Financial analysis report on Restaurant Brands Essays

Financial analysis report on Restaurant Brands Essays Financial analysis report on Restaurant Brands Essay Financial analysis report on Restaurant Brands Essay Individual Assignment Individual Assignment Fiscal analysis study on Restaurant Trade names Word Count: 996 words Submitted By: Table of Contents Table of Contentss : List of figures List of Tables Executive Summary The Industry The Company The Financials Decision and Recommendation Mentions List of Figures Restaurant Brand’s shops in New Zealand Gross graph for the last 5 old ages for Restaurant Trade names Bank Debt and dividend of the company Stock Price for Restaurant Trade names Net income Margin and company’s purchase List of Tables S.W.O.T. analysis of the industry S.W.O.T. analysis of the Restaurant Trade names Gross of Restaurant Brands from its franchises Net incomes and Dividends from 2008 boulder clay 2014 Executive Summary Restaurant Brands is a New Zealand company which franchises major trade names like KFC, Pizza Hut, Starbucks and Carl s Jr. across New Zealand. This study shows a fiscal analysis about the company so as to do a determination whether Portfolio Managers Ltd. can put in the company. Restaurant Brands founded in 1997 is a good established company and has 176 shops in New Zealand. Fast nutrient has become a new tendency and one the most demanding industry in the current decennary and Restaurant Brands is a leader in this industry. Financially, the company has drastically increased in gross comparing the old old ages. And it has proved there is a changeless income in the concern. The company s new venture in Carl s Jr. has besides showed a nice profitableness in the industry which shows the company is spread outing nationally in different fast nutrient trade names. The whole study would take to urge Portfolio Managers Ltd. to put in Restaurant Brands. The Industry Food is one of the industries in the universe which is profitable if the trade name maintains its quality and it is good established. Few old ages back New Zealand did non hold much fast nutrient eating houses, fast nutrient has become a necessity in today’s coevals. And franchising a good established fast nutrient trade name is acquiring better. As the rise in figure of different transnational trade names in the last few old ages show the rise in the industry. As an industry there can be tonss of competition but there are merely few major fast nutrient trade names. Restaurant Brands operates with major participants like KFC, Pizza Hut, Starbucks and Carl’s Jr. There is a little possibility of competition in the market as the rival trade names like McDonnell s, Dominos pizza are emerging. S.W.O.T Positive Negative Internal Strengths Existing concern theoretical account Support from the trade name Lesser competition for bigger trade names Less labour costs Failings Constrained industry High care Lesser profitableness External Opportunities Changeless income New and large market Menaces Intervention of authorities ordinance Trade name repute is precedence Table 1: S.W.O.T. analysis of the industry The rise of the Part-Time Economy, Refranchising, eCommerce integrating, Multiple Unit Ownership and More statute law of franchising are the few major tendencies in this industry. The industry is somewhat new to the market but a profitable industry. A right trade name would take to high success rate and profitableness. The Company A universe broad recognized trade name has its ain criterions and method of operation, pull offing a trade name worldwide is impossible. Franchising companies like Restaurant Brands plays a major function in pull offing these branded ironss of retails. As of February 2014, the company has 176 mercantile establishments which includes 90 KFC, 51 Pizza Hut, 27 Starbucks and8 Carl s Jr mercantile establishments. There are over 3,700 employees and 60,000 clients visit per twenty-four hours all over New Zealand. The increasing figure of shops for every trade name over the old ages and the quality maintained by every shop is the major success of this company. The undermentioned chart shows the figure of shops the company owns ; the company has major per centum of KFC shops. Figure 1: Restaurant Brand’s shops in New Zealand S.W.O.T Positive Negative Internal Strengths Trade name Loyalty Market leaders trade names Highly profitableness concern Diversified company Introducing Carl’s Jr ( high profitableness and shows enlargement ) Failings Low Productiveness Limited mark market ( young person ) Should keep high criterions Lack of R A ; D External