Sir Royalty Income Fund SIRZF

Primary Symbol: T.SRV.UN

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 > $100M market cap

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Comment by BlueJay2020on Sep 28, 2021 10:56am

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Post# 33930389

RE:RE:$100M market cap

We're going to see a big positive number in the bottom line by the end of the year, and it will be the reversal of much of the fair value hit the SIR loan took this year. It's all non-cash, of course, and one of the crazy rules of IFRS that can cause large fluctuations in balance sheet values. Still, black ink looks a lot better than red.

By the way, the fair value of the loan is a pretty good snapshot indicator of the health of the underlying company that most retail investors wouldn't pay much if any attention to.

Robsopinion wrote:
I think this is an amazing post, and should be revisited. It was certainly an angle I wasn't focused on at the time. I did not verify the numbers but am more than confident that BJ did.

Fowler tried to take the company private, in the midst of the chaos of Covid, while talking doom and gloom about the company, when the share price was at its all time low. And he (effectively being SIR) was offering half of what "he" owed the company (SRV) in loans!
While doing this, SIR was operating another brand (Renegade) out of OUR kitchens, advertised to OUR customers through OUR mailing lists, canabizing OUR sales, for sales on which he had zero intention of paying any royalties on.

Most interestingly, he was not purchasing units himself, which he could have easily done (and profited very handsomely) because that would have been seen as a sign of confidence for the company and its future.