Finsbury Food Share Discussion Threads

[bonio10000] 23/1/2012 10:50

I wonder if the Europe growth is due to Licensed sales? For example, the new Disney contract might well be pan-european.

[jpjp100] 23/1/2012 10:43

OK, I have thought about the pre close statement now

Overall I like it a lot and I think FIF is making good progress.

IMO this year has been about topline growth for FIF and it has delivered that in spades. The benefits of doing this are numerous and include a couple that I think will help in the longer term too: i) its easier to motivate and energise staff when growth is on the agenda and ii) if done profitably, it sends the right message to competitors and customers

However, it has been done at the expense of margin and it shouldn't be be understimated how hard it will be to get that margin back. Maybe it will never come back. For me, a small margin erosion is a price worth paying, but it is not something that can be repeated too many times.

The efficiency programmes mentioned are all about taking cost out. Again, there might have been some big wins from that early on, but the size of the prize does decrease over time and the efficiency gains in the future are likely to be smaller

The general state of the economy here in the UK is rubbish and I am not alone in thinking 2012 will be no better and maybe even worse than 2011

I am intrigued by the progress in Europe and, whilst its all through the JV, it should be profitable business and it maybe that there is more to come from that in the future too.

Some commodity prices have eased and whilst we don't know how FIF buys (in terms of length of contract / spot buy / etc.), there is a chance that some input costs may be lower just now than they have been in the year under review. General input inflation is still quite high I expect and there might be upward pressure on wages to contend with as FIF workers feel the squeeze of the higher costs of living that we are all subject to.

Again I come back to one of my main considerations: is FIF likely to be doing better than its competitors? I still think that it is and that gives me cause to remain cautiously optimistic for further improvements in the results to come.

Add to that that FIF is making itself known in Europe and that if debts can be further reduced it could make the company look undervalued.

Yes there is much that could go wrong, the balance sheet isn't very strong and there are questions about dilution when lots of options are issued but, all in all, I have to say that right now, I am happy with my holding.

[boffster] 23/1/2012 10:24

Topvest, this is me, you're both more than welcome over on my regularly updated thread, if you prefer.

[this_is_me] 23/1/2012 09:55

Good point topvest, although I would think that the supermarkets would be just as knowledgeable about input costs as FIF.

[spaceparallax] 23/1/2012 09:51

A very solid TS given the tough times in which we live - appears to have been well received by the Mkt too - 30p's within our grasp.

[topvest] 23/1/2012 08:23

Yes, a good trading update. There is a bit of a pattern developing on the cost side of their business - i.e. I think they always say it's very challenging. Partly I suspect this is because their customers will be reading!

[this_is_me] 23/1/2012 08:14

FIF is making good progress despite the difficult conditions of rising input prices. A fall in these prices would have a dramatic effect.

[bonio10000] 23/1/2012 08:02

30p would be a nice barrier to breach.

[bonio10000] 23/1/2012 07:23

So markedly higher sales with a slightly reduced margin.

Reads to me that this should translate to decent profit growth?

One Disney and one Muppet cake was purchased this weekend. Seeing as I do a lot of work for Disney and hold shares in FIF - seemed a winner all round.

;-)

[jpjp100] 23/1/2012 07:10

quite happy with the pre close update today, will post more later

[boffster] 21/1/2012 19:07

Regardless of what happens to the company (thorntons) you can bet bottom dollar that the brand would not disappear

[bonio10000] 21/1/2012 03:42

Markt is a filtered troll.

I don't really have any interest in Thorntons, but I might have to pray they don't go bust now, given that FIF appears to have a material interest in their viability.

Thorntons

The Group continues to develop its branded offering within the premium cake sector via its licensing arrangement with the Thorntons confectionery business. Through a combination of new product development, additional listings of existing products and targeted promotional activity, the Thorntons brand within Cake has seen fantastic growth of 17.4% value sales year on year (source: IRI/Kantar). This represents significant out-performance of the rest of the premium cake market. We have recently refreshed our celebration products and will look to launch some NPD in the new year in order to continue to invest in the brand to increase awareness and drive further profitable growth for both us and our customers.

[spaceparallax] 20/1/2012 16:44

Oh come on now Ale, you're being ridiculously objective.

[aleman] 20/1/2012 16:31

As well as ignoring the forecast growth, you are also ignoring the interest saving from paying down debt and deferred payments by at least £10m, even if there is no growth for two years. That should raise eps by over 1p. If the business grows, better cashflow could raise that to possibly a 1.5p enhancement from saved interest - on top of improved operating earnings. 2013 earnings would be 8p+ with no growth before options dilution, so just under 7p diluted, but is more likely to be around 10p with a little growth from the 7.7p this year. With full options dilution, you'd be looking at around 8.5p earnings.

You would need the business to shrink to stop eps rising as they are doing a good job of paying down interest-bearing liabilities.

[boffster] 20/1/2012 15:02

Markt... while its no secret I am not happy with the level of options granted to directors, your calculations make the following assumptions.

- That all options granted will be vested
- That there will be no profit growth
- That the options will be at nil cost

So you're being at best very pessimistic and at worst downright inaccurate.
What is your beef with this company?

[markt] 20/1/2012 14:26

to 32p....exercise dates before end of 2013= 5.1M
+6.5M new...lets exclude 1.5M as possibly exercisable in 2014...check
= +5

= 10.1M
versus approx. 1.2M at end of last fin. year.
approx. 9M extra.

last adjusted diluted = 7.1P
last fin. yr. number shares = 52.7M
last fin. yr. number diluted = 54.3M (adjusted diluted = 3.8M) 7.1p

'If' 9M extra shares then diluted number shares = 54.3+ 9 = 63.3M
and if same profit in this year as last year then diluted adjusted EPS would be 3.8M/ 63.3M = 6.0p/share.
=====


A reduction of approx. 1p/share due to dilution.

If profit is approx. same as last year what will the market think of an approx. 1p/share diluted EPS fall ?

a 1p fall after 2 years of diluted EPS being 7.0p then 7.1p....making 7.0p, 7.1p, 6.0p.
Market generally prefers the EPS to increase !


...noting that this includes options exercisable in the months after the end of this financial year....they are so close as they can not be ignored imho....noting that profit number has not been going anywhere in last few years....7.0p then 7.1p....while number of shares is going to see a big increase. Will the profit in fact be higher ?, time will tell, co. says profit margin has fallen but sales are up.

[markt] 20/1/2012 13:52

(I've done an EPS reduction calculation considering the large number of options..dilution..

posted on my FIF thread so I don't upset Spacey et al !)

[spaceparallax] 20/1/2012 09:56

Give it a rest Markt

[markt] 19/1/2012 18:15

chart....

but !
while the long term trend is up
the chart above does include a fall from 30p to 15p between 2009 and 2010 !
50% fall....
====

Anyone done any calculations of EPS taking into account the large amount of new options in play since last yearly report date ....some kicking in around 29-30p if I recall correctly..

(noting that at 28p any options at 30p are not diluting...since not 'in the money'...whereas at 30p-31p they are)

[aleman] 19/1/2012 16:09

Not really showing on Boff's charts but wheat and sugar are starting to creep up again.

[spaceparallax] 19/1/2012 15:45

a worthwhile time expansion thanks Ale

[spaceparallax] 19/1/2012 14:58

The recent few months have looked exceptionally solid - good, confidence-building stuff for chartists

[aleman] 19/1/2012 13:57

Just been shuffling my portfolio around a little and managed to free up a bit for a small top up here again. Didn't think I'd get any more under 30p.

[boffster] 19/1/2012 09:02

Expecting a pre-close update early next week, possibly Monday