Real Good Food Share Discussion Threads

[bingowing] 15/9/2013 14:51

That chart says this is going down.


Massive head and shoulders

[140661] 15/9/2013 14:50

CR the shares trade on just over 6x last years earnings and the business is performing in line in the first half so realistically the shares are probably trading on less than 5.5x current year. Next year should see very significant growth, so I see little risk but major upside.

[cockneyrebel] 15/9/2013 14:31

140661 - you're in a dream world, I never claimed these were going to be bust at the last results. The results were disappointing in that all that happened was brokers revised down forecasts and RGD eventually met the revised down numbers.

Doing fantastic aren't they, through a stock mkt that has rallied for the past two years the share price is 40% lower than it was two years ago.

I still say you're in for big disappointment here imo.

CR

[briangeeee] 15/9/2013 14:24

I think the BOD turned up in defensive mood, and wrongly treated the AGM as an investor presentation opportunity, at which they want to unlawfully quash normal formal AGM questioning.

Of course now, two of the non-independent non-exec directors own more than 50% of the company. So until they wake up to the damage being done, there is likely to be little headway made. In my opinion, the company is in need of a strong independent non-executive chairman.

The board have done well of course to structure the business, and it seems that the five divisions are now well run, although I think Renshaw has something to prove in terms of cost control.

At least this year there was little mention of the infamous failing 3-year plans. The individual groups have their plans and targets; best kept private however and not on public display!

There was some talk about changing the format of the AGM for next year. Currently they let all in off the street, and this year I think a couple of the 'guests' cleared off with much of the Haydens display, and a lot of the produce gift bags! I think if guests aren't known or proven shareholders they should register in advance with a valid reason for attending.

[fugwit] 15/9/2013 13:50

Thanks for the AGM report BrianGee, sounds little disappointing after the relative openness of last year. I wonder how long investors are likely to put up with BoD misbehaviour.

[140661] 15/9/2013 11:41

CR, the trading statement said in line with two weeks of the interim period left so yes I am sure they will read well. Prior to the company renewing its debt facility in Dec you said it was going bust but it then announced an increased facility on better terms. Then you said the final results would be disappointing but the company achieved significant increases in profits and a reduction in debt. You are the one who continually gets things wrong not me. I am not saying the company will pay a dividend this year but assuming the capex will start falling next year and the company continues to generate cash then I can see every reason to be hopeful of a dividend next year. BrianG's comments are the first I have read and he confirms what I expected which is that the business is doing well with a great focus on Napier Brown. This business is expected to be generating sales of over £350m by 2015 with a 5% net margin forecast so approx £17m profit, if we conservatively add in Renshaws at £6m, Haydens at £1m, Garrets £2m and ignore R&W Scott we have a combined profits of around £26m, debt should be below £10m by that atage and the market cap should be £200m or £3 per share.

[briangeeee] 15/9/2013 10:48

The meeting left a lot to be desired. In fact it was probably the worst chaired meeting I've ever attended. It got off to a poor start when the Chairman refused to take my valid questions on Resolution 1. His refusal was unlawful, and in breach of the Shareholder Rights Directive 2009. Thereafter it became clear the intention was to close the meeting without accepting any questions whatsoever. A limited number of questions were taken after the meeting closed, but even then there was a desire to escape anything awkward.

Last year's results unfortunately gave the impression of being extremely 'aggressive', which was very disappointing. The detail heavily contradicts the headline commentary.

Board pay and conflicts of interest are shocking.

However, in terms of current general business, things seem to be ticking along reasonably well in most divisions.

+ R&W Scott are improving but still running at a very low proportion of capacity. They're actively seeking new business. Nothing firm, but a number of opportunities should be known in the near future.

+ Haydens have a new MD who is more demand focused. I suspect the new arrangement at Haydens will markedly improve its profitability. I feel that in spite of the repeated promises from the company over the last 10 years.

+ Renshaw has lots of additional cost, mainly marketing, compliance, and sales staff, which is depressing profitability. They're trying to expand sales in the US and Europe. I don't expect anything dramatic here, but hopefully profits should grow gradually.

+ Garretts unusually for RGD consumes little capital and produces good profit and cash flow. I don't expect any fireworks, but they are reducing costs and profits should grow slowly.

+ Napier Brown is where much of the focus is at present, with the investment in sugar handling at Immingham, and the Whitworths brand at Normanton. They've made the vast majority of their contract sales for the current season already, which is significant because of falling sugar price. Immingham should be operational for handling by the end of the current calendar year. It's already being used for storage.


Overall, I suspect this year will be on track, but it will probably mark a peak in Capex, with I think £10m budgeted. There should be a paid-for broker note out about the end of October, which will focus on the opportunity as an independent sugar sourcing company.

A decent company that is being let down by an increasing self serving BOD.

[cockneyrebel] 15/9/2013 10:41

LoL - dream on. If you think Totte's gonna have the £25m debt here down by a significant amount in 18 months you're off your rocker.

