Real Good Food Share Discussion Threads

[spaceparallax] 04/12/2013 12:59

Just spotted the report, which is mildly disappointing. I suppose some correction, following the recent strong rise, was inevitable. Interesting to see where the share price settles.

[cockneyrebel] 04/12/2013 10:44

I don't think anyone at RGD know if the sugar price being high or low is good for them - seems to be run as you say Typo - just about turnover in the prayer that volume will bring margin gains.

As Buffet says, 'Sales are vanity, profit sanity.'

CR

[horndean eagle] 04/12/2013 10:37

CR has had it spot on here. I bailed out near 46 months ago when I finally saw the light. A PW and more bs from PT later and the shares are still much higher. Think any holders here should count their lucky stars shares haven't been smashed up harder.

[typo56] 04/12/2013 09:09

140661, I fear this has the makings of waking up to a nasty shock in the not too distant future.

Totte seems focussed on growing turnover and EBITBlar, rather than profitability. Interesting how the Hardman & Co research report (funded by RGD) makes a big thing about benefiting from the Immingham hub with the forthcoming abolition of EU sugar quotas. Is this justified, or a big gamble? Other analysis suggest that abolition of the quotas will free up European sugar producers to produce as much sugar as they want, bombing prices and possibly becoming net sugar exporters. If that were to happen, what might be the implications for Immingham?

[tech] 03/12/2013 21:19

Well overpriced on results, I always get out on first profit warning. Seen this before with other stocks, 6-9 month target 40p at best

[cockneyrebel] 03/12/2013 20:42

7.5p eps in the coming year would be no growth to speak of in the eps. They are already 1p behind last year's earnings so they need to have a much better H2 than last year.

Net borrowing was £25m at year end, it is now nearly £32m. So even if they meet forecasts earnings will be flat more or less and the co is £m worse off for debt.

The operating cashflow in H1 was £2m compared to £3m last year.

Totte has highlighted the European sugar price - that's a softener to the blow that will come with the trading update early next year.

You've spent a year or two calling me all sorts of names. You've chosen the low price to say that's where I said sell but actually I was here saying sell this @ 75p two years ago since which it has never returned to.

Omnicane another share holder having 60% between them isn't a plus imo, it just means they can take the co private more easily an cheaply.

But all that aside, even you have to admit sooner or later that all this co does is blow hot and cold. It doesn't make money, it just increases debt, says it's expanding but actual business going on is stagnant.

What good is it making another £500k a year profit if your debt advances by £5m or more?

It's a dog, Totte is to corporate management what John Prescott is to cat walk modelling.

You've never wanted to hear the truth 140661 and you'll be hear saying the co has told you this and that but this is AIM - a co debt getting close to it's mkt cap an will exceed it as the share price falls.

Pile of poo imo.

CR

[140661] 03/12/2013 20:09

CR, I agree the interims are a bit disappointing but the serious investors in this company are not focusing on the short term. At today's price the shares trade on less than 8x the forecast for March 2014 which makes them very cheap which is why institutions are buying the stock. You and your mates can keep shorting the stock and if other PI's want to sell then good luck; I am confident your shares will be picked up by long term investors who see the medium to long term potential of the story. If anyone wishes to scroll back through the posts on this board they will see CR slagging of this company at 36p recommending a sell, not sure that was great advise!! This share is not for short term investors but those who see the clear potential. To remind existing and potential investors:

1. the company is expected to achieve EPS pd circa 7.5 EPS for March 2014 which places the shares on a PE of less than 8x. Cheap.
2. through its sub Napier Brands the Company is in a very strong position to benefit from changes to the sugar market over the next two years. See the sugar report on the company's website. Cheap.
3. the loss making subs of Haydens and R&W Scotts are turning the corner into profitability.
4. Omnicane will be able to supply sugar to RGD from 2015 with significant benefits to the group.
5.Omnicane and other group shareholders own over 60% of the shares.
6. the boards' options only crystallize when the share price hits 100p, 150p, 200p and 250p respectively.
7. recent buying over the last 4 months totaling 5% of the company has been institutional

In summary, yes the interims are a bit disappointing but for those bothered to look there are good signs as well (25% own label next year, £100m is retail sugar sales, debt £3m below expectations and Haydens ahead of expectations). Those looking to make big profits over the next 3 months go ahead and sell, others like me who see the potential of this stock to reach 200p plus within 18 months will hold and accumalate, just like the institutions who have been buying the shares over the last 3 months.

