Finsbury Food Share Discussion Threads

[aleman] 01/11/2011 12:52

They made the critical shift into profitability in 2005! What have they been doing since? Callback should be in every call centre by now.

[spaceparallax] 01/11/2011 11:57

Net have only relatively recently achieved the critical shift into profitability, but given today's news I can easily see them becoming the product of choice for Authorities.

[aleman] 01/11/2011 11:47

Blimey - Netcall. I had them in about 2004. Great product. All call centres should run it. Why haven't they made a fortune from it, yet?

Had a good look at Toad back then as well. Doesn't look like they've done much either!

[spaceparallax] 01/11/2011 11:25

with efficiency, turnover, profit and debt reduction all looking good it's hard to disagree with adding at this level.

O/T another couple of mine have positive news this morning and might be of interest to other value seekers here - NET and C21. Both look set for tremendous continuing growth.

[aleman] 01/11/2011 11:12

I usually start at 6 to 8 times operating cashflow less debt. £72m to £96m less £36m = £36m to £60m. About 70-110p. Another way is £12m less capex less tax is about £6-7m so p/e 12 gives about £80m less debt or twice covered £3.5m divvie capability yielding 4% gives £90m less debt. THey all seem to concentrate values around £85m less £36m debt (and falling) so about £50m and rising, so just under 4 times the current share price and rising as debt falls. So my target is about 90p or so and rising by the amount debt is paid down, about 10p per year. In two years, with £10m less debt, 9p earnings and a 2p dividend (on its way to 4p), I'll be looking for 110p, maybe more if operating cashflow has risen. With debt by then at maybe £26m and interest cover of about 6, they might well be on the lookout for acquisitions again.

Market is way out on this one. there is a large cushion of safety if you crunch the numbers. We have already seen themcope with a commodities spike so another one won't end the world. Look at the price Northern Foods was taken out on. They had debt and pensions issues. I think the shares here could rise quite a bit just with some publicity but they are off the radar.

THat gives us the opportunity to keep buying!

[topvest] 01/11/2011 10:20

Looking at the annual report, it looks like they will be well place to return to the dividend list once the £4-5m of deferred consideration is paid in the next year. So, I would expect a final dividend this time next year, paid late 2012 or early 2013. In a year's time, not only will net debt be below £30m, but deferred consideration under c£2m. There are a couple of chunky deferred consideration payments which will absorb surplus cash flow in the next 12m, but thereafter they are very well set to be dividend paying and have a substantially higher share price.

What is FIF worth?

Well I would say that £12m of operating cash flow less £2m of normal capex is £10m net cash at a 10% cost of capital. That's a £100m or c£2 a share. Deduct debt of £30m (in a year's time) and you get to £70m target valuation. Knock-off a discount and you still get to a £1 a share! So, once the debt issue is resolved (12m off), then this will be worth much more than 25p. Views?

[boffster] 01/11/2011 10:06

AGM 24th November.

[topvest] 31/10/2011 20:59

Aleman - precisely. I agree with your thoughts. markt - one does have to ask, why you have shares in everything Mr Marshall related if you an axe to grind with him? I've never met the chap, but I think his businesses are run reasonably well, but often mis-priced by the market. They have certainly made mistakes, but who hasn't!?

[aleman] 31/10/2011 19:19

It's not the fault of the directors if the market chooses to misvalue the shares. The company has made perfectly good progress at paying off debt and deferred payments so you can't say taking on the extra debt to expand the business was a mistake. The market is showing signs of beginning to see its mistake. (Reinstatement of the dividend soon should accelerate this - news could be forthcoming with interims in 5 months after a couple of hints already.) I'm quite glad the markets make mistakes like these as I'd still be working without them.

[markt] 31/10/2011 18:46

Did you know.....

the shares issued as part of the acquisition of Memory Lane cakes (when D.Marshall backed it into a listed shell) were valued at 30p/share. July 2002.

