MFB - My Food Bag

[nztx]

Think short to medium term guys ...the opportunity is 20% and maybe even more gains...it will go to $2.35/$2.50

When share price goes below a buck is the time to say I told you so.



Like HMY .. or the budding Corporate Dairy Landlord NZL ? ;)

where they both heading ?

Headed towards or below a buck ? - things would have be looking fairly knackered then
and further south IMO .. ;)

Your $2.35/2.50 - put HGH on the list instead please .. ;)


When the Fancy Money & Fundies get to have tinker along the way, then the Institutions get to play with
the SP at the starting blocks - it pays to look very very carefully at past history to see how much 'putting in',
how much 'taking out' and how much 'bicycle pump action' has gone on along the way .. and what's
left over that they wanting to pass on to the next lot of eager beavers .. ;)

[winner69]

Nztx - I assume you won’t be touching this with a barge pole .... and will never ever buy any MFB shares

[nztx]

Nztx - I assume you won’t be touching this with a barge pole .... and will never ever buy any MFB shares


Dead right there ;)

[nztx]

FY 31 March 2021 Forecast:

(from page 64 of the published PDS)

Total Assets $ 100.8 Mil
Total Liabilities $ 48.1 Mil

Net Assets / SHF $ 52.7 Mil

/ 242.4 Mil shares = 21.74c Net Assets / share


IPO FLOAT SP MULTIPLE TO MAR 21 PROJECTED NET ASSETS / SHARE = 8.51


Assuming Intangibles remain roughly around $85.7 Mil at 31 Mar 21

then NTA / Share looks roughly around MINUS 13.6 cps


Liabilities still include projected $16.2 Mil Bank debt at 31 Mar 21 - even after IPO / Cap Raise done



Usually when floating an outfit - some sort of respectable last set of figures may be expected..
that is with reasonable surplus current assets/current liabilities, with work done arranging term liabilities
so that shows. that doesn't appear case with MFB and last Sep 2020 HY Accounts look a shambles with
large MINUS Current Assets/Current Liabilities and excessive Intangibles and the whole show
being offered at what IMO is hugely overpriced for what is offered... ;)

Obviously Deferred Revenue (AKA Customers paying in Advance) floats MFB's boat to a high degree
in recent 12-18 months without which the recent Net WC situation would be even worse than recorded.. ;)

Of further interest Projected March 2021 & 2022 periods reflect NO CASH on Hand - which must point
to further bank borrowing to keep operating .. ? (31 Mar 2020 Cash on hand $8.3 Mil)

How are future dividends going to be paid, other than from further borrowings ? ;)

Where is the dough being made post-IPO going ? ;)


Afraid I don't like the feel of this one .. one little bit .. ;)

[Balance]

Nztx - I assume you won’t be touching this with a barge pole .... and will never ever buy any MFB shares

All rthe more shares available to you & the other punters, W69?

[Getty]

My barge pole is @ 4 metres too short for this punt.

I intend to stay afloat, so wont be barging in on this float.

Poor old, oops, rich old Nadia wont be doing dinner for 2 with me.

[winner69]

All rthe more shares available to you & the other punters, W69?

Somebody has to help Craig’s and Forbar out

Probably be scaled back anyway ....excitement is mounting out there

Be good when the TV news shows the ringing of the bell when they open trading ...probably got Ambassador Nadia to help out that day.

[Balance]

Somebody has to help Craig’s and Forbar out

Probably be scaled back anyway ....excitement is mounting out there

Be good when the TV news shows the ringing of the bell when they open trading ...probably got Ambassador Nadia to help out that day.

Don't forget Kevin Roberts - he will probably load a machine gun and blaze away at a stand of food offerings from Countdown & Foodstuffs?

PS. While carrying a few packages of MFB food parcels on the other hand?

Those who have been around long enough will recall what he did when Lion Nathan launched Pepsi Cola to take on Coca Cola.

[airedale]

Reminds me of the Moa float.

[winner69]

Don't forget Kevin Roberts - he will probably load a machine gun and blaze away at a stand of food offerings from Countdown & Foodstuffs?

PS. While carrying a few packages of MFB food parcels on the other hand?

Those who have been around long enough will recall what he did when Lion Nathan launched Pepsi Cola to take on Coca Cola.

Lovemarks was a big thing once ...recall that Balance

[winner69]

A ROE of about 30% in F22 is more than pretty good

That alone somewhat justifies such a high IPO valuation

[nztx]

A ROE of about 30% in F22 is more than pretty good

That alone somewhat justifies such a high IPO valuation


bet some would be wishing they were seeing the same rate of ROE on their own equity thrown at it .. ;)

[Joshuatree]

Comparison with MMM (ASX) Marley Spoon, forward growth guidance re 25-30%, mkt cap re $780 mill. Hello Fresh guidance 23-25%

Download Document 1.53MB (https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvSDYL4Qm7y RLwv%2Fp08rFiGug%3D)

[winner69]

Comparison with MMM (ASX) Marley Spoon, forward growth guidance re 25-30%, mkt cap re $780 mill. Hello Fresh guidance 23-25%

Download Document 1.53MB (https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvSDYL4Qm7y RLwv%2Fp08rFiGug%3D)

Interesting ...thanks JT

[Ferg]

Further to the good work done by nztx and others, I decided to crunch some numbers.

My concerns (as others have also mentioned):
- Insiders cashing out
- Involvement of private equity
- large Intangible Assets (note some of this INCLUDES capitalised costs. Per the supplementary notes on the Companies Office website, where people costs go up partly due to less capitalised costs)
- Negative NTA
- High P/E
- Massive current liabilities versus current assets with no cash in the bank (as nztx says, what are the dividends being paid from?)
- The numbers are hard work; they being clever clogs working in millions has resulted in a myriad of rounding differences

Is it $16m or $17m in dividends being paid out on the FY22 results? One document says $16m but 242m shares at 7c per share is $17m. This feels sloppy.
Also of concern is they leave some marketing costs in COGS. Freebies fall into COGS when they really should be taken out and disclosed under marketing, otherwise margin reporting becomes distorted.
Forecast cashflow statement has been prepared on a GST exclusive basis. This feels naïve.

- massive variable cost savings to be achieved to land on FY22 NPAT numbers:

COGS per meal to reduce 6.1% in FY22 from $66.33/meal to $62.27 (2020 was $69.90)
Assembly per meal to reduce 0.8% in FY22 from $14.42/meal to $14.30 (2020 was $15.20)
Distribution per meal to reduce 2.9% in FY22 from $11.99/meal to $11.64 (2020 was $11.52) - hard to see how reductions are achieved with a contract with NZ Post locked in for 5 years
Total reduction in variable costs of $4.53/meal in FY22 for a saving of $6.8m (yes you read that right) - I will believe this when I see it.

- Average Sale Price per meal dropped in FY19 and FY20. The forecast prices for FY21 and FY22 are back to where they were in 2018.
- Whilst there was a boost in volumes due to the COVID lockdown, where is the momentum into FY22 that we are seeing in other retail sectors?
- External marketing A&P costs were reduced from $5.9m in FY19 to $3.7 in FY20. This reduction exceeded the increase in reported NPAT. This is typical of private equity organisations to cut marketing spend to shore up profits, but at what long term cost to the business? Given the spend is forecast to increase $0.8m in FY21 this effect may be somewhat mitigated, when combined with publicity surrounding the float.

Some numbers if others want to pick over them:



My Food Bag
FY18
FY19
FY20
FY21
FY22
$ Change
% Change












Meals Delivered
1,200,953
1,244,187
1,250,408
1,525,765
1,503,226

-1.5%


Volume Change

3.6%
0.5%
22.0%
-1.5%














Average Price
$124.07
$123.21
$122.60
$124.20
$124.00
-$0.20
-0.2%


Price Change

-0.7%
-0.5%
1.3%
-0.2%














Revenues $m
$149.0
$153.3
$153.3
$189.5
$186.4
-$3.1
-1.6%












Cost of Sales
$83.6
$84.8
$87.4
$101.2
$93.6
-$7.6
-7.5%


Gross Margin
$65.4
$68.5
$65.9
$88.3
$92.8
$4.5
5.1%


GM %
43.9%
44.7%
43.0%
46.6%
49.8%














Assembly
$19.6
$20.3
$19.0
$22.0
$21.5
-$0.5
-2.3%


Distribution
$15.9
$15.8
$14.4
$18.3
$17.5
-$0.8
-4.4%


Marketing
$5.9
$5.9
$3.7
$4.5
$4.8
$0.3
6.7%


Overheads
$12.5
$13.8
$12.0
$14.5
$14.7
$0.2
1.4%


Adj.

-$0.8
-$0.1

$0.1




Operating EBITDA
$11.5
$13.5
$16.9
$29.0
$34.2
$5.2
17.9%












Depreciation & Amort.
$3.3
$2.3
$4.3
$5.2
$5.3
$0.1
1.9%


Interest
$1.4
$1.2
$1.3
$1.8
$1.0
-$0.8
-44.4%


Restructure



$14.6

-$14.6



NPBT
$6.8
$10.0
$11.3
$7.4
$27.9
$20.5
277.0%












Tax
$1.8
$2.8
$3.1
$6.6
$7.8
$1.2
18.2%


NPAT
$5.0
$7.2
$8.2
$0.8
$20.1
$19.3
2412.5%
















FY21
FY22




Shares (m)



242.4
242.4




Earnings per Share



$0.00
$0.08




PE Ratio @ $1.85



560.6
22.3




Normalised Ratio @ $1.85



29.1
22.3














Dividends $m




$17.0




Dividend per Share




$0.07




Yield @ $1.85 - Nett




3.8%




Yield @ $1.85 - Pre-tax (33%)




5.6%



























FY20
FY21
FY22




Equity


$58.2
$52.7
$66.4














Receivables



$1.2
$1.2




Inventory



$0.8
$1.5




Others



$0.9
$1.1




Current Assets



$2.9
$3.8














Fixed Assets



$3.2
$3.6




Intangible Assets



$85.9
$85.4




IFRS Junk



$8.8
$6.3




Non Current Assets



$97.9
$95.3




Total Assets



$100.8
$99.1














Payables



$11.1
$8.7




Deferred Revenue



$3.5
$4.0




Tax



$0.8
$4.9




Others



$1.3
$1.1




IFRS Junk



$2.9
$2.4




Current Liabilities



$19.6
$21.1














Loans



$16.2
$1.3




Provisions



$0.3
$0.3




Deferred Tax



$4.5
$4.5




IFRS Junk



$7.5
$5.5




Non Current Liabilities



$28.5
$11.6




Total Liabilities



$48.1
$32.7


















FY21
FY22




Current Assets / Current Liabilities



0.15
0.18




Debt/Equity



0.91
0.49




NTA $m



-$31.6
-$17.4




NTA/Share



-$0.13
-$0.07




Return on Equity



1.4%
38.1%




Return on Equity Adj.



