Fast Food Company keeps its Head
Restaurant Brands (RBD) the operator of KFC, Pizza Hut and Starbucks in New Zealand has appointed, Russel Creedy, the man who has been acting chief executive since Vicki Salmon's departure to the permanent position as head.
Creedy has been with the company since 2001 and has run company supply chains and Pizza Hut in that time.
Unfortunately Creedy is part of the lack of service culture that pervades RBD's operations and his appointment comes in the wake of his failure at the Pizza Hut division to stem sales drops in the face of competition and the continuation of that as acting head.
His placement as the top Colonel seems to me to be a default kind of appointment and smacks of nobody else outside the company with enthusiasm and fresh ideas being attracted to the sinking ship that is Restaurant Brands.
As an aside but related story Mac Donald's in the US is making inroads into Starbuck's territory with better product and cheaper prices. This author wonders how the local bean crusher is faring against the big Mac.
Two of the countries larger retailers reported profits today, with similar results.
Clothing retailer Hallenstein Glasson (HLG) reported a 1.3% fall in net profit to NZ$21.4 million.
Sales were marginally up to just over $200 million with New Zealand operations struggling and Australian sales up a solid 8.1 %.
Expansion of OZ and Kiwi stores were on the cards for the previous 12 months with a Glassons opening in a new Westfield Mall 2 weeks ago in my local area. The store manager tells me it seems to be doing very well and foot traffic while I was there seemed to reflect the managers statement.
The Warehouse (WHS) New Zealand's largest retailer, has announced an annual net profit after tax of $115.5 million. Sales were up 2.4 per cent to $1.76 billion.
The profit included almost $20 million from asset disposal from which a 35c special dividend will be paid. There is to be a normal 5.5c dividend on top of that.
The Warehouse is in a state of flux at the moment. Expansion plans are on hold and ownership is in limbo as Foodstuffs and Progressive look to fight out ownership bids for the company in the courts early next month.
Both retailers will find the going tough for the medium turn, as high government spending has lead the economy into a tail spin raising interest rates and inflation.
Post 2008 election a new frugal, tax cutting regime will help stimulate this sector again.
Pumpkin Patch (PPL) the trendy global kids fashion retailer, will report Monday 17 September(NZ time) and judging by the spectacular fall in share price of the last several weeks insiders seem to know that the result isn't going to be pleasing.
Fonterra headed to a new Frontier?
As canvassed here a few weeks back the speculation about New Zealand's largest company being listed surfaced again this week.
Fonterra's brands business could be worth more than $4 billion if floated on the share market and analysts say it would be an eagerly awaited float.
Fonterra's brands business - including Anchor, Mainland and Tip Top - had an operating revenue of $4 billion.
This puts it above the scale of companies with similar strong brands, such as Goodman Fielder (GFF) which has approximate $2.5 Billion in sales.
With the NZX bereft of such large listings a partial float of Fonterra would give confidence to a sagging undervalued New Zealand stock market.Good news and bad news for Fonterra this week.
Rachael Hunter, the girl form Glenfield and the Tip Top Trumpet ice cream girl from 22 years ago this week launched the Jellytip Trumpet, a fusion of two classics.
Pictures of Rach' licking the new cone shaped concoction immediately reminded one that perhaps Rod Stewart might have seen the original picture of the pretty 16 year old doing exactly the same thing all those years ago. He of course latter married her.
The bad news, the milk that they base most of their products on has been implicated (again) for causing health problems.
Stupid is as Stupid does
Alan Bollard, the Reserve Bank Governor, has left the official cash rate at 8.25% this week.
Just when he should be lowering the rate because of a downturn in the New Zealand economy, with international markets likely to cut interest interest rates ,Bollard sits on his hands.
Bollard's possum in the headlights, hand on the tiller approach didn't work when he was raising rates and now he appears to be riddled with confusion as to what to do next.
"...This would be offset by the sharp rise in dairy prices and the decline in the New Zealand dollar in the past month..."
So he was critical of the Dairy industry when using it as an excuse to raise interest rates and now he is expecting the same industry to get the economy going when he did the best he could to destroy it with the highest interest rates in the developed world.
Cant have it both ways Forrest.
The Song Remains the Same
Finance companies are in the news again this week.
Geneva Finance, the latest company to strike problems in the financial sector crisis, yesterday gave its trustee assurances about its financial fitness.
On Tuesday, Standard & Poor's put Geneva on negative "CreditWatch" saying it was having liquidity problems.This writer cannot believe the amount of money being spent by this Finance company and others on saturation advertising trying to soothe prospective customers that their company's stability can be assured.
One could equate the quantity of any advertising of a particular company with the amount of trouble they might be in.
I certainly wouldn't come to that conclusion though-sound of one hand clapping.
Geneva insist things are hunky dory.
Jumping Ship at Telecom a good Call
Another Telecom (TEL) exec is about to head West. Telecom's CEO of its consumer arm, Kevin Kenrick, is resigning in December.
His departure follows the resignation of another senior Telecom exec, CFO, Marko Bogoievski.
Teresa Gattung was the first to get the heave-ho earlier this year when her dismal results as the CEO finally caught up with her.
Considering the pressure Telecom is now under because of Government regulation and the need to spend large capital sums replacing aging infrastructure it seems that head office has morale at the same levels as Telecoms dropping share price and future prospects.
The departures are well timed.
NZX Market wrap
The NZSX-50 index rose 20.25 points, or 0.5 per cent, to 4162.68 on turnover of $83.5 million.
Giant retailer The Warehouse(WHS) was flat at $5.95 after posting an annual net profit of $97.9m.
Clothing retailer Hallenstein Glasson(HLG) fell a cent to $4.59 after saying annual profit fell 1.3 per cent, to $21.4m.
Top stock Telecom (TEL)was down 2c at $4.35.
No 2 on the NZX board, Fletcher Building(FBU) increased on yesterday's 22c gain with a 14c rise to $11.99. Contact Energy(CEN) fell 2c to $8.97.
Fisher & Paykel Healthcare(FPH) was up a cent at 360, while F&P Appliances(FPA) rose 10c to 365. Auckland Airport (AIA)rose a cent to 311 with no more news of takeover talk, Sky City Entertainment(SKC) lost 2c to $4.38, and Sky TV(SKT) rose 17c to $5.60.
Air New Zealand(AIR) was up 4c at $2.29 ahead of a large dividend payout, Infratil (IFT)was up 8c at $2.80 and investment company Hellaby(HBY) was also up 8c, at $2.74.
NZX increased 15c to $9.75, PGG Wrightson(PGG) was up 2c at $1.78, Vector(VCT) the Auckland Lines company rose 5c to $2.58, and Tower(TWR) was up 5c at $2.25.
Going down were, Pumpkin Patch(PPL) was down 9c at $3.25 ahead of next weeks profit announcement, Nuplex(NPX) fell 13c to $6.97, Port of Tauranga (POT) lost 7c to $6.90, and Cavalier(CAV) was down 3c at $3.30.
c Share Investor 2007