Finsbury Food Share Discussion Threads

[jpjp100] 27/7/2011 12:16

Boffster, what I was trying to say is that FIF is likely in a better position than most of its rivals regards having to pass higher costs on!!

I am supportive of the options scheme.

For them to vest, some conditions that we don't yet know the details of need to be met. This can only be something to do with the share price increasing versus the strike price of the options. Given that 50% of the vesting can take place prior to 30 Sep 11, the board is expecting good things only to happen between now and then.

There are unlikely to be any more run of the mill announcements until the prelims.

The prelims were announced last year on Thurs 30 Sep. It would seem that this year they are going to be a few days earlier than that in order that any good news contained in them can be reflected in the share price in time for the options to vest before 30th.

Big news, like a takeover approach would, of course, be announced when it happened.

[boffster] 27/7/2011 11:41

As much as it will make no difference I still think these options are too generous and will be voting against it

[bonio10000] 27/7/2011 11:34

"Vesting of these options is subject to various conditions being met, but in
each case, half of these options may vest prior to 30th September 2011 and the
balance may vest in two equal tranches on 30th June 2012 and 30th June 2013.
The Final exercise date is 30th October 2016."

Mmmm.......30 Sept 2011?

[boffster] 27/7/2011 11:21

Jp, what I was trying to say was that none of FIF's rivals are in a better position, regarding having to pass higher costs on.

[jpjp100] 27/7/2011 11:18

I disagree Boffster: not all suppliers are in the same boat. This is the exact point that I was trying to make...

A supplier (like FIF) that is growing is in, IMO, a stronger negotiating position with the grocers (and indeed anyone else it needs to negotiate with) than one that is struggling / in decline.

This can be attributed to a whole host of reasons, including some less tangible ones such as FIF people simply feeling better because they know their company is growing...

[boffster] 27/7/2011 11:10

Of course when input costs rise rapidly, suppliers are going to struggle initially to pass costs on. They will likely be able to regain some margin at future negotiation points; after all the grocers do have to buy the goods from somewhere and all the suppliers are in the same boat.

[jpjp100] 27/7/2011 10:50

More thoughts having digested the pre close update

Getting top line growth was and remains important. It must be so much easier to talk with stakeholders about new products, new licences, price increases, promotions etc. when you can demonstrate growth, rather than trying to have the same discussions when your business is in decline.

The export business, as a JV / Distributor, will have lower margins than the main business. An extra Euro on the top line there isn't going to be worth as much as the same on the topline in the UK wholly owned business.

Managing input price changes is going to be essential to push the margin back up. Either passing on input price increases to customers, or not having to give input price decreases back to customers are going to be tough to do. Fingers crossed that FIF has success in doing so.

[jpjp100] 27/7/2011 07:55

Need to see by how much the margin has shrunk, how much debt has been repaid and if there are any significant one off costs from the efficiency programmes

But I liked the TS a lot, very positive tone to it. Every statement that Duffy has released has been slightly more positive than the previous one.

HSBC extending facility is positive too, they must be happy enough.

Everyone should buy a cake (or two) to celebrate!

[jpjp100] 27/7/2011 07:51

I think the trading statement is very positive overall but

-ve: The combination of higher sales growth and savings from internal efficiency projects only partially offset these costs to date and operating margins have reduced as a consequence.

i.e. even a near 13% growth in sales and some cost downs in the business have not offset input price increases, so the margin falls. OUCH!

Debt reduction is good, how good depends on by how much of course. As HSBC has extended its existing facility by 2 years, it must be happy enough - a good sign.

[markt] 26/7/2011 15:25

...BTW
FIF on the first page of risers of the day....
neck and neck with ILX

[aleman] 26/7/2011 15:08

Straight through all 3 averages looks positive.

[aleman] 26/7/2011 14:58

Better news makes 26p and 29p look reasonable short-term targets.

[aleman] 26/7/2011 14:54

I've seen a lot of "uncanny" options and bonus scheme timing over the years.

[bonio10000] 26/7/2011 14:49

The issue of those options was uncanny. Good to see they were granted prior to a positive update.

[boffster] 26/7/2011 14:06

Pote.. the dividend was suspended a couple of years ago in an effort to pay down debt more rapidly, sales were also struggling. If it were restored at the same level it would be a 10% yield at this price

[spaceparallax] 26/7/2011 12:45

yes, divi is looking likely although I'd not like it to curtail the aggressive debt reduction

[pote] 26/7/2011 12:24

"that dividend forecast looks much more likely to hold"

I'm being lazy here, but I am restricted for time today.
Could someone enlighten me about the dividend situation.

Thanks.

[boffster] 26/7/2011 12:08

I can only conclude the reason why we're so cheap is that hardly anybody knows about us.. I'll continue to add when I can, while this remains the case! :P

[spaceparallax] 26/7/2011 12:02

A wonderful TS - I especially like the fact that debt levels continue to reduce. Critical turning point approaches.

[aleman] 26/7/2011 09:23

Here is the pre-update forecast:

Panmure Gordon BUY 20 Oct 2010
2010 5.39 7.04 - 168.00
2011 5.79 7.50 - 169.00
2012 6.40 8.33 1.50 174.00

Turnover is well ahead of forecast but squeezed margins have held earnings in line. (P/E only 3!!!) Stabilised energy and commodities would see some margin recovery so it might be possible to beat the 2012 earnings. (Will PG tweak it up on a stronger revenue forecast?) Any fall in commodities might see it well beaten. (Wheat is down, sugar up. Anyone know about butter?) If they continue to increase, the company has already shown it hasn't suffered too badly in the recent surge. Surely, if debt is down and revenue up quite strongly, that dividend forecast looks much more likely to hold so long as commodities calm down a bit..

[boffster] 26/7/2011 09:10

A record year in revenue terms no less.
Doesn't seem to be much stock about. Struggling to get a quote inside the spread.