Opportunities Addition demand of fast nutrient Expansion possibility Targeting other recognized trade names Menaces Raising competition High Taxs Government and environmental intercessions Increasing nutrient costs Table 2: S.W.O.T. analysis of the Restaurant Trade names Every company has its ups and downs. Harmonizing to the above SWOT analysis, Restaurant Brands has its ain advantages and disadvantages. The good thing about the company is that it franchises the biggest trade names in the universe and has been demoing a really good profitableness. The lone concern for the company is the authorities intercession and revenue enhancements. The addition in cost of nutrient is a concern but comparing the cost of a normal eating house and a KFC repast it’s really low. The Financials Restaurant Brands Limited is an international company which is listed on the New Zealand Stock Exchange. Harmonizing to the fiscal studies, the following graph shows the gross of the company for the last 5 old ages. It shows the bead in gross in 2012, it was chiefly due to the temblor, even though there was a 4.4 % of bead in the gross the undermentioned old ages showed a important addition. In 2014, the gross increased by 5.6 % and the net net income went up by 23.5 % ; it is besides the 2nd best net income in 17 old ages for the company. Figure 2: Gross graph for the last 5 old ages for Restaurant Trade names 2014 ( $ m ) 2013 ( $ m ) Change ( % ) Entire Group Revenue 330.4 312.8 +5.6 Net Net income After Tax 20.0 16.2 +23.5 KFC Gross saless 241.5 237.0 +1.9 Pizza Hut Gross saless 48.4 47.9 +1.1 Starbucks Coffee Gross saless 25.0 25.1 -0.3 Carl’s Jr Gross saless 14.3 1.9 +662.2 Table 3: Gross of Restaurant Brands from its franchises The above tabular array shows the split up of the gross of each trade name. Increased per centum of gross revenues generated by KFC and Pizza hut of 1.9 % and 1.1 % severally. And there is a lessening in gross generated by Starbucks. The interesting fact is that the freshly opened shops of Carl’s Jr. are bring forthing Gross saless which is 662 % addition in the gross compared to old old ages. The operating hard currency flow for the company is $ 32.7 m and the company’s bank debt has dropped to $ 8.1 million. BANK DEBT $ 8.1m FULL Year DIVIDEND 97,871,090 portions issued Up 3.1 % 20.4 CENTS PER SHARE Figure 3: Bank Debt and dividend of the company( restaurantbrands.co.nz ) The undermentioned information shows the incremental portion value from 2008 boulder clay 2014. The net incomes per portion have increased from 16.5c to 20.4c through the old ages. Even though there was a bead in the value due to the temblor, within 3 old ages it has increased to 20.4c. And the portion monetary value of Restaurant Brands is presently $ 4.02 which is pretty sensible for the market. Net dividends distributed are 15,653. 2008 2009 2010 2011 2012 2013 2014 Net incomes per portion ( full twelvemonth ) 8.6c 8.5c 20.1c 24.9c 17.3c 16.5c 20.4c Ordinary dividend per portion 6.5c 7.0c 12.5c 17.0c 16.0c 16.0c 16.5c Table 4: Net incomes and Dividends from 2008 boulder clay 2014( restaurantbrands.co.nz ) Figure 4: Stock Price for Restaurant Trade names( restaurantbrands.co.nz ) The below chart shows the net income border of the company ; in 2013 it is 5.2 % and in 2014 it is 6 % which shows the addition in its profitableness. And the debt to plus ratio shows the company’s purchase ; in 2014 its 21 % . For a nutrient based industry these ratios are good. The company’s current ratio is 0.16 which is reasonably bad since the company is franchise based, leases most of the shops and for a nutrient based industry there is batch of revenue enhancements. Figure 5: Net income Margin and company’s purchase Decision and Recommendation Restaurant Brands is a good established company which has put itself in a place to turn and it is now good rooted. Opening shops like Carl’s Jr brought net income in twosome of old ages and the company shows enlargement. Harmonizing to the fiscal studies the company is making good and it is taking towards changeless addition in income. To be a portion in one of the world’s best eating houses like KFC and Starbucks can convey pride and income for Portfolio Managers Ltd. ; and Restaurant trade names can decidedly be a tract for this new venture. The possible base of Restaurant Brands in the market and the company’s profitableness and fiscal strength ; it can be concluded that Portfolio Managers Ltd. can buy portions and put in Restaurant Brands. Mentions Restaurant Brands ( 2015 ) . Available at: hypertext transfer protocol: //www.restaurantbrands.co.nz. Page1of10