India Outsourcing Services Share Discussion Threads

[stuart14] 30/1/2008 10:27

They are looking for 2 streams. One would be the pizza express type restaurant. £25 per head, nice atmosphere. The second would be a more Wagamama's style social environment. Benches where you sit next to people and chat to people you haven't necessarily arrived with. Bit cheaper.

The catering business will look to get involved more with Indian Weddings. If anyone has ever been to one you'll know how extravagent they are, and how long they last!!!

[outsider] 30/1/2008 10:23

Ah good makes sense.

[the big fella] 30/1/2008 10:21

Pete

From conversations I had yesterday that is already in the plan.

[hardie1960] 30/1/2008 10:20

Indian restaurants - you guy's must be locked in deep here.
I thought Stuart had more sense.
Suppose thats where greed get you.
This is a scam for the new owners, and the restaurant business being a cash business makes it more attractive for them.

Can anybody give a profile of the owners?

[outsider] 30/1/2008 10:18

Well it's on my watchlist....no doubt has potential.

Can't help feeling though UK is crying out for a fast Indian food outlet like McDonalds/Subway format, that really would make potential investors minds up, although I understand the pizza comparison.


After all they say themselves younger people are into curries etc, well imagine the students etc; that would love the opportunity to buy a cheap curry!

[the big fella] 30/1/2008 10:13

Exactly my point Stuart. Be selective, start up costs minimised, already have goodwill, and pay for it with equity / cash mix.

[stuart14] 30/1/2008 10:10

If I were trying to make a mark with Indian Restaurants, I certainly wouldn't look to start new ones in each town, rather bring existing, sucessful businesses into the group, rebrand them and move on.

[the big fella] 30/1/2008 10:06

Stuart - good points.

[the big fella] 30/1/2008 10:05

Pete

Thanks for our comments. You may be right with my source! Without revisiting the figures I think its about 16.5 mil shares so 3.3/3.5 mil about right.
500K was net profit. I haven't included the outdoor catering which could be another 100/200k.
They have over 2.2mil cash on their books. Clearly if this is going to multibag they will need to find the right outlets and have a successful expansion. Whos to say they don't use cash and equity to buy existing businesses that aren't loss making. I suspect there will be a mixture of both new and old.
The point I was making was really to put a stake in the sand and to generate some sensible discussion around valuation and the business rather than the Hardie drivel of 2 pints of lager and chicken tikka please.

[outsider] 30/1/2008 09:59

thx stuart

[stuart14] 30/1/2008 09:57

Outsider, the majority of the new shares cannot be sold for less than 26p, so they are out of the equation for now. Also the £3.5M MCAP assumes all the targets are met. For now there are not that many more shares in issue. Agree Cap-Ex will be large, but not insurmountable

[the big fella] 30/1/2008 09:44

Stuart / NTV

Thanks for your thoughts. I very much got the impression that we are talking well in excess of 500K. How many days cricket at the Oval with decent crowds - One dayers, 20/20 (Engalnd / Surrey) Tests. Id' have a guess at 15. 300K on 70% margin quite possible.
Anyway as they stand they can be bought at just above cash levels held and the exciting part is the roll out of the business plan.
I love Dragons Den. This is the kind of deal at a rating the dragons would invest in. Are profits and cash generation so unfashionable the business should be valued at virtually nothing?
Back to that risk / reward ratio. At these levels it is very attractively weighted.

[outsider] 30/1/2008 09:42

Been checking this one after your post BB...Pretty sure I know who the informant is!


But aren't we talking circa 3.5m mkt cap at 20p with deffered shares & 500k profit after tax will be 350k.


and after that aren't there losses from India outsourcing to be calculated?


Also heavy cap-ex in 8 new resto's plus initial losses first year?


I think it's interesting & one to keep an eye on, not sure now is the right time for purchase?

[the big fella] 30/1/2008 09:08

I don't recall any serious analysis of the results. And lack of finance can be true of any junior explorer - they will always need cash to dig holes (it's called risk / reward).

