Finsbury Food Share Discussion Threads

[cockneyrebel] 23/10/2012 14:54

MM's starting to tick up on L2.

CR

[woodcutter] 22/10/2012 13:31

CR

Thx indeed, very kind of you to be looking after my wellfare and money;-). sorry everyone off topic

I passed on it anyway.........for now. Can't justify the pension position.

Looks a great business with fantastic brands but the more i looked at it the more odd it looked particularly the shares in treasury, can't say i've ever come across a business with such a small share base 5m, and have 30% in treasury, still it takes all sorts.

I posted on your AIM thread, BRY expensive but looks very interesting, took a position today.

FDP on the move too, I may have timed that one nicely.

Woody.

[s34icknote] 22/10/2012 13:03

Looks like a general sell of in small caps not much volume !
Think some are choosing to take profits on small caps that have had a good run.
Sensible but you can always miss the boat when she leaves port again!!!

[boffster] 22/10/2012 10:27

SR - stating opinions as fact are not permitted on my board!

[s34icknote] 20/10/2012 20:20

Hi SR

I hope your write as I could top up again !!!

A lot safer here than pfd!!!

Sicknote

[this_is_me] 20/10/2012 20:01

FIF probably have too much debt to takie them over otherwise they would have bought them from the receivers when ITF went bust. I actually made a good bit of money on ITF on the way up, fortunately I dumped them when they over extended themselves and started to slide.

[cockneyrebel] 20/10/2012 11:36

Woodcutter - a word to the wise re TND. Be very careful imo. the management there are in it for themselves imo. Very illiquid and likely to lock you in on a warning imo. Didn't post this on the TND thread as it only rubs them up.

CR

[aleman] 19/10/2012 15:41

That's the question. A listed company would have more need to keep it secret until discussions complete. It's a growing company but needs investment. FIF could supply that. It could also improve efficiencies by moving production around and maybe closing the odd weaker site. I'm intrigued by the Polish factory. Poles are taking some British eating habits back to Poland with them. Some UK products might be made or distributed there using the local network and it could be a useful tester for direct FIF expansion abroad, besides expanding organic growth prospects based on Polish cross-selling. I doubt FIF could be ruled out as a buyer but it seems to be rather a lot of new sites to be taking on and it's own-label business. Nevetheless, would FIF want competition getting it? There always a chance that another company buys it but sells odd bits on, as well. McCambridge would be retaining Soreen and Ireland so that leaves 6 sites being sold.

[boffster] 19/10/2012 15:22

Who is the buyer?

[aleman] 19/10/2012 10:28

McCambridge cake division at an advanced stage of sale.

[aleman] 19/10/2012 10:27

I've been monitoring TNI for a while, which says something.

[s34icknote] 18/10/2012 22:45

Any thoughts on Tni ?

[boffster] 18/10/2012 15:49

I was going to say HIBU, but I fear that qualifies as a basket case! I've lost a bob or three on that one. :(

[aleman] 18/10/2012 15:34

It's not me, Boff. I'm already struggling with capital gains this year and the P/E is only 5 and arguably a touch better on cashflow. Find me something cheaper to buy by enough to cover my CGT and I'll sell some. (So, find me something on maybe p/e less than 4 and less than 1.5 x EBITDA, perhaps. Not easy to find anything at that level that isn't a basket case!)

[boffster] 18/10/2012 15:25

I'm watching you, Aleman ;o)

[aleman] 18/10/2012 15:05

Just looks like a bit of selling, Boff.

[boffster] 18/10/2012 14:46

Market maker trickery again?

[woodcutter] 16/10/2012 09:17

Nice to see some new posters on this board, hopefully new investors too, that'll help us get to 60p.

[eeza] 13/10/2012 10:42

Sorry Boffster but cannot post link because it needs login details.

[boffster] 13/10/2012 10:15

Thankyou for posting that Eeza, do you have a link to it? If so I will put it in the header

[eeza] 13/10/2012 08:49

IC tip


Baker Finsbury Food is looking like a credible turnaround story. In recent years the company has been tackling its debt, which peaked at £50m in 2008, whilst eking out growth from the troubled food retail sector. Yet results for 2011-12 show that Finsbury is making good progress, even though its shares are still priced for a disaster that now looks unlikely.

