Sir Royalty Income Fund T.SRV.UN

Alternate Symbol(s): SIRZF

Consumer Cyclical Restaurants

SIR Royalty Income Fund (the Fund) holds investment in SIR Corp (SIR). The Funds' investment, SIR is engaged in the business of owning and operating full-service restaurants in Canada. SIR has concept restaurant brands, including Jack Astor’s Bar and Grill, Scaddabush Italian Kitchen & Bar, and Canyon Creek Chop House, signature restaurant brands, such as Reds Wine Tavern, Reds Midtown Tavern, Reds Square One, and The Loose Moose, which are used by SIR under a license agreement with SIR Royalty Limited Partnership (the Partnership. The Fund receives distribution income from its investment in the Partnership and interest income from the SIR Loan. The Fund indirectly participates in the revenues generated under the License and Royalty Agreement through its Investment in the Partnership.

TSX:SRV.UN - Post by User

Sir Royalty Income Fund > If you bought at $1.50...

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Comment by flamingogoldon Sep 13, 2021 4:29pm

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Post# 33850188

RE:RE:RE:RE:RE:RE:If you bought at $1.50...

I won't say that I totally disagree with a share price above $15. Despite all the damage from covid, what it did do is fast track SRV to the digital age.

While there's plenty of room for improvement, they have an app now that can readily accept your order either for pick up or delivery. While I prefer to dine indoors, during covid this was not an option. I tried the app (albeit with some head scratching after that gawdy landing page), and got'r done. Second visit order was easy peasy.

But, I bring up the app for an even bigger reason. Thanks to covid (if it's possible to even say that) you can order beer and wine now with ease for take-out/delivery and the fund gets a cut from alcohol sales, which, if I'm not mistaken, not all restos offer.

Finally, there is the successful Renegade Chicken brand in the wings (no pun intended) that could be deployed at any time....imagine possibly even on a franchise basis! What would the stock be worth then?

Covid has turned a lot of things upside down so I wouldn't rule out anything.

BlueJay2020 wrote: I'd love to agree with your logic and I'd love you to be correct in 2022, but unfortunately I can't!

Which restaurants closed, and are they close to one of our restaurants and where they direct competitors? I don't know the answer to that.

There are too many other variables at play, including how big the overall restaurant pie is, not just how big a slice SRV gets. The pie is not how many restaurants there are, it's how much traffic there is in total and how much the traffic is willing/able to pay.

Then there is the other investing factor on the value investors place on the diistribution stream, which is inherently risk adjusted in terms of the earnings multiple investors are willing to pay. At $17 the earnings multiple was around 13.5, and right now it's under 10. That illustrates the increased risk that investors (rightly) see compared to pre-COVID.

Look, I can see us justifiably getting to $13. I can even stretch to $15 if all goes well. But $19 is a bridge too far from here at the moment for me! :)

Tommy123 wrote: If around 10% of competitors of Sir went under during Covid, then we should see dividends roughtly 10% above the pre-covid amount. So, as you mentioned, it was around $17. Therefore, we should see around $19 a share next year IMO.