grant wrote:The distribution has been accounced to be 8.4c/mo, which is EXACTLY what i predicted back in April, 2010. (i.e., between 8.33c/mo -> 8.50c/mo)
I haven't seen an announcement to that effect; have you? Although there was a press release which gave preliminary, non-forward-looking guidance. Such guidance only offered a first order assumption of what the distribution might
be. Until a distribution is actually announced, I think your 'conclusion' is a bit premature to come to. Especially in light of the accretive affect of the NCIB which has taken significant numbers of shares off the market, more than compensating for the SSSG losses.
At first I was shocked that you would attempt to present such an egregiously false statement as if you knew it to be fact.
This was on conference calls, that promotions driven by the 'corporation' were exempt from royalties, as well as, (IIRC), sales of alcohol.
I'm not privvy to their decision making, but I do know for a fact that as recently as 4 years ago, it would have been HERESAY to suggest $10 dinner specials or burgers at BP Inc.
Prices keep going up at the ones I frequent in Western Canada, and the only 'special' that remains is Pasta Tuesdays (which isn't even a BPI-driven promotion, but something they've always
done to bring in business on the weakest night of the week). Don't know which ones you frequent, but, despite the downturn, anecdotally, business is just as good as ever. Unitholders and the stock market obviously agrees as they've driven the unit price up to $14.65, which is pretty much its best level since I've been holding it (bought at $12, collected over $3 now in payments, over an interval of one of the worst downturns the western Canadian economy has ever seen).
$10 for a burger is still plenty, since, with a soft drink, and a tip, that ticket is still coming out to $15. Throw in one incremental item (more likely to have one of those if you're getting the meal 'cheap') such as an appetizer or dessert, and you're up to $20 easily.
Also, I'm not sure how the accounting for alcohol is done, or whether the trust derives revenue from the non-alcohol portion of an alcoholic drink (ie: the shot of liquor costs $2.50, but the martini
mix and glass service tags on another $4). I suspect they do, but I'd have to do some research on that.
I think you're barking up the wrong tree here, but I'm glad we share a belief that BP's SSSG is facing challenges in the coming years.
Don't forget food inflation, which is another beauty of this trust -- its revenue is derived as a percentage of total revenues, and not
from realized margins.
Having said that, I would probably sell if this thing hits $18. And probably buy more if it slumps and hits $11 on a general stock market decline.