26.5%
38.1%















FY18
FY19
FY20
FY21
FY22




COGS/Meal
$69.61
$68.16
$69.90
$66.33
$62.27




Cost Change

-2.1%
2.6%
-5.1%
-6.1%














Assembly/Meal
$16.32
$16.32
$15.20
$14.42
$14.30




Cost Change

0.0%
-6.9%
-5.1%
-0.8%














Distribution/Meal
$13.24
$12.70
$11.52
$11.99
$11.64




Cost Change

-4.1%
-9.3%
4.1%
-2.9%





EDIT P.S. I forgot to mention that given the values are disclosed in millions to 1 decimal place, the actual costs per meal can vary by up to $0.05m or 3.3c per meal - with a total possible distortion of plus or minus 10c per meal in any 1 year for the cost per meal. The maximum variation will be +/-$150k so the $6.8m savings is not far off their workings.

[Beagle]

Excellent caliber of work Ferg. (A+) :) I really appreciate your analysis and insights.
Extremely creative forecasting by the vendors in my opinion. I wouldn't touch this with a 40 ft barge pole.

[Ferg]

Thanks Beagle. As has been said, good on the PE guys for getting in and out but this feels fully priced. I'm sure the business will be successful but I look at things from a value POV and at the moment I think I can get better returns elsewhere. I'm not interested in stagging it either given that is gambling - I would prefer to invest. I'm sure in the investment wheel somewhere, there is an indicator for crapola floats peaking at the same time the market peaks. We are not yet at peak crapola because this business looks ok but I am curious as to what else is coming. Did you like my description for the IFRS16 Leased Assets? BTW they were excluded from the NTA calculation.

Edit: I added an edit to my original post that allows for variations in the variable cost savings due to their working in millions to 1 decimal place. In fairness to the organisation, they are forecasting a reduction in direct COGS/meal by 5.1% in the current year - and if that was only for part of the year, then the full benefit should be banked in FY22 less any cost increases. It could also be via reduced waste etc. keeping in mind there are some misplaced freebies/giveaway costs sitting in COGS.


Excellent caliber of work Ferg. (A+) :) I really appreciate your analysis and insights.
Extremely creative forecasting by the vendors in my opinion. I wouldn't touch this with a 40 ft barge pole.

[percy]

Thanks Beagle. As has been said, good on the PE guys for getting in and out but this feels fully priced. I'm sure the business will be successful but I look at things from a value POV and at the moment I think I can get better returns elsewhere. I'm not interested in stagging it either given that is gambling - I would prefer to invest. I'm sure in the investment wheel somewhere, there is an indicator for crapola floats peaking at the same time the market peaks. We are not yet at peak crapola because this business looks ok but I am curious as to what else is upcoming. Did you like my description for the IFRS16 Leased Assets? BTW they were excluded from the NTA calculation.

Edit: I added an edit to my original post that allows for variations in the variable cost savings due to their working in millions to 1 decimal place. In fairness to the organisation, they are forecasting a reduction in direct COGS/meal by 5.1% in the current year - and if that was only for part of the year, then the full benefit should be banked in FY22 less any cost increases. It could also be via reduced waste etc. keeping in mind there are some misplaced freebies/giveaway costs sitting in COGS.

Ferg.
Thank you for sharing .
Extremely helpful.

[RupertBear]

Excellent helpful post thanks Ferg :)

[peat]

Gaynor didnt bag it completely in his BusinessDesk article and says it will be the hottest listing for a while
But he asked a lot of hard questions implying he sees through the listing
and say things like : The listing brings back memories of high profile IPOs in the 1980s where demand substantially exceeded supply and brokers were swamped with orders they couldn’t satisfy. This resulted in inflated expectations, irrational post-listing investment decisions and share prices that couldn’t be maintained over the longer term.


​I'd rather go hungry than eat from this bag.

[Ferg]

Thanks everyone for your comments. Following are my workings on the direct cost savings and while I was at it I thought I would look at the inventory turnover.

FY21 has a projected inventory turn of 107 times per year, or 8.9 times a month and FY22 is 6.8 times a month. In other words they have on average less than 1 weeks inventory on hand. Granted that is the nature of shifting fresh food but IMO it is actually impressive. A good proportion of the inventories on hand will have a longer shelf life such as packaging and spices etc. which will inflate inventories, but these sorts of numbers show a high degree of logistical coordination. Earlier comparisons to a supermarket by others are not too wide of the mark.

The manpower and computing power to achieve these numbers should not be underestimated. An investor would want to see continuity of systems and procurement people given logistics is the backbone of this business. Recent investment into better systems will likely be central to achieving cost reductions via better purchase planning and less wastage etc. I wonder if such technology might be a path to growth for My Food Bag but in my experience it is very hard to monetise (damn I hate that word but it is the most appropriate). With such high inventory turnover, it will be hard to achieve bulk buying discounts without blowing out storage and distribution costs - in pursuit of lower variable costs they do not want to bloat their fixed costs. From a logistics perspective, this is an interesting business but my opinion on investing remains unchanged.



Forecasts
FY21
FY22
Change
Notes









Meals Delivered
1,525,765
1,503,226
-22,539










Direct COGS $m
$101.2
$93.6
-$7.6



Assembly
$22.0
$21.5
-$0.5



Distribution
$18.3
$17.5
-$0.8



Total Variable Costs
$141.5
$132.6
-$8.9










Cost per Meal
$92.74
$88.21
-$4.53










Cost Reconciliation: ($m)













FY21 Variable Costs
$141.5





Less Volume Reduction
-$2.1


$92.74 x 22.5k


Less Cost Savings
-$6.8


$4.53 x 1,503k


FY22 Variable Costs

$132.6
-$8.9




Inventory Analysis:






Inventory on Hand
$0.8
$1.5

FY20 = $1.1m


COGS per Day
$0.28
$0.26




Days COGS on Hand
2.9
5.8




Inventory Turnover p.a
107
81




Inventory Turnover pcm
8.9
6.8





Financial information sourced from here:

https://disclose-register.companiesoffice.govt.nz/
Search for OFR13033

[nztx]

Excellent in-depth presentation there - Ferg

Thanks

[Balance]

If retail investors end up with the bulk of the stock, there will be blood on the street.

Old saying in the IPO industry - ‘It’s too good for retail investors.’

[stoploss]

Gaynor didnt bag it completely in his BusinessDesk article and says it will be the hottest listing for a while
But he asked a lot of hard questions implying he sees through the listing
and say things like : The listing brings back memories of high profile IPOs in the 1980s where demand substantially exceeded supply and brokers were swamped with orders they couldn’t satisfy. This resulted in inflated expectations, irrational post-listing investment decisions and share prices that couldn’t be maintained over the longer term.
​I'd rather go hungry than eat from this bag.
Pete if he really"sees through the listing " Why is Milford taking 5 % of the company - pretty big risk ....

[winner69]

Businessdesk report -

My Food Bag chief executive Kevin Bowler says the meal-kit company is likely to outperform the growth targets outlined in its initial public offering documents,

Of course they well. Report full year in May and they’ll say beat PDS forecast ...whoopee ....and say F22 started well and sales will exceed forecast ....double whoopee

And share price will soar past $2.30

Thought at time Bacon Bowler was pretty stupid saying things like this.

Chairman Carter is really hacked off and 'disowns' those comments (Businessdesk)

I think Bowler in big big trouble

[Balance]

Pete if he really"sees through the listing " Why is Milford taking 5 % of the company - pretty big risk ....

Gaynor has been out of Milford since 2019.

As for Milford taking and investing 5% of the company ($23m), it’s a flea bite when Milford has over $9.5 billion of total funds under management.

[Balance]

Thought at time Bacon Bowler was pretty stupid saying things like this.

Chairman Carter is really hacked off and 'disowns' those comments (Businessdesk)

I think Bowler in big big trouble

https://www.nzherald.co.nz/business/my-food-bag-clarifies-ceo-comments-amid-fma-scrutiny-ahead-of-ipo/JTY3LPMAQKC7BKYAA2QC457SI4/

paywalled

"My Food Bag is confident that it will achieve its prospective financial information, but any suggestion that the business will outperform those financial results should be disregarded," Carter said."

And FMA has made inquiries:

"We are engaging with My Food Bag regarding certain comments reported in the media as being made by its CEO and, more generally, whether My Food Bag is comfortable with information in the public domain relating to its offer of shares. We note that the offer is registered but will not open to investors until 19 February."

[bull....]

Im in for a trade , while some good fundamental analysis has been made by nzxt and ferg and under normal conditions you would respect the analysis the current stock environment is all about momentum and liquidity. fundamentals unfortunately dont mean much in the current environment.

[sb9]

https://www.nzherald.co.nz/business/my-food-bag-clarifies-ceo-comments-amid-fma-scrutiny-ahead-of-ipo/JTY3LPMAQKC7BKYAA2QC457SI4/

paywalled

"My Food Bag is confident that it will achieve its prospective financial information, but any suggestion that the business will outperform those financial results should be disregarded," Carter said."

And FMA has made inquiries:

"We are engaging with My Food Bag regarding certain comments reported in the media as being made by its CEO and, more generally, whether My Food Bag is comfortable with information in the public domain relating to its offer of shares. We note that the offer is registered but will not open to investors until 19 February."

Oh dear, Carter won't be one bit amused and am sure same goes with Waterman and co.

[winner69]

https://www.nzherald.co.nz/business/my-food-bag-clarifies-ceo-comments-amid-fma-scrutiny-ahead-of-ipo/JTY3LPMAQKC7BKYAA2QC457SI4/

paywalled

"My Food Bag is confident that it will achieve its prospective financial information, but any suggestion that the business will outperform those financial results should be disregarded," Carter said."

And FMA has made inquiries:

"We are engaging with My Food Bag regarding certain comments reported in the media as being made by its CEO and, more generally, whether My Food Bag is comfortable with information in the public domain relating to its offer of shares. We note that the offer is registered but will not open to investors until 19 February."

Not a good look ...one would have thought that Bacon Bowler would have been given some lessons how to act as a CEO of a to be soon listed company.

Suppose so excited about his impending millions he couldn’t keep his mouth shut....I can imagine how grumpy Carter is.


Worst part was saying ‘We’ve got a business that we th8nk will outperform but didn’t wantsvto put them in the PDS .........’. I and any astute ;) watchers had a,ready worked that out ....Bacon didn’t need to tell us.

[winner69]

Im in for a trade , while some good fundamental analysis has been made by nzxt and ferg and under normal conditions you would respect the analysis the current stock environment is all about momentum and liquidity. fundamentals unfortunately dont mean much in the current environment.

With you there bull...

Excitement building up

And agree with your comments - as my signature says “In a roaring bull market, knowledge is superfluous and experience is a handicap.”

[Getty]

Anecdotally, your signature appears 100% correct.

[Balance]

Not a good look ...one would have thought that Bacon Bowler would have been given some lessons how to act as a CEO of a to be soon listed company.

Suppose so excited about his impending millions he couldn’t keep his mouth shut....I can imagine how grumpy Carter is.


