Indian Rest. Share Discussion Threads

[robandkerry] 29/6/2009 12:40

5 to 6 p fair value? I think the current price is fair value. They will soon burn the cash they have if they dont turn the business around. I still cant see what they are offering that is different, that would make people want to eat there.

[mike_f] 29/6/2009 12:33

Stuart14, you been in here for a while? I have been watching this company for the last month or so and got in a few days ago with a little top up Friday, they look very cheap currently IMO with cash twice as much as current market cap surely there is only one way to go? Would you say 5-6p is fair value in this current climate?

[stuart14] 29/6/2009 12:29

With the 2 at the top taking £490k per year in salaries between them, at the current rate they are O.K for the next 2 years. Think the directors need a long hard look in the mirror, sure they need rewarding, but not at the expense of the business.

Shareholder information is poor. They never even bothered telling the market they'd opened the Redhill Office.

However, the share price currently is pricing in a pretty poor future, so any surprises should come to the upside. Nice to see new posters here too.

[mike_f] 29/6/2009 12:23

Half Yearly Report is out and it doesn't look too bad, they are still struggling in this climate but who isn't!? Looks like they have twice as much cash as their current market cap and i liked the outlook:

Outlook
We are adopting a very selective expansion plan in the light of the current
challenging economic conditions, whereby we are targeting certain selective
areas which will complement our existing units. We are well placed to take
advantage of the opportunities when the market recovers.

Also liked this bit:

With respect to our units in the West End we have started reducing the levels of promotional discounts, in order to protect our overall margin. It is good to see that significant investments made in our promotional activities have resulted encouraging sales, and we will continue to modify our campaigns according to the changing market conditions.

Things could start to go well for them as soon as the economy starts to improve but at the time being cash value alone they should be on around 5-6p IMO. Any thoughts?

[the big fella] 29/6/2009 12:00

Directors salaries will put a dent in it I should imagine.

[mike_f] 29/6/2009 09:08

arctic, morning mate, glad you had the time to look over this and thanks to you and robandkerry for your constuctive comments. What enticed me to look at this company was the extremely low market cap and the fact they had 1.37mill in cash at xmas. How much of that is left we will soon find out. I feel that the high cash burn last year was mainly due to the fact that they aquired a couple of restaurants and the set up costs involved. I am not aware that there have been any further aquisitions this year so far and would like to think that the loss would have been dramatically reduced. In answer to your question, have i eaten at their restaurants before i am quite away out of the delivery area myself so unfortunately no. Looking forward to seeing the interims and seeing how wrong or right i am... lol GLA

goliard, i feel that was a bit unfair, a few people spark up a little interest on a possibly very good recovery share and you accuse us of pumping and dumping...

[thearcticfox] 28/6/2009 22:00

No ones pumping and dumping... I've already stated I'm not buying in until after the interims - depending on results. Mike F (an investor I know from other threads) asked me to have a look and give him my opinion of the company and Robandkerry have been adding intelligent thoughts to the debate.

I wouldn't advise anyone to invest or not invest in this company - DYOR - make your own decisions. Myself, Mike F and robandkerry have been doing our own research and discussing it here... Thats all. Why not add to the debate goliard? Valid points in the loss making and cash consumptive departments - but can be explained by the setting up costs (mainly the new takeaway service covering the whole london area) - hoping to see what cash is left in the kitty and if there's a marked improvement in turnover and profit (or at least less loss).

This thread is quite quiet tho, is there any current long term holders who are reading in? I notice none have joined the debate. Would be nice to hear from you if there is...

[goliard] 28/6/2009 16:51

The massive fall in share price is due to the fact that they are losing substantial amounts of money and are seeing profit margins eroded. This is clear from the last results. A loss making, cash consumptive business that is warning about lower than expected demand and falling margins is a prime candidate for going into administration - hence people selling what stock they own.

The recent flurry of posts looks like an orchestrated 'pump and dump' to me, but if I'm wrong then apologies to all involved.

[thearcticfox] 27/6/2009 14:54

According to HSBC research page the Mkt Cap is 430k. Working on their figures I make it 425k based on 13.08m shares in issue.

[thearcticfox] 27/6/2009 14:30

True, I'm gonna hold on until after the interims and see what they say. Mind you, the takeaway service should have done well in the current environment, with ppl opting to stay in rather than go out wasting money. Figures might not be that bad after all.

[robandkerry] 27/6/2009 11:38

The initial feedback from the brand development from our customers has been
positive, but it is clearly early days and the results will be measured over a
period of time.
To mitigate the impact of the economic climate, coupled with the downturn in
consumer spend, we embarked on a range of promotional activities including
two-for-one offers and internet-based discount coupons, which have produced
varied results. Overall the promotional activities have helped us to maintain
our sales but clearly they do impact negatively on profit margins. The
competitive landscape is changing, with very strong discount offers from other
restaurant operators and in order to retain and grow our customer base we will
need to continue the promotional offers in line with our competitors.

Whilst
we have adopted a cautious approach to expansion in the light of current
conditions, we continue to believe in the outstanding medium-term potential of
rolling out a chain of branded Indian restaurants in the UK.

