TSX:SRV.UN - Post by User
Post by
logicandinertiaon Dec 21, 2017 6:44pm
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Post# 27210580
Wow. Revs up 7.6% and SSSG +5% - best figures in years
Wow. Revs up 7.6% and SSSG +5% - best figures in yearsBig numbers out of Sir . The renovations are paying off at Jack’s and Scaddabush continues to kill it.
Moreover, three new Scaddabush are added to the pool on Jan 1 , including the lucrative Toronto Fron Street.
Given that the pool has to pay out close to 100 percent of revenue to minimize taxation, I think we will see growth in distribution in 2018. They snuck in a special year end bump, but there will be more. Simple math really.
Lastly, lots of optionality with SIR. They are 0 percent franchised and have no real presence outside of Ontario. When you factor in the Special at year end, the yield is 8 percent for T12M. If Cara could buy them, they definitely would. As Fowler gets older, maybe this is the exit strategy. No immediacy IMO.
Minimum wage age increases will likely force them to raise prices, but since the Pool revenue is driven by revenue not costs, this isn’t a bad thing for Pool investors. Given the momentum we are seeing, menu increases likely to be manageable.
Happy investing in 2018...