No more Hot & Spicy, page-35

Shouldn't worry about it over the short term. I was telling a mate today I'm more of a value long term investor, I'm in CKF not for the next year, but the next 5 years. I crystal ball this and see a company with the largest holding of KFC's in Australia, a portfolio of 40 / 50 Taco Bells across Australia, on the path to the dominant player of KFC in Europe, etc. As long as they can do that organically and without significant capital raises, then we are looking at dividends plus capital growth and a share price $15+

Whats really interesting for me is slide 5 of the presentation.

The contribution to cashflow vs EBITA from europe is telling. Europe contributes 12.5% of the revenue, but 6% of the EBITA. I'm assuming that there are some hard costs around setting up and head office that are eating the profits there.

Over the next 12 months those costs will need to be either spread out over a greater % of stores and increase the efficiencies there. That will provide an instant EPS uplift and provide a catalyst for re-rating the shares.

Historically Australian companies screw up international expansions (see wesfarmers hardware tilt) but i'm pretty confident that these guys have a good idea on what they are doing.

On the other hand im also watching Restaurant Brands pretty closely. On an EPS CKF is a better buy at the moment. If the directors of each were not so hostile to each other, there could be some real synergies between the 2 as a merged entity.