Finsbury Food Share Discussion Threads

[markt] 26/1/2012 12:22

"why not make your displeasure known to the company as I have done?"

Options are issued now.....subject was widely discussed on the FIF brd....and various people complained...and I think someone was going to mention that at the AGM...

I'm not going to mention it to the co.
You're a big holder...so they know that there are some people not fully happy.
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Looks like the CEO has options for approx. 7% of the co.
Most are exercisable within 18 months of July 2011. imo very unusually high

..maybe one of the 2 options writers wants the price up quick to then sell out the big stake they represent...who knows...time will tell us more..

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You said that must meet EBITDA reqts. to exercise the options.
I found no mention in the co. papers of having to meet any EBITDA perf. requirements.

"vesting is subject to various conditions being met" is the only requirement I have found.
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[bonio10000] 26/1/2012 12:20

Deffered consideration should also be done in the next 12 months ish as well. That will provide more firepower for debt reduction.

[aleman] 26/1/2012 12:18

No. just a 10k top up.

[spaceparallax] 26/1/2012 12:11

Looking very solid - the trend is lengthening and becoming more compelling.

[markt] 26/1/2012 12:09

BTW
I'm not anti FIF as some on the longs msg board may think...

Just that my other msg brd. seemed to want to have posts only with +ve pts. about FIF....and no -ve pts. And one of my posts was deleted.
For any share there are +ve and -ve pts. And everyone gives their own weighting to those +ve and -ve pts.....and hence a market exists...of buyers and sellers.
I give a higher importance than other people for FIF for risk such as some things like debt. Each to their own. No one is "right" imo. The future can not be 100% g'teed for any share. (if FIFs turnover or profits were to fall then that debt changes in significance...FIF turnover has increased recently....but in some recent past years it fell).

[boffster] 26/1/2012 12:09

Markt, assuming you are a shareholder (a subject which you seem to dodge) why not make your displeasure known to the company as I have done?

[markt] 26/1/2012 12:00

jpjp100
"Markt, imagine you are Chairman of FIF for a moment. What would you want done differently than the current Board has done to recruit and retain an executive team? Extrapolate that into EPS impact for us too please..."

Nice to see a post that doesn't concentrate on attacking me for posting any ideas that the longs don't like.

..chairman...
..nice idea !, free cakes all round, Friday afternoon off for the workers ?! he he !
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Recruit and retain exec. team.
Well, the options, very subjective subject. Everyone will see differently perhaps.
But I think I would have structured to be over a longer time......
most of the options vest by around Sept 2012 I think....
dirs. could say thanks 'very much'...exercise, sell all and take any profit...and then leave or propose to leave unless get more options or higher pay...

and less options for the CEO imo. approx. 10% of the co. ! ... and exercisable within about 18 months I think..too short a period imho...I have never seen that at any company.

if they left and new directors come then have to dish out another X millions of options....around 8M recently ?...17% of the company ?
If keep doing that every 3 years then the shareholders see a very real dilution of factory assetts/share, EPS/share etc.

I would perhaps have put conditions on selling them....that can only sell say 1/3rd of total in 1 year....(to assist to retaining dirs)

(at 1 company you can not exercise then sell options while still at the company, interesting)
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Part of the FIF problem imho. that has caused so many options to be generated....is the error imo of buying Lightbody at such a high price.
It has stuffed FIF rather than helping it. Gone from share issue price of 90p to 30p now...and 15p at the low. FIF had been progressing well in the years before that, smaller acquisitions. Lord Saatchi, chairman at that time, voted in favour of it....and made millions out of it by selling millions of shares.

[boffster] 26/1/2012 11:54

You're getting as bad as me Aleman

150K @ 30p you?

[aleman] 26/1/2012 11:31

Saw buys going though at under 30p again and thought I'd see if I could get some more sub-30p before results. Didn't quite manage it. But bought some more, anyway!

[boffster] 25/1/2012 13:26

Its worth bearing in mind that the director's remit is to grow EPS. We know there are certain EBITDA conditions (although we don't know what they are) before the options could vest, but it would be reasonable to expect that EBITDA would have to grow. If the options were all exercised against a static EBITDA, thus causing EPS to fall, the directors would be betraying their basic duty to shareholders.

Remember that the chairman Martin Lightbody personally owns around 25% of the business and voted in favour of these options, the man didn't get where he is by making silly decisions.

[jpjp100] 24/1/2012 15:57

markt's comments about options / dilution and the potential impact on EPS are valid. We won't know the actual impact until details are released, but its fair to make an estimate of the impact if we are to forecast EPS in the future.

