Finsbury Food Share Discussion Threads

[spaceparallax] 30/4/2012 15:23

Very surprised to see us dip below 26p

[boffster] 24/4/2012 10:21

Coming back a bit. Managed a top-up at 26.5

[spaceparallax] 20/4/2012 09:09

It's the typical selectivity displayed by shorters across the BB.

[boffster] 20/4/2012 00:31

Markt obviously chooses to ignore my post 82. I'm not going to entertain this sad man anymore. It really is the most pitiful thing I've ever seen on here.

[aleman] 19/4/2012 13:00

Care to put some numbers on how the strong £ squeezes FIF, bearing in mind it buys some of its commodities, like sugar, priced in Euros so they will now be less in £s (until the contracts expire)?

[markt] 18/4/2012 15:05

pound-soars-to-19-month-high-against-the-euro

(perhaps puts squeeze on sales to Europe when margin is already small....but we all knew it was coming...)





but don't tell anyone, not 'allowed' to post anything -ve !...except on my own thread anyway !

and looking "back" at the change in exhange rates....that is looking "back"...and that is not 'allowed' either !
only 'allowed' to look forward, in the view of the longs !
BS imho.

(and anyway, shares are to a degree valued on results...which are past data...ie. looking back...so past data can not be ignored as some longs would claim)

[jpjp100] 18/4/2012 07:16

Aleman, I am with you - I bought when the current CEO was in the COO job, partly because I believed (and still do) that a turnround / recovery was a likely scenario.

The tangible asset base may well be undervalued a bit, I don't know for sure but, as I have said a couple of times previously, the intangibles bit does raise questions for me

Happy to hold on for now though

[aleman] 17/4/2012 15:51

If the balance sheet were in better shape , the shares would be £1+ (with less interest and a normal rating on the higher earnings and a dividend typical of a food company on those earnings of 5 or 6p.) but there wouldn't be a chance to get in for a rerating. The whole point about FIF being a good investment opportunity is the balance sheet is weak but improving steadily thanks to the strong cashflow. The question for new and existing investors is how reliable the (growing?) cashflows are and how to price the risks to them. To me, the market seems too scared of debt after the recession and too many investors just walk away without running the numbers. I think more would buy FIF at the current price if they stopped and analysed the cashflows. Perhaps I am underestimating the risks to those cashflows and the market is right.

(With reference to the balance sheet, are land and buildings really only worth £11m, after depreciating £4m, or would they fetch higher?)

[jpjp100] 17/4/2012 14:25

but the value of 'goodwill' and other intangibles on the balance sheet is, imo, equally a misnomer in the opposite direction.

be in no doubt, the balance sheet is not pretty, but it is a bit less ugly than it has been and there is clearly a strong focus on getting it in better shape.

[bonio10000] 17/4/2012 12:51

I would think that where you have loans within 1 year of £14m that is also a bit of a misnomer.

If they can constantly refinance this, it might be that a portion of the loans are due within 12 months but they can be extended and so the balance is never payable. It is more an entry for accounting purposes than a reality.

If the bank is getting the interest covered, which they are, they would be happy to extend the maturity in due course. There is no indication that all of this amount has to be paid within 12 months.

Sure it is a pain to have the loans and invoice discounting, but in the next 2-3 years the deferred consideration is paid off and they should have decent cashflow to attack this. This will transform the balance sheet and the valuation.

I guess in conclusion, a large amount of the current liabilities don't actually appear to be current liabilities.

[aleman] 16/4/2012 22:44

I can understand the reasoning but it's been that way for many years since before the acquisitions when the shares were over £1 (and a bit higher at £21.5m more recently on Jan 2 2010). It seems to be the case that payables are always about 20% higher than receivables and there has been a significant overdraft on top and deferred payments in recent years. The overdraft seems to be easing and PG forecast further significant overdraft falls but with the 20% receivables/payables gap remaining. The completion of deferred payments will help slightly but that still leaves a decent deficit of £16m forecast for June. It has been pretty stable if you go through old numbers and now actually looks to be decreasing a bit.

[omega09] 16/4/2012 22:13

Thanks bonio.