Debt has been the key issue for some time and a focus for Finsbury's bosses, who came on board the then-struggling company in 2009. Now the situation no longer looks so bad. At the end of June, net debt including deferred considerations was £33.9m, a £3.2m drop in the preceding 12 months. This leaves debt representing a manageable 2.6 times last year's underlying cash profits, while net interest costs were covered 4.9 times by cash profits.

What's more, the company has a £47m debt facility with HSBC which stretches out to 2017. The balance sheet and borrowing position of the company is also strengthened by the fact that Finsbury owns a number of freehold sites. So, while the group's balance sheet still carries debt equal to 70 per cent of shareholders' funds, it has begun to look reasonably solid. Broker Cenkos, which advises Finsbury, thinks it is sound enough for the company to reinstate the dividend this year. That could provide the grounds for re-rating its shares that - trading at less than half their underlying book value (see table) - are in "deep value" territory.

FINSBURY FOOD (FIF)
ORD PRICE: 37p MARKET VALUE: £20m
TOUCH: 36.5-37p 12-MONTH HIGH/LOW: 37p 21p
DIVIDEND YIELD: 1.4% PE RATIO: 5
NET ASSET VALUE: 88p NET DEBT: 70%

Year to 30 June Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2009 179 1.78 2.3 nil
2010 168 4.87 5.7 nil
2011 190 5.95 7.6 nil
2012 207 6.53 8.0 nil
2013* 213 6.79 8.1 0.5
% change +2 +4 +1 –

Normal market size: 3,000

Market makers: 6

Beta: 0.5

*Cenkos forecasts

The performance of the business also looks better. The company achieved impressive growth last year. Cakes sales were helped by exports through Finsbury's 50 per cent-owned joint venture Lightbody and were 9 per cent ahead. Meanwhile, its bread and gluten-free products increased sales by 10 per cent. The group looks well positioned in some fast-growing areas and is the market leader in the gluten-free baked goods; this immature market is growing at around 15 per cent a year. Finsbury also had strong bread sales thanks to growing demand for freshly-baked bread. Its sales success has also been helped by investment in innovation and a number of brand licences, including Disney, Thorntons, Weight Watchers and Vogel.

However, the company still faces a tough consumer environment and the spectre of rising input costs. This means progress will not come easily, but the organic growth achieved over the last year is encouraging. With the balance sheet now looking stronger, there is also the potential for bolt-on acquisitions.

Share tip summary

Finsbury's share price suggests investors still think of the group as a write-off. That may have been fair when the group was labouring under a mass of debt, but Finsbury now looks much healthier. What's more, even using valuation metrics that take debt into account, the company still looks extremely cheap - its enterprise value (the value of net debt plus equity) is just 4 times Cenkos's forecast for 2012-13's cash profits. True, Finsbury shares come with big risks, but, if the company can convince investors it can produce growth despite the tough economic backdrop and that debt will no longer hold back development, there could be significant upside. Speculative buy.

[dashton42] 12/10/2012 13:36

To answer myself, I've just re-read the Investors Chronicle tip, which says "...Broker Cenkos, which advises Finsbury, thinks it [the balance sheet] is sound enough for the company to reinstate the dividend this year".

It's surprising, to me at least, that management didn't trumpet this in the results. Unless they did, and I missed it somehow.

[dashton42] 12/10/2012 13:31

I'm very new to FIF, but was wondering if anyone had a view on a reinstatement of the divi? I notice the preliminaries were conspicuously silent on this.

Thanks!

[s34icknote] 11/10/2012 22:17

Hi WC and Aleman
Thanks for your posts.
could be all about time scales ! would love to sell Fif at 90 p and top up my IGR!
One can dream !
PS my only other holding is Tni which I picked up at 51p.

thanks for your posts. Will try not to get off topic. It's great to beat CR to the bargains !!

Sick note