Big Food Grp. Share Discussion Threads

[25guilderbag] 19/10/2004 23:29

Details of the new format are in the 2004 annual report, nice presentation

[bigface] 19/10/2004 17:11

Yes factsonly - more fresh food papers cigarrettes - like a Tesco metro.

[robbie_3] 19/10/2004 17:03

I've seen the new layout a while ago, from what I remember there was less emphisis of fridge/freezer for more fresh produce.

[factsonly] 19/10/2004 16:41

Bigface - is the new format far less fride/freezer orientated?

[bigface] 18/10/2004 23:36

The new format Iceland stores fit the latest fashion of people buying their shopping at in-town scaled down supermarkets. The new format works - its just a question of refurbishing the stores as quickly as possible.

It would be a brave holdeer to sell out now. News next week not this I believe.

[factsonly] 18/10/2004 15:16

Fatmansys - I think you made a good move in buying 100k, I myself am also tempted to dip in quite heavily (only problem is getting the MMs to give me a good quote). Even though results were poor, nonetheless the NAV/share has increased. This will make the stock look even more attractive even if sales have declined... giving greater reason for management to sell off parts of the business or property...I know of a number of Iceland sites that Tesco's and etc. would pay a nice premium for.

[djlungi] 18/10/2004 14:59

Bigface,
The tobacco companies are liable to pay the duty at either the point of manufacture or when the goods leave their tobacco stores (see hmce.gov.uk).

Details of these duty payments can be found in the accounts of the tobacco companies, they state net turnover and turnover excluding duty payments.
There is no mention of tobacco duty in the BFP accounts.

Fwiw, this morning I spoke to my local Booker manager, he confirmed that the tobacco companies are responsible for the duty.
He reminded me of a valid point, that Booker profit from duty increases, if they were responsible for the duty payments this would not be possible.

[bigface] 17/10/2004 21:28

Thanks fatmansays. There has to be a link. Probably a legal ultimatum by MW as the cost to him (i.e. of a thwarted business transaction) was too great a risk for the SFO to contemplate. Good news indeed!

[bigface] 17/10/2004 21:24

djlungi - thanks for your post but,

According to Bill the company is working hard to control costs, protect profit margins and beat competition from Tesco and Asda. He said the figures look worse than they are partly because of cigarettes where of £1.5 billion in sales, £1.2 billion is tax. Profits from tobacco sales are non-existent, he said, but conceded that they bring people into the stores.

[fatmansays] 17/10/2004 14:58

Article on front of Observer Business Page re Walker. SFO have cleared him of insider dealing back in 2001. He is now free to bid for stores which Bauger may want to sell.

[djlungi] 17/10/2004 13:04

Bigface - 'Fags are a loss leader really and note that 1.5bn of cigarrrette sales is mainly tax.'

The tobacco sales stated are exclusive of vat and the tobacco companies pay the duty, BFP are not paying tax on the 1.5bn figure.

BFP tobacco sales are generated almost exclusively through the Booker group.
From the Booker website,
'Tobacco accounts for a significant proportion of retail sales footfall, and with 1 in every 6 cigarettes smoked in the UK supplied by us, you'll find everything you need at your local Booker branch.'

I've been led to believe that Booker is supplied tobacco products on a 30day credit basis.
Assuming annual sales of 1.5bn, monthly sales are 125m, so based on the 30 day arrangement, Booker have a 125m interest free loan.

Therefore annual tobacco profit = interest on 125m + in store markup.
I'll assume in store profit of half a percent, annual interest at 9%.

Profit is 0.5% x 1.5bn = 7.5m
Interest is 9% x 12.5m = 11.25m
Tobacco profit = 18.75m, a large part of Big Food profits

Of course these figures could be way out, as profit might be more or less than 0.5%. I feel that the 9% interest figure is a fair one, since this is about the rate of interest offered on BFP bonds (see press release 18 June 2002).
The figures also do not include any additional profits made from stockpiling before budget increases.

