Finsbury Food Share Discussion Threads

[aleman] 25/7/2012 12:48

It hurts me financially to take capital gains over income. My capital gains will be taxed and I don't see why I should be forced to sell to generate income. (How would you like it if you bought a corner shop but couldn't spend any of the profit it made until you retired or moved on?) I'd rather have the dividend - but I'm expecting big capital gains, regardless. The touted dividend is small compared to cashflows, anyway.

Do you realise how miserable I will be if we make massive capital gains and get no income? ;-)

[bonio10000] 25/7/2012 12:18

I would agree. Sort it out so current assets > current liabilites and thatwould increase the price by more than a token dividend imho.

[spaceparallax] 25/7/2012 12:12

I'd rather see quicker debt reduction to help silence the doubters/bashers and subsequently see a rerating, which would be a divi in itself.

[jpjp100] 25/7/2012 08:40

they must be itching to invest a few bob in new kit / new products too

remember that the growth programme has always been described as something of a one off so, to find some more growth, some money may need to be spent sometime soon

after all, we all want to see £300m turnover achieved profitably too

[boffster] 24/7/2012 16:33

I'm expecting a dividend. I'm getting impatient and I don't see how they could refuse at least a small one with the company continuing to perform strongly.

[spaceparallax] 24/7/2012 09:19

sounds as if they're continuing their good work - hopefully we'll see a a further reduction in debt.

[this_is_me] 24/7/2012 07:49

Just what we wanted to see. A well run company making steady progress and paying down debt.

[jpjp100] 24/7/2012 07:36

Got to be pleased with breaking the £200m turnover mark

Trading in line indicates it has been done profitably

All round good imo

[aleman] 24/7/2012 07:10

In line with expectations is probably quite good, given the weather. I was worried we might get "at the lower end". I suspect the change of broker will be of some significance, although it usually takes hindsight to work out why.

[markt] 16/7/2012 08:35

Beginners guide to writing a Procurement Specification...in case anyone is interested. (I've produced a few....)
separate each requirement into a new paragraph and give each requirement a unique number, 1,2,3 etc.
Have a verification section and list every single requirement number and for each and every one !! state how verification must be done for each requirement, whether by analysis, test, inspection etc.

(oh, and find someone willing, and able !, to stay awake long enough to produce such a solid document !....its quite boring !)

(if UCB or its supplier had produced such a doc. , ...then a high temperature requirement would have been included, since receives naan breads on fire from a 400C oven, and how that requirement was verified....and it would have failed the verification (since inflammable self fuelling thermoplastic) and the system would never have been delivered imo)

(the self fuelling part is quite amazing imo for conveyor material close to a 400C oven, needs to resist fire and if it catches fire imo it needs to self extinguish or at least not increase the fire)

(if all/many UK/European factories with ovens are in the same situation..inflammable materials in the process...then something needs to be done...or there will be more fires in the future...)

[markt] 15/7/2012 22:23

hmmm...very interesting...
a lot of it seems to be based on e-mails...and imho I doubt that a judge would award liability for 7M based on fact or not from e-mails...

I would guess that the subject would finally depend in part on what specification was sent out by UCB, that they could prove.....if the spec. was only an e-mail or a phone call, saying "conveyor belt system to convey naan breads from a hot oven" and nothing else then perhaps UCB have no case for the first fire, whereas if they sent out a written spec. saying "conveyor belt system to convey naan breads of up to X grammes and Ycm x Zcm and some can be at 300-400C from a hot oven" and the conveyer catches fire and the fire self fuels itself if it carries anything at over 250C, then the conveyor supply clearly breaks the specification.

(I note, if the rape seed is sprayed and some goes on to the conveyor, intentionally or not....and the conveyor belt catches fire around 200C-300C...and some naan breads catch fire..and self fuels itself...then it is a recipe for disaster. And fire did happen 3 times.

That the insurance company and local fire department gave permission for the operation to continue long term and with the same basic materials and process after the first fire surprises me.
And that they perhaps allowed the operation to re-start after the 2nd fire surprised me even more. (but I/we only see a small part of it..)
I would have expected a short report from the Insur. inspector or fire inspection saying that can not continue the process until make changes to avoid a repeat.
That there were 3 fires over 5 years seems amazing.
I would imagine that the insur. company may be playing a part somewhere in the wings. I doubt he is very happy about repeated fires if he is paying !

----

I would imagine that there was some pressure from UCB to get production operating again....without opening the bank account to buy a new conveyor system that was .....fire-proof.
That there were 3 fires at UCB property for 1 process over 5 years....infers to me contributory negligence/fault....which will imho count against them to some unknown degree. If you have 3 fires over 5 fires and you are the operator, you spray rape seed oil, you see burning naan breads emerging, you know you had 2 fires from the process in the past....seems difficult imo to say that it was all the fault of a remote equipment supplier.

---
Pile of e-mails, "he said this", "we meant this", "he said that"...."I wrote this but I was inferring that". "I didnt see that e-mail". "The context was different for us".
I would have thought it was difficult to win a legal case for 7M pnds on that basis. But I am not a lawyer.

Perhaps the key question is whether UCB can or can not produce a written spec. or purchase order that states what they wanted/needed and if that details the temperature of product and/or burning naan breads...and sprayed rape seed oil....
looking at the case notes...I couldnt see it...
if the supplier was not told in writing in the purchase order or a specification of the temperature required then looks difficult imho to blame the supplier legally....

(and perhaps UCB continuing with production...and having 2 fires more over a period of 5 years...perhaps argues that they gave more weight to being in prodution than for changing the process and removing/changing the inflammable conveyor belt.....