Now in 2011 the share price may get back to 30p ! (but with inflation that 30p is perhaps worth around 40p now...so still more to go)
(rising back to 85p to break even for the Lightbody acquisition shares may take a bit more doing)

[markt] 31/10/2011 18:27

Boffster
....yes, I am a holder.....

and I think that the FIF share price has a good chance of moving higher from here, high profit versus cap. value, could break through 25p resistance after failing many times
chart looks a bit like a compressing triangle coming to a point possibly overcome resistance at the tip

(but FIF shares also have -ve points !!)

---
.... I think that one of you big holders should go and voice any questions from msg board users.

I dont think any of my points are relevant to ask at the AGM.....mostly extra info about one of the directors of FIF (OK, creator of FIF) and poor track record of that person in other companies they have created

unless you want to ask D.M. if any mistake was made in the acquisition of Lightbody and the amount of debt taken on and in hindsight if he would have done it differently.

and perhaps ask if there is no option to sell any assett to boost the balance sheet and reduce debt

======

Spaceparallax

You doubt the accuser. (but I know that any -ve info is not popular on this message board, probably since some posters have large positions in FIF shares)
I repeat below the numbers for LFI, large investor in FIF, 8M shares.

The numbers are true and you can cross check. The numbers do not depend on the accuser. Just fact.

NAV was higher in the 90s that in recent years.
ie. I infer that D.Marshall (FIF director) has a bad track record as an investment manager.
(At WSE it is also negative growth, massive share issues at 56p in 1995, and 50p in 2007, price now to sell = 38p 16 years later. Also controlled by D.Marshall)


LFI, owns around 8M shares in FIF....D.Marshall in practice controls LFI

1993 LFI NAV = 37p. 1994 NAV = 34p.

2011 LFI NAV = 29p at last interim results, and 26p in February 2011.

Negative growth over 18 years.

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I would like to remove the directors from WSE/LFI or to have a distribution of the shares held (incl. FIF) to WSE/LFI shareholders.....to provide many advantages. (D.M. has been a director at LFI since 1971 so wont be in rush to give it up !). But I need more votes in order to be able to call an EGM or add a vote to the AGM. One day it may happen.

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The recorded bad track record of the person that created FIF initially by backing it into a shell and who was behind the FIF strategy of acquisitions (the big acquisition knocked the FIF share price for 6 I believe, due to resulting high FIF debt) is relevant background information for this message board imo.

[spaceparallax] 31/10/2011 16:52

I'm afraid that seeing someone go to such trouble in slagging off another tends to concern me more about the accuser than the accused

[boffster] 31/10/2011 16:09

Markt, are you going to go to the Finsbury AGM to voice your concerns? I'm assuming that you are actually a shareholder here.

[markt] 31/10/2011 16:02

Indeed !

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LFI, owns around 8M shares in FIF....D.Marshall in practice controls LFI

1993 LFI NAV = 37p. 1994 NAV = 34p.

2011 LFI NAV = 29p at last interim results, and 26p in February 2011.


Growth over 18 years is NEGATIVE !!!

====

While shareholders lose money, Mr Marshall senior and Mr Marshall junior make money from LFI. Every year. Year after year. (Mr Marshall senior makes a return of around 23%/year from his investment in LFI via his directors pay on WSE/LFI boards where he sits, so he has got back all of his investment.....appears the money is not paid to LFI not to WSE....but to an overseas company (Mr D.Marshall is resident in South Africa and LFI/WSE provide company services including for tax havens such as Luxembourg (where some D.M. managed companies are registered), Channel Islands, Virgin Islands etc.....
----

It could be argued that WSE/LFI does not sell or reduce their holdings in certain companies (eg. Creston, MWB when at peaks in 2007, FIF etc)....because Mr D.Marshall would probably lose his board position as a result....and hence his directors pay. ie. looks like conflict of interest versus what is good for WSE/LFI shareholders.....and by law the directors must (should !) act to safeguard the assetts of the company....(MWB price was 3 pounds, now 24p and could easily go bust due to debt, not selling the 2M shares held by LFI has cost LFI shareholders 5-6 million pounds profit and LFI cap is now only 6-7M !. Creston was 2 pounds, went to 20p, FIF was over 100p, went to 15p I think....LFI/WSE did not sell out....was it just to save D.M. directors pay ?)

