Crawshaw Share Discussion Threads

[tabhair] 13/12/2016 00:45

A few pages back I suggested that a 10% EBITDA margin was possible (mainly taking the Crawshaw investor presentation for granted). Having looked at the numbers again and stewing on it for awhile, I think this is wrong. If we are to use the managements own adjusted EBITDA numbers, then the margin for the current interim is more like 5%. Assuming £50M revenue for the year on 50 stores, that leaves adjusted EBITDA of £2.5M, perhaps with a little margin expansion that could go up to £3M. On a current market cap of £17.5M - that looks like a reasonably fair valuation.

I think I am done with analysing this share. The tiny profit margins and lack of operational gearing mean that even if this goes to 200 stores, EBITDA % probably barely moves, but in the mean time you've sunk a lot of capital in to get there. I think that perhaps management have understood this, and that is why they are pushing the newer factory store concept. Personally, I just cannot invest on a wing and a prayer. At this stage, I feel management lack credibility (their investor presentation just does not reflect reality), so unless I see evidence to the contrary, I am not touching this.

[mcmather] 13/12/2016 00:32

Tiger, how bloody dare you!! The other - and the correct! - side of the pennines; I was just using Carlton Street as an example:)

If anyone is doing a 'proper' shop fully agree it is either the internet, an outlet village or a supermarket for the 'big' shop.

What I've been surprised by over the last 12 months or so is the amount of people in town centres during the (working) day. Busier than I can ever recall.

There's a massive potential market here for the likes of Crawshaws from those who just get out each day (mums with young kids, retired, homemakers, part-time workers, etc) who are happy to pick up bits and bobs during the week and who don't want the hassle of going in a supermarket.

In the food to go range you can pick up a cooked chicken and a cooked joint (ham / pork / etc) for £6 all-in (some shops it is £5). With not much else a small family can get 2 decent meals out of that; perhaps even 3 at a push.

The other folk in town centres during the day are usually there to meet but specifically eat. The food to go range Crawshaws offers (IF operated correctly; see paleje's previous post re the Cannock store) is decent re overall quality / cost; £3/£3.50 for a very decent lunch with the meat being from the previous day's unsold stock but still able to used and which keeps wastage down. Can't immediately think of anything that can compete with the overall quality / cost.

The high street stores revenue is said to be 60% meat / 40% food to go. I wouldn't be surprised if the gap reduced going forward.

(What I'd like to see them do is post an offer for the week up on their social media platforms every Sunday evening. Nothing explosive; just a decent offer but one which might sow a seed for the upcoming week. Once a customer is in there is always the chance that they might then also purchase from the food to go range or vice versa)

Appreciate that there are clear challenges and management winking each other off whilst spouting off about being circa 33% cheaper than supermarkets won't have made matters any easier.

Just think the concept of the business here, as it currently stands, is compelling. But management will definitely need to be on their guard to nip any bad stuff - including ANY member of the management once again heading down Giddy Lemming Avenue - in the bud.

The concept is good and the potential customers are there. Don't think this is rocket science but, then again, management have recently struggled in grasping this is not much more than a simple butchers with a food to go offering...

[playful] 12/12/2016 22:49

The previous management at our Huddersfield shop introduced fish many years ago and I got the impression it was unbeknown to senior management at the time, but they were A/B testing so you can't knock them.

[castleford tiger] 12/12/2016 19:40

McMather
Castleford, not sure about the cheesy fish café thing.

I reckon the target market for Crawshaws is entirely different to the supermarkets.

The high street stores catering for those buying dinner or tea from the food to go range with your frequent shopper buying meat for that nights or the following nights tea; approx. 60/40 ratio in favour of meat sales compared to food to go sales.

The factory shops will more likely be up against the supermarkets but, again, it's still a different market; you'll go to a factory shop with a specific intention in mind - to purchase meat and likely in quantity. A supermarket customer will more likely be undertaking the weekly shop; ie meat possibly being one of up to 100 items.

Re the high street in general, when was the last time you were down Carlton Street during the day and how many people did you notice?

Bit of a give away ........Carlton street eh
ok lets look at it.
There are two butchers slogging it out there ,plus some old hands in the market...........so your daily customer has plenty of choice.
The other thing is that people don't cook the same as before. Its a ready meal for tea for the many.
The destination farm shop ( farmer copleys) Brayton etc are away from the cut price high street.
Its not a good place.
Family been at it 100 years and me just 40 but the growth in their Cas store was the food to go element.

Are you a Cas person?

tiger

[mcmather] 12/12/2016 16:39

Strangely, the last 2 trades totalling just over £4k pushed the share price back up a bit after the very large trades earlier on:

13:34:16 12-Dec-2016 20.00 235,000 47,000.00
13:34:07 12-Dec-2016 20.00 681,345 136,269.00

[mcmather] 12/12/2016 12:44

playful re job satisfaction; a tricky one. If you want money then you must work. Anything else on top is a bonus. But you get the environment right and the performance will follow. The real difficult bit here for Crawshaws is that they need decent store / area managers in place to nip any bad practices (eg the food to go offering at Cannock) in the bud. There has to be a motivation for such people to progress with and stay with the company. A significant aspect of that will be job satisfaction whether that be pride or, conversely, a decent remuneration package.

Edit; it probably helps if the management are not prone to being giddy lemmings.

[mcmather] 12/12/2016 12:22

Castleford, not sure about the cheesy fish café thing.

I reckon the target market for Crawshaws is entirely different to the supermarkets.

The high street stores catering for those buying dinner or tea from the food to go range with your frequent shopper buying meat for that nights or the following nights tea; approx. 60/40 ratio in favour of meat sales compared to food to go sales.

