Indian Rest. Share Discussion Threads

[robandkerry] 29/6/2009 15:28

That idea of a communal curry kitchen is a real no no im my book. People want freshly prepared meals. Well I certainly do. If you wanted a curry thats a few days old you would go to asda and buy it.

[supernumerary] 29/6/2009 15:24

I started watching this when it first listed on AIM, largely as a result of TBF saying it was worth keeping an eye on. His argument at the time, as I remember, was largely that it had a big cash balance, lol...

Since then they've done nothing of interest. The idea of a branded Indian chain has some merit, but 'The Mela Group' has never seriously tried to establish a brand. Read the interview someone posted on here a few days ago - four? different restaurants, all with different names, menus, target markets - no consistency at all. Where's the brand there?

If someone says Pizza Express, I know what the brand is. If they say Nando's or Starbucks or Wagamama or Pret a Manger I know - there are endless examples in the restaurant business - but Mela? Or Chowki? Or the Monkey Puzzle? Or what else was there - I lose track.

Now they're setting up a communal curry kitchen to make reheated food for the whole of London, thus further cheapening any image they may have (already attacked no doubt by special offers, discounts etc), to serve a market they don't yet seem to have established.

Sorry to be a downer but imo definitely not one to invest in until they're a lot clearer about their strategy and have proven their ability to implement it.

[robandkerry] 29/6/2009 15:18

Is it not worth loading up at this price big fella to get your average down to a more achievable price.

[the big fella] 29/6/2009 15:15

From memory they had 2.3 mil cash when they listed. Now they have under a million and falling fast. Directors were not helped with the down turn in the economy and they could well be the best recovery play on the market. My ave is 15p so I hope so, but please excuse me for being a little negative when the Directors have been doing very little for their dis-proportionate high salaries and I have seen my "investment" turned to peanuts.

[mike_f] 29/6/2009 15:13

I was joking...

[mike_f] 29/6/2009 15:09

Not all of their ingredients they wouldn't or it would be an english restaurant chain wouldn't it... lol

[robandkerry] 29/6/2009 15:07

Why would the weak pound increase product costs. I would assume they buy their ingregients fresh every day from here in the UK.

[mike_f] 29/6/2009 15:02

They blame the weak pound for current increase in product costs, been a good turnaround there in the last 3-4 weeks, if the sterling can sustain this rise then they could swing back into profit very quickly. Why so negative?

[the big fella] 29/6/2009 14:56

Give it another year and the Directors salaries will have wiped that out. Unless trading has drastically improved then I would steer well clear.

[mike_f] 29/6/2009 14:54

spinvest, i am looking at this share as a good recovery play but believe it is worth more atm with their cash twice as much as their current market cap. GL

[spinvest] 29/6/2009 14:45

Mike_F

Thanks for that; although the only declared ethnic origin is Kuldep Singh.

I know very little about ethnic origins of names and I am very reluctant to make judgements based on the little knowledge I have.

Right at the moment the leisure industry would be a "bottom of the league" investment for me but I think I will keep an eye on this one.

[robandkerry] 29/6/2009 14:45

The points Stuart made about the benefits of having a chain i agree with, but that is the same for any chain of restaurants. The thing you need to make a chain successful is a constant or a USP. If you look at all the big successful chains they all have a constant or a USP, whether it be the celebrity owner, or the food, or the brand. I just dont see what this company has to make it a successful chain. If all the restaurants were called the same name then that would be a start towards building a brand. It sounds very much to me like the directors are massaging their own egos down the pub, rather than trying to build a susscessful business. Look at me, I own a chain of Indian restaurants and pay myself a fortune.

[dope007] 29/6/2009 14:26

directors paying themselves more than the company mkt cap!!!!!. Seems to me shareholders are the last thing on their list of priorities.

[mike_f] 29/6/2009 14:11

Both of my buys have been shown as sells as you can buy below the mid price... i feel this company has alot of upside and will stick with it!

[the_beagle] 29/6/2009 14:07

Mike. I think you're fighting a losing battle here. Only £600 worth of buys over the last month and it sounds as if those were all yours. I would cut my loss if I were you, and look elsewhere.

[mike_f] 29/6/2009 14:02

Post on LSE from haventgotaacllue:

Interesting they blame the weak pound for current increase in product costs, been a bug turnaround there in the last 3-4 weeks, if the sterling can sustain this rise then they could swing back into profit very quickly.

Very good point...

[stuart14] 29/6/2009 13:45

Centralised Kitchen, bulk produce buying, usual economies of scale savings. If they have the same menu, decor, cutlery, training for staff etc U.K wide it would potentially be a very good business.

My worry is the directors sit around for the next 2 years, taking all the spare company cash as salary and then wind it up.

The reason the share price doesn't reflect the companies cash balance is simply because the only people who can control that balance, at the moment, are acting in their own self interests over there shareholders.

[robandkerry] 29/6/2009 13:13

But there is no leading Indian Restaurant Chain in the U.K and that is a space i'd hope they can fill given time.

This is what I still cant get my head around. What is the benefit of having a chain of Indian restaurants?

[mike_f] 29/6/2009 13:05

Stuart14, i agree that the wages for directors are a little excessive that is the main reason for the losses, the company as a whole seems to be doing very well at keeping its head way above the water so to speak and cash value alone is surely a great buffer for investment? i.e in December if the cash burn remains the same they will be looking at 600k in cash which is still more than the current sp! I think this company has a great future and will become a very good investment. Feel that fair value is around 5p still taking everything into account...

[thearcticfox] 29/6/2009 12:50

I'm tending to agree with robandkerry on this one, I remain monitoring it - and might buy in if the price falls. But at the rate they're burning the cash at, it doesn't look like good sense to buy in before they bring it under control. And if Stuart's correct about the top two taking 490k per annum out then it's no wonder they're losses are mounting. Sorry Mike can't find enough in the report to justify investing here, Good luck tho.

[stuart14] 29/6/2009 12:49

For my sins i've been in from the beginning Mike. There central london restaurants are high quality, don't know about the Redhill venue, but imagine it is good. I don't think they need to offer much that is different to elsewhere, but there is no leading Indian Restaurant Chain in the U.K and that is a space i'd hope they can fill given time. The plan to integrate individual restaurants into the group makes a lot of sense, they'd benefit from the economies of scale, and the brand would add weight through-out their geographical regions.

My big bug-bear at the moment is the directors salaries. Nearly £500k has gone to those 2 in the last year. £100k each would be fair. £300k saved would have been enough to bring 2 more restaurants into the group.

I think Haresh is a very smart man, with the ability to deliver. Not so sure on what Amit's role is. The Mela Group bought management with them.

There are now at least 2 Indian restaurants with Michelin Stars in London. They should be aiming to get to that level. The Cinamon Club is a truely great experience for example, and always busy. If they can start to attract the corporate diner as well as the evening and weekend locals they'll be in a much better position.

Lastly, it is a shame we didn't get Bombay Bicycle last year. The debt would have hurt the group, but the size of the chain would have really helped us long term

[mike_f] 29/6/2009 12:46

robandkerry, they had 1.3mill cash in December so after 6months they haven't burnt that much cash have they? They are just a chain of upper end of the market Indian Restaurants, why would they need to offer anything different? If the Indian restaurant/takeaway business wasn't profitable there wouldn't be thousands accross the UK would there? They are the first chain on the AIM and with their cash @ 918k and their current market cap @ 430k that's twice as much!! Very undervalued IMO... GLA