Finsbury Food Share Discussion Threads

[boffster] 23/3/2011 15:36

The non-controlling interest is to do with the overseas venture, Lightbody Stretz.

[markt] 23/3/2011 15:06

jpjp100
cakes, I note your comments


BTW ...note that a number of the products produced are as own brand products...eg. the caramel bars ...they make and sell 5M every week !

(according to the wrapper) (and very nice too !)
(Tunnock, a very strong item/brand in Scotland)

supermarkets cannot dictate to FIF the price they pay for those.....b'cause only one manufacturer
the competition or limiting factors of the price that FIF can obtain are, imho, the prices of other brands of competing choc/wafer bars

and when you make 5M/week then I assume that you have some advantages resulting from the volume....such as use of efficient fully automated production machines....cheap production cost per unit...and buying power for the materials used

(if they could make 1p profit /caramel bar ....and if sales really are 5M/week...then = 50k/week profit....52 weeks =.....2.6M
but in reality the profit is smaller since all of FIF only makes around 4-5M/ year
and not an exact or very real calculation....but it shows the possibilities if can make some profit from large turnover, and FIF sure has large turnover, heading for solid increase in T/O this year

[aleman] 23/3/2011 14:26

markt - I had assumed the profit from non-controlling interest was their share of the joint venture (which isn't necessarily the same as half the profit of the businesses for sale detailed in the joint venture RNS). Perhaps someone else can help. I'm new to this one and don't know it all. Quite often I don't know all I want to until I get to an AGM - and there's plenty I don't get to!

There were secured loan notes circulating at 5% previously. Does it matter if it is only £36k now?

[spaceparallax] 23/3/2011 14:16

Let's not forget that the Genius purchase would not include the Company debt.

[jpjp100] 23/3/2011 14:11

I don't think Genius intends to exercise the option - as Aleman says why would you when you could have the whole company for £10m.

No, I think the option is there to offer all parties to the JV a little reassurance that everyone is pointing the same way. I really would be surprised if it was exercised.

The cake market has overcapacity. The supermarkets know this and will have no hesitation in using their strong position in the market to make sure they benefit from that. That FIF is holding its own and maybe even gaining a little market share is to their credit.

[aleman] 23/3/2011 14:00

Why would Genius buy the joint venture for £21m when they can buy the whole of Finsbury for half that? It just underlines the madness of the share price.

[markt] 23/3/2011 13:57

Aleman
You seem to have read the results in detail..

you understand the large % minority interest ?
Who/what is the 'minority interest' ?

And do you know the terms of the loan notes ? (interest % ?)

[markt] 23/3/2011 13:46

BTW...I see the possible future sale of the Genius thing (see joint venture notice) as a done deal....
and note that they will get, I think, a new 2M production facility included in the deal...and solid growth in turnover....so buyer will be happy imho

and FIF shareholders would be happy since a 20M cash injection would wipe out a lot of the debt and hence shareprice should jump (instantly)

so, a mutually beneficial deal so I think it will happen

(and if deal not done then FIF could always offer to A.N.Other....cheap on profit/earnings so someone would do the deal imho)

[aleman] 23/3/2011 13:41

Tax charge was estimated at 28%. Corporation tax has just been reduced to 26% so post tax goes up from 72% to 74%, enhancing earnings by 2.8%.

[markt] 23/3/2011 13:39

BTW...10k pnds of buys over yesterday and today...are mine
...I'm hoping that it is/was good timing...

(if announce one day that complete the announced possible sale (the Genius thing, see old RNS)....then the price would instantly rocket imho.....since would produce big reduction in debt...which is the thing holding back the price imho)

as many have pointed out....with annual profit in the 4-5M range then a cap. value around 10M doesn't make sense, especially with reported increase in turnover (in 2008-9, with reduction in turnover I think it was then one can understand concerns about the debt hitting the share price, all behind us now hopefully)

Interesting that they mention acquisitions if they find something beneficial and capable to do it. Many have worried about debt and/but the company mentions that will consider acquisitions....