Markt, imagine you are Chairman of FIF for a moment. What would you want done differently than the current Board has done to recruit and retain an executive team? Extrapolate that into EPS impact for us too please...

I mentioned something about wage costs in a post on Boffster's thread yesterday '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.'

That too is a valid concern that we will only know the impact of when details are released.

As far as I can see, FIF has done as good a job as could be expected of passing on cost increases to customers with price increases. We have to hope that it can keep doing so, but we have to expect that this will continue to get harder to do in many cases.

[markt] 24/1/2012 15:38

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

"10M reduction in debt"

What you say doesn't agree with past performance.
They have increased sales in the past in Free From sector...and profits from overseas sales...and reduced staff numbers....and !! increased investment in machines to reduce costs...
but the EPS has not moved in previous 4 years...flattish
in part gives the impression of running to keep still in terms of margin

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'10M reduction in debt and deferred payments.'
Never achieved anything near that in past years.
And said they have continued investing to improve efficiency.
They have a big depreciation charge.....to a degree they have no choice but to keep investing....if not then 10 years later they would be out of business...since competition will keep investing.
So, I think your number is ...well, no good.

5M maybe.
250k increase in PBT maybe.
Effect of options will reduce the EPS much more than 250k would increase it.
The interest cost saving in 1 year won't make big impact the EPS imho.
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various pros and cons
another con is the wages bill and effect of inflation over 3 years...if can't reduce staff numbers...
('if' receive close to inflation then 50M +3%, +3%, +3%...gives 5M increase in wages !!)
...but perhaps it is better 'out of sight, out of mind' !

FIF, big numbers in and big numbers out. Final results averaged over next 5 years, have to wait to see.

[aleman] 24/1/2012 14:50

From what I can gather, Panmure Gordon have left numbers the same but increased the price target to 36p. The comments here make it sound like margins are still having a tough time. They talk about stubbornly high commodity prices but don't name the source.

[spaceparallax] 24/1/2012 10:58

yes and no - takes time for small fry news to spread

[bonio10000] 24/1/2012 08:47

Odd that there are already more trades today than yesterday !

[spaceparallax] 24/1/2012 08:35

Great to back in the 30s - deservedly so as the gearing shrinks so rapidly

[aleman] 24/1/2012 01:30

I agree. Growth is unlikely to remain at 16%. But do recall that they claimed a return to underlying growth in H2 last year rather than just getting a boost from the one-offs. And we need no growth for the shares to motor if they continue to pay down debt and deferred payments by £5.5m like last year.

[jpjp100] 23/1/2012 21:46

but do heed the warning in this and the last update: such growth is pretty much a one off based on FIF's flurry of activities a year ago.

Whilst they are clearly hoping to hold onto this new revenue, they are warning not to expect another 16% next year....

I am sure they will keep working hard to find something though!

[boffster] 23/1/2012 19:32

That was one of the finest updates I've seen for a while, let's hope that Finsbury continue to save money every day, as they say every little helps! We should really be able to taste the difference at the interim results...

[aleman] 23/1/2012 17:58

So the brokers went for increases of £5m and £7m in turnover yet we are up £14m so far - and they reduced forecasts in November due to margin pressures. They'll be hard-pressed not to increase forecasts if/when they review forecasts.

[boffster] 23/1/2012 17:05

Your top-up last week would appear sage Aleman. Looking forward to seeing the numbers in March.

[aleman] 23/1/2012 15:06

November:

The operating environment remains particularly challenging. Shopper behaviour continues to be affected by the economic uncertainty, and we have experienced ingredient and input cost inflation year on year. Higher sales, resulting from volume growth and price increases, assisted by further internal efficiency initiatives, have partially offset this cost inflation, although operating margins are lower year on year.


Now:



The trading environment remains very tough, with the challenges of a financially squeezed shopper, and stubbornly high commodity and input price inflation. That said, Finsbury is continuing to invest in each of the businesses to further improve operating efficiencies, and drive growth through innovation to mitigate against these headwinds. The high first half growth, delivered through both volume and price rises, complemented the Group's efficiency initiatives to largely offset year on year commodity inflation, although the operating margin percentage was slightly lower than prior year as a consequence.

We've gone from partially offsetting input costs with lower margins in a particularly challenging environment to largely offsetting input costs with slightly lower margin in a very tough one. With the increased turnover maintained, recovering margin has to be good news.

[spaceparallax] 23/1/2012 13:22

or even Peter pan European.

I'd love to know where PG get their modest TPs from