The factory shops will more likely be up against the supermarkets but, again, it's still a different market; you'll go to a factory shop with a specific intention in mind - to purchase meat and likely in quantity. A supermarket customer will more likely be undertaking the weekly shop; ie meat possibly being one of up to 100 items.

Re the high street in general, when was the last time you were down Carlton Street during the day and how many people did you notice?

[my retirement fund] 12/12/2016 11:04

This has Richard Rose involved I think, single figures soon, more like bloody insolvency with shareholders left with nothing.

lol, LOL!

[castleford tiger] 12/12/2016 10:38

Harold
Castleford Tiger wouldn't craw get a cheaper price than you because of their volume purchases.also do you buy products from suppliers where they have made up stocks for customers that have not purchased them ? I pressume that craw would get a much greater discount on these products.

yes they would. Also parcels of products made for a supermarket are sold on to people like us and if there is enough CRAW may take a look.

Pogue

This one has been watched by me from the 2p days.
I am old enough to remember Dewhursts.

However most food chains have been wiped out by supermarkets. Our area was fresh food/frozen foods.
We supply some of the biggest independents in this sector.
A stand alone meat business was a shock. It still is.
However there is a sector that they could make work.
A roll out of Farm shop size units with
Meat/fruits/cheese/fish a café a wine dept and tag on a few fields for xmas trees /pumpkins so it becomes a morning out.
That's the growth area. Not the high street.

The shares close to 20p may well soon be in single figures.

tiger

[hybrasil] 12/12/2016 10:30

I'm looking for 14p as an entry price. Will I get it ?

[playful] 11/12/2016 23:03

Valid point on shareholder accessibility to shops but I’ve gone down the hamper path with them before and trust me it’s a well-trodden one.

Do I want to help increase sales or share ownership? I guess you’d have to say both would benefit from some type of a shareholder incentive, but will it happen?

[davidosh] 11/12/2016 01:12

playful....shareholder perks do not work very well here for a number of reasons...

1. Many of the shareholders do not have access to or live near any of the stores and so would not be incentivised to use stamps or indeed a 5% discount for example.

2. Are you trying to increase sales or make the buying of shares more attractive ?

3. Holidays and hotels are very high value purchases and occupancy rates are important as an empty room would be worth near 80% margin so can easily be discounted and delivered around the country or even to a visitor from outside the UK.

My view is that it would be best to concentrate on higher value hampers if looking to get shareholders involved. They are very attractive Christmas gifts and if a shareholder ordered say 20 for friends, work colleagues etc then I am sure there would be a way that Crawshaws could have them delivered to one address anywhere in the UK and add hundreds of thousands of pounds to their sales at Christmas and keep everyone happy without affecting follow on sales. If receivers are happy with the hampers then that could add longer term custom too.

[playful] 10/12/2016 23:47

Perhaps introducing a free book of saving stamps to shareholders with over 10K shares and they could publish this within the annual report with the corresponding telephone number to claim your stamps. This works well with other companies on AIM, Peel hotels use this and Mr Peel takes the calls himself on many occasions.

[optomistic] 10/12/2016 09:23

Topped the freezer up with chicken breasts yesterday...2.5 kilos for £8.
Told a friend and he went and did the same.

[pogue] 10/12/2016 07:42

Castleford tiger what's your motivation for posting on this thread, you hold no shares.

[playful] 09/12/2016 22:11

You could write a book with the amount of comments I have decided against posting here...

[optomistic] 09/12/2016 09:38

No buyers again yet they haved upped the bid a touch...must be looking for stock!

[haroldthegreat] 07/12/2016 10:31

Castleford Tiger wouldn't craw get a cheaper price than you because of their volume purchases.also do you buy products from suppliers where they have made up stocks for customers that have not purchased them ? I pressume that craw would get a much greater discount on these products.

[optomistic] 07/12/2016 10:11

Thanks for that useful information Harold, something not widely known.

btw all...the southern fried chicken steaks were very tasty and one each was adequate.
Definately buy these again.

[haroldthegreat] 07/12/2016 10:03

In colder weather if a fridge / freezer is in a room below a certain temperature it does not operate correctly.I checked the freezer temperature in a fridge/freezer last week where the room heating was off and found the freezer was -10.it should have been _20 !in the manual I found an instruction that said to leave fast freeze on if the external temperature drops in the room
This meant any frozen products would go off faster.
For those people who have complained about deterioration of their products I suggest purchasing an electronic max/ min thermometer .I was aware having a freezer in a cold garage caused problems but in a cool kitchen was a surprise.one would think to use fast freeze in hot weather or when putting large amounts of food in it to freeze.

[playful] 06/12/2016 17:39

The best advice I can give them is what I suggested at the AGM which was to employ someone to help improve & maintain employee satisfaction. I got the impression this was not high on his list of priorities.

[optomistic] 06/12/2016 14:10

"(Why would you choose that pack though if a genuine purchase....)"

From mcmather's post...yes why indeed!
I've been to town today and bought from Crawshaws:

1.5 Kilo gammon joint...for the slow cooker.

1 kilo of very attractive mince (12% fat) I know it'a tasty because I've had it before.

1 pack of pork, sage and onion and apricot stuffing should make a tasty change for Christmas. Just in case people may say poor lad...we will be having the customary meats as well :-)

Tryin some southern fried chicken stakes...steaks reads better :-) tonight for dinner 4 for £1.50 not had them before, will report later.

All this meat looked fresh and asking to be bought, had any not been I would not have bought it...all this for a tenner...try getting that at ASDA for the money.

[paleje] 06/12/2016 12:08

Can't disagree with any of that, mcmather, they sound like the butchery version of Fawlty Towers but so easy to address lots of the issues if they get down to it. That's why they're still potentially attractive, I got stopped out at 30p and haven't re-entered but still might, the Jan update will be interesting.