It seems to me that they are struggling like everyone else. I think they will be closing restaurants rather than opening them this year.

Im sure this company has potential, but I can forsee a poor set of results this year and the share price to go much lower than it is now.

[robandkerry] 27/6/2009 11:28

I have just done a few calculations and I make the mkt cap around 376k. Can anyone confirm this?

[thearcticfox] 26/6/2009 17:08

I'll check it out over the weekend, maybe wait to see what that cash situations like before moving tho. If I did invest, it'd mean selling one of my other positions, as fully in at the moment. I dunno looking at the portfolio what I'd wanna get rid of.

I like the sound of the company tho, and don't think being a chain would be a disadvantage - if that's what robandkerry is trying to say. Everybody must have one of these all you can eat for a tenner chinese restaurants near them now... That's a pretty big chain, I wish I had the chance to invest in that before it went national... If this company could repeat that success then it would be a cracking buy at the moment.

Like I said - haven't researched it yet tho - I'll let you know what I think Monday Mike - and wether I've joined you.

[mike_f] 26/6/2009 16:39

I think so, if the interims are positive then i can see this having a decent rise, especially as there are a very small amount of shares in issue. GL

[robandkerry] 26/6/2009 16:32

One to watch then Mike. :)

[mike_f] 26/6/2009 16:25

robandkerry, i would be very surprised if a restaurant made exactly the same as what they usually have at home. I also have a couple of Indian friends and we have eaten out in East Ham before. Was very much like home style food, not at all commercialised like the names curry's Madras or Jalfrezi, it's just meat curry or hot meat curry, but the food was amazing, much tastier than your average Indian restaurant and that was full (of Indian clientel). I can see this company moving onto great things in the future if their expansion plans happen the way they intend. Vikas Nath, one of the directors also owns 29% of the company now, if that doesn't say they are confident of success i don't know what does. GLA

I would imagine they cater for both styles of food preferences. They aren't going to not include tikka masala!

[robandkerry] 26/6/2009 16:18

Im not saying they are targeting Indians Mike, im saying they are missing out on a possible customer base. 2 of my best friends are Indian. If they eat out, which is rare, they dont go to an Indian restaurant that offers the same food that their wifes cook for a 10th of the price.

One of the reasons Indian restaurants are so successful is they offer restaurant style food, which is different to the home cooked style. So many Indians go out to eat in Indian restaurants because they are still getting Indian food but its different to what they get at home.

Also a lot of white people, including Kerry, dont really care that much for the home cooked style, but love restaurant style food. The most popular dish in britain is chicken tikka masalla. Which you would not get if you went to an Indian persons house to eat.

[mike_f] 26/6/2009 16:15

I'm in, got in 2days ago, topped up with a little this morning as well. What do you think of the company arctic?

[thearcticfox] 26/6/2009 16:09

Are you in here yet Mike or still researching?

[mike_f] 26/6/2009 16:05

robandkerry, they aren't solely targeting Indian's! It's like pubs saying home cooked food, why eat at a pub when you can eat at home?? The catering industry has been very pofitable for many years and the downturn has affected quite a few businesses. This is a very young company which is looking to expand hugely when possible. They have taken a cautious approach for the time being but last year they aquired the Mela Group which are a popular chain of a few restaurants in London and opened a restaurant in redhill. I feel this company could expand very well in coming months/years and seem undervalued to me at their current sp, especially if their cash is still greater than their market cap. Preliminary results are to be released by the end of this month which will confirm their cash position. GL

[robandkerry] 26/6/2009 15:57

I cant really see what is unique about this company. A chain of Indian restaurants? so what. They are trying to break into a very well established marketplace with thousands of competitors. They say they are offering home cooked (style) food. Why would an Indian go to an Indian restaurant to eat what he can get at home? I think they need to come up with a USP before anyone will take notice.

[mike_f] 26/6/2009 15:37

Hardly any shares in issue:

The Company's issued share capital consists of 13,079,850 ordinary shares with a nominal value of 10 pence each ("Ordinary Shares"), each share having equal voting rights.

The company does not hold any Ordinary Shares in treasury and therefore the number of Ordinary Shares with voting rights is 13,079,850.

The percentage of the Company's Aim securities that are not held in public hands is 41.12%.

At 26th May 2009 the following interests of shareholders in excess of 3%, have been notified to the company.

[mike_f] 26/6/2009 14:57

In a difficult trading environment and a declining economy, we have had to adopt a cautious approach to expansion. In particular we have focused our new site expansion on London and the M25 area, in locations with low premiums and rents. Based on this strategy, we finalised the agreement to open a new site in Redhill, Surrey, post the year-end. Mela Redhill commenced operations in December 2008 and has been well received by the local community.

Outlook:

We are keenly focused on effectively managing the Group through the current, challenging economic conditions and believe that each of our brands offers outstanding and competitive value to the increasingly discerning Indian food consumer. We will continue to make adjustments to menu offerings and to our promotional activities with the objective of growing our business.

Whilst we have adopted a cautious approach to expansion in the light of current conditions, we continue to believe in the outstanding medium-term potential of rolling out a chain of branded Indian restaurants in the UK.