Worst part was saying ‘We’ve got a business that we th8nk will outperform but didn’t wantsvto put them in the PDS .........’. I and any astute ;) watchers had a,ready worked that out ....Bacon didn’t need to tell us.

Sounds like a Pump & Dump job, doesn't it?

[stoploss]

Gaynor has been out of Milford since 2019.

As for Milford taking and investing 5% of the company ($23m), it’s a flea bite when Milford has over $9.5 billion of total funds under management.

He is still a non executive director of Milford , so presumably he is happy to sign off on the risk ?

[winner69]

Be funny if FMA put a stop to this and insist on a new PDS to be issued before proceeding.

After all CEO has admitted the PDS is not really reality ....and Carter ‘disowning’ his comments doesn’t take away the fact that internally expectations are different.

[Balance]

He is still a non executive director of Milford , so presumably he is happy to sign off on the risk ?

Not at his level as a non-executive director - day to day investment decisions are made by the fund managers.

Like I wrote, $23m is a flea bite (Milford lost big in Wynyard with no ill effects) and it's not like MFB is not a good business. It is a good business - just a question of price.

[Sir Ten]

Bowler's slip feels conveniently manufactured. The message the sponsors wanted out there is now out... and the conciliatory statement from Carter is just aimed at placating the FMA.

[winner69]

Bowler's slip feels conveniently manufactured. The message the sponsors wanted out there is now out... and the conciliatory statement from Carter is just aimed at placating the FMA.

But that was going to be story come results announcement in May .....keeping the hype up etc etc for another 6 months.

Now the ‘outperformance’ that would have sounded great in May is a a non-event

I think sponsors etc will be peeved

[Beagle]

Perhaps people should reflect on the standard of governance at Fletcher building over the years when thinking about Tony Carter's governance capabilities...
Brought the FBU situation up with him once at an AIR annual meeting...WOW, what a conversation killer that was.

[Balance]

Be funny if FMA put a stop to this and insist on a new PDS to be issued before proceeding.

After all CEO has admitted the PDS is not really reality ....and Carter ‘disowning’ his comments doesn’t take away the fact that internally expectations are different.

Don't hold your breath - word is that the FMA bought up the entire stock of Auckland Transport bus tickets from storage and is getting ready to wet them.

[winner69]

Perhaps people should reflect on the standard of governance at Fletcher building over the years when thinking about Tony Carter's governance capabilities...
Brought the FBU situation up with him once at an AIR annual meeting...WOW, what a conversation killer that was.

You sorted Carter out at AIR didn’t you when Luxon et all started selling shares

[Beagle]

You sorted Carter out at AIR didn’t you when Luxon et all started selling shares

Wouldn't say I sorted him out but yeah, we did have a pretty frank chat and he admitted his approval of those sales was a line ball call and had very poor optics. I didn't see any subsequent questionable calls like that during his remaining tenor so maybe that chat had some impact ?...but realistically there was some negative media commentary about those insider sales that I am sure he wouldn't have liked.

[Beagle]

Don't hold your breath - word is that the FMA bought up the entire stock of Auckland Transport bus tickets from storage and is getting ready to wet them.

:lol: that's very funny :D

[winner69]

Don't hold your breath - word is that the FMA bought up the entire stock of Auckland Transport bus tickets from storage and is getting ready to wet them.

A yellow card before the game starts is some feat

[peat]

Wouldn't say I sorted him out but yeah, we did have a pretty frank chat

12313

robust discussion huh

[artemis]

Thanks everyone for your comments. Following are my workings on the direct cost savings and while I was at it I thought I would look at the inventory turnover....


Thanks for your work on that Ferg. Excellent.

Here's a view from the front line. I've been a customer pretty much since inception. I can count on one hand the number of times there was an item substitution and in each case there was an email from the company explaining what had happened and any recipe changes needed. Impressive planning and fulfilment given the number and complexity of options available every week.

There have also been quite a few changes to offerings over the years, some added some dropped, and a serious commitment to sustainable packaging. Plus support for community initiatives such as school gardens.

In summary a well run and agile business.

[nztx]

Wonder what the next scheme in hand for the select 'MY FAT WALLETS' brigade will be after this one .. ;)

After all on to a good thing, wouldn't stop just there, would they ? ;)

[Beagle]

12313

robust discussion huh

LOL that encapsulates the tone of the conversation perfectly :)

[Balance]

Wonder what the next scheme in hand for the select 'MY FAT WALLETS' brigade will be after this one .. ;)

After all on to a good thing, wouldn't stop just there, would they ? ;)

That's the game that they are in and who can blame them when NZ investors line up to partake even after the horrendous losses from Feltex, Wynyard, CBL, Interiu, MPG, Orion Health, GeoP, Snakk, etc etc etc.

[winner69]

There were many who shot down Oceania in flames when they floated ....horrendous balance sheet blah blah blah

[Lego_Man]

Basically a logistics business. Capital light and good margins. However would question their ability to maintain margin in an accelerating inflationary environment like the one i think we are about to get. How quickly and sustainably will they be able to get price increases through?

Secondly i don't believe for a moment their TAM numbers. It is essentially a product for time-poor, predominantly white middle class professionals/families. Retired people don't use it (obvious reasons), those who consume specific ethnic cooking don't use it. Those at the bottom end of the income ladder don't use it. Those 3 groups encompass basically all of NZ's demographic growth. I don't believe their market is growing quickly, and their market is price-sensitive, and will be even more so as the middle class gets squeezed with higher housing costs.

But fundamentally the issue is price of the IPO.

[Ferg]

Im in for a trade , while some good fundamental analysis has been made by nzxt and ferg and under normal conditions you would respect the analysis the current stock environment is all about momentum and liquidity. fundamentals unfortunately dont mean much in the current environment.

A very good point. I too am prone to paralysis by analysis and too often look for the negatives. As you say we should also look at the state of the current market with TINA and TRINA.

I can't help but cast an eye over the most recent floats being HMY, NZL, RUA and RAD. None of which have done particularly well. Maybe this will be different?

[nztx]

And so now we have the good folk of the Naki starting to get concerned that
temporary inwards travellers from Auckland aren't eating while in the Naki
for days (officially that is from Min of Health's digging) .. ;)

Perhaps they should check the Rubbish Bins to make sure there aren't any discarded
Food Bags there with sneaky UK passengers hitchhiking a free ride into the Naki ? ;)

[Baa_Baa]

A very good point. I too am prone to paralysis by analysis and too often look for the negatives. As you say we should also look at the state of the current market with TINA and TRINA.

I can't help but cast an eye over the most recent floats being HMY, NZL, RUA and RAD. None of which have done particularly well. Maybe this will be different?

Wouldn't apologise for good analysis (and your analysis is better than good!), it might keep you out of some stags or dubious IPO's, but will certainly make sure you buy into the good ones.

Remember we have a diverse membership here, some don't give a stuff about future prospects for the company and they make their money on the trade - good on them if they've got the skills and are nimble enough. Others look for long term prospects, they aren't swayed by puffed up (or lightweight) prospectus and are happy to sit out those IPO's.

There's always going to be another 'great deal' around the corner.

[nztx]

Interesting that Sharesies haven't come through yet with anything on this IPO ;)

A couple of the other brokerages have been fairly persistent with IPO emails

[bull....]

A very good point. I too am prone to paralysis by analysis and too often look for the negatives. As you say we should also look at the state of the current market with TINA and TRINA.

I can't help but cast an eye over the most recent floats being HMY, NZL, RUA and RAD. None of which have done particularly well. Maybe this will be different?

i think you and nzxt summed it up well. look forward to reading your posts in the mean time bull hoping for a stag

[Balance]

But that was going to be story come results announcement in May .....keeping the hype up etc etc for another 6 months.

Now the ‘outperformance’ that would have sounded great in May is a a non-event

I think sponsors etc will be peeved

https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audio/duncan-bridgeman-my-food-bag-clarifies-ceo-comments-amid-fma-scrutiny-ahead-of-ipo/

I think this is where the big damage to the post IPO market has been done - market now expects a better than PDS forecasts (in the bag anyway!) but MFG will not dare to post a better than forecast result!

So what is the company going to report?

Don't under-estimate what a screw-up this is!

[winner69]

https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audio/duncan-bridgeman-my-food-bag-clarifies-ceo-comments-amid-fma-scrutiny-ahead-of-ipo/

I think this is where the big damage to the post IPO market has been done - market now expects a better than PDS forecasts (in the bag anyway!) but MFG will not dare to post a better than forecast result!

So what is the company going to report?

Don't under-estimate what a screw-up this is!

Sure is a screw-up of enormous proportions.

Whereas a slightly better than PDS result in May would have been exciting stuff Bowler has made it really unexciting and market will just give a big yawn.

Don’t think share price will get to $2.30/$2.40 in June now ......need to lower my expectations (significantly)


Bowler and his big mouth stuffed up big time

What will they report? Probably ‘just over’ PDS and see what happens and if share price goes nowhere come out with a big profit upgrade in Aug/Sep

[RTM]

Basically a logistics business. Capital light and good margins. However would question their ability to maintain margin in an accelerating inflationary environment like the one i think we are about to get. How quickly and sustainably will they be able to get price increases through?

Secondly i don't believe for a moment their TAM numbers. It is essentially a product for time-poor, predominantly white middle class professionals/families. Retired people don't use it (obvious reasons), those who consume specific ethnic cooking don't use it. Those at the bottom end of the income ladder don't use it. Those 3 groups encompass basically all of NZ's demographic growth. I don't believe their market is growing quickly, and their market is price-sensitive, and will be even more so as the middle class gets squeezed with higher housing costs.

But fundamentally the issue is price of the IPO.

You have articulated my thoughts perfectly. Thanks.
Not interested at all in this one.

[Sir Ten]

But that was going to be story come results announcement in May .....keeping the hype up etc etc for another 6 months.

Now the ‘outperformance’ that would have sounded great in May is a a non-event

I think sponsors etc will be peeved

Fair point... but the hype in 6 months doesn't mean much if they don't get the day 1 glow... or worse yet, don't manage to fill the book (which is probably unlikely, despite my view that the price for this is too high).

I think they've been quite crafty providing their subscribers with an allocation. Between Sharesies and MFB subscribers, it will drive some hype. Many of those who subscribe via their MFB allocation probably won't know how (or won't have set up a brokerage account) to sell them on day 1 either... which is good for the stags (assuming it is actually oversubscribed).

[Balance]

Fair point... but the hype in 6 months doesn't mean much if they don't get the day 1 glow... or worse yet, don't manage to fill the book (which is probably unlikely, despite my view that the price for this is too high).

I think they've been quite crafty providing their subscribers with an allocation. Between Sharesies and MFB subscribers, it will drive some hype. Many of those who subscribe via their MFB allocation probably won't know how (or won't have set up a brokerage account) to sell them on day 1 either... which is good for the stags (assuming it is actually oversubscribed).

There's opportunity to stag only if there is unsatisfied demand from institutions who buy on market on listing.

I recall Trust Bank was hyped up to buggery and everyone was scaled back severely in that IPO.

