earnings before interest, tax, depreciation & amortisation) of $25.6m, down 15.5%, on sales of $171.1 million.

Pizza Hut NZ sales grew 7.4% to $81.3 million, ebitda 9.7% to $12.3 million.

Starbucks Coffee returned to positive same-store sales growth in the fourth quarter with total sales up 1.1% to $23.1 million. Ebitda rose 15.7% to $3 million.

Pizza Hut Victoria has nearly completed its store transformation programme. Despite this disruption, the business increased sales 18.9% to $29.1m and improved its margin performance at store level.

A 5.5c/share final dividend will be paid, taking the full-year payment to 10c/share, consistent with the previous 4 years.

Company website: Restaurant Brands

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Restaurant Brands profit up 26.8% to $12.2 million

on Tuesday 2 March 2004 in Restaurant Brands

Starbucks still growing, KFC refurbishing

Restaurant Brands NZ Ltd increased net profit after tax & abnormals by 26.8% to $12.2 million in the 30 November year on sales up 12.7% to $258.8 million. Earnings before interest, tax, depreciation & amortisation (ebitda) rose 14.8% to $46 million.

Earnings/share rose 23.9%, from 10.65c to 13.19c.

KFC sales grew 1.5%, and ebitda grew 30 points to 20.9%.

Pizza Hut sales grew 44.6%, and ebitda 280 points to 11.4% after last year’s expansion.

Starbucks sales grew 55.6%. Restaurant Brands said Starbucks was gaining critical mass, with ebitda up 650 basis points to 10.8%.

Total store numbers rose by 15 to 201. Twelve of the new stores were Starbucks, five Pizza Hut delivery/takeaway outlets opened and two restaurants were closed, and at KFC the Newmarket store closed and a new one opened at Botany Downs.

Pizza Hut will open three new delivery/takeaway outlets in 2002 and will explore more provincial development after successfully opening in Whakatane. The company said in 1998 it would have 50 Starbucks outlets by the end of 2003, and it’s on track, with 6-10 to open this year. Up to $4 million will be invested in KFC store refurbishments this year.

Financial statements for the 2000 financial year were prepared on a 53-week basis because Restaurant Brands normally uses a 52-week (364-day) year and a leap year is occasionally required. To provide a like-for-like comparison, the 2000 year has been restated on a pro-rata basis to reflect a 52-week year.

Restaurant Brands is also changing its annual balance date from 30 November to 28 February, resulting in a 15-month trading period this financial year. This report is for the 12 months to 30 November 2001. A final report for the 15 months to 28 February 2002 will be released in April.

A fully imputed final dividend of 8c/share will be paid, giving 12.5c/share for the year. Annualised, the total is 10c/share.

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