Journey Grp Share Discussion Threads

[battlebus2] 04/8/2015 13:18

We are on a journey :)) upwards I hope...

[battlebus2] 03/8/2015 16:16

Tick up to finish the day :))

[battlebus2] 03/8/2015 08:09

I've added in flight products specialists Journey Group to the portfolio. We all know how bad airplane food can be but Journey's model differs from the way meals are currently made and distributed by the likes of Gate Gourmet, it promises a revolution in food on the go, if not in terms of taste, then in cost and flexibility. To understand what I mean you have to first know how airline catering is currently conducted. Thousands of starters, main courses and puds are cooked and packed in large, expensive kitchens on airport property. No surprises there.It means the traditional caterers are expensive and low margin, while the airlines have little say in what’s served up to their passengers.These businesses are asset heavy and require a lot of ongoing investment to maintain.

Air Fayre has turned the model on its head by using specialist food suppliers and high-end restaurants and hotels, rather than its own kitchens, to cook its food in the down-time between sittings.This means the model is relatively asset light (although it has invested in chilled warehousing and refrigerated trucks). It also means the airlines are able to specify which meals it wants to carry on its next cycle.The carrier is then charged the price of the meal plus a margin on top to cover wastage and breakage.

Air Fayre (Journeys main revenue earner) makes its money by levying a handling fee per plane depending on its size and destination.This covers the cost of putting the chilled meals on trays, stacking them on trolleys and transporting them air-side in chilled trucks.The process has been patented, which has warded off potential competitors. This protection lasts until 2022.All this takes place around 10 miles away from the airport, which means the premises are cheaper and labour can be non-unionised.Contrast this with Gate Gourmet and LSG, which are based at the airport, which is heavily unionised.The acid test that this works is that the business is now scaling up, winning new customers.Where its competitors’ might earn single digit return on sales, the Air Fayre model generates a much better return.The risk to Journey is the renewal of the United contract, which accounts for the majority of Air Fayre’s turnover.However, this is unlikely to be a problem, as the consistently high quality of the food and the punctuality of deliveries have earned Air Fayre a top award from United.

And the opportunity is huge if it can replicate the template it has created at LAX at other hubs across the States. It could find itself with a decent slice of pie worth US$2bn annually.

JNY produced a PBT of 2.02 million last time around and forecasts are for 2.38 this time with EPS of 12p leaving them on a P/E of 13 and a dividend of 2.2%, while cheap this doesn't take into account the cash balances of £4.25 million. Forecasts for Dec 2016 show PBT of 2.67 with EPS of 13.41 with the P/E falling to 11.
Current share price 157/161 so the spread is very reasonable. IMV now maybe the opportune time to buy given the new contracts they have been signing like the one recently announced with FEDX, Stephen Yapp Excutive Chairman who was also director at another co i hold (ALT) said, " the Board is confident that the Group has now entered onto a new strategic path for growth from 2016 onwards." Negatives could be the few lumpy contracts and if one major deal was lost this would have a material impact on the co. I also didn't realise until i started researching that Chris Mills is a major holder here and was appointed to the board in January 2015 so a big plus given his track record. Just my musings so as ever it's a long term buy but DYOR ETC...Initial target price £2.

[topvest] 18/7/2015 09:27

Yes, good point. Looking at the original announcements it was a 7 year contract until November 2015. They must be going through the renewal / re-tender now then. I suspect that they will be reasonably confident of retaining it given the good job they appear to have done.

[hydrus] 14/7/2015 22:35

I was most interested in the expansion to another state, although of course much bigger contract is great also.When is the United/Continental contract up for renewal? Is it this year?

[topvest] 14/7/2015 21:31

Sorry - wrong maths 70 flights per week to 1170 flights per week is 17 fold.

Quite like this:

"Consequently, the Board is confident that the Group has now entered onto a new strategic path for growth from 2016 onwards."

That is quite bullish.

[topvest] 14/7/2015 21:06

Yes, "transformational" is what they say. Well they said there would be contract opportunities and here is the first. Takes FedEx business 10 fold higher from what I can see. That's good...should be flying!

[hydrus] 14/7/2015 08:03

I think the market may have underestimated this it's clearly transformational

[hydrus] 14/7/2015 08:01

Massive deal today

[ironstorm] 07/4/2015 14:59

I think that might be a good idea topvest. Results look good and I can see these going far higher if they keep the positive progress - as they are cheap.