Share price fell sharply on listing when the stags tried to sell but there was no follow-through demand by institutions.

Stags became venision on that occasion!

The promotors and lead managers have to manage the allocation just right to ensure after market support. Retail investors don't buy more on listing as a general rule.

[Getty]

Stags become venison on that occasion!

Nice one, the quote of the day.

[artemis]

.....

Secondly i don't believe for a moment their TAM numbers. It is essentially a product for time-poor, predominantly white middle class professionals/families. Retired people don't use it (obvious reasons), those who consume specific ethnic cooking don't use it. Those at the bottom end of the income ladder don't use it. Those 3 groups encompass basically all of NZ's demographic growth. I don't believe their market is growing quickly, and their market is price-sensitive, and will be even more so as the middle class gets squeezed with higher housing costs....

Agree in part, but only in part. Many of the retired demographic have high disposable income and home equity increasing fast. And they have time and many are watching their health. MFB caters pretty well for these folk with a wide range of prepare yourself, ready to heat, quality ingredients, lots of veges, interesting recipes and no waste.

Ethnic cooks, yes, not a big client base probably (though I don't know) but plenty of MFB recipes are asian and look to me to be fairly authentic. And of course once there is a new generation in the household spreading the culinary wings in this country is probable.

Low income, agree, this is not the target audience. However a household with two incomes, even low, could weigh up the time, cost and health benefits of meal kits against takeaways.

[stoploss]

Agree in part, but only in part. Many of the retired demographic have high disposable income and home equity increasing fast. And they have time and many are watching their health. MFB caters pretty well for these folk with a wide range of prepare yourself, ready to heat, quality ingredients, lots of veges, interesting recipes and no waste.

Ethnic cooks, yes, not a big client base probably (though I don't know) but plenty of MFB recipes are asian and look to me to be fairly authentic. And of course once there is a new generation in the household spreading the culinary wings in this country is probable.

Low income, agree, this is not the target audience. However a household with two incomes, even low, could weigh up the time, cost and health benefits of meal kits against takeaways.
Does have potential to low income families, at least you know they are getting something healthy.
https://www.neighbourly.co.nz/public/auckland/new-lynn/message/63791684

[Balance]

https://www.thespinoff.co.nz/business/18-02-2021/whats-the-deal-with-the-my-food-bag-ipo/

Excerpt : "However, in a column for BusinessDesk, Brain Gaynor wondered why the existing shareholders would be selling 75% of their holdings if the company is forecasting significant growth.

“Why are CEO Kevin Bowler and CFO Mark Winter, who are relatively new to the company, selling 4.1 million of their combined 5.4 million shares through the IPO?” Gaynor asked.


He also noted that four out of five directors have been part of the company for only a month, with “Chris Marshall the only remaining director with a deep knowledge of the company”.

[nztx]

Rumour has it that the Sharesies crew now get to have a bite of the MFG cherry ;)

[Balance]

Rumour has it that the Sharesies crew now get to have a bite of the MFG cherry ;)

Gone all quiet on the publicity front?

[nztx]

Gone all quiet on the publicity front?


Wonder why ? Did demand evaporate or decrease ? then find some more Brokers to fill a gap ? ;)

[nztx]

Doesn't change my thoughts on things however .. even a punt is potentially cruising for bruising .. ;)

[Balance]

Wonder why ? Did demand evaporate or decrease ? then find some more Brokers to fill a gap ? ;)

Hardly an inspiring & encouraging counter to Brian Gaynor’s scathing criticism of how the original shareholders are taking their money and running?

“However, Henry Chung, director of investment banking at Jarden, said at the time of the announcement the IPO will offer investors the opportunity to get involved in a sector they had so far been unable to access on the NZX.

“Companies like My Food Bag taking the lead in going public on the NZX can really make an impact, encouraging new companies to list and allowing investors to expand into new industries – locally.”

[nztx]

Hardly an inspiring & encouraging counter to Brian Gaynor’s scathing criticism of how the original shareholders are taking their money and running?

“However, Henry Chung, director of investment banking at Jarden, said at the time of the announcement the IPO will offer investors the opportunity to get involved in a sector they had so far been unable to access on the NZX.

“Companies like My Food Bag taking the lead in going public on the NZX can really make an impact, encouraging new companies to list and allowing investors to expand into new industries – locally.”


Yeah well .. I prefer to see my IPO take ups to at least have a reasonable amount of goodness left in the bag
to carry forward .. and not most of it creatively sucked out leaving behind mostly skin & a bit of water, with those
responsible for the IPO job (ie the newly enriched MFW's (MY FAT WALLETS) promptly doing an exit into the distance ;)


Have bookings for the Spectator seats closed just yet ? ;)

[tim23]

Hardly an inspiring & encouraging counter to Brian Gaynor’s scathing criticism of how the original shareholders are taking their money and running?

“However, Henry Chung, director of investment banking at Jarden, said at the time of the announcement the IPO will offer investors the opportunity to get involved in a sector they had so far been unable to access on the NZX.

“Companies like My Food Bag taking the lead in going public on the NZX can really make an impact, encouraging new companies to list and allowing investors to expand into new industries – locally.”

Horah Henry!- doesn't necessarily make it a good investment because its a new sector re listed cos - whats say its the first pie maker to be listed - same applies might be different but might be a dud.

[traineeinvestor]

I'd rather put my money in put options than ords on this one.

[winner69]

My Food Bag a great little company. It will continue to perform solidly financially - like consistently making around $20m (and a bit more) profit in the next few years.

That's pretty good eh

But going public how good the company is will be dependent on the share price.

With all the IPO hype consistently making about $20m wont be good enough and My Food Bag will be seen as a dog of a company - useless at evrything it does and similar such comments will be thrown around.

Beauty is in the eye of the beholder - but I think it sad that even though little will have changed how they satisfy customers on a day to day basis they can one day seen as a solid little company and the next a dog.

Happened to Metro Glass. If you take out the Australian acquisition that he money men forced them to do and look at the NZ business it on a day to day basis has been chugging along nicely since IPO (even has some profitability measures that global peers envy) but in the eyes of most it is seen as dog of a company because of its share price - a hopeless one etc etc

Being private is good - being in the headlights of the money men and greedy retail shareholders is a different story.

I feel sorry for those who work at My Food Bag - their little company will never be seen the same again - and those workers have been seduced with shares as well

[winner69]

Businessdesk reckon big mouth Bowler only got his 4,437,400 shares the other day ......and he’s selling 3,328,050 of these through the IPO at $1.85 each.

Wonder if they were ‘free’ shares? Maybe his hugely bonus

[Habits]

Businessdesk reckon big mouth Bowler only got his 4,437,400 shares the other day ......and he’s selling 3,328,050 of these through the IPO at $1.85 each.

Wonder if they were ‘free’ shares? Maybe his hugely bonus

Sick... not trustworthy at all if completely correct

[Bjauck]

Horah Henry!- doesn't necessarily make it a good investment because its a new sector re listed cos - whats say its the first pie maker to be listed - same applies might be different but might be a dud. Well I guess it just how desperate some are for any new listings on the local exchange as we watch how residential real estate continues to suck up local household investment funds, with NZ Government blessing.

[Sir Ten]

Note from Craigs suggested "The My Food Bag IPO book-build closed early on Friday and was heavily over-subscribed."

[winner69]

Note from Craigs suggested "The My Food Bag IPO book-build closed early on Friday and was heavily over-subscribed."

That’s what we want to hear, great news

Still reckon we could see share price of 230 plus by may

[artemis]

Today's Herald - paywalled. Looking to expand ready-to-eat offerings, and thoughts about diversifying into pet food, cleaning, personal care subscriptions. The logistics infrastructure is in place and working well so not a major to extend it. Assume initially extended to existing customers to test the market, which is already the case with a range of additions.

[winner69]

My Food Bag in a $37 billion market .... and their sales are just under $200m

[Balance]

Talk up the hype - got to get the retail crowd out there to not only take the stock but buy more on listing!

[FTG]

Yes, it seems it may have been over-subscribed. I have been scaled back about 15% on requested allocation.

[winner69]

Yes, it seems it may have been over-subscribed. I have been scaled back about 15% on requested allocation.

You'll just have to buy more on market - get in quick though

[BlackPeter]

You'll just have to buy more on market - get in quick though

Jeez - you are pushing hard for the 230 peak, aren't you :):

[Balance]

You'll just have to buy more on market - get in quick though

And you have some available to the lucky few at $2.30?

[nztx]

Jeez - you are pushing hard for the 230 peak, aren't you :):



I wonder if I can join in, if I bring my doggy bag .. ;)

[winner69]

Jeez - you are pushing hard for the 230 peak, aren't you :):

Could even go to 240 or more :t_up:

Esp if they keep pumping out good announcements

I've already suggested a good canine menu for a weeks supply of decent dinners rather than the old TUX - why shouldn't the dog get a decent meal as well -- MY DOGGY BAG

[nztx]

Could even go to 240 or more :t_up:

Esp if they keep pumping out good announcements

I've already suggested a good canine menu for a weeks supply of decent dinners rather than the old TUX - why shouldn't the dog get a decent meal as well -- MY DOGGY BAG


Good that that they deferred their advertising spend too - eh .. ;)

perhaps if we get Ogg in here 300 may be possible .. ;)


wonder if there's a possibility of merging it with RBD ? ;)

it would have to be a fast in & out though .. wouldn't want get left holding the bag
.. that may be worse than getting QEXED ..:)

[Sir Ten]

I've been torn on this... greed reared its head when I heard about the scaling... thankfully my better half has talked me down.

Screw this IPO. The economics and growth are sh*t.

It'll be over-subscribed, but the after-market is crummy. The instos won't be there (or shouldn't be there if they are).

I'm out - better places to punt into... like cash or red wine. At least I'll enjoy the avoided loss on holding cash... and the hangover on the pinot will be far more pleasurable (and that says alot when you're drinking it by the case).

As an aside, I do wonder how the rest of NZ private equity and the NZX feels about this. The former should be pissed as may limit their exit optionality if it all goes pear shaped... as for the latter, they're just desperate.

[Shareguy]

Yes I felt exactly the same. For me the numbers just don’t stack up. A new board with the old hands taking the money says it all about how they think the future stacks up. Whats left is a company with debt. A capital raise to come as none of these funds raised will grow the business it’s just debt repayment and they are loosing the battle against helo fresh and woop. Marley spoon and others on the way. Final Nail came from the wife who said that her and all her friends think MFB is the worst offering of all. So I’m out. Best of luck though for any holders

[nztx]

Yes I felt exactly the same. For me the numbers just don’t stack up. A new board with the old hands taking the money says it all about how they think the future stacks up. Whats left is a company with debt. A capital raise to come as none of these funds raised will grow the business it’s just debt repayment and they are loosing the battle against helo fresh and woop. Marley spoon and others on the way. Final Nail came from the wife who said that her and all her friends think MFB is the worst offering of all. So I’m out. Best of luck though for any holders


Good posts Sir Ten & Shareguy

my thoughts too

If the vendors selling up hadn't have been so greedy then it may have been an okay IPO if done the right way.. ;)

[winner69]

Good posts Sir Ten & Shareguy

my thoughts too

If the vendors selling up hadn't have been so greedy then it may have been an okay IPO if done the right way.. ;)

That's life eh mate

In most big transactions (property etc etc) sellers always feel they are not getting enough / buyers think it should be cheaper

Betcha you feel like that sometimes

[Balance]

Good posts Sir Ten & Shareguy

my thoughts too

If the vendors selling up hadn't have been so greedy then it may have been an okay IPO if done the right way.. ;)

Raising money to pay a dividend to create a dividend yield angle for investors - smells of Feltex-style hogwash to me.