(if the company at some time in the future starts producing big dividends then the price then will be much higher...buying now would seem to make sense, if willing to wait)

===

Anyone understand the large % minority interest ?
Who/what is the 'minority interest' ?

[spaceparallax] 23/3/2011 13:33

Blue on mine but it doesn't rhyme

[jpjp100] 23/3/2011 13:16

3h15' to go to the close and then we get to see if ydderF's prediction of a sub 20 close comes to pass or not.... so far its still green on my screen

[ydderf] 23/3/2011 12:56

£17,000 value of shares traded.....(7 bargains)........huff, puff, huff, puff....looks like the longs and penny scalpers and cfd gamblers are going to have to go to bed tonight with a dog - let's hope it doesn't also have fleas, but by the look of that balance sheet, i would give yourselves a good dusting of if i were yous

[topvest] 23/3/2011 12:32

Good update today - steady progress being made and the cash rolls in in H2 so should be reduced debt by the year-end. Starting to get much more manageable. Their strategy is spot on - i.e. to keep within covenants and reduce debt until conditions improve. If they ever need an injection then they have a number of deep pocket shareholders, but that would clearly dilute value. Only way to get back to £1 per share is to keep trading well and halve the debt. That is achievable.

[spaceparallax] 23/3/2011 10:55

Overall, debt continues to be reduced - as with RGD, who were also unloved for being in a similar position a year or two back, the debt reduction will have an escalating positive effect.

[aleman] 23/3/2011 10:09

Companies never pay things off perfectly smoothly. The operating cashflow before working capital movements shows the rising cashflow trend remains steady. Look at the last 12 months balance sheet changes and you find the company paid down debt by £3.8m and made the deferred acquisition payment as well as increasing stocks. Once the refinancing is sorted, that £6m can be put to other uses like dividends. Actually, once the refinancing is done, debt will have fallen further and turnover increased so interest savings and higher operating cashflow may take that to £7m free cashflow. Now compare the ability to pay a £7m dividend with the market cap. The forecast to pay 1.5p (£780k) dividend out of 8.3p (£4.3m) earnings in 2012 almost looks miserly when you look at underlying cashflow. It would be nice if there was an increased dividend for 2013 in the updated forecasts.

[boffster] 23/3/2011 10:05

CC - Happy to help :o)

[captain crash] 23/3/2011 10:01

Sorry Boffster - I did read that wrong.

[jpjp100] 23/3/2011 09:58

Hear what you are saying on cashflow, but I really don't like to see negative cashflow in a reporting period - whatever the reason.

All would be forgiven in my mind if it came in positive at the year end

[boffster] 23/3/2011 09:54

As Aleman says, cash generated after tax and interest as £2.7m, there was a £1.25m spend on capex and £1.75m went on paying down the deferred consideration, hence slightly negative cashflow in the period

[boffster] 23/3/2011 09:46

Average interest rate on the debt has fallen to 5.4% from 6.11% at the year end.

[aleman] 23/3/2011 09:41

Cashflow was fine. It was £3.5m after tax and interest but they spent £800k on stock and £3m on equipment and an acquisition. Compare that £3.8m spent in only half a year to a market cap of £10m. They wouldn't be spending that if there were any problems. Defer capex for 12 months, stop buying other businesses and keep stock flat and that's £7.5m over a year to play with after you've paid tax and interest. You could buy this company at the current price and pay off the cost in 18 months with the cashflow. (Add in the deferred acquisition payments and it stretches it out to a whole 2 years.)

[bonio10000] 23/3/2011 09:41

I did buy a Spiderman and a Liverpool cake in Jan.

Other than the Torres picture on part of the cake - very tasty.

[jpjp100] 23/3/2011 09:32

My biggest downer on these results is the negative cashflow for the period. I don't like to see that.