[stuart14] 30/1/2008 09:07

I believe that a lot more detail will be published soon. The fact that the group and 2/3 restaurants are all making profits is enough for me. It means thet can start rolling the model out in other towns. The value here is the scaling. 3 restaurants are never going to make any of us rich. 30 though and we're cooking!!!

[ntv] 30/1/2008 09:05

tbf
not doubting your source/truth but just saying you would have thought that the figures would have been put in the rns

[hardie1960] 30/1/2008 09:04

Hardie - as for being proved right on GGG you had a 50/50 chance. As always you didn't offer any reasoned arguement.

No reasoned arguement? How about continuing disappointing results, and lack of finance.

[hardie1960] 30/1/2008 09:02

TBF,

yes but I sold them at 10.5p , so a lot better then today.
That has freed up funds to invest elsewhere.
GGG was a bad investment but at least it has well meaning management - i'm not so sure about the management here.
Each to his own, good mid caps seem to be a better bet.

[the big fella] 30/1/2008 08:48

The figures I quote you were from the company via a very respected source (Chairman / Director of listed companies)so I have no reason to doubt them.
I would assume that the earn out was a way of deferring consideration on the purchase. It is pretty much a given it will be paid, therefore prudent to assume so in any valuation calculation.

Hardie - as for being proved right on GGG you had a 50/50 chance. As always you didn't offer any reasoned arguement. Oh and I suppose you forgot to mention you were so right you sold them for less than you paid for them. Every thread deserves a genius like you!

[ntv] 30/1/2008 08:22

agree james if those figures are corrent then it is poor pr
the other q you have to ask and i have had a stab is that they are probably before all the usual stuff like goodwill,central overheads etc so the realistic figure is £120k

[hardie1960] 30/1/2008 08:05

The big fella,

re credibility on ggg, I think that I have been shown to be right again - just look at the share price graph.

Re this one, i'd say that the owners just need a business, any business, as a home for their money.
We shall see. I know the restaurant business pretty well, I made much of my own money there before switching to property investment.
Its not a great business to be in at moment, and with this management I see a steady drip in the share price here down to single digits.

[james 2] 29/1/2008 22:29

The big fella, if they are earning £500k I would question why[unless I am missign something] the earn out shares you mention are for profit after tax of only £120k in 2009 ?

They are also taking on upto £280k liabilities.

Deferred Consideration Shares (which may be issued conditional upon turnover and profit before tax of the Mela Group for the year ending 31 March 2009 being not less than £2.5 million and £120,000

I'm surprised they didn't include the financials they have given to you above, strange and more the pity for existing shareholders.

[simon54] 29/1/2008 20:52

FWIW, a view from the outside (and given that I've expressed doubts about IOS before now) - you seem to be in one helluva better position than you were a couple of days ago. I think your company maybe has too many directors at the moment, though!;-)

Good luck! :-)

[the big fella] 29/1/2008 20:28

hardie1960 - 29 Jan'08 - 19:44 - 1047 of 1048
Stuart,
what a load of rubbish - and you know it.


All for a bit of free speach so come then Hardie I have been eagerly awaiting some reasoned analysis from you. But I suspect you are actually incapable of that. Your "credibility" already having been shot to bits on various threads(notably GGG) on ADVFN.

The figures I have quoted have been sourced from the company. It is a pity they didn't put more of the financials in todays announcement as those selling today could have done so in full knowledge, not on the back of assumptions and gut feel.

I suspect most of todays volume were short term punters that have got in over the last few trading days. I suspect all other hot money long since gone on the fall from 30 odd pence so I would expect recovery - especially in light of the fundamentals.

[stuart14] 29/1/2008 19:57

hardie1960 - 29 Jan'08 - 19:44 - 1047 of 1047 (Filtered)

No idea what you are saying, not interested anymore. You have no credibility left and come across as a really bitter person these days. Won't be taking you off fiter either. Goodbye.