That's not what a growth company does.

[artemis]

That's life eh mate

In most big transactions (property etc etc) sellers always feel they are not getting enough / buyers think it should be cheaper
Betcha you feel like that sometimes

That's a lot of dosh looking for a home. Interesting to see where it ends up. I'm picking another startup. Reason being the cashed up now have a lot of experience in logistics and marketing, plus energy that will keep them off the sofa. Setting up new is a very different mindset than Business as Usual. So first movers exiting is a good thing.

[nztx]

Rumour has it that the size of the Bags has had to be scaled back ...

On Sharesies, apparently scaled back to 72% of applied for..

[Balance]

Rumour has it that the size of the Bags has had to be scaled back ...

On Sharesies, apparently scaled back to 72% of applied for..

Think they will buy on market with their refund money?

[nztx]

Think they will buy on market with their refund money?


certainly be interesting see what happens when it hits NZX .. :)

[Baa_Baa]

I’ll pick a decent spike for the stags and then a return to a sensible valuation that is a long way beneath ipo. Just haven’t yet figured out where that is yet 🤣

[troyvdh]

Given the sentiment its not hard to understand why folk prefer residential houses to invest in....sad..sad.

[Longhaul]

Rumour has it that the size of the Bags has had to be scaled back ...

On Sharesies, apparently scaled back to 72% of applied for..

A family member of mine got 83% of what they applied for (not via Sharesies). I'm sitting this one out but will be interesting to see which way it goes.

[Tomtom]

This one isn't for me. There are far bigger players now entering this market (Supermarkets, HelloFresh etc.)

Unfortunate for those that have been 'pushed' this via their sharetrading app. The boiler room is alive and well it seems.

[Baa_Baa]

Listing today https://www.nzx.com/companies/MFB $448m MC, $1.85 SP

[winner69]

Today’s the day

Go My Food Bag ....MFB

[sb9]

Today’s the day

Go My Food Bag ....MFB

You must be ready for the stag eh mate....

[Getty]

Todays the day, or will it be the recipe for disaster?

Maybe not today, as pride will prop it up in the meantime.

[Getty]

Who's in for the main course, and who just wants to go straight to desert?

[DownTownJr]

Sharesies crowed are pumped for this. It's going to be interesting, I don't so how this doesn't eventually end in a flop.

[Ohdoyle]

Looking at the depth I actually think it will trade at a discount today.

Not a great day to list, alot of people distracted by tsunamis unfortunately.

I've been wrong plenty of times before but not looking like a stag to me.

The sharsies crowd might be pumped, but surprisingly alot of people very negative about this listing on that platform too.

Proof will be in the pudding I guess.

[Rawz]

Could be another Harmoney

[Getty]

It may stag ger

[Rawz]

Oh it trades at 11am. Was hitting the refresh button over and over wondering why the trades were not matching off.

IPO's in general i stay away from due to the winner's curse. Still remember putting money into Marlin and watching that sink to $0.70

[Blendy]

I'm curious about this one. I know years ago on this thread I felt that they've kind of reached their peak. When this offer came out I assumed their growth strategy was to expand to new countries, but no, it's not.

They have done well to create a whole new ecosystem and it likely helps smaller manufacturers who don't get as much supermarket space. This is a new style of shopping and cooking, and many people have embraced it. They've even got the Made meals for people who don't like to/are unable to cook, which is a really fabulous option.

Will this be a huge share success? Who knows. There is new hype amongst people who are new to the sharemarket, so maybe that's a good thing? At least it's a brand that everyone knows.

I have been a MFB customer since the very beginning. Over the last year I have been alternating weekly between MFB and Hello Fresh to experience the difference. I still prefer MFB for value and content. I have now cancelled HF and will be doing MFB every week since now I'm a shareholder.... and strangely I got 100% of my request! How did I not get scaled?

[Sir Ten]

Looking at the depth I actually think it will trade at a discount today.

Not a great day to list, alot of people distracted by tsunamis unfortunately.

I've been wrong plenty of times before but not looking like a stag to me.

The sharsies crowd might be pumped, but surprisingly alot of people very negative about this listing on that platform too.

Proof will be in the pudding I guess.

Depth looking very soft for sellers. Couple of punters willing to buy a 'massive' 4,000 shares at $2.30.

According to Direct Broking, buying volume at or above the issue price of only about 25,000 shares vs. 120,000 shares willing to sell at or below issue price.

I'm not even ashamed to be taking pleasure in what looks like an inevitable flop as it is just a very average offer, particularly for those Foodie "investors".

[Beagle]

Further to the good work done by nztx and others, I decided to crunch some numbers.

My concerns (as others have also mentioned):
- Insiders cashing out
- Involvement of private equity
- large Intangible Assets (note some of this INCLUDES capitalised costs. Per the supplementary notes on the Companies Office website, where people costs go up partly due to less capitalised costs)
- Negative NTA
- High P/E
- Massive current liabilities versus current assets with no cash in the bank (as nztx says, what are the dividends being paid from?)
- The numbers are hard work; they being clever clogs working in millions has resulted in a myriad of rounding differences

Is it $16m or $17m in dividends being paid out on the FY22 results? One document says $16m but 242m shares at 7c per share is $17m. This feels sloppy.
Also of concern is they leave some marketing costs in COGS. Freebies fall into COGS when they really should be taken out and disclosed under marketing, otherwise margin reporting becomes distorted.
Forecast cashflow statement has been prepared on a GST exclusive basis. This feels naïve.

- massive variable cost savings to be achieved to land on FY22 NPAT numbers:

COGS per meal to reduce 6.1% in FY22 from $66.33/meal to $62.27 (2020 was $69.90)
Assembly per meal to reduce 0.8% in FY22 from $14.42/meal to $14.30 (2020 was $15.20)
Distribution per meal to reduce 2.9% in FY22 from $11.99/meal to $11.64 (2020 was $11.52) - hard to see how reductions are achieved with a contract with NZ Post locked in for 5 years
Total reduction in variable costs of $4.53/meal in FY22 for a saving of $6.8m (yes you read that right) - I will believe this when I see it.

- Average Sale Price per meal dropped in FY19 and FY20. The forecast prices for FY21 and FY22 are back to where they were in 2018.
- Whilst there was a boost in volumes due to the COVID lockdown, where is the momentum into FY22 that we are seeing in other retail sectors?
- External marketing A&P costs were reduced from $5.9m in FY19 to $3.7 in FY20. This reduction exceeded the increase in reported NPAT. This is typical of private equity organisations to cut marketing spend to shore up profits, but at what long term cost to the business? Given the spend is forecast to increase $0.8m in FY21 this effect may be somewhat mitigated, when combined with publicity surrounding the float.

Some numbers if others want to pick over them:



My Food Bag
FY18
FY19
FY20
FY21
FY22
$ Change
% Change












Meals Delivered
1,200,953
1,244,187
1,250,408
1,525,765
1,503,226

-1.5%


Volume Change

3.6%
0.5%
22.0%
-1.5%














Average Price
$124.07
$123.21
$122.60
$124.20
$124.00
-$0.20
-0.2%


Price Change

-0.7%
-0.5%
1.3%
-0.2%














Revenues $m
$149.0
$153.3
$153.3
$189.5
$186.4
-$3.1
-1.6%












Cost of Sales
$83.6
$84.8
$87.4
$101.2
$93.6
-$7.6
-7.5%


Gross Margin
$65.4
$68.5
$65.9
$88.3
$92.8
$4.5
5.1%


GM %
43.9%
44.7%
43.0%
46.6%
49.8%














Assembly
$19.6
$20.3
$19.0
$22.0
$21.5
-$0.5
-2.3%


Distribution
$15.9
$15.8
$14.4
$18.3
$17.5
-$0.8
-4.4%


Marketing
$5.9
$5.9
$3.7
$4.5
$4.8
$0.3
6.7%


Overheads
$12.5
$13.8
$12.0
$14.5
$14.7
$0.2
1.4%


Adj.

-$0.8
-$0.1

$0.1




Operating EBITDA
$11.5
$13.5
$16.9
$29.0
$34.2
$5.2
17.9%












Depreciation & Amort.
$3.3
$2.3
$4.3
$5.2
$5.3
$0.1
1.9%


Interest
$1.4
$1.2
$1.3
$1.8
$1.0
-$0.8
-44.4%


Restructure



$14.6

-$14.6



NPBT
$6.8
$10.0
$11.3
$7.4
$27.9
$20.5
277.0%












Tax
$1.8
$2.8
$3.1
$6.6
$7.8
$1.2
18.2%


NPAT
$5.0
$7.2
$8.2
$0.8
$20.1
$19.3
2412.5%
















FY21
FY22




Shares (m)



242.4
242.4




Earnings per Share



$0.00
$0.08




PE Ratio @ $1.85



560.6
22.3




Normalised Ratio @ $1.85



29.1
22.3














Dividends $m




$17.0




Dividend per Share




$0.07




Yield @ $1.85 - Nett




3.8%




Yield @ $1.85 - Pre-tax (33%)




5.6%



























FY20
FY21
FY22




Equity


$58.2
$52.7
$66.4














Receivables



$1.2
$1.2




Inventory



$0.8
$1.5




Others



$0.9
$1.1




Current Assets



$2.9
$3.8














Fixed Assets



$3.2
$3.6




Intangible Assets



$85.9
$85.4




IFRS Junk



$8.8
$6.3




Non Current Assets



$97.9
$95.3




Total Assets



$100.8
$99.1














Payables



$11.1
$8.7




Deferred Revenue



$3.5
$4.0




Tax



$0.8
$4.9




Others



$1.3
$1.1




IFRS Junk



$2.9
$2.4




Current Liabilities



$19.6
$21.1














Loans



$16.2
$1.3




Provisions



$0.3
$0.3




Deferred Tax



$4.5
$4.5




IFRS Junk



$7.5
$5.5




Non Current Liabilities



$28.5
$11.6




Total Liabilities



$48.1
$32.7


















FY21
FY22




Current Assets / Current Liabilities



0.15
0.18




Debt/Equity



0.91
0.49




NTA $m



-$31.6
-$17.4




NTA/Share



-$0.13
-$0.07




Return on Equity



1.4%
38.1%




Return on Equity Adj.



