# CKF - Collins Foods



## System (3 August 2011)

Collins Foods is a major restaurant operator in Australia. It is the:


Operator of 117 KFC restaurants in Queensland and two in New South Wales and is Australia's largest KFC franchisee by number of restaurants.
Operator of 26 Sizzler restaurants in Queensland, Western Australia and New South Wales.
Owner of Sizzler trademarks in Australia and more than 68 other countries (Excluding the United States, Guatemala and Puerto Rico.)
Franchisor of 59 Sizzler restaurants in Asia, predominantly located in Thailand, Japan and China.

http://www.collinsfg.com.au


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## ROE (18 November 2011)

Despite its problem, I think this stock is over sold and now cheap according to my calculation

I take a conservative view they earn 10.5m and earning increase with inflation that sit around $1.50 and I factor in various scenario for a good margin of safety.

On that note I bought 20,000 shares today


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## McLovin (19 November 2011)

Interesting.

Management either lied or is completely incompetent. In consumer business like this it's pretty hard to get your numbers that wrong. Not only that but revenue has fallen 1.2% and profit halved, yest management has said the profit slide was because of tough trading conditions; a 1.2% fall doesn't look that tough.

My own feeling on this one is that the numbers were being "adjusted" for an IPO (it was private equity afterall). Now that it has listed we are seeing how profitable the business really is. I'd rather own Yum! than a franchisee. Personally, I wouldn't pay more than about ~6x earnings.

Good luck ROE.


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## ROE (20 November 2011)

McLovin said:


> Interesting.
> 
> Management either lied or is completely incompetent. In consumer business like this it's pretty hard to get your numbers that wrong. Not only that but revenue has fallen 1.2% and profit halved, yest management has said the profit slide was because of tough trading conditions; a 1.2% fall doesn't look that tough.
> 
> ...




I feel private equity dress it up to sell it but now inflated price is out of the way
it time to pound 

I can tell you these business are very profitable..... I know people who has these franchisee, once you have one you buy as many as you can.

You rarely see a family who own 1 maca or 1 KFC franchise.
It definite logic these are not highly profitable if the family want more and more of it

Now compared to YUM!, who are these people? do they know people who owns
these franchise or just some analyst reading a few number 

YUM! is no doubt a good business but I don't think owner of these franchise is any worse off in fact I reckon the franchisee has better operational leverage..

YUM! take a cut of the sale, owner keep the rest ...so for every dollar increase in sale to franchisee YUM! takes extra 8-10% the owner take extra 20-30%

Now who better to Judge KFC than the Copulos Family who owns 50 of these Franchisee in NSW  ..they just bought a 5% stake in CKF..

I reckon it's a magic combination having Copulos Family as substantial holder

One Control the largest KFC in QLD the other in NSW together I'm sure they know how to drive sales.

At this price the down side seem pretty damn good compared to the up side


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## Huskar (24 November 2011)

I love your simple and compelling logic ROE. And I tend to agree that at the current price there is very little downside. How will you know if you are wrong? Will another profit downgrade impact your analysis (they always seem to come in pairs...)?


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## McLovin (24 November 2011)

I've had a closer look at this (I was a bit hasty in my first look). It certainly does look cheap. I'm not quite ready to jump in though, these sort of things usually provide ample time to take a position. So I'll let the market digest (pardon the pun) the news and see if things pick up. I'm a little dubious about the margin deterioration.


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## gell (25 November 2011)

ROE, I also bought CKF based on the same logic as you.


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## robusta (4 May 2012)

Starting to see why ROE likes this stock, picked up some today at $1.055

Here is a article in the Courier

http://www.couriermail.com.au/busin...ry-to-share-pain/story-fnbdkrr9-1226321601307


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## So_Cynical (4 May 2012)

robusta said:


> Starting to see why ROE likes this stock, picked up some today at $1.055
> 
> Here is a article in the Courier
> 
> http://www.couriermail.com.au/busin...ry-to-share-pain/story-fnbdkrr9-1226321601307




LOL im in today at $1.06 ~ as there were 22 thousand shares in the que in front of me at $1.055 and it was 3PM so i figured what the hell and paid the extra half a cent.

Lots to like about this business....floated 9 months ago at $2.50 then smashed soon afterwards due to a profit warning and the uncertainty of the prospectus financials as a result of that...thieving private equity bastards. 
~


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## Ves (5 May 2012)

I was wonder, what if anything, as a _franchisee_ can you do to arrest a sales slide? The options seem way more limited as you have less control over the product and its delivery, you effectively have to bow to a master who owns the brand. Short of restaurant re-furbishments, and let's face it, these won't help much, I think they have to wait for margin recovery and consumer sentiment to pick up.


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## ROE (5 May 2012)

What they need is focus so hopefully after a year of listing and various distraction
and a few bad things going their way they will be able to focus...

at this price you don't really need to drive growth but maintain profitable shop and pay 50% out as dividend.

and fast food and burger joins tend to keep pace with inflation very well...

that all I'm after


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## robusta (5 May 2012)

So_Cynical said:


> LOL im in today at $1.06 ~ as there were 22 thousand shares in the que in front of me at $1.055 and it was 3PM so i figured what the hell and paid the extra half a cent.
> 
> Lots to like about this business....floated 9 months ago at $2.50 then smashed soon afterwards due to a profit warning and the uncertainty of the prospectus financials as a result of that...thieving private equity bastards.
> ~




About time you, ROE and me ended up in the same stock, seems to be unloved by almost everyone else, this in a strange way gives me extra confidence.


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## So_Cynical (5 May 2012)

Ves said:


> I was wonder, what if anything, as a _franchisee_ can you do to arrest a sales slide? The options seem way more limited as you have less control over the product and its delivery, you effectively have to bow to a master who owns the brand. Short of restaurant re-furbishments, and let's face it, these won't help much, I think they have to wait for margin recovery and consumer sentiment to pick up.




They actual can set their own prices (with limits) and buy their own stock as long as it meets YUM requirements...and they can do their own "local" advertising and of course have control of probably the biggest single cost component labour.

CKF is a punt on the economic robustness of QLD and the desire of Queenslander's to continue their love affair with the Colonel's particular take on fried chicken...its a proven business in a growth state, its just that at the moment people are spending more conservatively and clearly the prospectus forecasts were at the very upper end of expectations.



robusta said:


> About time you, ROE and me ended up in the same stock, seems to be unloved by almost everyone else, this in a strange way gives me extra confidence.




What a surprise i got when i searched for the CKF thread to post my entry  very surprised to see you had posted before me but happy we can share our "journey" together...and in on the same day, im just hoping this is one of the 3 out of every 5 first entry's that i get right...as i would love to turn this trade around in a month or 3, one good ann should do it.


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## robz7777 (5 May 2012)

How much of the price movement is due to the "professionals" hoping to get this one off their books before they have to tell anyone?? Much prefer Allan Gray (formerly Orbis) buying this one as they are contrarian and have plenty of conviction on this one - having bought 18% of all stock in the past few months.. 

Even if things really go to the dogs is KFC going to suffer a massive drop in sales? Or will it be the debt that kills this chicken?


