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Finsbury Foods PLC (FIF)

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WickedLester
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Finsbury Foods PLC (FIF)

#342942

Postby WickedLester » September 26th, 2020, 9:10 am

I bought a few more of these the other day as I think they are an interesting opportunity that will prove to be cheap in a couple of years time.

The final results were out the other day and they show a resilient performance in the face of the lockdown.

https://www.investegate.co.uk/finsbury- ... 00075528Z/

At the current price the market capital is around £74m and profit before exceptionals came in at over £10m giving adjusted eps of 7.9p against a current offer of around 57p a share. The balance sheet is not too bad but net debt at £25m is a bit higher than I would like normally although this was down from £35m last year. Cash flow was excellent, helped by the suspension of all discretionary capex and the dividend. There was a substantial write down of goodwill and a bit more for fixed assets which caused the marginal profit overall.

The Foodservice business which was practically shut overnight due to the lockdown is now returning to better trading. This is 20% of turnover and the rest of the business performed quite well through lockdown.

After the results there was substantial buying by the wives of a couple of Direrctors and I think it is worth following suit and getting a few. They are also hopeful of reinstating the dividend next year and I think there is a good chance of this happening.

If they return to a 3.5p payout this would leave them yielding over 5%.

https://www.investegate.co.uk/finsbury- ... 00106466Z/

Thoughts and comments welcome.

WickedLester
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Re: Finsbury Foods PLC (FIF)

#357999

Postby WickedLester » November 19th, 2020, 9:50 am

This idea didn't generate much interest but I feel it's a solid investment opportunity.

Anyway the AGM statement was out today and it's not at all bad.

https://www.investegate.co.uk/finsbury- ... 00057889F/

Sales have recovered strongly and are only 3.4% down on last year. Food Service is still being impacted but is recovering now the schools are open again.

on the outlook they say:

Despite the challenges faced by the Group as a result of the pandemic, our drive for excellence has not diminished. The operational initiatives that have been introduced across the Group have gained significant traction and are yielding substantial improvements in quality, higher operational efficiency and lower waste. Given the strong trading and wider operational performance in the first four months of the new financial year, and assuming that an effective Brexit deal can be reached, the Board expects to deliver further sales and profit growth in the current financial year.

The shares are now up to 66p bid.

simoan
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Re: Finsbury Foods PLC (FIF)

#358020

Postby simoan » November 19th, 2020, 10:16 am

WickedLester wrote:This idea didn't generate much interest but I feel it's a solid investment opportunity.

Anyway the AGM statement was out today and it's not at all bad.

https://www.investegate.co.uk/finsbury- ... 00057889F/

Sales have recovered strongly and are only 3.4% down on last year. Food Service is still being impacted but is recovering now the schools are open again.

on the outlook they say:

Despite the challenges faced by the Group as a result of the pandemic, our drive for excellence has not diminished. The operational initiatives that have been introduced across the Group have gained significant traction and are yielding substantial improvements in quality, higher operational efficiency and lower waste. Given the strong trading and wider operational performance in the first four months of the new financial year, and assuming that an effective Brexit deal can be reached, the Board expects to deliver further sales and profit growth in the current financial year.

The shares are now up to 66p bid.

You're right, certainly no interest from me. It's never appeared on any of my screens and I can see why. An uncomfortable amount of debt, very low margins, earnings per share that always seems to have adjustments, and very poor returns on capital and equity. Dividends seem just about covered by free cashflow, but it seems to me they should really drop it and pay down the debt. Also, I personally avoid any company that supplies the supermarkets, although I have no idea how much of their business is reliant on them.

It does look cheap on the usual metrics, but it seems there's probably a good reason for that.

All the best, Si

WickedLester
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Re: Finsbury Foods PLC (FIF)

#358032

Postby WickedLester » November 19th, 2020, 10:47 am

You're right, certainly no interest from me. It's never appeared on any of my screens and I can see why. An uncomfortable amount of debt, very low margins, earnings per share that always seems to have adjustments, and very poor returns on capital and equity. Dividends seem just about covered by free cashflow, but it seems to me they should really drop it and pay down the debt. Also, I personally avoid any company that supplies the supermarkets, although I have no idea how much of their business is reliant on them.

It does look cheap on the usual metrics, but it seems there's probably a good reason for that.


I agree it's a low margin business but that didn't put me off buying Wynnstay and that's also performing well. Also as for cashflow they paid down £10m of debt last year and I agree it is a bit higher than I would like but it doesn't look troublesome to me. They have made very significant capital investment in recent years and hopefully that is nearly ending for the time being.

I wouldn't be too troubled if they cut the dividend until debt is much lower but I am also happy to accept a 5% yield. Either way I still feel these are worth looking at at anything below 70p or so. In more normal times they usually trade for around £1.

WickedLester
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Re: Finsbury Foods PLC (FIF)

#415206

Postby WickedLester » May 26th, 2021, 7:51 am

There's a trading update from these this morning and although it's brief it's fortunately good news.

https://www.investegate.co.uk/finsbury- ... 00057889Z/

Trading in the second half of the financial year has been strong and the Board now anticipates that Profit Before Tax for the full year will be no less than £15.0m, ahead of current market expectations.

They are also reinstating the dividend.

Dod101
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Re: Finsbury Foods PLC (FIF)

#415213

Postby Dod101 » May 26th, 2021, 8:20 am

I have no interest in this company but I am puzzled by your comments re the dividend. In the trading announcement they say they are planning to reintroduce the dividend and yet last November you were enjoying the 5% yield and would not mind if they cut the dividend.

Dod

WickedLester
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Re: Finsbury Foods PLC (FIF)

#415217

Postby WickedLester » May 26th, 2021, 8:32 am

Hi Dod

I think you misunderstand me, if you read the whole thread it should become clearer I hope.


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