GLAH

[cockneyrebel] 03/12/2013 11:55

Have a look at Haydens:

"Haydens has continued its recovery, with first half sales up 11.6% on last year, in line with expectations. This growth has come both from existing and new customers across both retail and foodservice channels."


Sales are up 11% - no mention of profitability.

""Once again we approach the key Christmas trading period with the Group well placed to benefit from the traditional seasonal boost in sales, and I am pleased with the continued progress we are making in re-shaping the Group."

Progress in what? As I see it the only progress Totte is making is progress with increasing the debt so high that these will be insolvent eventually imo.

CR

[cockneyrebel] 03/12/2013 11:52

Read the AGM statement - you wouldn't think this was the same co!

"AGM Statement
The Real Good Food Company plc ("the Group" or "RGFC"), the diversified food group, owns Napier Brown (Europe's biggest non-refining sugar distributor) as well as Renshaw and R&W Scott (bakery ingredients), Garrett Ingredients (dairy ingredients) and Haydens Bakery (patisserie and desserts).
At today's Annual General Meeting, Pieter Totté, Executive Chairman, will make the following comments:
"It is less than three months since I announced our positive trading performance for the 12 months ended 31 March 2013, with a significant improvement in profitability, EBITDA up 24% to GBP10.5m and especially pleasing performances at Haydens and R&W Scott.
"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.
"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."

[shanklin] 03/12/2013 10:52

Is that the well publicised dramatic drop that RGD did not think to tell anybody about?

[typo56] 03/12/2013 10:47

Not that great at the moment, is it?

Does the well publicised dramatic drop in EU sugar market prices in any way affect the viability of the sugar hub at Immingham?

[felix99] 03/12/2013 10:41

lol don't forget this bit:-

"In Napier Brown we face a significant challenge over the coming months, following the well publicised dramatic drop in EU sugar market prices as we bring our buying book in line with this correction in market prices."

Translate that as a profit warning for second half to me never mind the first. That just says we have contracted and bought sugar at high prices and face a big challenge over the next few months trying to renegotiate how slowly we can drop our prices to customers who will be demanding cuts given the fall in the EU sugar price.

At worst they are buying sugar at a contracted price and selling it at spot (just like northern rock borrowing at spot to provide money lent out on a long term to customers - and we know how well that went ) effectively trying to make a profit sugar trading. Great when prices are rising but not great when as they say now prices are plummeting.

At best they are buying at a fixed price and they sell at a base price to Tesco etc with a ratchet up or done based upon the movement in spot prices. Great in theory to lock in your margin at contracted prices but in practice when spot prices plunge Tesco will be on phone screaming for a cut straight away and when they rise you wont be able to speak to the buyer for weeks to implement the rise.

Not going to end well. Good luck all holders I think you may need it ............

[cockneyrebel] 03/12/2013 10:27

Well if they can't do well when everyone has supposed to been home baking after watching The Great British Bake Off then when will they?

The bit about the sugar price is a softener ahead of the miss imo - so that they can say at the next update " as highlighted in the interims, the European sugar price......blah blah.

Totte has a history - check it our and make an informed decision whether you think a leopard can change its spots.

All imo/dyor etc.

CR

[briangeeee] 03/12/2013 09:40

In 3439, I was probably more correct than I wished to be with this thought:

So, going back the the results , I will be disappointed if they don't do 2.5p diluted. I think I stand a pretty good chance of being disappointed however, as the AGM statement sounded like a first half profits warning, which was effectively saying "we've taken on more sales and marketing staff, so our quieter first half will suffer from that added fixed cost".


One thing we can be certain of however is that profits would have been stronger without the hugely excessive and unmerited boardroom pay rises over the last two years.

The company has a lot to prove in H2. The closing paragraph to the report seems almost comical:

Most of the trading divisions of RGFC are seasonal, creating a large proportion of their EBITDA in the October to December period. This was the prime reason we changed our accounting reference date to the 31 March in order to improve both the quality and accuracy of our budget and investor reporting.