So a slowdown in sales, either through competition or regulation will inevitably have an effect on BFP profits.

[bigface] 16/10/2004 10:57

91% of my portfolio fatmansays (far too many) - The next item of news may be the review of the pension fund - management are saying not very different from the 192m deficit reported in the 2004 accounts

[fatmansays] 15/10/2004 15:31

Holding 100K through CFdS

% holfing in portfolio approx 14%

[bigface] 15/10/2004 15:24

You are holding 100,000 shares fatmansays?

I am sticking to my prediction of sliipage followed by gradula rise in the run up to expected completion of due diligence.

How much of your portfolio is this fatman - how much can you afford to lose?

[fatmansays] 15/10/2004 11:28

What should I expect ?

Slipping gradually everyday.

Holding 100K

[bigface] 14/10/2004 22:06

Wait for the mail in two weeks fatmansays.

[fatmansays] 14/10/2004 18:23

good post BF

[bigface] 14/10/2004 17:58

Still like egg Kingdwg, but its wavering - I am superlocked into slow moving, due diligence bound, BFG

I spoke to BFG today with the objective of obtaining a timescale for the conclusion of due diligence and get an overall feel for the attitude of the Company to any deliberate delay to flatten the price.

I was told that within four to eight weeks from the indicative offer is the stated timetable.

If I'd thought the wait would be this long I'd have bailed as I have lost out on a few opportnities (also sold egg as I had too many "recovery" plays.

I told BFG that most holders have a paper loss and that I do not expect anything from Bauger until 6 weeks from offer at least as he will want to drop the price as far as possible. It was also pointed out (as the only positive) that Fidelitry is holding and that was acknowledged. I told them they were rarely wrong - they should already know this.

They were positive overall, but the general feeeling I got was that the management had to consider the indicative offer from Bauger rather than snapping their hand off. They seemed genuinely intersted in keeping shareholders informed (having many employee holders themselves of course).

My opinion (all things considered is that it will start moving up) in about a week in the run up the completing due diligence. Fidelity will probably buy a few more too.

I am holding for the bid that I believe (all considered) will happen. Bauger has his timing spot on and they have to be given tome to complete their due diligence. Bauger are spending £380m after all and, as ever, patience and strong nerves are required.

[kingdwg] 14/10/2004 15:11

Well done Bigface, looks like you got out of egg right, you'll probably be able to reload under 90 soon.

[bigface] 14/10/2004 15:03

Due Diligence will be done within 4 to 5 weeks from now.

[bigface] 13/10/2004 19:05

For encouragement look at the turnover to market cap ratio and the value of booker (Goodwill 335m) and the remaining assets - Bauger knows this is buy one get one free which is why there is all this talk of offloading iceland and Bauger keeping Booker.

The big shareholders won't be scarred into accepting lessthan they paid for the Company.

Keep you head on your shoulders Bauger will -

[bigface] 13/10/2004 08:42

Sold egg Old Crow and will buy back in due course - I wouldn't be overly worried in mid 90's and would expect better results in the future.

Sales as expected at BFG and inevitable when the company has an accelerated refit programme. Many Booker/Iceland stores look tired and refits uplift sales dramatically but in tghe short run relatively more stores are closed and sales zero so down she goes.

The combination of the managements strategy of refitting and reducing sales accoirdingly plays makes the Bid timing of Bauger perect. I just hope that its not so good for him that the bid price is even lower than I expected i.e 105p (possibly + div).

I am relying on the major sharehol,ders to beef up these arguments and refuse to sell out cheap. The larger shareholders are capable of tipping of a VC or another bidder and maybe this is why Fidelity are adding!!!

Still holding all my stock.

[kingdwg] 13/10/2004 08:29

old crow - lack lustre to say the least but it doesn't look like a disaster, not when you look at sbry & mks of late. Bauger should hopefully see the potential and get this cleared up as soon as possible. Yes I'm still in egg, had 2 goes at it now, has to come good after the French operation is bottler up I'm sure.