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## StumpyPhantom (5 May 2012)

robz7777 said:


> How much of the price movement is due to the "professionals" hoping to get this one off their books before they have to tell anyone?? Much prefer Allan Gray (formerly Orbis) buying this one as they are contrarian and have plenty of conviction on this one - having bought 18% of all stock in the past few months..
> 
> Even if things really go to the dogs is KFC going to suffer a massive drop in sales? Or will it be the debt that kills this chicken?




I know this happened in Sydney (and so outside CKF ownership):

KFC Ordered to Pay Millions After Customer Gets Chicken-Related Brain Damage

http://www.topix.com/forum/health/food-poisoning/T4MQC23C9QN5VQ17H

But this could really affect sentiment, and there are an awful lot of teenagers behind the counter (the teenagers in my house can't boil water properly).


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## So_Cynical (5 May 2012)

robz7777 said:


> How much of the price movement is due to the "professionals" hoping to get this one off their books before they have to tell anyone?? Much prefer Allan Gray (formerly *Orbis*) buying this one as they are contrarian and have plenty of conviction on this one - having bought 18% of all stock in the past few months..




Yeah i noticed that to, Orbis  (now Allan Gray) i keep bumping into these guys  with 50/50 results...i entered ILU a couple of months before Orbis and we both made a motza, and then Orbis entered APN a couple of months before me and we both got smashed. :dunno:

I suppose contrarian investing in Aust is alot like value investing in that there's only 5 or 10 stocks that stand out at any one time and like minds find them...like contrarian bees drawn to a contrarian honey pot.


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## skc (6 May 2012)

FWIW I think CKF has some real cash issues. I know this sounds crazy for a fastfood business selling friend chicken... but looking at the financials.

H1 2011 operating cashflow was $11m after paying $11m interest. The HY result presentation earmarked ~$17.6m cap ex for new outlets and refurbishment. So they are pretty much $6-7m short on that.

They do have $40m in debt headroom, but the balance sheet also showed current payables of $46.3m (with only very little receivables ($2.7m) and inventories ($4m) against that). 

So depending on what is in those payables, they potentially need to find extra $20-25m which means they need to draw down on their debt. This in turn adds another $1m to the interest bill. This may or may not be offset by the all out cost cutting initiatives as per the news article. They can also cut down on capex/refurbishment program - but that will have an impact on the top line sales.

The H1 proforma (i.e. stripped of IPO costs) NPAT was $8m, and the guidance is lower end of $18-20m for the year. So they need to achieve $10m in H2 alone... and given the recent trading update on H2 sales expectation being revised down again, the market has every reason to be sceptical about CKF hitting guidance.

Then again, at current price CKF only has a market cap of <$100m. They do have high debt so a PE ~6x is probably the ballpark multiple. On that note they only need ~$7-8m NPAT in H2 to justify the current valuation. So while fundamentally they may not be turning around yet, the share price can probably bounce a bit without too much problem.


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## Ves (6 May 2012)

Great post SKC,  I believe waiting for the next report is probably a good idea for taking the plunge.


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## McLovin (7 May 2012)

skc said:


> FWIW I think CKF has some real cash issues. I know this sounds crazy for a fastfood business selling friend chicken... but looking at the financials.
> 
> H1 2011 operating cashflow was $11m after paying $11m interest. The HY result presentation earmarked ~$17.6m cap ex for new outlets and refurbishment. So they are pretty much $6-7m short on that.
> 
> ...




Just a couple of observations from my reading.

I can't imagine that $11m interest bill will be as high going forward, unless they are such a poor credit risk that they are paying $22m in interest on $105m debt. I believe the reason for the large interest bill was related to the pre-float debt level of $262m. The prospectus pro-forma interest is around the $8-$9m mark for the proceeding three years. That should free up a significant chunk of cash for CAPEX and leave some over for dividends.

On the payables, I assume this is just a normal retailer's balance sheet and the negative net working capital is a good thing.

That being said, you wouldn't buy it for it's tangible assets. What's the nature of the agreement with Yum?


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## skc (7 May 2012)

McLovin said:


> Just a couple of observations from my reading.
> 
> I can't imagine that $11m interest bill will be as high going forward, unless they are such a poor credit risk that they are paying $22m in interest on $105m debt. I believe the reason for the large interest bill was related to the pre-float debt level of $262m. The prospectus pro-forma interest is around the $8-$9m mark for the proceeding three years. That should free up a significant chunk of cash for CAPEX and leave some over for dividends.




You are quite right. $8-9m for the full year going forward is probably much more sensible. So they probably not short of cash to pay for the capex fr op cashflow.




McLovin said:


> On the payables, I assume this is just a normal retailer's balance sheet and the negative net working capital is a good thing.
> 
> That being said, you wouldn't buy it for it's tangible assets. What's the nature of the agreement with Yum?




Just can't quite pin down the corresponding balance sheet item for the payables. Most retailer's balance sheet should show inventory against the payables... but CKF is not storing a lot of chicken. It is possible that KFC is asking the chicken farmers to fund their inventory via generous payment terms. But with CKF being a recent private equity sale - you just don't know if there are some temp arrangement that makes the balance sheet look different than how it would going forward.


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## McLovin (7 May 2012)

skc said:


> Just can't quite pin down the corresponding balance sheet item for the payables. Most retailer's balance sheet should show inventory against the payables... but CKF is not storing a lot of chicken. It is possible that KFC is asking the chicken farmers to fund their inventory via generous payment terms. But with CKF being a recent private equity sale - you just don't know if there are some temp arrangement that makes the balance sheet look different than how it would going forward.




You do have a point, the working capital is _very_ negative. You'd at least expect the cash balance to be a bit higher if they're sellling stuff and not paying for it. Considering it was $43m in May. The FY reports should have more detail. I'm wondering if the mid-month balance date has something to do with it.

They do address it briefly in 3.7.1.4 of the prospectus.

http://asx.com.au/asxpdf/20110715/pdf/41zsygbqrm968d.pdf


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## So_Cynical (7 May 2012)

Amazing how this stock held up today, in the late morning the SP was actually up  on a day when you would expect a stock that is in a clear down trend to take a hit...it didn't.

Sellers exhausted. :dunno:


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## studmuffin (8 May 2012)

So_Cynical said:


> Amazing how this stock held up today, in the late morning the SP was actually up  on a day when you would expect a stock that is in a clear down trend to take a hit...it didn't.
> 
> Sellers exhausted. :dunno:




I thought the same thing but alas another day another 52 week low.


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## McCoy Pauley (9 May 2012)

I've not analysed this company in any great detail but if that analysis on the cashflow is correct, then I'd be concerned.

Seriously, this company should not be having any cashflow concerns.  Its customers pay cash up front for their meals.  Their suppliers should be on 7/14/28/30/60/90 day terms.  The cash should be cycling through the company at a great rate of knots.


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## So_Cynical (22 May 2012)

So_Cynical said:


> (7th-May-2012) Amazing how this stock held up today, in the late morning the SP was actually up  on a day when you would expect a stock that is in a clear down trend to take a hit...it didn't.
> 
> *Sellers exhausted*. :dunno:




Seems as if i was more right and wrong when i made the above statement 2 weeks ago, falling volumes and a very small up trend have emerged..i reckon the volume is significant....no over 400,000 days in over 5 weeks, while the general market has been correcting and sentiment has been horrid.

