Finsbury Food Share Discussion Threads

[boffster] 13/7/2011 23:40

Markt, you have obviously spent a lot of time going through the accounts, some of your points I feel are more valid than others. I do think you may have stumbled upon something though, in that why the company net assets were pretty much unchanged from 2009 to 2010 despite a profit. Being the simpleton that I am, all other things being equal, I would expect a company's profit (loss) to be reflected in a change to the balance sheet year on year.

One item on the balance sheet puzzles me, this is why the debtor figure is so low, at £12m vs £20m in the prior year. However there are several references in the report to the strong debtor book (£21.4m, similar to the prior year) however this doesn't seem to be properly reflected on the balance sheet, surely it should be. Is this a mistake? Is the £12m figure quoted not accurate?

[markt] 13/7/2011 19:07

Debt (oh no !)

past discussions have said that FIF is reducing its debt.....paid from profits...
and hopefully it will repeat in future years and then can pay large % divi and the share price will rise

BUT
looking at the accounts...
the shareholder funds are the same at the end of 2009 as at the end of 2010

that infers imo that there was no nett change in the numbers.
(debt only reduced in fact imo by reducing the total amount of debtors)
moving money from 1 bucket to another, no nett change (except that in 1 bucket have to pay interest while not in the other bucket, so saved 1M in interest, which is impressive, big %)
ie. if the debtors amount goes back up to where it was the debt numbers will go straight back to where they were ! since no real nett change
(if Thorntons for example say will pay late......then not much you can do about it imo)


a 5M reduction is imo "just" because they held less inventories in 2010 than in 2009.

any views ?
am I missing something ?

[markt] 13/7/2011 18:07

J.Duffy. 3.4 million options in the past to be precise !!...or ??!

6.4% of existing number of shares....52-53M.

6,4%....from before.....
significant options percentages popping out left and right...

(approx. 3.3M options in place at July 2010 with exercise price below 40p. Still exist or ?)


but page 79 says that he paid for 1.04M shares...and received 1.26M options....
fair enough...since he bought similar amount...

----


BTW
Lord Satchi held 1.6M shares on 20th Sept 2010...price 25p at the time...
now owns 0. So he didnt want to wait any longer !.
No market notice till recently. So, one assumes that FIF/registrar have not complied with market rules, eg. going below 3%.

glaring lack of institutions or others on the shareholder list BTW with > 3%

[boffster] 13/7/2011 16:06

Duffy was already granted a load of options a couple of years ago: -



Utterly absurd that he should be given more.

[markt] 13/7/2011 16:02

...they hold about 41% combined....
so...one assumes that they agreed to it....

[boffster] 13/7/2011 15:43

Aleman, mainly for the links and references, but also to moderate any pond life (not that we have any on here, yet)

I would be interested to know what Mr. Lightbody (25% shareholder) and Mr. Marshall (chairman of large shareholder) think about this. They are the non-execs who Aleman rightly says are supposed to look after shareholders interests. Martin Lightbody is no shop-egg and I doubt very much he is happy to have his shareholding reduced, unless he feels it is for good reason

[bonio10000] 13/7/2011 15:18

Just make sure you cut 15% of that cake for the Directors....

;-)

[aleman] 13/7/2011 14:29

Moderation hasn't been a problem. Are you setting up a new thread for links and references or another reason?



I see there is another trading update out from Thorntons that is still weak but better than the period of the Royal Wedding and hot April weather. I Still think we will get a small but unsustained boost at FIF, although it might just tempt a few people back into buying cakes and the like for socialising over afternoon tea as a counter to the doom and gloom of the recession and its coverage in the media. If you can't afford to go out at night it must be a nice option to keep up with friends and family with a chat over a hot cuppa and a bit of gingerbread or whatever.

[boffster] 13/7/2011 13:53

I have set up a new thread if anyone wants to use it:-



As I don't think the current thread moderator looks in on this one anymore, I will add useful links and info to the header (let me know of any requests)

[boffster] 13/7/2011 13:49

Finsbury Profits up 19% - 26-3-12

[boffster] 13/7/2011 13:48

created in error - (ADMIN, PLEASE DELETE)

[bonio10000] 13/7/2011 13:15

If he can get onto uswitch and drop the lighting bill for the office by 10%, well worthwhile.

