Finsbury Food Share Discussion Threads

[boffster] 26/3/2012 22:27

Markt, you wouldn't know reasonable if it painted itself purple and danced the bolero in front of you.

[aleman] 26/3/2012 17:59

silverfern - 26 Mar'12 - 14:10 - 538 of 545

It costs £1.7 m to finance the debt every year. Someone blamed Saatchi - it is the current management ; the reverse takeover of Finsbury by Lightbody gave the people on the Board many millions of £s which is now the company debt. IN effect the company is making money only to pay for the money it paid the current Board to take over the company.

£1.7m is not even 15% of this year's likely operating profit of £12m (down from 19% last year) so you are grossly exaggerating.

[markt] 26/3/2012 17:50

silverfern - 26 Mar'12 - 14:10 - 538 of 544

Very reasonable/logical post imho.

...and, imho, most of the board that made that decision (ie. the takeover of Lightbody and the price paid and massive debt taken onboard which has resulted in
- the chairman making approx. 5M profit.
- shareholders seeing the share price collapse for a number of years....
- shareholders seeing no dividend be paid, despite them putting up the cash to buy Lightbody and taking a lot of risk since very tough sector with small margins and some companies going bust.

..those people "still" control the board imho or almost do, just. (D.Marshall, E.Beale, Monk....)

[aleman] 26/3/2012 17:13

I hope you've noted that the article said interim adjusted profits were ahead of analyst expectations so we've a chance of slightly beating full year forecasts.

[jpjp100] 26/3/2012 15:10

Aleman, fingers crossed that Heston's hot x buns are as popular as his xmas pudding!

[jpjp100] 26/3/2012 15:09

silverfern, the current CEO and FD joined well after that deal

- CEO as interim COO from Sep 08 and then as CEO from Sep 09

- FD Jan 10

[boffster] 26/3/2012 14:22

Another backward looking statement. Yes it was a bum deal. But how is that relevant to the business going forward

[silverfern] 26/3/2012 14:10

It costs £1.7 m to finance the debt every year. Someone blamed Saatchi - it is the current management ; the reverse takeover of Finsbury by Lightbody gave the people on the Board many millions of £s which is now the company debt. IN effect the company is making money only to pay for the money it paid the current Board to take over the company. "During 2006, Martin Lightbody and Finsbury started chatting and it soon became clear that the businesses were a perfect match with their focus on innovation, quality, and the premium end of the market place - and about a year later, they were joined together" AT who's expense you now know

[aleman] 26/3/2012 11:25

We get an extra day's sales this half without some of the costs which might add an odd £100k to operating and free cashflow as well. :-)

[aleman] 26/3/2012 11:11

THey paid down £1.2m of current bank loans in H2 last year and still increased cash by £3.3m after paying £220k in deferred payment so they should be able to meet the £2.7m deferred payment without any trouble. Capex might be lighter in H2 after a heavy H1 (might remain higher if they keep growing), the interest payment in H2 looks set to be lower than last year, and corporation tax is down 2%, also. So there could be over £2m to pay down debt after paying off the rest of the deferred payments. It looks pretty comfortable to me.

[jpjp100] 26/3/2012 10:42

markt, still concentrating on the past I see

I think it would cheer you up to look at the current and future prospects of FIF

We all know the past and some (me included) share your dim view of some of the actions of some of the parties involved

As you know, I wasn't a shareholder then and I only became a shareholder based on the current and future prospects at the time I bought. The company is very different now to how it was then imo

[jpjp100] 26/3/2012 10:40

Aleman, thanks that has cleared it up for me.... Some that was non current at 1 Jan 11 became current by 2 Jul 11

So, the total line is the one that matters

1 Jan 11 4680/4435
2 Jul 11 4460/4321
31 Dec 11 2940/2886

So, in 2011, a total of 1740/1549 was paid back in deferred consideration.

£2.7m to be paid back in deferred consideration this year (i.e. current). That is a fair chunk of cash to find. I suppose it depends on how much the banks want back in the period - the facility was set up specifically with cover for the deferred consideration so it really should be OK.