And benefit scheme introduced....4% of LFI and 4% of WSE...free shares...and surprise surprise...a son of Mr D.Marshall is one of the 2 main beneficiaries.....maybe D.Marshall is number 3 !...rubs salt in the wound of terrible performance.

To have done worse would have been be difficult in my view.
Negative growth over 18 years !. Terrible.
----

So FIF directors have I think options for 15% of the company....and then at LFI 4% of the company is under option....and LFI costs 3%/year to run.....
..while shareholders get -ve growth over 18 years !!

----

There are perhaps some other LFI shareholders that are not very impressed, not just me. (I'd prefer to replace the directors or distribute the shares held by LFI and WSE, including FIF shares....giving many advantages to shareholders imo.....but so far no one else interested....but I'm not going to give up !...just need 1 big shareholder to call a vote...and action could result.

[spaceparallax] 28/10/2011 15:51

clearly Markt you have a real downer on this guy.

[markt] 28/10/2011 15:39

The facts completely disagree with what you have written in your post.
(most info is slightly off-thread.....but relates to 2 non-execs at FIF (David Marshall and Edward Beale)....so some people may find some info of interest)

Finsbury. Massive acquistion around 85p, under Mr Marshall's impulse imo. Share price now 25p. Approx. 1/3rd. Not been a success.

Creston. started in 2000 at around 100p...11 years later and share price is 90p, with negligible or low dividends. Not been a success.

Western selection. biggest share issues in 1995 at 56p. 2M new shares at 64p in 2006. And 6M new shares issued in 2007 effectively at 50p (from 12M shares to 18M). Share price now if want to recoup your cash = 38p !. Not been a success. Pay 56p in 1995 and only get 38p if sell now in 2011 !!. Terrible !. Dividends around 3%, not kept up with inflation.
In no way can it be viewed as "reasonably solid overall".

LFI has performed worse than WSE. Average price in last 3 years is lower than average price in the 90s, 20 years ago. Not been a success.

MWB. Share price has collapsed from its peak of around 3 pounds I think it was, now 24p, at risk of going bust. Sufferred from too much debt and gearing, also hit FIF share price.

Northbridge, big success but not enough to provide good performance from WSE.

One problem with WSE:LFI is that over 10 years they consume 30% of the assetts due to running costs. 2 periods of 10 years is 2 blocks of 30%, it adds up.

And Mr D.Marshall receives around 107k/year from being a director at companies where LFI/WSE invests.....paid to "an overseas company". Over 10 years that is over 1M pounds. (D.M. is resident in South Africa....while has close knowledge of benefits of registering in Luxembourg, Channel Islands, Virgin Islands etc, so perhaps paid to tax haven to avoid taxes).

In response to the bad performance the board under Mr David Marshall's control introduced a benefits scheme at WSE and LFI.....with a son as one of the 2 main beneficiaries while intentionally not mentioning that fact in the paperwork to vote on the scheme and intentionally not informing shareholders of the conditions that need to be achieved. So shareholders may continue to get poorer while a son of the main director may get richer. And D.Marshall may receive some shares as well. Shares at no cost I understand.
---

...use of LFI apartment (2.1M pounds) by employees of Monteagle Marshall (3 sons work there, some subsidiaries are registered at same offices in London, also used by FIF), so it could be used by David Marshall, the CEO....or a son or son+ family
..and there was a high cost car in old accounts..but you only see this info if you obtain the subsidiary accounts, so PIs will never find out ...at listed company level Edward Beale (non-exec. at FIF and the CEO at City Group, which runs LFI and WSE) intentionally imo never gives a break down of the costs in LFI/WSE accounts seen by the market. Stops any shareholder complaining about misuse of company funds if no info is given !!