I think the bottoms in... at least until we get another negative announcement.
~


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## skc (23 May 2012)

So_Cynical said:


> Seems as if i was more right and wrong when i made the above statement 2 weeks ago, falling volumes and a very small up trend have emerged..i reckon the volume is significant....no over 400,000 days in over 5 weeks, while the general market has been correcting and sentiment has been horrid.
> 
> I think the bottoms in... at least until we get another negative announcement.
> ~




Looks like a bearish flag if you ask me.

http://chart-patterns.netfirms.com/bearflag.htm


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## So_Cynical (23 May 2012)

skc said:


> Looks like a bearish flag if you ask me.
> 
> http://chart-patterns.netfirms.com/bearflag.htm




I played with your bearish flag chart.  i like my interpretation better.

Price held up again today (low1.045) on flat volume.
~


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## Ves (23 May 2012)

skc said:


> Looks like a bearish flag if you ask me.
> 
> http://chart-patterns.netfirms.com/bearflag.htm




I don't think the volume of the decline is strong enough to call a bearish flag, after reading the definition.  But if you are correct, would the price target be about 85-90c?


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## skc (23 May 2012)

So_Cynical said:


> I played with your bearish flag chart.  i like my interpretation better.
> 
> Price held up again today (low1.045) on flat volume.
> ~




I should it also has the potential to form a bearish flag. It's only a bearish flag after it breaks down as confirmation.



Ves said:


> I don't think the volume of the decline is strong enough to call a bearish flag, after reading the definition.  But if you are correct, would the price target be about 85-90c?




The target seems to be a reasonable call.


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## catfish (30 May 2012)

Hey all,

I got into this one at 1.07 today before the buyers went crazy. Any ideas what sparked it? although volumes were not huge. 

I have been paying high price for quality recently and thought this was a good play with significant upside. Refreshing to get something cheap and happy to hold for a while.

Diaster for investors who participated in the float, and for management. Great to see conviction from the CEO and willingness to 'suffer' with shareholders.

I would have thought this was a reasonably defensive business, although same store sales declines tell a different story. It will be interesting to see the medium term effect of store refurbishment on sales growth. 

Great insight from the members on the first page of this thread. Thanks 

Next time my mates are hungry, I will be suggesting KFC.


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## McLovin (30 May 2012)

Catfish, did you see the discussion re the quality of this company in the Robusta thread?

Starts about here. Well worth the read

https://www.aussiestockforums.com/forums/showthread.php?t=23106&page=24


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## catfish (30 May 2012)

McLovin said:


> Catfish, did you see the discussion re the quality of this company in the Robusta thread?
> 
> Starts about here. Well worth the read
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=23106&page=24




Thanks for that mclovin


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## So_Cynical (30 May 2012)

McLovin said:


> Catfish, did you see the discussion re the quality of this company in the Robusta thread?
> 
> Starts about here. *Well worth the read*
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=23106&page=24




"Well worth the read" ~ jeez i don't know...a bunch of mostly value investors failing to see value  i thought that the quality of the comments made about the quality of this company wasn't of a very high quality.  i seem to remember people claiming that KFC was in decline, Franchises didn't make money and people didn't like fried Chicken.  yer right.

But what do i know :dunno:....im just a punter looking for profits, buying the lows and making my own decisions.

---------------

Oh by the way how about today's 7.14% Share price jump.


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## Ves (30 May 2012)

Did you selectively forget the bit about the debt convenants? How about the part about the inherent risk in the financial structure?


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## So_Cynical (30 May 2012)

Ves said:


> Did you selectively forget the bit about the debt convenants? How about the part about the inherent risk in the financial structure?




I tend to try and look at the big picture when summing up the pros and cons of my current and potential investments...on balance there's more to like about CKF (at my buy in price) than there is to not like about the company.

If debt covenants and refinancing was a big issue the SP would be like 10c same as Hastie and Centro were...so the market isn't pricing in a total disaster however the market is pricing in uncertainty and fear and it is still a bear market.

I know this is a somewhat risky investment and i also know that one decent announcement combined with seller exhaustion and the 10 month down trend could easily see this stock jump 10 or 15% over a very small time frame...and that's all i need.


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## ROE (30 May 2012)

I may be Bias but the way I see it
this business isn't as bad as most people made it out to be ...

All these problems some seem fairly significant but it boil down to floating problems.

1. they dress up a bit to make it look good for the float ....we didn't buy
    at the float price 50% cheaper so this problem solved with inflated price

2. Management stuffed up the forecast, I think this is more to do with them
    being new to a public listing company...I have not seen them done anything that
    destroyed shareholder value or management act dishonestly.

    the cut cost memo I see nothing wrong with it, you do what you have to do
    to build market confident and cut cost after you made a forecasting blunder

3. High debt this is a problem but fast food especially KFC, Macas has very reliable
   cash flow so I'm confident they can easily service debt, their cash not going to   dropped off the cliff but maybe seasonal variation...Management need to start paying down debt to build a better buffer...do like what RFG did, they are under a mountain load of debt going into GFC, again reliable cash flow enable them to paid down debt
every half since then..

CKF have a bad start in life and without these issues you can not get them for $1 
I think all these issues are easily fixable and I'm confident in my research that they can
in 3 years time.

CCP during its dark day look like it going down the toilet with hundred of million in debt....people on the forum called for its doom day...but I look at their automatic payment book, it is big and it is beautiful and it can easily service debt and I make a calculated bet that with this reliable cash coming in they will pay down debt....

I make the same judgement on CKF now...their cash flow will eventually give them room to pay down debt and prosper...

We shall visit here in a few years and see how it pan out


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## ParleVouFrancois (31 May 2012)

I went back and had a look at all the annual reports since 2009... Interesting reading to say the least. CKF has been a troubled child of a company, even before it was listed. As far as I can tell it's been loaded up with debt, and while the underlying business of selling KFC is great and profitable (I love KFC, I even used to work at one for a few months in highschool), being the 'last in line' for the cashflows (debt & royalties take their cut  first) I don't see much scope for shareholder wealth creation in this company.


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## Ves (31 May 2012)

ParleVouFrancois said:


> being the 'last in line' for the cashflows (debt & royalties take their cut  first) I don't see much scope for shareholder wealth creation in this company.



Don't forgot lease payments and capex to keep the stores fresh.


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## So_Cynical (4 June 2012)

So_Cynical said:


> (4th-May-2012) im in today at $1.06




Exactly 1 Month later and i have sold most of my holding today @ $1.11 ~ as usual i have left the profit in (A Tiny 2.8%) with a little capital...the smallest holding in my portfolio by a long way.

Again amazing how the CKF share price held up today.



studmuffin said:


> (8th-May-2012) I thought the same thing but alas another day another 52 week low.




Another day, well a day when 164 ASX listed stocks hit new 12 month lows...and CKF wasn't one of them .


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## ROE (4 June 2012)

So_Cynical said:


> Exactly 1 Month later and i have sold most of my holding today @ $1.11 ~ as usual i have left the profit in (A Tiny 2.8%) with a little capital...the smallest holding in my portfolio by a long way.
> 
> Again amazing how the CKF share price held up today.
> 
> ...