Only issue for me is dependency on just a couple of customers which clearly introduces some risk (esp in the US air industry).

I am going to ponder on these and may (re)join you too.

[topvest] 07/4/2015 13:17

Decided to buy into this one again. Reasons are:
- Christopher Mills has been appointed + NASCIT have recently taken 7/8% at 120p. Overall, his related entities hold 30%.
- Always happy to follow him into an investment as the chances of success are improved.
- Outlook refers to US opportunities near term which is what they have been flagging two years out.
- Cost base under control and significant management incentive through options recently awarded to increase the share price and presumably exit at double the existing price.
- QV Rank is 90 on Stockopedia.
- Exit catalyst within 12-18m with activist Christopher Mills onboard and clear US contract opportunities this year which could grow the business significantly.
- Good balance sheet.
- Possible sale of UK business short-term to fund US expansion?
Think this could prove to be a good investment within 12-18 months.

[proactivest] 27/11/2014 10:38

Video interview with chairman Stephen Yapp




Stephen Yapp, the chairman of Journey Group (LON:JNY), says the American airline industry is the main focus for the in-flight catering specialist.
Yapp adds the fundamentals of the business have not changed despite the recent share price decline.

[deanowls] 25/3/2014 15:01

Just read the Midas article and its all very well saying chefs cook it in their downtime? I very much doubt it if you are achieving scale!

It's a highly competitive market (I've worked in it for twenty years), they can control temp better on niche products but try doing it when your supplying 1000 meals per aircraft, one airport ops, high costs to expand.

Also airlines don't ever get given whats just available at the lowest cost, they get what they want and are willing to pay for, any catering company will gladly give people caviar and lobster as long as they pay for it.

Alpha launched a similar thing about 15 years ago in the uk and had to write it off as it didnt take off.

[philanderer] 25/3/2014 09:07

Good numbers confirmed today.

and...

The Group paid an interim dividend of 1.25 pence per share in December 2013 and, in line with the Group's progressive dividend policy, the Board has decided to recommend a final dividend for the year of 1.5 pence per share, making a total of 2.75 pence for the year and representing a 10% increase over the previous year. The total dividend is covered 2.6 times by adjusted diluted earnings per share from continuing operations. If approved by shareholders, the ex-dividend date will be 28 May 2014 and the dividend will be paid on 27 June 2014 to shareholders who are on the register as at the close of business on 30 May 2014.

[philanderer] 22/3/2014 23:10

MIDAS SHARE TIPS: Tasty airline food! So tuck into Journey Group shares

Read more:

[ironstorm] 18/9/2013 08:56

As expected great results and so quiet. That must be a buying sign.

Muted shareprice reaction too.

//ironstorminvesting.blogspot.co.uk/

[ironstorm] 16/9/2013 16:43

Results out on Wednesday. I will be interested how they turn out - there is not much in the way of news here.

With a bit more clarity I might look to buy-in. Should be interesting.

More on my thoughts today here

//ironstorminvesting.blogspot.co.uk/

[sammy_smith] 01/5/2013 10:40

Listen to Stephen Yapp, Executive Chairman, Journey Group - Final Results

Click the below link to listen.

[topvest] 02/4/2013 20:24

Yes, quite a drop - pleased with my timing for once!

[mrphil] 02/4/2013 17:21

So what was all that about today?

[hmt] 22/3/2013 08:24

A1 thanks, well what can I say but a good lesson taught, hopefully one day it may get there!

[a1samu] 22/3/2013 07:35

HMT, I like your wishful thinking, it suits you. 100000 x .1p = 10000 pennies = £100.00, since there is 100 pence in the £. The time will come when the dividend will be raised to 1p, which will result in your hoped for dividend income. I hope you found this maths lesson of use!

[topvest] 21/3/2013 20:35

Good results and 0.1p dividend. Decided to sell mine at a circa 25% profit in 6 months. Don't normally sell so quickly, but decided that selling at twice the price Lord Rothschild and RIT sold (only a couple of months ago) was a pretty good return in 6 months. Outlook is good in the US but a bit dodgy in the products division in my opinion. Overall, the management team have done very well here. There is big upside if the patented US operation does really have competitive advantage.

[hmt] 21/3/2013 18:11

Am I right in saying that a holding of 100k will earn £1000 in divi payment?

[ptgint] 21/3/2013 15:58

Excellent results and promising outlook . It won't be long imho before it gets tipped and we see the share price climb.