====

Monteagle S.A.
by the way....
a very strange beast...

import export....and runs a sizeable portfolio of listed shares as well ..very strange imo
I know of no other listed company that is a normal business and also runs a portfolio of shares; outside of the finance.
(maybe the real interest for Mr Marshall and related parties is personal gain from investments, resulting from knowledge from operating in the investment sector....or buying/selling in companies where WSE/LFI has inside information, but complying with the regulations rather than from growing the LFI/WSE share price).

noting that related party of Mr D.Marshall (operating from the same offices in London as WSE/LFI and FIF) invested in loan notes of MWB which have proved a good investment imo, paying approx. 9.75% over X years that adds up....

various private investing companies operating from the same offices in London as WSE/LFI and FIF. D.Marshall has his own investment company registered there
----

WSE/LFI do not own controlling holdings in these companies......and the WSE/LFI stakes are not the cause of these investee companies being lowly valued
(the low FIF share price results partly from the debt, tough sector, "challenging conditions", etc not because LFI own X %, approx 15% I think, +/-....if someone wanted to buy FIF they could even if LFI voted against it)

----

PIs have complained (and are still not happy) about share options for directors at companies where David Marshall is a director and where he or people he controls sit on the renumeration committee that decides on those options. Creston, FIF, WSE, LFI ......
Some of these D.M. related companies do not comply with the disclosure regulations for selling shares (Lord Saatchi sales at FIF, 5% sale on 4th October at NBI, Suffolk Life 4.8% at WSE itself.... no RNS notice have reported) a common factor is perhaps the cause, that the secretarial services are all provided by a D.Marshall company, City Group PLC.

[topvest] 27/10/2011 20:39

He hasn't got a bad record at all - his only total loss investment recently was Doctor's Direct I believe. I agree his record is patchy, but reasonably solid overall. For anyone with his wealth and success I think your comments are a tad OTT. Look at Monteagle Holdings - that's successful, as are Creston, Northbridge, Hartim, Swallowfield, Western, Lonfin, Finsbury Foods etc to varying levels of degree. Many are valued poorly, I agree, but they are certainly not bad businesses imho and a poor share price is not always indicative of a poor business. I do think that lots of his investee companies are valued lowly because of his "blocking holdings".

[markt] 27/10/2011 18:16

...FIF is looking quite good recently...

but at another company where David Marshall pulled the strings and with a similar strategy (ie. lots of debt and gearing) looks in risk of going bust, MWB. (was 2 pounds, now 25p !!)
(at FIF , David Marshall backed FIF into a shell and was the creator of the acquistion and synergy policy and hence the acquisition that has hit the FIF share price so hard ever since, due to high debt levels....

and at Creston the same David Marshall policy/plan has failed thus far, with the Creston shares being worth less now than they were 10 years ago when the policy/venture was started....

at Doctors Direct PLC ...David Marshall was the force that pushed its IPO, and as chairman allowed the directors to burn the 800k pounds or so raised in less than 18 months with no resulting noticeable income being generated as a result(with many related parties transactions and payments to themselves and friends for extra work !)....causing it to de-list with shareholders losing all. (Edward Beale was also a non exec. director, also a non-exec at FIF, chartered accountant, supposed to monitor the numbers/money, failed, hopefully do better in his role at FIF)

My point ?
....just to be aware of the wider picture...and risks of debt..and the bad 10-20 year track record of certain FIF directors (10-20 year performance of WSE and LFI has been bad, down...both controlled by David Marshall)....and be aware that LFI/David Marshall was probably also responsible for the recent share option awards at FIF which have caused various PI complaints on this msg board....(Edward Beale sits on FIF renumeration committee (2 people) and is completely under David Marshall's control since various companies he controls pays all of E.B.s wages....)

[spaceparallax] 26/10/2011 14:58

No, but I would appreciate feedback here.

[boffster] 26/10/2011 14:50

Anyone planning on attending the AGM?

[spaceparallax] 26/10/2011 14:42

I'm pleased to hear that

[boffster] 26/10/2011 13:51

Of course, I could be lying.

[spaceparallax] 26/10/2011 12:54

wow, I'm surprised to hear that.

[boffster] 26/10/2011 10:49

This share is pants. I'm out

[spaceparallax] 24/10/2011 12:22

Sp showing durability - perhaps it won't be long until we get back to 30p.