Nice to see you get some profitable trade  when all the bad news has factor in and seller disappear there isn't much more down side  at once stage it went up 3% today someone is probably accumulating without wanting to sound alarming bell...

I'm in for a long haul like most of my stocks, the day will come when I know when to exit


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## Ves (29 June 2012)

Interesting results.

Two main things I saw in my very brief look:

1.   They are still "comfortably" within their debt convenants.  Although this comes down to how much economic reality you give their depreciation claims.  It's more than half of the EBIT.

2.  This business clearly has no control of costs.  In fact, their suppliers, competitors, lessor(s) etc are putting lots of pressure on their profitability margins.  For instance, they believe the carbon tax will have a $2.5 million impact on their business according to the presentation, but they cannot pass any of this on. They make an excuse about the business environment and poor trading conditions that are around at present, but this looks like management speak for it's out of our control to me.

edit:  On a more long-term note; if they ran this company efficiently and competently there is probably no reason why 5-7% avaerge EPS growth is not unachievable.  I'm not convinced yet that the particular team at the moment is capable of this.


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## McLovin (2 July 2012)

Coupolos Group been doing a bit more buying.


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## ROE (9 July 2012)

I join the Coupolus family and double up 
These guys know kfc better than any one in Australiaq


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## Tannin (15 July 2012)

Excellent thread, people, and a very interesting company. 

On the negative working capital thing that SKC and McLovin were discussing a little while back, that's normal for this sort of business. They hold back on paying their suppliers for as long as possible (just because they can) but as a supplier you smile and come back for more because hardly anyone else buys chicken or oil or bread in the sort of quantity KFC does, and although you hate waiting for your money, you know that they are always going to be good for it eventually. 

Most retailers do this. Suppliers hate it but they do it just the same. But most retailers have to carry a lot of stock.

In the fast food game, you don't keep the inventory on hand, so it doesn't show up as a current asset, while your raw material bills _do_ show up as a current liability, so there is an apparent imbalance. In fact, your small amount of current inventory is worth a lot more than its book value (book value in this context = bare cost price plus delivery) because later this week you will spend a fairly small amount on electricity and labour and magic the $2000 worth of cheap chickens in the fridge into $20,000 worth of take-away meals.

In short, the negative working capital isn't a problem for this sort of company, it is actually a sign that they are screwing their suppliers over and making the poor bloody farmer finance the day-to-day running cost of the business - i.e., that they are hard-nosed managers getting a good deal for the organisation.

On the down side, I am concerned that they don't seem to be lifting sales and margins back to where we would want them to be yet. Management says that they are working on it and everything will turn out roses. Well, we will just have to wait and see. Sometimes I wonder if Australians are finally turning away from stuff like KFC in favour of tastier, more healthy meals - you know, ones with actual food in them. But then I decide that no-one ever went broke selling grease and too much sodium in a fancy bucket, and that there will always be a place for KFC.

Disclaimer: I bought a smal lparcel back in March at $1.17, and doubled down a few weeks later at $1.13, would have gone back for a third lot at around $1.05 when it hit that low but was away or distracted and missed the chance. I'm still open to the idea of getting a little more if the price is right - anything under $1.10 would be hard to say no to (but depending on what else I have going at the time). I'm happy to sit on my holding for now. The share price seems to have turned the corner and over time I remain confident of a modest but worthwhile profit. We will see.


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## skc (15 July 2012)

Tannin said:


> In short, the negative working capital isn't a problem for this sort of company, it is actually a sign that they are screwing their suppliers over and making the poor bloody farmer finance the day-to-day running cost of the business - i.e., that they are hard-nosed managers getting a good deal for the organisation.




I think that is a fair conclusion. What I came away from that though, is that the benefits of such supplier squeeze went to the private equity guys who sold out, and not to the buyers of public float (or current buyers/holders).

Their profit figures were in line with forecast and cashflow was much improved so the strain on the balance sheet is probably lower than what I evisaged. The FY13 figures are still not awesome from a growth point of view and they have to muddle the bottom line figure with qualifiers like "ignoring carbon tax effect".

It is still a cheap share and it is cheap for a reason. As you said, things may or may not work out but that's the same with lots of companies I guess.


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## Tannin (15 July 2012)

Cheers, Skc.

No doubt at all that the private equity guys made a killing, and no wonder that the instititionals who bought in at the top expecting much better value than they got are unhappy. 

There are essentially two different sorts of debt we should be considering here. The long-term debt is what the PE guys saddled the company with and here I agree with you entirely. The negative working capital, however, is a much smaller amount (if I remember the numbers correctly) and there would be no intention of _ever_ paying that off. Why should they? They get the money for nothing, so they'd be mad _not_ to take advantage of it! I would expect that negative working capital ratio to exist pretty much forever, and I'd expect other firms in the same general line of business to operate in a similar way.

The overall carbon tax effect should be close to zero. On the downside, the cost of energy for lights and fryers and fridges increases by about 10%, and most other fixed inputs rise by a bit less than 1% (raw materials, building costs, and so on). Wages - a very large expense - do not change. On the upside, low to middle income Australians now have more money to spend (because of the income tax cuts that came in on July 1) and fast food operations depend overwhelmingly on low and middle income bracket customers. Wealthy people now have have a small amount less to spend, but it's hard to see these quite small changes having any impart of fast food sales, and in any case, higher income people tend to go a bit further upmarket whern they eat out. So all in all, it looks like being a non-event for CKF.

We will watch with interest.


----------



## skc (16 July 2012)

Tannin said:


> There are essentially two different sorts of debt we should be considering here. The long-term debt is what the PE guys saddled the company with and here I agree with you entirely. The negative working capital, however, is a much smaller amount (if I remember the numbers correctly) and there would be no intention of _ever_ paying that off. Why should they? They get the money for nothing, so they'd be mad _not_ to take advantage of it! I would expect that negative working capital ratio to exist pretty much forever, and I'd expect other firms in the same general line of business to operate in a similar way.




Yes I agree the negative working capital will be ongoing. What I meant to say was that the one-time benefit of reducing working capital was most likely gained by the PE guys (although I can't be sure if that is the case - the negative working capital may have been around for some time) rather than current holders. The current holders should benefit from a higher ROE than otherwise in future new investments.



Tannin said:


> The overall carbon tax effect should be close to zero.




Management is quoting $2.5m pre-tax impact of carbon tax so I am just saying what they said. Now if the real impact of the carbon tax is $0 then they've got themselves some buffer in their profit numbers.


----------



## Tannin (16 July 2012)

I agree on both counts.


----------



## So_Cynical (7 November 2012)

So_Cynical said:


> (22nd-May-2012 11:43 PM)
> 
> *I think the bottoms in*... at least until we get another negative announcement.
> ~




Turns out i was 100% correct, the bottom was in, also with hindsight it turns out my falling volume/seller exhaustion thinking was also 100% correct..to bad i only made a couple of hundred outa this. :cussing: i will continue to hold for the dividends and look for a re-entry opportunity.

This thread got really busy when the SP was falling and myself and a few other contrarians took positions...now the turn around is established no ones interested.
~


----------



## ROE (7 November 2012)

Most people under-estimate the reliability earning of fast food even with high debt ...
watch and see as they clean up debt and start kick ass dividend.


