CKF - Collins Foods

[prawn_86]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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

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.

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]

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]

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]

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]

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]

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]

Great mate,

It's bloody Wednesday.

You are a dill.

Post such as this of a Monday.

gg

Haha

 

[tinhat]

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.

"Market Briefing" 21 February 2013

Key priorities for 2H13

Targeted promotional and value plays, with focus
on soft trade periods
− add on promotion
− 2 for 1 Tuesdays
− value priced lunch meals

"FY13 HALF YEAR RESULTS" 30 November 2012

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]

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]

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]

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!