Real Good Food Share Discussion Threads

[tonyfabrizi] 21/11/2013 08:56

BrianG, appreciate your post above. Assuming decent figures with interims and positive comments on current trading where do you see the share price going this side of Christmas?

[briangeeee] 20/11/2013 20:48

Back on the 18th May, in 3205, I posted some RGD fundamental data from Stock-o-pedia.

Original post:


Unfortunately ADVFN have change posting policy to prevent non-paying members from embedding pictures, so all I can do is post a couple of links to the current data.



A lot more green blobs in the performance area than previously.

Interims should be out very soon, which will hopefully give us some indication of how the CAPEX programme is progressing, although because of the Q3 weighting, aren't always a great guide to full year performance. I'm expecting to see performance decently up on the prior year however.

[thoseintheknow] 15/11/2013 07:36

I told you all months back to buy this share and its up nearly 100%. Lots of positive news coming that will send this share price into 3 figures. Read the signals.

[tonyfabrizi] 15/11/2013 07:24

BrianG, appreciate your thoughts, lets hope the interims present a strong story going forward.

[briangeeee] 14/11/2013 23:14

For most of this year I've maintained that the price would strengthen in the period leading up to the interims, and post the interims. The comparatives are pretty soft. That enthusiasm has been tempered somewhat by the slightly conservative tone of the AGM trading statement, and the fact that this year will mark the peak in capex, and possibly borrowing levels.

However all signs are that trading is going well. Sound and profitable AIM shares have had a very good run since the August introduction of new ISA regulations. RGD has been noticeably left behind, and I think now is starting to catch-up. If the interims are solid, I think it has significant further ground to make up.

Regarding the sugar report, yes I think it was weak, but the first page summary was fine, and 90% of readers won't read much further.

In terms of news being imminent, I really have no idea. The interims aren't far off, but apart from that, I know nothing.

[malcontent] 14/11/2013 22:59

70p-75p is historic resistance.
If we can bust beyond that, then we are in for some fun

[tonyfabrizi] 14/11/2013 16:55

BrianG, why do you think the price has risen so much so quickly, you did not seem too impressed by the research report! 140661 seems to feel news is imminent, what do you believe?

[140661] 14/11/2013 11:01

great rise early and since then sellers out in force, still holding a decent gain so looking strong. GLAH

[140661] 13/11/2013 07:25

interesting to see whether yesterday's gain can be consolidated, the share price performance over the last 3 months has been very strong and while they have announced good results and some nice business wins, the price rise suggests something more is happening in the background.

[spaceparallax] 12/11/2013 21:14

impressive

[140661] 12/11/2013 16:03

Wow, that is a quick move up 7% in 5 minutes. This has been building for a while, will we get into the 70s this week?

[140661] 08/11/2013 15:58

left an order to buy another 20k shares this morning, only done 10k and no stock around, this is getting primed for a major breakout.

[140661] 08/11/2013 12:29

BrianG, when I last met with PT about 10 days ago he was very upbeat about the sugar business, I sensed more good news is coming in that area. He has often mentioned the magical 500k tons although I cannot recall if that is 2015 or 2016 as most things get pushed back a little in PT's world I am assuming 2016. The key question is can he improve his margin back up towards 5-6%, if so we are going to be seeing the share price well above 200p. The final point I would make is that PT seems to have enjoyed success in bringing in some institutional buyers and this should again be the catalyst to a strengthening share price. AIMHO GLAH

[briangeeee] 08/11/2013 11:26

Although the AGM presentation was light on EU sugar quotas and sugar regime, it gives a better overview of where RGD want to take the business, and reads more positively.

[briangeeee] 08/11/2013 11:15

Yes, although I agree there aren't really any surprises in the Omnicane area, although it's probably best to stress it for those that don't know. All could have been done more clearly and concisely unfortunately.

The more immediate positive was the fact they've booked 350,000 tons of (I assume contract) sugar sales this year, which seems a good step up, although we haven't been given the reliable historic figure other than the 250,000 tons mentioned. They've always talked about being at 500k tons by 2015, so I wonder are they on track for that even without a contribution from Mauritius grown sugar. Remember that the Mauritian refinery has capacity to refine a limited amount of sugar that is not contracted to Suedzucker.

[140661] 08/11/2013 10:46

The most interesting aspect of the research report in my opinion is the assumption that Omnicane will be supplying their sugar to RGD. Although most of us had been working on this assumption the fact its incorporated in the report, which has no doubt been reviewed by the Company, confirms this key development. Also good to see the shares ticking up again, hopefully we might break through 70p this year.

[tonyfabrizi] 06/11/2013 16:53

just spotted a large buy of 235k shares at 63p at the close, some one must like the sugar report. BrianG looking forward to your informed comment on the note.

[briangeeee] 06/11/2013 12:46

Sugar lumps for all the best shareholders!

Just about to read the Hardman sugar report.....

[typo56] 06/11/2013 11:55

140661, you are sweet.

[140661] 06/11/2013 11:28

typo, you should eat a little more sugar you are sounding rather bitter LOL.