----------



## Huskar (8 November 2012)

Most recent quarter-on-quarter uptick in food and takeaway retailing gives some positive insight: 

http://www.abs.gov.au/ausstats/abs@.nsf/mf/8501.0.


----------



## McLovin (4 December 2012)

Some interesting commentary in the HY results. The collapsing revenues seem to have been halted, albeit at the expense of lower margins. They've cut pretty deep into some of their operating costs but still have seen EBIT margins fall.

It appears that the standalone KFC stores are doing OK, it's the food court ones that are suffering. This would make sense given the current retail environment. They're not looking as bad as they were 6 months ago, although they still have all that debt and are going pretty CAPEX hard at the moment. Maybe not the best time to declare your maiden dividend when it can't be supported by FCF.


----------



## So_Cynical (4 December 2012)

New 10 month high of $1.40 and goes ex dividend tomorrow...just to easy.

Why cant they all be this easy. :dunno: people were falling over themselves to bag this stock 6 and 8 months ago.


----------



## skc (5 December 2012)

So_Cynical said:


> New 10 month high of $1.40 and goes ex dividend tomorrow...just to easy.
> 
> Why cant they all be this easy. :dunno: people were falling over themselves to bag this stock 6 and 8 months ago.




I still want to bag this stock!

I bought some KFC yesterday and they were terrible. The chicken was dry and luke warm, the chips lacked salt and were luke warm.

I asked my wife to punch me in the face, everytime I said I feel like some KFC in the future.

Oh... good trade btw.


----------



## Huskar (5 December 2012)

Copulos family is still buying. Up to 7% of the company now...

Interesting to compare KFC with Maccas - why is it that McDonalds is seeing growth downturn for the first time in 10 years while KFC is not?


----------



## Cyph (18 December 2012)

How can you touch this one when the ROE is under 7%?


----------



## ROE (18 December 2012)

Cyph said:


> How can you touch this one when the ROE is under 7%?




It's not always about current Return on Equity...you can buy stock in anticipation for higher return on equity and
that where you can make serious return...

Sometimes the stock is so cheap you can make plenty of money by it improve its operation
a little and improve margin little and everything else will fall in place...

This stock is badly manage and laden with debt, I think as a listed company and the Copulus
family involvement, this stock will improve over time I'm not losing money on this one my average price is 1.10 and  it already paid dividend doesn't take make much more for it to go higher...

at $1.10 and say dividend maintain 7-8c a share you get around 6.5-7.5% fully frank dividend and I'm fairly close
to certain that can be maintained if not increase in coming years...beat money in the bank any day.

I know fast food business, very very reliable cash flow....


----------



## davdaw (9 January 2013)

Wonder how the guys at WBC/BT Investment Management feel seeing the share price at $1.43 today, after dumping just under 4m shares at $1.29 on Friday (4/1/13)? Or is something corporate and clever going on that small retail investors can't understand? I have 38,000 CKF shares.


----------



## ROE (9 January 2013)

davdaw said:


> Wonder how the guys at WBC/BT Investment Management feel seeing the share price at $1.43 today, after dumping just under 4m shares at $1.29 on Friday (4/1/13)? Or is something corporate and clever going on that small retail investors can't understand? I have 38,000 CKF shares.




Dont worry about large fund managers, they played by different rules...at least they dont cause much a concern for me entering or exiting....they have to buy and sell according to a set of rules set out for their fund which is nothing like my set of rules for buying and selling...

it's a positive thing that the Copolus family keep increasing their stake...CKF will turn with this family involvement decent money already been made buying at $1.10 ..more to come...

I always place my money with family business wealth and not the fund manger money...
you rarely lose sticky to decent business that has large family fortune ties to the business.


----------



## Huskar (21 March 2013)

Interesting to note that KFC visits have fallen from 24% of Aussies to 20% over the last year as people visit less quick food joints:

http://www.ausfoodnews.com.au/2013/03/13/mcdonald’s-defies-qsr-downward-trend.html.

McDonalds still the clear leader and holding its market share at 31% of all Australians visiting it in 2012!


----------



## prawn_86 (21 March 2013)

Huskar said:


> McDonalds still the clear leader and holding its market share at 31% of all Australians visiting it in 2012!




I can honestly say that in the last 9 months i have not been to any of the top 3 fast food stores. Nando's would be the closest i get.

31% seems a bit low i would have thought, especially for a year, personally i would have thought up around 50%


----------



## Muschu (14 May 2013)

Any thoughts on what happened to CKF yesterday?  Very significant drop although it closed above the day's low.
There was no news of note of which I am aware.
Comments very welcome.
Regards
Rick


----------



## So_Cynical (14 May 2013)

Muschu said:


> Any thoughts on what happened to CKF yesterday?  Very significant drop although it closed above the day's low.
> There was no news of note of which I am aware.
> Comments very welcome.
> Regards
> Rick




The 12 month chart still looks strong, the SP has had quite a run up and the 9 month channel is unbroken....personally i was expecting another little dividend before the end of the financial year.
~


----------



## Garpal Gumnut (14 May 2013)

So_Cynical said:


> The 12 month chart still looks strong, the SP has had quite a run up and the 9 month channel is unbroken....personally i was expecting another little dividend before the end of the financial year.
> ~




Agree sc, it's on my watch list. 

gg


----------



## Muschu (14 May 2013)

Thanks SC and gg.  I have a small holding and didn't jump off but the extent of the drop and volume behind it seemed a bit OTT.

Best

Rick


----------



## Garpal Gumnut (14 May 2013)

Muschu said:


> Thanks SC and gg.  I have a small holding and didn't jump off but the extent of the drop and volume behind it seemed a bit OTT.
> 
> Best
> 
> Rick




I noticed that , it may trade sideways for a while. Watch volume for the next leg up.

gg


----------



## VSntchr (14 May 2013)

Muschu said:


> Any thoughts on what happened to CKF yesterday?  Very significant drop although it closed above the day's low.
> There was no news of note of which I am aware.
> Comments very welcome.
> Regards
> Rick




The drop may have been due to an AFR article.
It was about YUM and how they have lost their way in their main market, CHINA.

I read it today, which obviously is one day after the drop (and the article was based on information released to the markets last week or later?)...
But this was the only link I could find to the mini plunge.


----------



## tinhat (15 May 2013)

Garpal Gumnut said:


> I noticed that , it may trade sideways for a while. Watch volume for the next leg up.
> 
> gg




The Point & Figure chart for CKF looks interesting. The P&F chart indicates that upon breaking out of congestion the upper target for the move up is $1.83. This is determined by counting the number of columns horizontally through the period of congestion it is breaking out from. 13 points (at 0.03 per point) plus $1.44 (the price it is breakout out from) gives a target of $1.83. Actual top was at $1.91




Wyckoff suggests, as you do GG, that a period of congestion is needed to build a case [cause] for the price to move up higher (or lower) [effect].

Fundamentally, CKF faces a challenging market. They have stated that they are under cost pressures and that they can't pass on their cost increases to their customers in the current trading environment so I can understand shareholders wanting to take profit ahead of any disappointing news that may come out of the annual report.


