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| Weekly Commentary Archive | | For archival copies of the Weekly Commentary click here... | | | | 24th February 2010 |
Restaurant Brands (RBD) enjoyed a strong lift in earnings over 2009-10, driven by the outstanding success of its revamped KFC brand and a solid turnaround in Pizza Hut. A further six KFC stores were rebuilt over the year, bringing total rebuilt or refurbished stores to 40, nearly one half of the total network. The Pizza Hut business finally began to return to profitability in 2009-10. Starbucks Coffee revenues were down on a same store basis but the business managed to improve its earnings by 9.6 percent. RBD has produced a significant step up in its profit performance with all three brands delivering trading results well above the prior year, but there is still some way to go before it fires on all cylinders. Pizza Hut is expected to continue the momentum of same store sales growth seen in 2009-10, while Starbucks is expected to return to same store sales growth this year.
OneSteel (Au: OST) is a global manufacturer and distributor of steel and finished steel products. The company has interests in Australia and around the world, including a 50.3 percent stake in New Zealand’s Steel and Tube. Most of OST’s products are used in the construction, manufacturing, housing, mining and agricultural industries. OST’s net profit fell by 49 percent in the first half to December 31, 2009, to $117.4 million. OST expects the full 2009-10 financial year to remain challenging but is confident that sales volumes will improve. OST still has some way to go before it fully recovers from the aftermath of the 2009-9 world economic downturn but international prices for its goods, after being driven artificially low through overcapacity in last 12 months, are likely to improve. The IMF expects Australia to record growth of 3 percent this year and 3.5 percent next year, which augurs well for OST.
Disclosure Statement: A disclosure statement can be obtained free of charge by calling IRG 0800 474669, or by email info@irg.co.nz.)
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