Ann: Investor Presentation - Strategic Review & Management Change, page-6

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tone124

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16/04/25

14:59

Post #: 78714922
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Originally posted by timbowls: ↑

I've listened in to the full conference call this evening.... I would say it's well worth a listen for any holders.

The positives - Overall I like the disciplined new strategy and focus on capital allocation. The new CEO should have his feet underneath him at this point and has acted decisively to focus up the business

- They seem really bullish on Germany and there does seem to be a big potential runway for growth there (207 KFC stores vs 1400 McDonalds). I'm glad they are exclusively going to open stores in the two states they've been granted exclusive rights from Yum as they specifically mentioned on the call that one of their mistakes with Taco Bell was spreading the sites out too much and not allowing themselves to ever build an advantage in any given area.

- There were a few hints dropped that KFC Australia is trading pretty well which lines up with the recent Yum Announcement that caused a big pop in the SP

The negatives - There has been a real change in management sentiment towards the Netherlands Business which seems to be really struggling. It's amazing to hear that wage costs have inflated 30% in just two years over there. We've clearly copped a big write down on this business unit on top of the recent Taco Bell write off and it makes me question whether fried chicken just doesn't really work over there? All of a sudden we've flipped around to Germany being the "second growth pillar" whereas this was previously always touted as the Netherlands. One analyst did ask whether it had a long term future at Collins and Xavier said that on top of the Macro issues they've had operational struggles that need to be fixed.

- I get the sense the Taco Bell exit could be a bit agonising as their going to try and find a buyer for a non profitable business that has just proven it can't get any traction in the Australian market. I question whether trying to hand this back to Yum could damage a very important relationship there?

- I did really miss the plain speaking and owners mindset on Kevin Perkins on the conference call as this one felt pretty heavy on what I call "corporate speak" at times. I felt that the CFO in particular was a bit irritable and terse and could have answered quite a few of the questions in a more full some way.

Part of me wonders how much better off we'd have been if we'd just focused on the highly cash generative Aussie KFC franchises all those years ago.

I've now been a holder for 8 years and seen quite a bit of the CKF journey unfold. I would like to do a bit of a deeper dive into the financials in the coming days but I would say I'm still cautiously optimistic.

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I agree should of been focussed on growing their Australian KFC stores especially in Victoria and NSW.
With the growing number of Muslims in Australia and KFC being so popular in this demographic it would of been much better to try and buy existing KFCs in Victoria than invest in Taco bell.
i was very surprised nobody asked the plans regarding dividend distribution considering a huge amount of capital is going to be required in growing it's KFC germany presence.

CKF Price at posting: $7.99 Sentiment: Buy Disclosure: Held
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