----------



## JTLP (15 May 2013)

From a consumer perspective - you see a lot of KFC advertising around town these days. However - I find their messages conflicting/confusing and with no real thought. What are they trying to say? Where is the consistency? Where is the frequency?

I get bombarded with about 5 different KFC ads in a week - they are a fast food chain trying to appeal to different targets in a week...sheesh.


----------



## Garpal Gumnut (15 May 2013)

tinhat said:


> The Point & Figure chart for CKF looks interesting. The P&F chart indicates that upon breaking out of congestion the upper target for the move up is $1.83. This is determined by counting the number of columns horizontally through the period of congestion it is breaking out from. 13 points (at 0.03 per point) plus $1.44 (the price it is breakout out from) gives a target of $1.83. Actual top was at $1.91
> 
> View attachment 52188
> 
> ...




Thanks th, I watch CKF daily and am still undecided re an entry. Good pf chart and analysis. I'll keep it close to my hot n spicey.

gg

gg


----------



## So_Cynical (15 May 2013)

JTLP said:


> From a consumer perspective - you see a lot of KFC advertising around town these days. However - I find their messages conflicting/confusing and with no real thought. What are they trying to say? Where is the consistency? Where is the frequency?
> 
> I get bombarded with about 5 different KFC ads in a week - they are a fast food chain trying to appeal to different targets in a week...sheesh.




The advertising spend is considerable...i have noticed that in some Sydney stores they have been doing Cheap Tuesdays with 10 piece packs selling for around 8 or 9 dollars...there was a cue out onto the foot path the one time i visited for cheap Tuesday Chicken, took me 25 minutes to get out of there.

-------------

CKF is one of my smallest holdings..i will continue to hold for div yield.


----------



## skc (15 May 2013)

So_Cynical said:


> The advertising spend is considerable...i have noticed that in some Sydney stores they have been doing Cheap Tuesdays with 10 piece packs selling for around 8 or 9 dollars...there was a cue out onto the foot path the one time i visited for cheap Tuesday Chicken, took me 25 minutes to get out of there.
> 
> -------------
> 
> CKF is one of my smallest holdings..i will continue to hold for div yield.




CKF has 122 KFCs and 120 of them are in QLD. I don't recall seeing cheap Tuesday ads up here. Then again I can't say I pay much attention to KFC ads.


----------



## tinhat (15 May 2013)

skc said:


> CKF has 122 KFCs and 120 of them are in QLD. I don't recall seeing cheap Tuesday ads up here. Then again I can't say I pay much attention to KFC ads.




I'm not their target market. I do recall them mentioning cheap Tuesday in their most recent report.


----------



## Garpal Gumnut (15 May 2013)

tinhat said:


> I'm not their target market. I do recall them mentioning cheap Tuesday in their most recent report.





Great mate,

It's bloody Wednesday.

You are a dill.

Post such as this of a Monday.

gg


----------



## JTLP (15 May 2013)

So_Cynical said:


> The advertising spend is considerable...i have noticed that in some Sydney stores they have been doing Cheap Tuesdays with 10 piece packs selling for around 8 or 9 dollars...there was a cue out onto the foot path the one time i visited for cheap Tuesday Chicken, took me 25 minutes to get out of there.
> 
> -------------
> 
> CKF is one of my smallest holdings..i will continue to hold for div yield.




CKF may be loss leading on that deal in the hope people would buy other things? I can't imagine they would be meeting GM hurdles etc...this would be quite a costly process for franchises to buy in to.


----------



## herzy (16 May 2013)

Garpal Gumnut said:


> Great mate,
> 
> It's bloody Wednesday.
> 
> ...




Haha


----------



## tinhat (16 May 2013)

> We have also found that our customers are increasingly driven to “value deals”, and as a result our
> Tuesday specials are performing very strongly with our stores tracking at around 30% increased sales
> on Tuesday evenings. Importantly, this has not reduced trade on other evenings, with other days
> also generating a higher check average.
> ...






> Key priorities for 2H13
> 
> Targeted promotional and value plays, with focus
> on soft trade periods
> ...






Just reading over the last half financial report. It's a tough business. Gross margin is only 10% and that is before all the overheads. Plus they have to continually invest into store refurbishments and equipment. $104m of debt with interest payments of $3.16 for the last half. If interest rates go up this will pinch the bottom line.

Given the amount of debt they have on their books I think a 50% payout ratio is about all they can afford.

Interestingly, management argue that it is the KFCs located in shopping malls that are underperforming.

Some of the analyst forecasts seem a bit optimistic to me. I'm guessing 16c EPA, 0.8c dividends which gives a current yield of about 5%.

$1.62 is an important support line on the P&F chart (0.03 box, 3 box reversal).


----------



## JTLP (25 June 2013)

CKF down a little over 3% today to $1.595 on the back of their full year results.

They actually looked a lot more sturdy than I would have guessed...bit of a debt paydown here; revenue up there. EBITDA was down which is attributed to their tight margins and increased costs. If they could somehow look to bring these under control it would have been a pretty tidy FY for holders.

DNH


----------



## McLovin (25 June 2013)

Pretty average result. If you strip out the one off efficiency gain in corporate overhead then the underlying result is pretty poor, imo. Considering the depths of the cost cutting they've already done, you'd have to assume there's little fat left to trim and any improvement in profitability will need to be driven by top line growth.


----------



## JTLP (25 June 2013)

McLovin said:


> Pretty average result. If you strip out the one off efficiency gain in corporate overhead then the underlying result is pretty poor, imo. Considering the depths of the cost cutting they've already done, you'd have to assume there's little fat left to trim and any improvement in profitability will need to be driven by top line growth.




True - the one off did help; I was looking at more of a same store sales growth etc. Agree it will be even harder to make this operation leaner - McDonalds love to push their chicken options every now and again!


----------



## piggybank (6 January 2014)

November 28th - CKF First Half Results Presentation

http://stocknessmonster.com/news-item?S=CKF&E=ASX&N=770808


----------



## ROE (10 July 2014)

How are we doing? Market under estimate the power of fast food and its reliable cash flow 
sometimes ago just because it has teething issues


----------



## TPI (23 August 2014)

Anyone reading the letters between the board and Stephen Copulous?

Where will all this be heading?

Is he likely to have the numbers to vote against the resolutions successfully?

His case seems to make sense to me and he seems to have a lot of his own $ on the line.

His wording seems to suggest Sizzler's next set of results will also be negative.

I can't see the appeal of Sizzler either, most of us don't go to restaurants to have fresh salads when we can make it fresher and safer at home with no chance of Lysteria? (but seafood, pasta etc. I can appreciate)

With Snag Stand he also seems to suggest that the next update on this won't be positive either.

I've frequented Snag Stand quite a few times at my local Westfield Shopping Mall food court and their hot dogs seem pretty tastey to me, and asides from outside Bunnings where else do you get hot dogs these days?

He also quotes cost-to-sales ratio of 6.5% being high compared to companies like RFG where it is more like 4%.

I guess even if he is not successful he is keeping the board more accountable by keeping shareholders in the loop on some of this stuff, and it may at least bring forward a decision on the life of the Sizzler business...