So in effect the invoice discounting part can be rolled over so does not have to be met within a year. That accounts for £11m of the current liabilities. Do you know what other current liabilities are rolled over? I guess many companies I have written off in the past may be more stable than they seem if they can just roll over their current liabilities.

[boffster] 16/4/2012 22:03

I'm quite happy to hear your negative comments but not the same one rehashed and posted over and over again. You are welcome to post on my thread but please nothing more about the events of 5 years ago. Finsbury is not the only company that got a bit 'carried away' in the good times. Unlike many they've traded through without any fundraising (I should say, so far at least) which I think is commendable.

[boffster] 16/4/2012 21:50

"the company given any indication as to how they will meet their net current liabilities of £19m?"

With a facility from HSBC of £50m and strong free cash flow, I think is the answer.

I can't see a company with 'serious solvency issues' being lent £9m at under 2%.

[bonio10000] 16/4/2012 21:29

"It should be noted that current liabilities continue to exceed current assets. Having reviewed the Group's plans the Board has reasonable expectations that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group has strong asset backing and strong debtor book. Accordingly, the Board continues to adopt the going concern basis in preparing the financial statements. "

Note 1 - seems that the invoice discouting secured on the debtor book is a large part of it, but due to the quality of customers, they are happy this can be renewed on an ongoing basis.

Now the deferred consideration is out of the way (nearly), they will be in a position to aggresively attack this.

[bonio10000] 16/4/2012 21:20

?

It was worse last year.....and has fallen this year.

Clearly not something the company is fussed about.

Interest on the debt is easily being serviced.

See note 6 for the debt analysis.

Invoice discounting is a large bit - which is just replaced with new debtors as and when they are raised, so is effectively just a revolving facility.

They also said net debt is slightly higher at H1 due to seasonality, i.e. Easter is in H2.

They have plenty of headroom in existing facilties too.

[omega09] 16/4/2012 21:15

Just been looking in here as I was attracted initially by the low P/E. The balance sheet however looks horrendous. Have the company given any indication as to how they will meet their net current liabilities of £19m? Talk of a dividend or acquisitions seems absurd to me given that they appear to have a very serious solvency issue. Very interested to hear current investors thoughts about Finsbury's short term liabilities.

Cheers

[markt] 16/4/2012 19:15

...if a company has good directors on the board....that do good deals, good acquisitions for the company, that benefit shareholders....

you longs would all be shouting about it....

but any mention of bad previous acquisitions....

shhhhhh.....not allowed to mention that !!

----

I disagree. There is no logic to that...apart from the fact that you are long in the shares (probably from 15-20p and not from the days of the acquisition at 85p !!) and don't want any -ve posts or comments.

[markt] 16/4/2012 18:28

Boffster
"Neither Beale or Marshall have an executive role with the company. This means they are not involved in the running of the company."

You gotta be kidding me !!

D.Marshall votes for 8M shares....and sits on the board...and E.B.
(E.B. works for D.M.)

and played major part in the backing FIF into a shell

E.B. is a chartered accountant.....so I would be pretty confident that any numbers analysis of any acquisition by FIF will be reviewed by him (or if not if too busy then by someone working for him)...so imho his opinion on the numbers of any acquisition would depend quite highly on his opinion.....

and also, last time I heard....a BOD has a lot to do with how a company is run !....(otherwise they wouldn't need to bother turning up !...and one assumes that they do some stuff between meetings as well to justify the pay)

[aleman] 16/4/2012 17:05

Most of the commodities look to be easing again. Brent crude down to $118. Anybody know whether FIF is mainly a coal, oil or gas consumer?

[jpjp100] 15/4/2012 14:45

well libor isn't going down much anytime soon, I am quite sure of that

I don't think its going up much in a 2 year horizon either, but I am not sure of that

[boffster] 15/4/2012 11:28

jp... as I understand it, as LIBOR changes so does the fair value of the interest rate swaps FIF has in place (i.e. it either becomes a good deal or bad one) So that is recognised as either a charge or credit onto the balance sheet. I could have it totally round my neck though.

[aleman] 14/4/2012 22:02

The risk is highlighted in the annual accounts - £199k loss of profit for every 1% rise in base rate or LIBOR. That covers interest risk on all the debt and £24m in swaps. You can stop scaremongering now.