""Since then we have been focusing on the three major initiatives I shared with you: investment in our sugar handling hub near Immingham, which will be operational in the next quarter; our focus on brands, with Whitworths gaining significant new retail listings, Renshaw's presence being established in Europe and the US, and R&W Scott implementing its retail strategy.
"Underpinning all of this, I am continuing to drive the businesses to be more market-led, investing further in sales and marketing management to help realize the growth opportunities faster and more effectively.
"Trading performance for the first half of the year has been in line with the Board's expectations, with year-on-year trends reflecting the level of planned investment outlined above."

Totte - 'investing' read as - 'cash outflow' imo. Trading statement repeated the last update and then just went on to say he had been spending money heavily since. Ge talks id riddles, dangles carrots, comperes different time periods, blows hot and cold.

Enjoy the interims in Nov :-)

CR

[140661] 15/9/2013 09:48

CR, an indication that they are anticipating paying a dividend sooner rather than later shows where management expect the business to be moving over the next 12-18 months.

[cockneyrebel] 15/9/2013 09:18

140661 - you have got to be bonkers.

The co has £25m+ of debt and a mkt cap of £30m. If he starts paying a divi that would signify he has no commitment to getting the debt down.

I sometimes wonder if you're for real.

CR

[140661] 15/9/2013 08:35

Graham I spoke to PT on Friday and he remained very upbeat and felt the AGM went well, but I would also like some views of those attending. An interesting comment made in one of the press articles post the meeting was a return to dividends sooner rather than later. Shares are trading at the same level as a year ago despite the market moving ahead and other food cos performing very well, this in a period when the company announced excellent results with strong rises in EPS, EBITDA and a reduction in debt. At some point these will be re-rated but its been a frustrating wait.

[graham1ty] 13/9/2013 06:29

Yes, space, but any specific feedback from meeting. I know a lot of people were planning to go

[spaceparallax] 12/9/2013 15:23

Graham,

he is slippery. On the matter of exposure to the masses - a careful examination of results or TS RNSs is pretty revealing i.e. consistently much vague, non-specific waffle and little susbstance. There again, I suppose that the only way that he'll be going will be if instis get together in a vote of no confidence.

[spaceparallax] 12/9/2013 13:29

I think it will ultimately repay, but there needs to substantial improvement in either or both of debt and profitability before that's likely. Totte's huff and puff needs to be replaced by meaningful action that delivers consistently.

It'll be interesting to see Omnicane developments - if they strengthen their holding and influence then the share price could ease up nicely; if they decide to reduce then the mid 30s support could be threatened. I'm intrigued to know how well PT and Omni get along.

[140661] 12/9/2013 12:13

CR, yes I remain very hopeful this share will repay my patience this year. I am looking forward to seeing some feedback from today's meeting on the points I raised. On the question of the sugar price and its impact on RGD, I believe you will soon be able to read a piece of research which is being prepared on this very subject.

[cockneyrebel] 12/9/2013 10:20

Ever the optimist 140661 :-)

What nobody has been able to tell me here is the sugar price. Do RGD benefit from a higher or lower sugar price?

Also - if you can't give a lot of good news in your trading update, repeat any good news from the last results.

A big no thanks from me - you can keep RGD.

CR

[140661] 12/9/2013 10:12

Shanklin RGD did a small placing of £2.5m to a strategic investor at 60p when the price was around 54p, not a bad result in my opinion. Debt was down by more than this figure last year so despite heavy investment in the business they managed to reduce debt irrespective of the placing.

If anyone attending the AGM could answer the following I would be most grateful:
1. any news on Omnicane relationship and in particular when we should hear about Omnicane supplying their sugar to RGD?
2. todays announcement referred to Napier Brown making progress on its retail sales, any more info much appreciated.
3. is Haydens continuing to improve its performance?
4. any news on broker research? My understanding is that something is due out imminently.

Any other interesting observations from today's meeting gratefully received.

[shanklin] 12/9/2013 09:39

smudge

ROFL. No, no struggle there, you seem to have forgotten the placing which is the only reason debt didn't go up even more.

[spaceparallax] 12/9/2013 08:43

The announcement does more to highlight Totte's egotism than actually say much about trading.

[smudge104] 12/9/2013 07:14

did you struggle with this bit

"We were also able to report a reduction in net debt to GBP25.0m, down approximately 13% on the prior year, as well the completion of our refinancing exercise.

[140661] 12/9/2013 06:30

Shanklin, RGD produced £7m of cash last year so I am assuming debt will remain broadly unchanged this year given the higher level of investment, with a steady fall thereafter. As you say RGD looks cheap so it would be good to hear feedback post the meeting when I am sure the company will reveal a lot more about its plans. GLAH

[shanklin] 12/9/2013 06:18

No comment whatsoever on cash flow and debt, so given the current initiatives I presume debt (ignoring placings) is still on the up. Certainly it would be interesting to know about this. RGD has looked cheap for ages if one can be sure the debt is under control.

Also somebody needs to tell Mr Totte that there's no "i" in team.

[140661] 12/9/2013 06:09

todays announcement was a non event, trading in line. Appreciate knowing if anything more illuminating is said at todays AGM.

[sidam] 11/9/2013 22:48

- YT
I am pretty sure that there will be a full presentation on the company and its plans, so it could well last 2 hours or so! That is the time for which I have planned.