26.5%
38.1%















FY18
FY19
FY20
FY21
FY22




COGS/Meal
$69.61
$68.16
$69.90
$66.33
$62.27




Cost Change

-2.1%
2.6%
-5.1%
-6.1%














Assembly/Meal
$16.32
$16.32
$15.20
$14.42
$14.30




Cost Change

0.0%
-6.9%
-5.1%
-0.8%














Distribution/Meal
$13.24
$12.70
$11.52
$11.99
$11.64




Cost Change

-4.1%
-9.3%
4.1%
-2.9%





EDIT P.S. I forgot to mention that given the values are disclosed in millions to 1 decimal place, the actual costs per meal can vary by up to $0.05m or 3.3c per meal - with a total possible distortion of plus or minus 10c per meal in any 1 year for the cost per meal. The maximum variation will be +/-$150k so the $6.8m savings is not far off their workings.


Excellent caliber of work Ferg. (A+) :) I really appreciate your analysis and insights.
Extremely creative forecasting by the vendors in my opinion. I wouldn't touch this with a 40 ft barge pole.


I'm curious about this one. I know years ago on this thread I felt that they've kind of reached their peak. When this offer came out I assumed their growth strategy was to expand to new countries, but no, it's not.

They have done well to create a whole new ecosystem and it likely helps smaller manufacturers who don't get as much supermarket space. This is a new style of shopping and cooking, and many people have embraced it. They've even got the Made meals for people who don't like to/are unable to cook, which is a really fabulous option.

Will this be a huge share success? Who knows. There is new hype amongst people who are new to the sharemarket, so maybe that's a good thing? At least it's a brand that everyone knows.

I have been a MFB customer since the very beginning. Over the last year I have been alternating weekly between MFB and Hello Fresh to experience the difference. I still prefer MFB for value and content. I have now cancelled HF and will be doing MFB every week since now I'm a shareholder.... and strangely I got 100% of my request! How did I not get scaled?

Good luck Blendy. Ferg (who impresses me as the brightest newcomer from the class of 2020) did some stellar work on this on 15/02/2021.
Plenty of warning signs for those who ran the ruler over this properly.

[JohnnyTheHorse]

Depth looking very soft for sellers. Couple of punters willing to buy a 'massive' 4,000 shares at $2.30.

According to Direct Broking, buying volume at or above the issue price of only about 25,000 shares vs. 120,000 shares willing to sell at or below issue price.

I'm not even ashamed to be taking pleasure in what looks like an inevitable flop as it is just a very average offer, particularly for those Foodie "investors".

Never a great indication until a couple of minutes before opening. In saying that, especially with the market weakness currently I don't see this outperforming.

[winner69]

Plenty of warning signs for those who ran the ruler over this properly.

I recall you saying much the same at the time Oceania debuted on the NZX

[Baa_Baa]

Never a great indication until a couple of minutes before opening. In saying that, especially with the market weakness currently I don't see this outperforming.

For sure not a great indicator is Depth but interesting at this stage there's only 44k bid vs 609k ask, and some 300k of that ask is at $1.83

Better check again closer to 11am.

[trader_jackson]

ouch not off to a good start, down 5% on the open

[Getty]

$1.76

Indigestion or malnutrition?

[bull....]

ouch that was a flop

[Balance]

Stags?

Venison on the table instead?

[Sir Ten]

This is mild. Should be down 20%.

[mikeybycrikey]

ouch not off to a good start, down 5% on the open

As we’ve seen over the past few years, never buy from private equity sellers. Waterman fully priced the offer, leaving less than nothing on the table for buyers. This is really not a good look for the company.

[Baa_Baa]

This is mild. Should be down 20%.

Patience patience. ;)

[Ferg]

Good luck Blendy. Ferg (who impresses me as the brightest newcomer from the class of 2020) did some stellar work on this on 15/02/2021.
Plenty of warning signs for those who ran the ruler over this properly.
Aw shucks. Thanks Beagle. Although I must warn everyone that I have the reverse Midas touch. Usually, anything I touch immediately moves in the opposite direction and it takes a strong conviction to not over-react to short term price movements. I generally use the contrarian (aka Grahamite?) method to investing by buying counter-cyclically. I'm not very good at picking the low.

For the record, I think this is an ok business. If they can achieve savings on COGS then that makes this a stronger business. But if they can't, then it's hard to see how they will achieve profit growth, especially given the listing is not being used to fund growth. The forecast dividend yield is ok, but that is dependant on achieving cost savings.

Disclosure: curious observer, no holding or intention to hold (anyone who believes my reverse Midas touch comment should see that as a short term indicator to buy).
GLTAH

[winner69]

Probably close below 150 today

[Balance]

Probably close below 150 today

Before heading back up to $2.30 by results date?

[Getty]

$1.69

The way this is going down the toilet, some critter slipped some laxatives in the mix.

[FTG]

It seems the institutions were scaled back a bit too. Based on the Market Cap & free float expect index related funds to start nibbling at some point......

[winner69]

Before heading back up to $2.30 by results date?

Maybe not 230 now but 220 will be OK

Remember profit upgrades come in 3s

[Balance]

Maybe not 230 now but 220 will be OK

Remember profit upgrades come in 3s

They don't actually but that's another story.

But chance for you (without worrying about scaling back) to load up at these bargain basement prices as $2.20 less $1.70 = 50c = 29% vs $2.30 less $1.85 = 45c = 24%.

[Ruby]

They don't actually but that's another story.

But chance for you (without worrying about scaling back) to load up at these bargain basement prices as $2.20 less $1.70 = 50c = 29% vs $2.30 less $1.85 = 45c = 24%.
Just so I keep learning...is it only downgrades that come in 3's??

[Balance]

Just so I keep learning...is it only downgrades that come in 3's??

Downgrades are forced upon companies - so management try to minimize their impact and keep underestimating the worse, hence the three or more downgrades.


Companies can time their upgrades as they are not forced on the companies so expect upgrades to be a well managed process to maximize their impact on the sp. FBU is a good example in recent times.

[Lego_Man]

My Food...Bag Holders

[Balance]

Going to leave a very bad taste in the mouths of customers/shareholders if they don't get the sp back to $1.85.

https://www.nzherald.co.nz/business/my-food-bag-shares-list-on-the-nzx-at-a-discount/6Z6KAFSPQMT45IBXVXJXXAD5BE/

This morning My Food Bag chairman Tony Carter welcomed all new shareholders to the My Food Bag family.

"We are particularly delighted to welcome so many of our customers as shareholders following their participation in the Foodies Offer," he said.

[Beagle]

"Tuck In" was the promoters punchline. That's hard to do when they only leave crumbs on the table after gorging themselves.
I must check how that other listing a few years ago that started with "M" is going (MPG), ouch only 35 cents, surely not ! Mmmmm, surely we're not going to get a repeat of that or...on the other hand maybe we are ? :eek2:

I'm calling it, the new breed of punters have been sold a mangy pup !

[Balance]

They don't actually but that's another story.

But chance for you (without worrying about scaling back) to load up at these bargain basement prices as $2.20 less $1.70 = 50c = 29% vs $2.30 less $1.85 = 45c = 24%.

Milford & the other 2 institutions taking >5% each will surely come in and buy more at below $1.85 so short term, probably good buying at $1.70 for a quick flick by traders?

[Getty]

$1.68 new low.

No ones taking the bait.

Could be a lean diet for many this weekend.

Will their appetite for My old bag on Monday be refreshed, or famished?

[Balance]

$1.68 new low.

No ones taking the bait.

Could be a lean diet for many this weekend.

Will their appetite for My old bag on Monday be refreshed, or famished?

My Food bags to include venison this weekend?

[Ggcc]

Looks like this IPO is going great.......... Why do people feel a company making approximately 25 million a year and growing to 35 million, give or take by 2022 is worth 450 million dollars. who are they paying for that valuation. It would make the average local fish and chip shop worth approximately 1 million dollars.

[Getty]

My Food bags to include venison this weekend?

They are paying deerly

[BlackPeter]

$1.68 new low.

No ones taking the bait.

Could be a lean diet for many this weekend.

Will their appetite for My old bag on Monday be refreshed, or famished?

Actually - quite impressive volumes.

Just wondering, whether this is new holders immediately realizing their IPO losses, or whether this is some of the old owners selling out some more shares they didn't get rid of during IPO?

Anyway, not really comforting for new holders ...

[Balance]

They are paying deerly

Think they will have some w(h)ine with their food bag this weekend?

[Beagle]

Looks like this IPO is going great.......... Why do people feel a company making approximately 25 million a year and growing to 35 million, give or take by 2022 is worth 450 million dollars. who are they paying for that valuation. It would make the average local fish and chip shop worth approximately 1 million dollars.

Maybe MFB is an acronym for "Many Fudged Books" ?

[Getty]

The way they are stag gering around at the moment, some of them wont even make it to My Food Bank...

[nztx]

Actually - quite impressive volumes.

Just wondering, whether this is new holders immediately realizing their IPO losses, or whether this is some of the old owners selling out some more shares they didn't get rid of during IPO?

Anyway, not really comforting for new holders ...

Just a bit over 1% of total issued shares traded in opening round so far ..

Forgot to bring my doggy bag & not worth going back for it at current SP levels for a bit of a punt .. ;)

doesn't look like too much demand currently for leftovers either .. ;)

[nztx]

Maybe MFB is an acronym for "Many Fudged Books" ?



Could be too .. if things start looking ugly then some very much more colourful variants may emerge .. ;)

horses for courses .. NZA looked a better opening today and cheap enough too .. IMO .. ;)

[Rawz]

Not sure what's worse for holders. The beating the share price has taken or having to read the puns in this thread lol

(Not a holder)

[Getty]

$1.65

At this rate, the thread title will have to be changed, from coming soon, to going soon!

[Beagle]

"My Food bank" is surely the best play on words so far...where many a new punter will be heading this weekend.

[Getty]

Good to have OGG on board.

Will there be a takeover, or a takeaway?

[Balance]

MFB = My Foolish Bet by the stags?

[percy]

Could be too .. if things start looking ugly then some very much more colourful variants may emerge .. ;)

horses for courses .. NZA looked a better opening today and cheap enough too .. IMO .. ;)

I too thought NZA looked better,however not tempted to buy either..
NZA market cap today is $58mil compared to MFB's $402 mil,

[Balance]

Good to have OGG on board.

Will there be a takeover, or a takeaway?

Shhhhh - he will be trying to convince Sky to merge with MFB.

That way, punters can watch Sky (at a discounted rate) while choking on MFB sour & bitter dishes?

[maclir]

Maybe Future Buy

[Getty]

Who's noticed the new thread title?
what a hoot!!!

[Getty]

Shhhhh - he will be trying to convince Sky to merge with MFB.

That way, punters can watch Sky (at a discounted rate) while choking on MFB sour & bitter dishes?

Not seeing much BlueSky at the moment!

[Getty]

Those Funned Managers will be seeing the error of their ways.

No more gorging for them.

[Baa_Baa]

12366

... stag on the menu ...

[Getty]

Poor old Winner has gone quiet.

He must be losing.

