Finsbury Food Share Discussion Threads

[bigfrocks] 20/11/2011 21:37

just hooked up a new suit for the agm ;-b

[markt] 19/11/2011 18:26

Aleman/Boffster
If you know how the orders and sales structure works for selling via supermarkets can you possibly post ?
And how far ahead do you think they may forward buy sugar and wheat ?
I don't know and interested to know/learn.

The supermarkets take product on a sale or return basis if it is not sold ?
or they place a fixed order and pay for it, sold or not ?
If a fixed order then only for say 1 week ahead and they can stop all orders at any time ?
I assume that s.market chain may not want to advance order X tonnes/week for next 6 months and g'tee to pay for it all....since may not be able to sell it all and then lose loads of money...

And for how many months of operation would FIF forward buy sugar and wheat and eggs ?
I assume that can not forward buy for too many weeks/months...since if price then falls wrt order price...then competition may buy at lower price and sell at lower price...or if smarket chain reduces its order then you may have to re-sell or cancel some of forward buys and you could lose money on that....
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If wheat/sugar prices are noticeably higher in 2012 or 2013 or 2014...then FIF share price would be expected to fall ?

If Euro falls how could it affect prices of raw materials ?
If pound falls ('cause exports to Eurozone fall due to experts rising in price due to Euro fall) how could if affect prices of raw materials ? (up I assume)
If Rouble rises then gas for cooking rises in price ?

[markt] 18/11/2011 14:18

Boffster
Nice one !....made me smile !

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...to be fair ....the accounts are covered in words like "challenging"...." tough trading environment"....."many difficulties lie ahead"

Maybe you bulls should write to the directors and criticise them for using -ve words !!...and not just me !

...some stuff I post perhaps mirrors what the directors say

...my point is that you all seem to have calculated the PAT, debt reduction and total debt for the next 5 to 10 years.....and that your numbers are 100% g'teed.
And that there are almost no negative posts.
Every share has +ve pts and -ve pts imo. And all should be discussed imo.
Nothing is 100% g'teed imo. Prem. Foods share price for example has gone from over 30p to below 10p over a few months. Risk exists.
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I take notice of what people post....and I am grateful for it....and I do learn facts/data.....
and I do have some FIF shares....
but for me....I still see the high ratio of debt+ deferred to PAT...and negative current assetts ..as part of the overal info for FIF...as well as the low P/E....most of you are not so concerned (at this moment !)

....each person to decide for themselves.

[aleman] 18/11/2011 12:34

sp - You typed too soon!

That 26p resistance has held for a while so it would be quite normal to retest it before moving up as a few people that bought sub-20p top-sliced a few. It's no bad thing if it lets new buyers in on decent volume so that a switch is made from nervous holders to some looking for much bigger longer term gains. That makes rises more sustainable rather than just watching it fly, only to tank again if volumes are thin. Increasing volumes will make it more tempting for institutional holders as the market cap rises, as well, and you can only get higher volumes if there is some selling. So, a pull-back to around 26p support to build a base for future increases is healthy and should be expected. Two steps forward and one back will get us where we want to be. My target is much higher than the current price but I expect it to take 2 to 3 years and I'll be happy to take the dividend while I'm waiting.

[boffster] 18/11/2011 12:22

Markt selling up with any luck :)

[spaceparallax] 18/11/2011 11:59

Not sure how to interpret today's trades but the static share price would suggest that overall they're buys rather than sells or that we have a significant buy order being filled?

[spaceparallax] 18/11/2011 08:58

I'd like to see continued debt reduction and no acquisitions for now.

[topvest] 17/11/2011 19:23

Looking very positive on a poor day for the market. Encouraging!

[boffster] 17/11/2011 19:05

Markt. Nothing wrong with keeping mindful of the risks but you seem to focus on them. You talk about competition, yes there is always that. But what has happened in recent years, has FIF's market share been growing or shrinking?
What is the financial health of FIF's competitors? (particularly I'm thinking here of the rather dire condition of the no.1 cake maker) Let me know if you don't know the answers and I will enlighten you.

[markt] 17/11/2011 18:45

...my guess would be closer to 5M off debt and deferreds...
deferreds to approx. 2M and bank debt from 32M to 29M
and 2.3M deferred left to pay

'if' business is same as 2011 !!

(all the competition will be pushing to increase market share and increase competitivity of their products....never ending competition....)

...if bank max. stays unchanged then headroom would increase by 3M if pay off 3M, to 10M...still small imo versus turnover and payables and receivables...and wages (over 2k people)
...still more to do after 2012 results which are fair distance away...

past recession.....with the sovereign debt problems and cut backs in USA and all European countries....and the Euro parlament still in a position of power !! (they have no idea how to manage Europe, the policy is to give subsidies to everyone imo)...Italy and Spain may be bailed out this week or next if Europe can afford, or maybe the Euro collapses if it can not afford it !!..affect on sugar/wheat prices ?, affect on exports to France ?...the future is not looking 100% g'teed....

[boffster] 17/11/2011 18:28

Markt. You've got to be the most bearish 'shareholder' I've ever encountered. Maybe you should sell if you feel so badly about the firm's prospects. Anyway, two points on your rambling above:-

1) Banking facilities were re-negotiated a few months ago (they didn't need to be) the facility is now smaller than it was. That is because we don't owe as much so don't need a bigger facility.

2) Acquisitions. For the benefit of those who weren't here a couple of years ago, while only small fry, Goswells (vogels) was acquired a couple of years ago for a cash sum, and the company's financial prospects looked considerably bleaker then than they do now.