---
If UCB made the supplier the design authority, since UCB know little about supplying conveyors, and said/wrote in their purchase order, "1 conveyor system, to meet the needs of the naan production on site, to be witnessed/ascertained by the supplier" and the supplied visited 3 times to see what the use was, and had the chance to measure temperatures, then the supplier is the design authority and is liable imo since the system has caught fire 3 times. (whether liable for consequential losses or only to repay the cost of the inflammable non/suitable conveyor unit supplied, is another question. The suppliers standard contracts conditions will I am sure state that not liable for consequential losses, although one could claim gross/blatant negligence which infers some liability perhaps, as will FIF supply contracts to their suppliers. If FIF factory breaks down or delivery problems then Tesco could not imo sue them for loss of Tesco profit from not selling FIF products.

---

If UCB/FIF loose the case...would legal costs impact on profits, or be negligible ?
If they won and got 7M would they keep it, and big jump in FIF profits or would it just go to their insurance company who perhaps have already paid it to UCB/FIF ?
---

...flaming naan....phew, there goes another one !

[aleman] 15/7/2012 15:18

The purchaser has to correctly specify what he wants...and to verify that what is supplied meets his specification.

That seems to be what they tried to do, based on previous fires and crude testing of their own. The argument seems to rest on the legal strength of verifications from Spooner and Forbo and an alteration made to am email from Forbo to Spooner before it was forwarded to UCB.

[markt] 15/7/2012 13:59

..so UCB/FIF had a Naan bread created equipment/factory fire in 2001...then in 2003...and then in 2006....


Personally I dont think they can blame it all on the equipment supplier.
The purchaser has to correctly specify what he wants...and to verify that what is supplied meets his specification.
The purchaser of equipment is often he who decides on the overall solution since he decides how much he wants to pay...and will often decide against the expensive solution...even if it may be the correct one.
With 3 fires in a few years, imho it infers partial complicity of the equipment buyer, UCB in the problem/fires .

If cooking at 450C...and sprayed rape seed oil is part of process (so one can imagine rape seed oil on fire on surfaces, not just on naan breads...)...sounds to me like need metal plate convoyer (not thermoplastic), or made from fire blanket material !....

Legally it may be difficult for UCB/FIF to get much/anything....since most contracts exclude consequencial liability (oven equipment producers must see heat related problems all the time)....and as UCB/FIF will have agreed the proposed solution and materials before put into production they may struggle to pin it all on the supplier. And the UCB/FIF procurement specification could well have woolly wording.
And if the case dates from 2006, now 2012...it infers to me that the case is probably not 100% black and white in the favour of 1 side.

[spaceparallax] 12/7/2012 12:07

Ale,

As you know many share that view - hopefully fundamentals will shine through eventually.

[aleman] 12/7/2012 11:28

With turnover clearly up and likely debt+deferreds well down at the end of this financial year, I would expect FIF to take a big step closer to the rating of other food companies. I'd expect PG to rerun its enterprise and cashflow valuation exercises after the stronger second half of the year to get nearly 50p and 60p respectively (from 46p and 54p in March based on half year results). I expect the bad weather could produce slightly disappointing turnover and profit numbers for H2 but a smaller than expected increase in working capital could help cashflow and still see debt still fall as expected. I think the market might be impressed that debt continues to fall despite the bad weather and then start to revalue FIF just like any other food company (from a 40% discount now) and move more into line with PG targets. (It arguably should be at a very slight premium if these results continue the very steady nature of the improvement over the last few years.) I'm hoping an update with decent debt news can turn 30p into support and the ensuing results can then see an attempt to break 40p, which is where this share ought to be if it just had more publicity about its steady improvement.

Fingers crossed that the weather hasn't disrupted the trend too much.

[woodcutter] 12/7/2012 10:37

A positive update and we may see it break new ground above 30p, you never know.

[aleman] 10/7/2012 13:44

No date set for year-end up date, yet. Expected to be last week of July, as usual.

[aleman] 09/7/2012 11:05

I doubt a sharp spot rise in wheat every now and then makes much difference so long as it comes down in between times, as it did recently. Hedging forward will tend to be between the two and not as volatile. Futures prices seem to tend towards the lower end as they don't assume a weather event every year. The company's statements gave the impression that the high prices of 2011 were difficult yet results seemed to hold up pretty well. Prices now are only back to where they were and futures suggest they'll ease again. I think it is easy to exaggerate the effect of one price move. I think there is more of a problem when you get all the commodities going up together. We don't have that (yet).

I think we should be prepared, though. Dairy prices are similar to 2000 and farmers are screaming again They are likely to jump a bit from recent lows at some point. I wouldn't be surprised to see another spike cause cream and butter to nearly double before falling back. It's a contingency that must be planned for. Good planning gives the edge over the competition who also have to deal with it.

[woodcutter] 09/7/2012 10:51

Interesting reading that the usa wheat harvest not looking as good as expected due to weather. Prices up 30% in short space of time. Wonder what effect, if any, that might have on production cost/sales revenue and ultimately profit.

Boff, i was hoping to see a 2 in front of it long term, next four years.

Woody

[this_is_me] 06/7/2012 22:38

I got in at less than that - but then I've had mine for over a year!

[s34icknote] 06/7/2012 22:27

Thanks woody.
Just reading your posts here and IGR.
May have called it right and wish I bought at 22p but last purchase was 23.5
Always hard to call bottom.
I,m only in four holdings IGR Fif nxr and pic. Sold me PDFs to buy more fif and IGR

Am now holding for long term rather tan short punts

Good luck all

[boffster] 06/7/2012 14:54

Hopefully the next time we see 20p it will have a 1 in front of it.

[bonio10000] 04/7/2012 22:58

£7m would be very handy ......

I had a chilli naan the other week that felt about that hot !

[sir rational] 04/7/2012 22:27

maybe they will issue a naanRNS