[Balance]

Poor old Winner has gone quiet.

He must be losing.

He went from cold on the IPO to very hot.

Heat in the kitchen may have proven too much for his liking?

[Getty]

Could be simmering..

Is this launch on its way to The Scumbag of the day Award?

[patrick]

Remember the Company floated to process Possum skins?

[Getty]

No, but they are both stunned in the headlights..

[RGR367]

Is winner69 really bought into this one after all the warnings on this thread?

[winner69]

He went from cold on the IPO to very hot.

Heat in the kitchen may have proven too much for his liking?


Just back from oysters and chips on the beach ..... no tsunami ....and the seagulls got a few chips .... their squawking reminded me of some on ST

Nearly choked laughing when a beagle who was having a little paddle got caught up in some seaweed and get swamped by a wave (on a little one) and panicked and its owner had to rescue it and in doing so fell in the tide - nothing like a distraught owner with a wet beagle

Bought s a few more NFB when I got home ...not many.

Don't worry about me - it'll turn out fine

[Getty]

Actually, I think there has been a mistake with the menu instructions.

They said use a Skillet, but the unskilled have jumped out of the frying pan, into the Fire!

[Balance]

Just back from oysters and chips on the beach ..... no tsunami ....and the seagulls got a few chips .... their squawking reminded me of some on ST

Nearly choked laughing when a beagle who was having a little paddle got caught up in some seaweed and get swamped by a wave (on a little one) and panicked and its owner had to rescue it and in doing so fell in the tide - nothing like a distraught owner with a wet beagle

Bought s a few more NFB when I got home ...not many.

Don't worry about me - it'll turn out fine

We never worry about you, W69 except you should not let MFB go cold?

It’s best served hot!

[Louisphan]

I don't like the business too.

But Milford Asset hold the Substantial Shares brought me the attention on this companyˆˆ.

Let see what is going on!

[Getty]

You're not a phan?

[Beagle]

MFB = My Foolish Bet by the stags?


Just back from oysters and chips on the beach ..... no tsunami ....and the seagulls got a few chips .... their squawking reminded me of some on ST

Nearly choked laughing when a beagle who was having a little paddle got caught up in some seaweed and get swamped by a wave (on a little one) and panicked and its owner had to rescue it and in doing so fell in the tide - nothing like a distraught owner with a wet beagle

Bought s a few more NFB when I got home ...not many.

Don't worry about me - it'll turn out fine

Oh my goodness, I hope you gave that Beagle owner some trauma counselling...seeing one's million dollar dog in strife is deeply traumatizing.

Speaking of being in trouble or staying out of it...Fortunately I am blessed with a good nose for B.S. and am a strong swimmer so its not a case of "My Fleeced or Floundering Beagle" with this listing :cool:

Nice work on the thread name change Winner.

[Getty]

When's the New World IPO?
https://i.imgur.com/GKgQ4MD.jpg

Looks like the're too far into the Red for me!!!

[winner69]

Bit of a concern that it’s below IPO price on day one — even OCA managed to close at its IPO price on first day .... even though a few sniffed out the B S and concluded the forecasts were just that and concluded ‘you cannot list on fancy pants multiples’ because of inflated growth forecasts you can take with a grain of salt etc etc

Oceania turned out OK .... MFB could do the same ....one needs to be just a bit objective

[Getty]

You are a Magician OGG, totally wasted on here, but dont go away all the same.

I would say we have all have had a good afternoon of entertainment, win or lose.

[Getty]

Looks like its one for the Rainbow Community now.

Definitely a New World for most.

[Habits]

Yahoo finance shows MFb up $1.69 for the day, percentage gain 2816.67 percent... flippin missed out again 😄

[mikeybycrikey]

I thought that $1.60 would've been a good issue price and I still stick with that. It could be a good boring dividend payer.

Unfortunately sellers were too greedy and are getting bad headlines on day 1. They also got a few million dollars more so maybe it paid off but it really doesn't look good and erodes trust.

I'm slightly concerned what effect it might have on the most passionate customers. MFB worked pretty hard to get customers to buy in. Now they're underwater by about 10%. How passionate are these customers going to be now after being sold cold leftovers instead of haute cuisine?

[Baa_Baa]

Bit of a concern that it’s below IPO price on day one ... [snip]

See whether the >5%'ers line-wipe the asks at close to finish on IPO price. If they thought $1.80 was good, then current price must be a steal. ;)

[HCR20]

Oceania turned out OK .... MFB could do the same ....one needs to be just a bit objective


What's the thesis?

Easily replicated business with no growth prospects. I guess they could screw suppliers a little more but there is only so much blood you can get from a potato. Maybe they can differentiate via their recipes (jokes). Aside from that, this is going the way it was always going to go. This is about the owners cashing up and getting out.

[Getty]

A big day for many.

Stage managed finish I would suggest at $1.74, but the VWAP at $1.7039 b4 that does not lie.

$8.21M has been consumed by new buyers , @ 8% discount overall.

Was it a special, or a clearance?

Next week will confirm.

Dont go hungry in the meantime.

[Blendy]

I'm slightly concerned what effect it might have on the most passionate customers. MFB worked pretty hard to get customers to buy in. Now they're underwater by about 10%. How passionate are these customers going to be now after being sold cold leftovers instead of haute cuisine?

Yes I agree - there has been a pretty good campaign to attract people who may never have invested in shares before to participate in this IPO and own part of a business they know and trust.

For many people their first day of being an investor = OMG I'll never do this again. While it's extremely common to not instantly make a profit on shares you just bought, not having the support of the market and losing money is rather bad PR for a household brand, and MFB will need to do something to restore the trust of their own customers who are now also shareholders.

Disclosure: reluctant shareholder, devoted customer

[nztx]

What's the thesis?

Easily replicated business with no growth prospects. I guess they could screw suppliers a little more but there is only so much blood you can get from a potato. Maybe they can differentiate via their recipes (jokes). Aside from that, this is going the way it was always going to go. This is about the owners cashing up and getting out.

Agree with you there ..

[Beagle]

Old mutton dressed / priced up like fresh spring lamb. It will leave a bad and dry taste in consumers mouths as they will feel duped after being urged time and again to "tuck in". Little did they realise that they were the ones on the menu and are ostensibly like lambs to the slaughter...

[nztx]

See whether the >5%'ers line-wipe the asks at close to finish on IPO price. If they thought $1.80 was good, then current price must be a steal. ;)

be a few wondering why they bothered with IPO allocations & the rest of the hyped up nonsense on what
the first day out of the stall onto the track has seen .. ;)

[Beagle]

What's the thesis?

Easily replicated business with no growth prospects. I guess they could screw suppliers a little more but there is only so much blood you can get from a potato. Maybe they can differentiate via their recipes (jokes). Aside from that, this is going the way it was always going to go. This is about the owners cashing up and getting out.

+1 but priced like it was a high growth company. I am surprised that some old hands on here were duped so easily.

[nztx]

What realistic opportunities are there for cutting cost of direct produce & ingredients are there ?

Produce seasonal - price fluctuates - many perishable lines with limited chiller use by date

Meat & other products - in many instances wholesale price is market driven as well ..

Aside from volume discounts / and possibly a bit of customer shafting on content volume in the bag
doing things a bit better - is potential for raw ingredient costs coming in even possible ? ;)

Okay of course if the job wasn't being done efficiently in the first place .. maybe .. ;)

Those in the tucker game will have some ideas on this I guess..

[Balance]

My Food Bag a great little company. It will continue to perform solidly financially - like consistently making around $20m (and a bit more) profit in the next few years.

That's pretty good eh

But going public how good the company is will be dependent on the share price.

With all the IPO hype consistently making about $20m wont be good enough and My Food Bag will be seen as a dog of a company - useless at evrything it does and similar such comments will be thrown around.

Beauty is in the eye of the beholder - but I think it sad that even though little will have changed how they satisfy customers on a day to day basis they can one day seen as a solid little company and the next a dog.

Happened to Metro Glass. If you take out the Australian acquisition that he money men forced them to do and look at the NZ business it on a day to day basis has been chugging along nicely since IPO (even has some profitability measures that global peers envy) but in the eyes of most it is seen as dog of a company because of its share price - a hopeless one etc etc

Being private is good - being in the headlights of the money men and greedy retail shareholders is a different story.

I feel sorry for those who work at My Food Bag - their little company will never be seen the same again - and those workers have been seduced with shares as well

Sadly, W69’s accurate take before he got seduced by the hype.

[nztx]

+1 but priced like it was a high growth company. I am surprised that some old hands on here were duped so easily.


the effective SP certainly saw some high effective growth .. well for founders & up to time IPO mutterings were on the table .. ;)

the Gattung & Fund's stakes for beneficial / Retirement / Greedy interests yielded some very some substantial growth..

Will that do ? ;)

If it doesn't fly - will they be as fast to reimburse, if for example the new investor serf class onboard aren't happy
with things, or will it take throwing a class action or two & large paper bag at them to sort it out ? ;)

[moimoi]

Blendy, as you know..It's extremely common to instantly make a profit on shares on day 1 of IPO'd shares in other markets..

NZ with its tiny capital markets, with very few significant entities prepared to come to market, appears to have listing brokers primarily operating on behalf of the vendor of the securities....IMO.

[Balance]

Blendy, as you know..It's extremely common to instantly make a profit on shares on day 1 of IPO'd shares in other markets..

NZ with its tiny capital markets, with very few significant entities prepared to come to market, appears to have listing brokers primarily operating on behalf of the vendor of the securities....IMO.

Add another one to Jarden (was FNZ Capital) & Forsyth Barr’s string of IPO failures.

This one has some of the hallmarks of the Feltex IPO :

- retail investors getting stuffed with stock,

- PE players cleaning up mostly
and

- the little money raised relatively for the company being used to pay dividends to make the offer ‘dividend yield’ attractive.

Why bother?

[Beagle]

Add another one to Jarden (was FNZ Capital) & Forsyth Barr’s string of IPO failures.

This one has many of the hallmarks of Feltex - retail investors getting stuffed with stock, PE players cleaning up mostly and the little money raised for the company being used to pay dividends to make the offer ‘dividend yield’ attractive.

Had the same feel as Feltex on day one too. Furrbarr stuffed as many Feltex shares as they could into clients accounts for which they had full management control. $1.50 or less coming up, I reckon. Anyway...I love a good trainwreck so I added these to my "Trainwreck" watchlist...they're sitting just above Synlait... AIR tops the list though...that's going to be spectacular to say the least !

[SPC]

If it's an IPO then run as fast as you can in the opposite direction and walk back slowly with your cash in your pocket.
Have we not learned this by now..?
Good luck. Once burned...never again.

[Getty]

Old mutton dressed / priced up like fresh spring lamb. It will leave a bad and dry taste in consumers mouths as they will feel duped after being urged time and again to "tuck in". Little did they realise that they were the ones on the menu and are ostensibly like lambs to the slaughter...

I love the way that some of the old cliches, are still the most apt for modern events.