----------



## ukulele (6 March 2015)

Collins had a pretty good run after it's latest dividend, but then it crashed on the 3rd and 4th of February. I checked the news/announcement and is the reason for the drop excess supply due to the "change of interests of substantial holder"


----------



## So_Cynical (2 December 2015)

Woosh - up 12%+ straight thru $4 like it was nothing  same store sales up 5.2% EBITDA up 19.8% Dividend up 20% ~ and they said take away chicken was an industry in decline. 

http://www.asx.com.au/asxpdf/20151202/pdf/433hqv63w1y1gx.pdf


----------



## Value Collector (2 December 2015)

So_Cynical said:


> and they said take away chicken was an industry in decline.




They obviously haven't tried wicked wings hahah, I can't walk past a KFC without getting a wicked wing snack box.


----------



## Gringotts Bank (4 July 2016)

Drop without pop.  A close below 4.20 would be a reasonable short imo.


----------



## Nortorious (4 July 2016)

Gringotts Bank said:


> Drop without pop.  A close below 4.20 would be a reasonable short imo.




Completely agree GB. A nice short with a quick profit target at around 3.50ish. Beyond that, it's down down down to 2.40ish....

Love their chicken but a healthy conscious community may have said enough is enough when they started seeing gyms opening up above KFC properties! And I'm pretty sure that's in one of the towns where one of the major shareholder has their business based.


----------



## So_Cynical (4 July 2016)

Nortorious said:


> Completely agree GB. A nice short with a quick profit target at around 3.50ish. Beyond that, it's down down down to 2.40ish.....




CKF goes up and down a bit, wouldn't get too carried away.


----------



## So_Cynical (31 October 2016)

Collins foods moving into the German market.

http://www.asx.com.au/asxpdf/20161031/pdf/43cjly0wnjj4g4.pdf

I dont think this has been thought through? wouldn't it make more sense to pay down debt here first? are 11 KFC stores in Germany really a compelling investment opportunity?


----------



## So_Cynical (1 November 2016)

So_Cynical said:


> Collins foods moving into the German market.
> 
> http://www.asx.com.au/asxpdf/20161031/pdf/43cjly0wnjj4g4.pdf
> 
> I dont think this has been thought through? wouldn't it make more sense to pay down debt here first? are 11 KFC stores in Germany really a compelling investment opportunity?




Well the market liked the German news, CKF up to $5 today.


----------



## So_Cynical (30 November 2016)

Half year report out.

 Revenue up 4.7%
 Same store sales down 0.6%
 EBITDA up 9.4%
 FF interim Div up 33.3% (16c full year)
 Cash 40m
The above would seem to justify the recent run up in share price, dividend getting serious now.

http://www.asx.com.au/asxpdf/20161130/pdf/43dbt1qt22cm64.pdf


----------



## Knobby22 (30 November 2016)

Expanding into Germany from Australia!
KFC are huge in Asia but that's obviously the main company.

I do feel KFC still hasn't got their offering right. Even so they are doing alright. Bought recently, hope not too late.

Never heard of "Snag Stand". Has anyone had any experience with it??


----------



## So_Cynical (30 November 2016)

Knobby22 said:


> Expanding into Germany from Australia!
> KFC are huge in Asia but that's obviously the main company.
> 
> I do feel KFC still hasn't got their offering right. Even so they are doing alright. Bought recently, hope not too late.
> ...




Snag Stand - have sampled it and was impressed, still its just a gourmet sausage with extras, the franchised food segment is very congested.

KFC Germany - well its a good market for many things, Dominoes did well selling cheap crappy pizza in France so anything is possible, i would of preferred them to focus on Aust/NZ and pay down debt etc.


----------



## tech/a (30 November 2016)

Pointed this one out no 19/11

https://www.aussiestockforums.com/forums/showthread.php?t=31431&page=4


----------



## So_Cynical (12 December 2016)

So_Cynical said:


> (4th-May-2012) in today at $1.06




Four and half years later i have sold ($6.50) half my remaining shares, 504% trade profit, dividends insignificant in comparison and this was the rational for the half exit, that and i really need more dividends plus the latest run up cannot be sustained, too steep.


----------



## Toyota Lexcen (13 December 2016)

well done

KFC is probably my favourite of the MAcca's, Hungry Jacks & KFS  fast food shops

normally get the Zinger reg combo meal, I like that you get a can or bottle with your meal and not a big container of ice

the chips are good, plenty of potato in them


----------



## So_Cynical (29 June 2017)

So_Cynical said:


> (Dec 12 2016)Four and half years later i have sold ($6.50) half my remaining shares, 504% trade profit, dividends insignificant in comparison and this was the rational for the half exit, that and i really need more dividends *plus the latest run up cannot be sustained, too steep*.




Considering i have a poor track record for picking tops, occasionally i get it spot on, anyway retail entitlement offer opens on Monday, new shares on a 1 for 11 basis and ex date on announcement, just as i like it...i suppose ill pay up, one should reward this type of company behaviour.
~


----------



## VSntchr (30 June 2017)

Market seems to like the capital raisings lately!
CKF, BGA, LNK - all doing very well upon resumption.


----------



## skc (30 June 2017)

VSntchr said:


> Market seems to like the capital raisings lately!
> CKF, BGA, LNK - all doing very well upon resumption.




I think the market learned from that DOW and BLD recent not to over-react to a cap raising.


----------



## So_Cynical (30 June 2017)

Yep - there are good cap raisings and bad, just need to differentiate.


----------



## rnr (11 November 2018)

On the move again?
Some bearish divergence may halt the progress for a while....let's see what happens from here.


----------



## rnr (29 November 2018)

Bearish divergence has played out and price looks set to make a new ATH.


----------



## mullokintyre (6 July 2021)

Bought into this back in January when I was looking for the the sort of businesses that benefit from lockdown, had a mainly younger  clientelle, and good takeaway processes.  Was already into Dominoes , which was doing pretty well, and this one came up .
Had a recent pullback from its 13 highs after the recent FY21 report, trading now at 10.80.
The report I thought was reasonably good, but the lack of management guidance seems to have spooked the market a bit.
I still see some value in it, so have added to my holdings.
Mick


----------



## frugal.rock (8 September 2021)

Was driving past a Domino's pizza joint today and my thoughts wandered to Collins.
Decent uptrend again. 
Any entry after July would've been nice... "shut up and take my money" ?
I understand their advertising is pointed at younger people with healthier livers than mine, however I reckon they could easily broaden there target audience.


----------



## mullokintyre (14 September 2021)

Announced a restructure of Debt facilities.
Has concentrated on  reducing debt over recent times, not sure why they needed to restructure debt and increase the ability to  add more debt  should the need arise.
This suggests they might be looking at adding some balance sheet via takeovers.
I much prefer organic growth rather than growth by acquisition.
I might take my profits on this one and wait for another pullback.
Mick


----------



## mullokintyre (24 September 2021)

Sold out at 12.40 when it started coming off the highs of 13.25.
Want to get back in, as I still think its got growth potential (there is a new KFC opening up in the next town to me).
My kids all favour KFC over maccas, which is another plus.
Would love to get back in under 11 bucks if I can, but will accept low  11.
mick
Mick


----------



## mullokintyre (4 October 2021)

Back into CKF average price a tad over 12.
Look to get out again if it heads above 13.40.
Mick


----------



## mullokintyre (7 October 2021)

CKF signed a management deal to handle all the KFC franchises in the Netherlands.
Won't do any harm.
Mick


----------



## mullokintyre (11 October 2021)

CKF hit a new 52 week high at 13.25.
That 13.40 may be hit sooner than I anticipated.
Mick


----------



## mullokintyre (11 October 2021)

out at 13.40.
May well go higher, but I have my profit, and thats enough for me.
Mick


----------



## mullokintyre (30 November 2021)

Back into CKF.
Good half yearly result out today, revenue  up 8.5%, profit up 26% after tax, dividend of 12 CPS, same as last years.
KFC Europe was the big driver,
They recently took over management of KFC sores in the Netherland, so that should underpin further growth for the full year.
Will top it up further any time it gets beklow 12.40.
Mick


----------



## Tyre Kicker (30 November 2021)

A ripping good stock this one.