[aleman] 13/7/2011 12:40

Just had a quick look at last year's results. There is an undetailed cash bonus scheme in place and another 3m options that crystalise below 30p so that's options over 15% of the resultant expanded share issue if the shares hit 30p. Too generous. Why are they giving bigger options the cheaper the share price gets as well? If they've granted options over 15% in the last couple of years and they carry on at that rate they''ll control the company in a decade and past experience says minority shareholders get screwed.

[markt] 13/7/2011 12:08

the free from agreement to sell.....non-starter imo....the lady that owns the recipe has imo no interest in taking on debt of X million to start producing herself....she makes easy clean profit by taking a % of sales, with no debt...
and now licensing in USA.....if she can take a small % of sales in USA and recipe is in demand then she will make loads....no need to get involved in producing...

[jpjp100] 13/7/2011 11:58

Partly this is about having a credible Board too. Duffy & Boyd have good track records of generating significant shareholder value (and of making themselves a few bob in the process too of course).

I have no doubt that the turnround needed to get FIF onto a decent PE and held in higher regard by institutions and others requires a strong Board. Given that there is likely to be consolidation in the sector that FIF operates in, I'd like FIF to be in a position to participate as it wants to, not just to be a sitting duck to be acquired cheap and shut to take out capacity.

Similarly, I want a good team leading FIF's negotiations with top customers, licence holders, top talent that the business wants to recruit and others. I also want a Board that makes things happen and has high expectations of the people working for them.

From the track record that Duffy & Boyd between them have and from the progress they are making at FIF already, I am happy that they have a rewards package that should keep them there a while - I don't want them stealing away for the sake of a few hundred grand, by a Private Equity deal outside FIF for instance: they are well into that network from previous deals.

[markt] 13/7/2011 11:48

....I would say/guess that the financial function has a lot to do at FIF
2.7k staff......that needs a lot of work/admin.
payments to/from suppliers/customers for is it around 170M pounds of sales...

chasing late payers
a variety of debt methods to manage include against sales
etc
====

How much the FD does personally and how much the Fin. manager does etc, of course I dont know.

[bonio10000] 13/7/2011 11:40

All of those are not very tough.

So you get a bank facility that lasts you 12 months plus and you shop around through an energy broker for a 12 month plus deal on power.

How long does that take in a year, 2 weeks?

You will find there is usually a dedicated purchasing manager who usually deals with the rest and as for the old cost benefit analysis on machinery.......

So that leaves lunch with HR flexing the staff wage around 1% to 4% wages rises. Nothing a 30 min spreadsheet won't cover.

[mrphil] 13/7/2011 11:39

If they intend to take up their options at 20.5p before September, I presume they believe the share price is likely to rise a fair bit from today's level. If the share price drops any more, they'd be able to buy on the open market at a similar price!

[this_is_me] 13/7/2011 11:35

Our FD would need to be doing much more than "pressing a button" at the end of each month. How about:
arranging things to reduce the tax paid,
reducing interest charges
reducing electricity bills etc.
other input costs eg. packaging
performing cost/benefit analysis on investments in new plant
input into reducing distributation costs
product pricing
input into setting salaries/wages and staff levels
etc.

[markt] 13/7/2011 11:34

I dont understand how/why the date for half of the options is Sept.

...options should be for medium/long term motivation imo

[mrphil] 13/7/2011 11:33

Coming in late on the discussion and must admit I haven't studied it in depth, but am I right in saying they have been awarded one lot of shares as part of their remuneration package then an additional share option scheme?

The "free" shares as part of their remuneration does seem a tad generous, unless their salaries are at a lower level to reflect that.

As far as the share option scheme is concerned, I presume they will have to physically hand over the money at the relevant strike price which seems reasonable?

[bonio10000] 13/7/2011 11:10

It makes you wonder is this will generate a short term view on the potential realisation of the free from business.

Sell it off to jump the share price and get the options into the black.

Whereas I would prefer to see them develop this growing part of the business and keep any future benefits within the company.