[malcontent] 03/12/2013 09:29

hmmm think this one depends on whether you are taking a 6 month or 3 year view.
I will be keeping my few as they were bought on the "3 year" view, and I personally don't see anything here that changes that longer view.
Anyone disagree?

[felix99] 03/12/2013 08:15

lol and it isn't already Graham ! You haven't been around long then

[graham1ty] 03/12/2013 08:11

This is going to become one of those "most hated" stocks with a built in distrust discount............

[felix99] 03/12/2013 08:10

the positive is you could have sold at 64/65 if you were quick . Sadly IG wont short it . Be interesting to see what price Omincane step in at to support it - and ultimately what price they decide to pay shareholders when they take it private.

[briangeeee] 03/12/2013 07:49

Yup, difficult to find much positive to say - very disappointing.

[cockneyrebel] 03/12/2013 07:37

Good morning.

Same old Totte - read the last t/s then read these results - you wouldn't think it was the same co imo.

EPS has plummeted, net borrowing £31m, up from the £25m at the t/s. Operating cashflow £2m compared to £3m last year.

Good luck 140661 - the carrot will be dangled forever but you'll keep being beaten by Totte's stick imo.

CR

[140661] 02/12/2013 08:20

BrianG, I spoke to PT a few weeks back and while he was careful not to be explicit on the first half performance there were enough pointers in the last trading update to suggest the first half will show little growth over last year. This is supported by the broker research which shows EPS going from 7.2p to 7.6p this year. This is a year of building the infrastructure, new sugar handling facility which will be operational shortly and sales and marketing resource, which takes time to settle in. The payback will be over the next two years, so I am expecting minimal growth, if any in first half, a confident forecast for the remainder of the year and strong expectations for growth in next two years. This share has enjoyed a decent run on the back of institutional buying that is long term and building towards significant EPS growth in the next two years. AIMHO and GLAH.

[briangeeee] 01/12/2013 23:52

I really don't have any insight into how the interims will look, and like everyone else am just waiting to see. They're somewhat later than last year, but not yet later than the prior couple of years.

The recent trading statement contained the following rather enigmatic concluding paragraph:
"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."

I think we know that these interims are likely to mark the peak in reported capex. Whether that translates to a peak in net debt, I don't know, but the current extended borrowing facility was arranged with that possibility in mind. Debt might further increase around the end of the year, but that won't be visible, as it should have fallen back by the next reporting date of end March. Then over the next year, cash flow should really start to catch up with profits, and we should start to see debt levels falling, as the capital spend starts to tail off.

So, going back the the results , I will be disappointed if they don't do 2.5p diluted. I think I stand a pretty good chance of being disappointed however, as the AGM statement sounded like a first half profits warning, which was effectively saying "we've taken on more sales and marketing staff, so our quieter first half will suffer from that added fixed cost".

[tonyfabrizi] 26/11/2013 09:56

brianG, I have looked back to the interims last year and the finals together with Shore's forecasts. The interims showed turnover of £137m, EBITDA of £3m and EPS of 1.5p which by the year end had become turnover of £266m, EBITDA of £10.5m and EPS of 7.2p. The broker forecasts for this year which are not split by interims and final and show turnover of £311m, EBITDA of £12m and EPS of 7.6p. Given the business is cyclical with a much stronger second half and that the company is investing heavily in marketing and capex what are you hoping to see with the interims?

[tonyfabrizi] 21/11/2013 14:35

BrainG, thxs for your insightful views again.

[briangeeee] 21/11/2013 09:35

I really don't know about the price at the year end.

Looking back six months, I believed the price would rise in the period around the interims as it became increasingly visible that trading was strong, and the anomaly of the 15m year dropped away. That's broadly come to pass, so from here to the year end, what matters really is the interim results themselves, and the outlook statement. So we'll just have to see how that turns out.

There could also be a little price resistance around the low 70s as some value investors sell at what was the recent high. Others will see it as positive that the stock has recovered strongly, and will buy on that basis. So it might take a little trading to break through to a higher level.