[typo56] 06/11/2013 10:25

Given that the Hardman report was paid for by RGD (i.e. you) I would have been surprised to be given the impression that the future was anything but exciting!

[140661] 06/11/2013 08:15

share price on the move again. I read the research note on the sugar business and am feeling a warm glow, this business is going to make us all a lot of money, onwards and upwards. GLAH

[tonyfabrizi] 05/11/2013 13:45

Just looking at the RGD website and saw a new addition with a section called research reports on the investor section of the website. The document was put on the site today and is 42 pages long and just covers the sugar business of Napier Brown. I have copied the conclusion below. Sounds very encouraging and looks like the company is building a very solid and exciting future.

"In conclusion – Napier Brown
(The Real Good Food Company) excitement builds all the way to 2017 EU reforms
Napier Brown's decades of expertise have built it into the leading European
sugar distributor, but without being tied to one supply of refined product. This
facilitates flexibility of supply and it now supplies over 90% of the larger UK food and drink manufacturers.
The three key factors which we highlight driving future profits are as follows:
1) The running rate of sales volumes is 30% up year on year.
2) Its investment in an expanded import facility coming onstream at the
end of calendar 2013.
3) The EU quota system was announced in June 2013 to be coming to an
end in September 2017 and this has added to the trend of freeing up
suppliers' market shares.

What is the scope for margins? Overheads are relatively fixed and bulk volumes
are set to rise. Napier Brown will be sourcing low cost, quality, refined sugar on a consistent long term basis, particularly from 2015. If this does not offer an experienced trader long term opportunities to raise margins we would be very
surprised.

So there are two key positives: the operational gearing and 30% rise in volume
run rates allied to the expansion in volumes specifically from lower cost regions. This more than makes up for any erosion in the sugar price. Note that other operators in this market will not be seeing volume rises and will not be
benefitting from expansion in the lower-cost region sourcing mix.

And the main risk? The sugar price is cyclical (e.g. it rose nearly 40% in late
2010) and is falling in the UK/ EU. This is countered by the factors outlined
above and Napier Brown's commerciality. Customer-supplier relationships are
always key to pricing power. Napier Brown looks eminently well placed to be
the most competitive supplier (flexible, high quality low cost input) so
distribution profits should remain robust. Because of its sourcing flexibility,
Napier Brown is in a strong position.
Napier Brown is currently estimated to source 25% of its sugar from world
markets. This will rise, so were the disparity between UK and world prices to
erode partly, substantial rises in projected sourcing of overseas supply more
than compensate.

Key factors:
 There is a significant change in customers' management of supply
chains, looking for security of more diverse sourcing as traditional lines
of supply (e.g. EU beet which supplies 80% of the market currently) are
likely to shrink as a result of the legislative reforms. Napier Brown has
stepped up to take advantage of this.
 Napier Brown has established its service credentials to become Europe's
largest distributor of refined sugar not affiliated to any particular EU
refinery. There are a number of raw sugar traders but these are not
engrained in the market, not having the service and infrastructure.
 Infrastructure is in place for significant expansion, with as new £5m hub
opening start 2014. Napier Brown is set to grow its bulk business and
this has operational gearing benefits.
 Geography is right – Napier Brown's factory is adjacent M62 which thus
covers 25% of UK market and is nearer than any competition.
 Demand growth is nearly all from existing Napier Brown customers set
to expand their market share to Napier Brown sourcing (few currently
buy over 30% from Napier Brown and the ending of quotas will make
market shares much more liquid).
 Supply. Napier Brown can source wherever it wishes in the world as it is
not tied down to a refinery-ownership network. It is much larger than
the other independents who cannot offer the service, location, security,
consistency of supply. A likely new large-volume cheap source of supply
is set to come onstream 2015 via East Africa and Omnicane.
 Omnicane will be a big leap forward but Napier Brown has in the past
five years already moved from near all UK supply to 25% non UK. This
will expand significantly by 2015.
 Napier Brown's Whitworths retail brand was relaunched in 2012 and
trebled market share (UK) to 25%. This is a premium price segment and
one which supplements volumes. The retail market is currently in a
competitive time of the business cycle, however. Overheads for
expansion of the bulk operation are minimal however, so both sides are
important.
And to reiterate our conclusions for EU policy impacts and add our view from a
Real Good Food perspective:
 The share of cane and of non-quota supply will rise – Omnicane's
production and refinery and East African opportunities are likely to add
60-70% to Napier Brown volumes.
 Cane will be significantly more cost effective if it is refined where it is
grown – Omnicane has its refinery recently built.
 Suppliers with a flexible supply chain but with a focus on imported
refined cane sugar should do the best. The ideal position is that the sunk
cost should be focused on flexibility, i.e. a processing factory and
distribution network, not a fixed refinery base – Napier Brown fits the
bill and indeed is the only operator EU-wide to fit the bill.
 The market share of bulk suppliers of sugar in EU is set to see significant
changes – Opening the road to Napier Brown's ambitions to near
doubling of volumes from its 12% current UK share."

[spaceparallax] 24/10/2013 12:44

I too never like it but it is increasingly the nature of today's mkt.