3) The company has insurance policies in place, not sure of the details exactly but I would imagine they would be covered in the event of having a bad debtor.

[aleman] 17/11/2011 17:59

They paid off over £5m last year and should have higher EBITDA and lower I this year so I think we should be working on £6m off debt and deferreds. That leaves some scope to avoid shocks. We are already well into the year and commodities are working in favour, if anything. Like the others, I'm not bothered about acquisitions and wouldn't expect them until all the deferreds are done but I do expect a dividend to return after the hints we've had and a broker forecasting one this year after actually revising it down. I very much doubt the bankers will be worried after seeing them pay off £20m of debt and deferreds already in the last 4 years despite a recession, egg scare and 2 commodities spikes.

[markt] 17/11/2011 17:46

..sure is going up....

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Aleman
I disagree with your debt reduction estimate.
last reported bank debt 32M (bank) + 4.3M deferred . (anything else on liabilities payables vs receivables ?..)

36M total
and only 7M of headroom

if pay down 4-5M (as per previous year I think on bank debt + deferred)
then deferred likley to go 2M (keeping the 2M that is interest free !)
and bank debt to 29-30M.

at the moment I think the bank will want the headroom increased
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36M debt and 4.5M PAT.

36/4.5 = 8.
It's a lot of debt imo....a good number of years to pay it off.

19M negative on current assetts....with the 7M headroom......I think the co. will be keen to keep on reducing debt...co. has not got enough real assetts to pay its debts if had problems with the bank...or had to fund some problems in the company such as a big customer not paying on time or whatever...
(45 shareholder funds, 62M of that is intangibles...so 17M negative of real assetts)

(imo some investors won't invest in a co. with such a ratio)
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16M of customers money should arrive each month.
7M bank headroom is just under 2 weeks. imo the 7M needs to be increased...

I can't see any acquisition by cash of greater than 1M (ie. peanuts) until headroom is increased).

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acquisitions !!
dream on imo
Nothing above 1-2M imo with only 7M headroom....ie. in same range as depreciation which is 3M.
FIF turnover was 189M....so a 1-2M acquisition using cash is unlikely to move the share price at all imo.

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How long would the headroom last if there were problems ?
another egg scare or something....
2 weeks ?, 3 ?. 7M is peanuts imo.
Over 2k workers that have to get paid each week...even if 1 customer sends back some product or doesn't want to pay for another month due to cashflow problems......and note the massive power of the customers, can't threaten them quickly with court or they just take their business down the road...

Need to increase the headroom imo.
And imo the bank perhaps may want the current nett assetts to be brought to be level or positive from being negative.

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All depends on amount of capex. If keep up with depreciation then it is 3M/year. But likely to be 1-2M even if do almost nothing imo. Vehicles, stainless this, stainless that...expensive.

....imo have to be careful to calculate the next 10 years in advance for debt, dividends etc.....noting that accounts are full of words about how tough the sector is.....FIF is only number 3 in the market I think in some sectors so I am sure the the others will be keen to take sales away from FIF if they can...and most of FIF turnover is of brands that they don't own, so very easy imo that the brand owner could move to other company if cheaper or some other reason......when brands come up for renewal the brand owners probably goes out to see who will offer the highest license fee, if co. B is desperate for work perhaps they pay high price to get licence X, taking it from FIF....interest rates in future years (if a lot higher in 3 years time then big impact on FIF PAT...3 years time, who knows what economies etc will be doing)......I'm not an expert but lots of variables out there imho

.....high street spending is tough...Europe seems to be collapsing..Italian and Spanish debt now seems to be unaffordable and the ECB doesn't have enough money imo to rescue them !!..and Germany doesn't want to ! (too much money)

(and who is behind the ECB ?, Ireland, Portugal, Greece, Belgium, Spain, Italy....if you see my point, bankrupts lending to themselves is not a solution..+ Germany and a few others)

.if Euro falls then not good for FIF exports and could be very price sensitive....and perhaps the price of sugar would increase if imported from Eurozone (European sugar beet ?...)

"The difficulties we face should not be underestimated. " John Duffy

...sure, be aware of the positive points ..but also of the risks imho...
next results reporting any reduction in debt are the interims...and then the finals...and then another year....and another....slow...

[boffster] 17/11/2011 16:34

Receivership? :o)

[spaceparallax] 17/11/2011 16:31

Looking good - what might tomorrow bring.

[boffster] 17/11/2011 14:51

Ya wee dancer!!

[aleman] 17/11/2011 13:07

There is a buy on plus at 12:45 that lists the spread as 26.5/28.5 at the time.

[aleman] 17/11/2011 13:01

I'm wondering if it is just small buys hitting MMs with no stock or is a larger buy being worked in the background? THe market cap is approaching the level where we should she the first signs of funds buying again.

[spaceparallax] 17/11/2011 12:11

on the move again - lots of little tick-ups in recent days

[spaceparallax] 17/11/2011 10:26

I would rather not see any acquisition until after our share price has re-rated to recognise the constantly declining debt level.

[jpjp100] 17/11/2011 09:15

Acquisitions are an interesting area

If FIF demonstrates it is running its business better than its competitors, the various Private Equity firms and Groups that own those competitors could be minded to help engineer a deal

Boffster is right that making a purchase with lowly rated equity isn't easily going to be too attractive

All depends what is available and when. I expect conversations are going on.

[boffster] 17/11/2011 00:07

I'm not keen on acquisitions at the moment (although, of course, it depends what can be bought and for how much) but I'm even more against equity funded mergers whilst we are so cheap. With our equity worth (in my opinion) a fraction of what it should be we would never get value for money that way.