[aleman] 26/3/2012 09:54

jpjp100 - It is, but that's the current deferred payment and you are missing the drop in non-current deferred consideration. Add them together and the total has dropped.

markt - they generated plenty of cash in the weaker H1. Have you not read my post about where it went. Growing businesses soak up working capital. The underlying trend is still good. Most debt reduction occurs in the stronger H2 and they've paid off another £1.5m of deferred acquisition payment in H1. The extra cash absorption will hold reduction in debt and deferred payments down to maybe £4m this year and then bounce back to about £7m next year. So debt could be maybe fall to £31m at the end of this year and £24m next year at the same time as the rest of the deferred acquisition payments are completed.

[markt] 26/3/2012 09:47

.....still loads of debt !

At least Lord Saatchi is still happy....as chairman having sold X million shares at I think 93p to pocket around 5M squid....a lot being exercised as options at 30p.....

while leaving FIF to labour imho... saddled with loads of debt....

X years later now and still got ..is it 35M of debt.

[spaceparallax] 26/3/2012 09:46

Good results with an encouraging continuation of debt reduction - one day the mkt will wake up and recognise this gem.

[jpjp100] 26/3/2012 09:35

talk to me about deferred consideration....

1 Jan 11 1740 / 1693

31 Dec 11 2720 / 2677

I see that as an increase of £1m versus H1 last year.

But, 2 Jul 11 4240 / 4117

So its a decrease of £1.5m versus then.

Can someone clarify that for me please...

[aleman] 26/3/2012 08:57

Looking pretty good. EPS healthy. Operating cashflow set to break £12m. Free cash at interims hit by increased working capital (£1.2m absorbed because of growth - no bad thing) and smaller hits from tax, capex and options which all look like being a bit easier in H2 and then there's the deferred consideration (nearly done now!)which added £1.5m to the debt total, as well. So H1 slightly disappointing but H2 should be back to normal, with the usual stronger operating half being hit less by the irregular cash items, giving the usual debt reduction. The dividend looks less certain for this year but still possible.

All looks to be on track, still, and this year's earnings forecasts should remain the same, even if it could be beaten slightly. Even if we miss the dividend this year, it will come next and the shares look very cheap on a 2013 p/e of 3.5.

[jpjp100] 26/3/2012 08:35

yes, the 8% growth seen in the first 8 weeks of this half year is very encouraging

I am cautiously optimistic that the European operations (even though its only a JV just now) could provide an increasingly significant contribution in the future. Think of the potential of those licenced products in European countries and it doesn't need much imagination to start to think about quite big numbers.

Sooner or later that might lead to some sorting out of the JV situation, which would make things tidier too.

[topvest] 26/3/2012 08:04

The key thing here is to pay off the deferred consideration - roughly a third paid in H1, so almost done! After that there may be some cash flow to pay a small dividend. Being careful not to over-promise I guess, but a dividend may be possible with the final results.

[this_is_me] 26/3/2012 08:00

An excellent performance in the present circumstances.

Debt reduction has to be a higher priority than restoring the dividend in the short term.

[boffster] 26/3/2012 07:59

Surprised about the debt thing. There again deferred consideration is down £1.5m from the year end so in real terms it is up about £0.6m. The first half is always much weaker than the second. Nice to see a decent growth rate of 8% during the first couple of months of this year.

[jpjp100] 26/3/2012 07:38

7m options granted in the half year = £589k and a £306k charge for shares issues in the previous H1 (the 7m is significant given that there are 53.3m shares in issue)

Generally I am against adjusted EPS calculations and usually ignore that to look only at the basic EPS

£14m extra sales = £300k extra profit. That shows how tough it is out there imo.

[henmat] 26/3/2012 07:28

jp, you can say that again ;-))

i'm pleased with the numbers :

§ Group revenue up £14m (16%) to £102 million (H1 2011: £87.8 million)

§ Profit before tax up £0.3m to £2.2 million (H1 2011: £1.9 million)

§ Sales in the Cake division up 19% to £76.4 million (H1 2011: £64.2 million)

§ Sales in the Bread & Free From division up 8% to £25.6 million (H1 2011: £23.6 million)

§ Net debt down 5% to £34.8 million (H1 2011: £36.8 million)