I have to say one thing though, they are run a lot better than their competitors in QLD, the quality and service of the product are quite high and much more expensive as well. Usually with places like KFC and Mc Donnies when they first open the service and quality are high and then it drops off to the garbage level, and you wouldn’t feed the food to your dog. Always wondered about their profit margin as rice is quite cheap and makes up a good part of their burritos.
Is that Taco Bell?
@Dona Ferentes PE of 370, is pretty close to what Street Talk came up with.
This is gaining a lot of scrutiny in the media at the moment. 380 PE wouldn’t pass the RIH dart club test.
“It is not only fundamentally wrong, it is inconsistent with normal practice for constructing earnings multiples or how a prospectus for a business like Dominos or Collins Food is valued or analysed,” said one prospective investor said on Monday.
“Anyone who understands valuation multiples knows that when EBITDA is presented excluding the costs of the leased stores – which their selection of EBITDA does because rent manifests primarily as Amortisation of the Right of Use Asset, and Interest on Lease Liabilities – then the enterprise value needs to include the debt associated with the leases,” another investor told this column.
So, that’s $210 million as at December 31, “and would, of course, be higher at June 30,” the investor said. “And much higher in 2025, which is, of course, the earnings they want the valuation based off.”
Fist bumps at TDM
Actually, the treatment of the lease liability is in the prospectus. In the fine print. Is that disclosure enough to prevent the corporate regulator requesting a supplementary disclosure to give prospective investors a truer picture, fundies are asking.
It may also offer an insight into why New York-headquartered buyout giant Blackstone could not come to a deal to buy up Guzman y Gomez, as revealed by Street Talk.
Of course, value is in the eye of the beholder. But consider how expensive Guzman y Gomez would appear if it was more traditional when it came to metrics. That would be about 100-times EBIT. Or 380-times PE.
The float will see TDM go down from 33 per cent to 29.7 per cent of the register, while Guzman y Gomez’s founder, Steven Marks will fall from 11.2 per cent to 9.9 per cent. Barrenjoey will slide from 10.5 per cent to 9.6 per cent. The sell down will account for $42.5 million of the float’s $242.5 million proceeds.