----------



## mullokintyre (1 December 2021)

Another 52 week high today on a generally down day.
May have mossed the boat on topping up below 12.40/
Such is life.
Mick


----------



## mullokintyre (9 December 2021)

Somebody keen for a chunk of CKF today.
Buy order in at 14.01 that will gobble up 50% of the sells on offer.
Be interesting to see where it finishes the day.
Mick


----------



## Ann (13 January 2022)

Let's see if CKF can tow the 200dsma line with all this supply chain turmoil happening. I just bought this yesterday, prior to seeing all the publicity of reduced menu and so forth. Meh, whatevr!
I have put this in my KISS thread down in Trading Journals section with more comments.


----------



## mullokintyre (13 January 2022)

I have also added.
KFC will still be in demand, and likely served even in the event of a nuclear war!
Mick


----------



## Ann (6 February 2022)

Taking another look at CKF


----------



## tech/a (7 February 2022)

Ann said:


> Taking another look at CKF
> 
> View attachment 137132




Ann

The volume Spike is a massive sell off so should be seen as resistance not support

The volume Spike is a massive sell off so should be seen as resistance not support

opposite to your musings


----------



## Ann (7 February 2022)

tech/a said:


> The volume Spike is a massive sell off so should be seen as resistance not support



.....exactly, and this is what has blinded me for so many years to the secret of trading with volume spikes John. I also have looked into the spikes to see if they are buyers or sellers. When identified as sellers I have taken no further notice or worse, sold a stock with that knowledge, often to see it rise with me left at the curb looking dumb faced.  I am still working on this but I can see a degree of logic behind what I am thinking.

I have just explained this to my son whom I am encouraging to trade Bitcoin, let me copy and paste my email to him in order to save saying it twice...



> This old dog has learned a new trick. I always thought trading using volumes was a wank but I have seen something I have never noticed before. Where there is a huge volume spike you draw a line from the EOD (end of day) price level and that becomes either a sturdy support or resistance horizontal. It can be used either as a signal to buy or a great level of stop-loss if the price fails the line.
> 
> It is not tea leaves as most of the market is automated by computer-generated trading software and this would be a logical level to program into a trading program as support or resistance. This is why I now understand why trading programs have a limited life span before they don't work anymore, or they did at one stage.
> 
> With share issues, splits, consolidations and all things that alter the price of a stock, these horizontal lines alter their position, I have seen this often on my charts when I have drawn lines either horizontal or trending, they completely move out of shape over the years. To use these lines on a permanent basis you need to check the volume spike/EOD price is still in the same position. I guess a good AI program could do this automatically. Bitcoin with its splits would suffer from this problem as well.


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## tech/a (7 February 2022)

I'll mark up the Chart when I get a chance hopefully it will help.


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## Ann (7 February 2022)

tech/a said:


> I'll mark up the Chart when I get a chance hopefully it will help.



Thanks, John I would be interested to see your take.

Now another new trick with volumes I worked out and you confirmed is a volume spike at either a top or bottom which can indicate a reversal in the price. I am seeing just such a spike at the bottom of the recent fall testing $11.


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## Ann (7 February 2022)

tech/a said:


> The volume Spike is a massive sell off so should be seen as resistance not support



I know we chart differently from each other but I see a support line as any 'proven' line where the price sits above said support line. All or most horizontal support lines behave over their lifetime as either support or resistance, it all depends where the price sits. Currently, the $11.47 would be regarded as a support line, should the price fall below the $11.47 line, then I would regard it as a 'resistance' line and would expect further falls. The rising trendline is currently acting as a resistance line as the price is under the rising support line.


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## tech/a (7 February 2022)

The old support at $11.47 has been broken when the price traded as low as $10.80.
It could be argued that old support at $10.80 has held. $11.47 has no relevance.


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## mullokintyre (9 February 2022)

Well look at this.
Here we have two posters who ,to those of us who don't understand the dark arts of charting, give a pretty good impression of knowing what they are talking about.
Despite having pretty much diametrically opposed views on the subject, they are polite and respectfull of the other persons views.
No derogatory name calling, do perjorative labelling, no histrionics.
Perhaps the rest of us on ASF might take a leaf out of their respective books.
Just sayin.
Mick


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## Ann (27 February 2022)

I sold CKF on Friday as it was showing weakness and was under a lot of overhead and trending resistance. There is now a reason I feel the sale was premature and went into more detail on my Trading Journal thread here... https://www.aussiestockforums.com/threads/kiss-with-ann.36706/


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## mullokintyre (28 June 2022)

Another good annual report out for CKF, driven by big increases in European division.
Revenue up11%, operating cash flow up from 128mil to 156 mil., dividen up from 1 to 15 cps.
In this environment, more than happy with it.
Market seemed to agree, up over 20% today.
Good long term hold this one.
Mick


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## mullokintyre (29 November 2022)

And todays result is the complete reverse.
Sales were up 15%, but there was also big increases in costs - wages, transport, energy.
The killer was the reduction in profit,  NPAT down 14%, but a half of of this was due to write downs on taco bell assets.
Net cash was down 3.2 million,  but net debt was decreased by 6 million.
Dividend maintained at 12 CPS.
Market not happy, SP down 20%.
This is a long term hold for me, so will hoover up some more.
Mick


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## eskys (1 December 2022)

CKF ex dividend on the 5th Dec (next Monday) 12 cents fully franked. I bought yesterday. Just break even at this price, so will hold, watch, and decide tomorrow


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## mullokintyre (23 December 2022)

CKF hit another 52 week low.
Now has fallen nearly 50% from the highs at the start of the year.
The market has spoken, but  I think the risk/reward  has now turned more towards the reward side.
I am still happy with this one, the queues at KFC dod not seem to be diminishing.
Will not top up until it either displays a turn around in price or  gets a newer low approaching the  next dividend.
Mick


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## Knobby22 (23 December 2022)

mullokintyre said:


> CKF hit another 52 week low.
> Now has fallen nearly 50% from the highs at the start of the year.
> The market has spoken, but  I think the risk/reward  has now turned more towards the reward side.
> I am still happy with this one, the queues at KFC dod not seem to be diminishing.
> ...



Had a look.
PE ratio of 16, yield about 3.6%, taco bell growth plans in trouble.

On the plus side, you would expect management to concentrate on the small stuff and increase profitability over next 2 years.

Getting interesting ,   still, with higher interest rates I would like a lower price to buy in. Put on my watch list.


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