Finsbury Food Share Discussion Threads

[woodcutter] 28/2/2013 12:27

that's a very valid point boff. If the rating doesn't improve and the share price rise then someone will be looking at the cash generated and the revised debt position, with a very keen interest i'm sure.

Woody

Post Note

Space i'm not so sure debt reduction is an issue going forward now and any strong earnings enhancing aquisition would be favourable particularly if they could move on the restoration of the divi which must be given serious consideration.

[boffster] 28/2/2013 12:16

Of course this stands the group in great stead as a takeover target.

[this_is_me] 28/2/2013 12:15

Normally I strongly object when companies sell off bits because often they sell off the growth bit at too low a price instead of selling off the stodge at a reasonable rating. However the price sold was excellent and at this valuation there was no point in fighting with the brand owners. Both FIF and the brand owners have done well over the lifetime of the partnership.

It seems that, by coincidence, FIF were tipped in Shares Mag. today so there will be a lot of people looking at it over the next week. The share price could easily double from here. (It is already more than double what I paid in 2011.)

[spaceparallax] 28/2/2013 12:13

I'd rather see continued debt reduction than an acquisition.

[woodcutter] 28/2/2013 12:13

yep agree.

[aleman] 28/2/2013 11:58

I don't think they are the crown jewels either, which is why the phrase was in quotation marks. The sale of a non-core business for a very good price which was a large chunk of market cap in both cases means the comparison with DCG still stands.

[woodcutter] 28/2/2013 11:48

Aleman i'm not so sure they are the crown jewels. My belief is the gluten free market is niche but limited and sales growth has been reducing so maybe they saw it plateauing, added to which possible further competition and erosion of margins so probably a good time to make the sale particularly for the price £21m for a loss of earnings of £600K and further debt reduction. It looks a no brainer to me.

Woody

[aleman] 28/2/2013 11:29

I think there are strong similarities with what has happened here and at Dairy Crest. Both companies that had supposedly worryingly high debt but strong cashflows in low growth food industries and that have sold off the "crown jewels" at strong prices to raise cash for reinvesting in potential acquisitions in the core business. Now compare the ratings.

[s34icknote] 28/2/2013 10:59

Bought back in guys despite the directors dealings in the rights which led to my exit.
Feel these have only one way to go

[aleman] 28/2/2013 10:58

I also suspect there will be an acquisition in the near future that will enhance earnings. There have been clear references to plans for acquisitions, once the balance sheet was strong enough.

[boffster] 28/2/2013 10:44

Looks like a great deal for FIF. Compare to PFD which is drowning in a sea of debt and having to make disposals at fire sale prices.

[bonio10000] 28/2/2013 09:46

BTW - it is noted the management still helped themselves to a larger slice of the company with the recent share issue for the machinery upgrades.

Given they must have been in negotiations to sell - that could easily have been funded out of the cash received, with no need to shaft current holders.

[spaceparallax] 28/2/2013 09:18

Well done FIF, that should finally put to bed the issue that many have carped about - serious rerating underway, the debt will now erode very quickly.

[woodcutter] 28/2/2013 09:14

all in all i say this was a pretty good deal. Free from sales growth has been falling over the last few years from 14% to 10% so perhaps they saw the value in selling now.

If the PBT is only £0.6m then i figure that's somewhere around 0.7p eps. The debt reduction at say £17.7m initially (excluding any pension provision) should result in somewhere around £1.5m reduction in interest payments . Adding this £1.5m back and taking out the free from pbt of £0.6m gives around 9+p eps, based on last years results. These are rough estimates nevertheless it looks a good deal and still very undervalued.

would welcome any thoughts on my figures.

Woody

[topvest] 28/2/2013 08:54

I think it is very good news. At long last they have sorted their balance sheet once and for all. This opens the gates for dividend payments, a re-rating and acquisitions (equity funded not debt). As I've said before, I expect a dividend this year. If this doesn't happen I will sell mine.

[bonio10000] 28/2/2013 08:41

Good news for the price but would echo comments about possibly selling off the crown jewels.

Is it a compulsory purchase? I thought the binding agreement in place to sell expired some time ago?

[dashton42] 28/2/2013 08:20

I didn't see that coming. The market seems to be giving it the thumbs up though.

[this_is_me] 28/2/2013 07:20

Seems a very good price, althpugh selling the fastest growing part is somewhat disappointing.

Still very undervalued.

[spaceparallax] 25/2/2013 09:57

A little life this morning

[spaceparallax] 22/2/2013 16:36

methinks you're rather clutching at straws, given the miniscule percentage listed - this pales into insignificance cf the strides made in trading health over recent years. This is only likely to head upward over coming months - after all, they're offering fairly priced products that the market continues to want and be able to afford.

[markt] 22/2/2013 16:32

block listing about to happen....as option shares are added to the market

Ready for some EPS dilution ?
to add to the dilution resulting from the recent share issues....

[this_is_me] 13/2/2013 23:15

Tesco to sponsor horse racing on channel 4; they will supply 'horse ambulances' for injured horses.