Finsbury Food Share Discussion Threads

[funkmasterp12] 24/1/2014 12:26

I've been watching here too, the T/S isn't terrible but this one line caught my attention: "the Group plans to invest in up-weighted market activities to protect volumes" Buying retail space? Dropping cost prices for higher volumes?

[callumross] 24/1/2014 12:21

Trouble is that this is a profit warning disguised as a "trading statement". These things tend to come in threes. Will keep a watching brief until further updates from the company.

[spaceparallax] 24/1/2014 09:51

A good point; financially, the Company's never looked healthier.

[topvest] 24/1/2014 09:43

Yes, I'm happy to hold. A P/E of 8 is hardly demanding. On cost pressures, they have endured much more tricky times than now.

[spaceparallax] 24/1/2014 09:36

I'm perfectly happy with the TS - it would be nice to see the cost price inflation contained, but as said they're in a much healthier financial position to work on improvements within the Company. I suspect the recent share price erosion is temporary and expect to see a return to the 60s pdq.

[salpara111] 24/1/2014 09:08

Been watching and waiting for this update but I won't be investing on the back of it. Flat to marginally declining sales and costs up....no mention of being able to recover the additional costs through price increases which is hardly surprising. I am putting this on my low level watch list but clearly there will be no positive news for quite some time.

[dashton42] 24/1/2014 08:31

A bit of an unfortunate contrast with RGD, which Investors Chronicle has been tipping recently. Jam tomorrow, I suppose.

[boffster] 24/1/2014 08:15

I would anticipate a higher dividend this year. With debt all but eliminated, an EPS of over 6p gives plenty of room for an improved yield whilst retaining earnings for investment.

[this_is_me] 24/1/2014 08:11

You can get 6% yield on utility or similar solid very low growth companies so why invest in FIF at the current price?

[topvest] 24/1/2014 08:03

Yes, guess this announcement was already known by the market. The announcement is a bit on the gloomy side, but this is clearly a transitional year until their growth plans come to fruition. They have been very good at growing their business historically, and so I'm sure they will find some growth again over the medium term. In the meantime, there is a dividend and a low P/E.

[el1te] 24/1/2014 07:24

Interesting trading statement, and the chocolate/butter cost prices are probably what the market was tracking with the recent falls. However, results in line with expectations and expecting to show an improved pre-tax profit (i.e. at least £2.98m which I think was 3.3p in EPS for H1?)

[battlebus2] 24/1/2014 07:05

The Board expects to report first half profit in line with market expectations. Following the sale of the Free From business in February 2013, continuing first half Group sales revenues are £86.6m, versus £88.2m in the prior year period. The UK Bakery business declined by 2.1%, £1.6m, whilst Lightbody Europe, the Group's 50% owned joint venture business, was flat year on year. Cost inflation in key ingredients such as butter and chocolate combined with general cost inflation continues to keep pressure on margins. The Company has however mitigated this pressure with internal efficiency investment and a cost reduction focus. The planned cake capital investment programme is progressing well with the new cake slice 'snap pack' packaging format launched and further snacking cake automation investment on track for year end completion. Similarly the Nicolas and Harris bread facility expansion is being commissioned in January 2014. These and future capital investments will underpin further internal efficiency and capacity improvements to support sales growth in the coming years. The Board remains confident of reporting a year on year improvement in PBT but believes general cost inflation will impact the Group's performance during the second half of the financial year. In reaction to the current trading environment, the Group plans to invest in up-weighted market activities to protect volumes and undertake an overhead reduction programme which will be completed in the second half. The full year benefit of the overhead reduction will be seen in the next financial year. John Duffy, Chief Executive of Finsbury Food Group plc, commented; "Whilst the trading environment remains tough in the short term, in line with our stated strategy, our low level of debt and interest cost allows us to make significant investment in our factories and businesses for the future. "In a transitional year following the sale of the fast growing Free From division and consequent group restructuring and capital investment, I am pleased with the progress made and believe we will enter next fiscal in a stronger position for the eventual improvement in consumer market behaviour ahead."

[boffster] 23/1/2014 14:22

Duffy "We could easily double the size of our bread business in the next few years"

[boffster] 23/1/2014 13:32

Finsbury AGM was back in November, unfortunately I couldn't make it this year.

[whitej_d] 23/1/2014 12:34

Don't know how much to read into it, but Thorntons reported large growth in their FMCG division. I believe some of this is manufactured by FIF.This area at least should show growth if true.

[aleman] 23/1/2014 12:09

I only gave two reasons why the shares might be falling. I never said it was the correct response. Shares Magazine has FIF down as having an AGM on Wednesday. I wonder if that is the preclose update.

[boffster] 23/1/2014 11:46

Isn't FIF a big supplier to Waitrose? I'm expecting to see benefits from the money raised in the placing last year. Remember we were told it would yield an annual benefit of £2m? Along with much reduced debt servicing costs I am optimistic.

[aleman] 23/1/2014 08:45

I would imagine there are two factors at play here. Profit-taking as we approach the tax-year end and the poor sales figures from the main supermarkets. How much pressure will supermarkets put on FIF's pricing and what proportion of sales might actually be lost as more people shop at Aldi, Lidl and Waitrose? Despite the potential for sales and margins pressures, I think the shares are too cheap.

[boffster] 23/1/2014 01:08

They didn't expand the Nicolas & Harris bakery expecting sales to be flat.

[topvest] 22/1/2014 18:50

Well either someone knows something negative or this will bounce on the update. It's on a forward P.E of only 8.7. Looks cheap versus others at the moment. I suspect sales are flat or even down a bit, given low sales growth numbers at the big food retailers, but they have grown in the past and I'm sure they will grow again without the debt burden that was holding them back.

[uhound] 22/1/2014 15:50

Agree that a trading update probably due this week and I tend to think based on share price performance figures will be flat. At this level though looks good value unless there is a nasty supprise!

[spaceparallax] 22/1/2014 15:02

It does. On the issue of growth, unless we replace the contribution by Free From, the income stream will decline; however, the outgoings element will doubtless have declined by more given the substantial reduction in debt and its associated costs. Overall, I anticipate an improved EPS and a much reduced gearing, which to my mind indicates a more healthy company in a position to either manage organic growth (my preference) or take up promising minor acquisition opps. In a nutshell, we have regained control of our healthy business.

[boffster] 22/1/2014 14:53

I am still expecting growth this year although at a modest rate. With EPS 6p+ and little debt, 55p looks a miserly valuation.

[spaceparallax] 22/1/2014 14:44

if the decline continues, I'm looking to shuffle more money into FIF. There are no fundamental reasons for this share price decline.

[el1te] 22/1/2014 14:16

Yes, but a lot has changed since then, not least the debt size.