[winner69]

Glad most of you had a most enjoyable day. I admire you ability to only pick winners

The only thing that didn't go to plan was that I assumed there would be a lot more greater fools than there were

More action one way or the other - at least MFB didn't go bust and they live to fight another day

The most galling thing today is that I lost more $s on HLG than I did on MFB

[Getty]

Until you restore that cat on your profile, you will only be a part time Winner, lol

[Balance]

Glad most of you had a most enjoyable day. I admire you ability to only pick winners

The only thing that didn't go to plan was that I assumed there would be a lot more greater fools than there were

More action one way or the other - at least MFB didn't go bust and they live to fight another day

The most galling thing today is that I lost more $s on HLG than I did on MFB

Time to double up on MFB - sell HLG to fund the doubling up?

[Beagle]

Time to double up on MFB - sell HLG to fund the doubling up?

What could possibly go wrong :lol:

[Balance]

How could the issue be heavily over-subscribed but according to the commentary, too many shares were offered?

https://www.stuff.co.nz/business/industries/124453745/slumping-meridian-contact-weigh-on-nzx50-index-my-food-bag-disappoints

"Stephen Bennie of Castle Point Funds called the debut disappointing, although not a disaster.

Investors had been prepared to accept a price below the IPO, a sign that too many shares had been offered during the placement.'


Note from Craigs suggested "The My Food Bag IPO book-build closed early on Friday and was heavily over-subscribed."

[nztx]

What could possibly go wrong :lol:


Haha .. what could go wrong ? ;)

Those large HLG Div's might get hit with the new 39% top Tax rate .. ;)

All part of the winning process ..

[Getty]

My Food Bag a great little company. It will continue to perform solidly financially - like consistently making around $20m (and a bit more) profit in the next few years.

That's pretty good eh

But going public how good the company is will be dependent on the share price.

With all the IPO hype consistently making about $20m wont be good enough and My Food Bag will be seen as a dog of a company - useless at evrything it does and similar such comments will be thrown around.

Beauty is in the eye of the beholder - but I think it sad that even though little will have changed how they satisfy customers on a day to day basis they can one day seen as a solid little company and the next a dog.

Happened to Metro Glass. If you take out the Australian acquisition that he money men forced them to do and look at the NZ business it on a day to day basis has been chugging along nicely since IPO (even has some profitability measures that global peers envy) but in the eyes of most it is seen as dog of a company because of its share price - a hopeless one etc etc

Being private is good - being in the headlights of the money men and greedy retail shareholders is a different story.

I feel sorry for those who work at My Food Bag - their little company will never be seen the same again - and those workers have been seduced with shares as well

Winner using a bit of reverse psychology, while he was in fact backing up his truck to load up.

He thought he was feinting, but he blo0dy near fainted when he got back from his oysters and chips, and saw the share price!

He can be sure his sins will find him out, eh Beagle?

[Beagle]

I'm sure he wasn't the only one with indigestion on Friday. The question is will Winner suck it up, realise he's been duped and cut his losses or will he double down, (or much more) and chase it like the punter he is ? My money is on him taking a big punt when he thinks the shares have found a floor.

[nztx]

they still sinking -- bag sizes may be needing to be shrunk by a further 2.3% so far on the
back of last week's indigestion .. ;)

may be quite a few new punters with a dose of guts ache coming on, out of toying with this IPO .. ;)

[Sideshow Bob]

I note the change in title of this thread......:closed eyes:

[Tomtom]

What I found interesting in the prospectus was the chart showing how rapidly the market for people-who-have-the-motivation-to-cook-but-not-to-shop is growing in Australia. Nowhere does it actually mention any plans to enter the Australian market however?

It's as flawed as my ultimately tragic plan to date the prettiest girl at school by never actually asking her out. A slight oversight in the participatory aspect of success.

[artemis]

What I found interesting in the prospectus was the chart showing how rapidly the market for people-who-have-the-motivation-to-cook-but-not-to-shop is growing in Australia. Nowhere does it actually mention any plans to enter the Australian market however?

It's as flawed as my ultimately tragic plan to date the prettiest girl at school by never actually asking her out. A slight oversight in the participatory aspect of success.

They did expand to Australia but opted out after maybe couple of years as I assume not profitable. There have been a couple of attempts to partner up here (coffee and wine) that are no longer happening AFAIK. However there are a number of long term partnerships with brands and suppliers at the smaller, artisan, sustainable or free range end of the scale. Probably been good boosts for those suppliers, has to be a positive. They have announced new possible lines to take advantage of their very good logistics capability.

I like that they try things, and only continue if they work.

I see this as an income play for a while, but have seen a tsunami of Hello Fresh advertising lately. I guess taking advantage of the IPO buzz to grab some market share.

[Gerald]

They did expand to Australia but opted out after maybe couple of years as I assume not profitable. There have been a couple of attempts to partner up here (coffee and wine) that are no longer happening AFAIK. However there are a number of long term partnerships with brands and suppliers at the smaller, artisan, sustainable or free range end of the scale. Probably been good boosts for those suppliers, has to be a positive. They have announced new possible lines to take advantage of their very good logistics capability.

I like that they try things, and only continue if they work.

I see this as an income play for a while, but have seen a tsunami of Hello Fresh advertising lately. I guess taking advantage of the IPO buzz to grab some market share.

Saw a fair bit of MFB advertising on the Herald thanking the shareholders for taking part in the IPO. Good to see they are extracting optimal value from their limited advertising spend.

[artemis]

Saw a fair bit of MFB advertising on the Herald thanking the shareholders for taking part in the IPO. Good to see they are extracting optimal value from their limited advertising spend.

Targeting a new potential market? Have to think retail shareholders are a good target market.

[FTG]

Quite possibly not articulated very clearly, but I suspect that they are are trying to suggest that what has occurred in Aussie is likely to occur in this market too.
Aussie is arguably more at the leading edge of setting direction for F & B trends. Traditionally NZ tends to lag Aussie by 1-2 years in all things cuisine related.

[Balance]

A PE guy once told me most advances made to them to buy businesses get laughed out the door (metaphorically) ....or if they show promise screw the price to hell.

If somebody fronted up to Waterman with a glossy brochure like the current MFB one they’d probably be laughed out the door

W69 normally has good instincts but something went amiss with his take on MFB.

Went from cold to very hot.

Think the hot curry dish MFB included in their offering last month got into his head?

[Beagle]

W69 normally has good instincts but something went amiss with his take on MFB.

Went from cold to very hot.

Think the hot curry dish MFB included in their offering last month got into his head?
I feel a song coming on....

One of the best all time album's...trouble is you can get yourself into all sorts of trouble with a Momentary Lapse of Reason https://www.youtube.com/watch?v=Ykz6w2ldoFw

[SPC]

Confusion can come in to it also.
Confusion is a good marketing tool.
I think has been said before somewhere..

[Getty]

https://youtu.be/5Qh9XC1IVhM

A bit more on trouble, and doubling down.

[Tomtom]

I see this as an income play for a while, but have seen a tsunami of Hello Fresh advertising lately. I guess taking advantage of the IPO buzz to grab some market share. To be honest I think HelloFresh are the main reason for starting to cash out and settle up. (https://www.inc.com/magazine/201808/burt-helm/hellofresh.html)

[winner69]

Mike Jagger had a bit of fun recently

https://ultimateclassicrock.com/mick-jagger-pride-before-a-fall-song-tease/

Proverbs 16.18 comes to mind

But I am awe of you all for never ever been a loser ....even a small one now and again

[Balance]

I’m always wary when none of the proceeds of an IPO go directly to the company when they are touted as a high growth business.

After the $17m of IPO costs the rest of the $342m cash goes to lenders and current shareholders

Plus, dividends (as a sweetener to call MFB IPO as a yield story as well) to be paid via the capital raising!

MFB smelled really really bad right from day 1.

W69, they covered up the bad smell with the hot curry & spices in the IPO special
Dish they provided?

[Balance]

https://www.nzherald.co.nz/business/my-food-bag-shares-list-on-the-nzx-at-a-discount-after-342m-ipo/6Z6KAFSPQMT45IBXVXJXXAD5BE/

Paywalled

“A My Food Bag spokesperson declined to say how many of its customers took part in the float, although it has been reported that more than 10,000 customers and staff registered their interest.”

A big admission of failure to take care of customers but didn’t the original shareholders do well - successfully selling shares even better than the food dishes!

[SPC]

So as a rule of thumb, if it sounds like an IPO and smells like a curry, run like hell.
"The bitter taste of poor quality lingers long after the sweet burst of bagging a bargain"..proverbs:old man

[Balance]

So as a rule of thumb, if it sounds like an IPO and smells like a curry, run like hell.
"The bitter taste of poor quality lingers long after the sweet burst of bagging a bargain"..proverbs:old man

https://www.youtube.com/watch?v=_ZPc7DVbgjI

Plenty of warnings - plenty of red flags.

Plus this :

Of the $55m raised for the company, $19.7m were for Dividends for F21* and F22, & $16.8m were for IPO expenses!

So $36.5m or 2/3rd of the money raised for the company's own use were for non-productive & non-growth purposes!


*$13.3m dividends were paid using bank debt and then, repaid through IPO proceeds.

[Beagle]

Shareholders should rush out and buy a whole year's worth of Quick Eze for the ongoing pain and indigestion this no growth company will give them. BIG BIG difference between the price of fresh spring lamb and tough old mutton, a fact that's yet to be reflected in the share price in my opinion.

No growth companies should list on a PE of 11 in my opinion which is half the PE they listed on. That takes fair value back to $1.85 / 2 = 92.5 cents per share in my opinion, assuming the forecasted figures are reasonable and achievable, ((I have serious doubts whether they are).

Everyone makes mistakes and nobody gets every decision right. Its a hard skill to acquire...the one where you recognize you made a mistake, cut your losses and move on. This forum is littered with examples of people who do the exact opposite and can't accept a loss and double (or much, much worse), down and suffer the consequences.

[Baa_Baa]

Interesting quote from Joshua Wang who has been doing some impressive analysis (fundamental and technical) on Youtube.

"They really timed this IPO well on the back of the pandemic tailwind and euphoric market. They intend to pay a dividend at a payout ratio of 90%, which means not a lot of reinvestment going into this business. I'm not paying more than 84 cents for this company!"


https://www.youtube.com/watch?v=_ZPc7DVbgjI

Plenty of warnings - plenty of red flags.

Plus this :

Of the $55m raised for the company, $19.7m were for Dividends for F21* and F22, & $16.8m were for IPO expenses!

So $36.5m or 2/3rd of the money raised for the company's own use were for non-productive & non-growth purposes!


*$13.3m dividends were paid using bank debt and then, repaid through IPO proceeds.

[Baa_Baa]

Big difference between the price of fresh spring lamb and tough old mutton.

Tough old mutton is still WAY better than fresh spring lamb, after a LOooooNG LOW & SLOW ROASTING! I should know.

BAA

[Beagle]

Tough old mutton is still WAY better than fresh spring lamb, after a LOooooNG LOW & SLOW ROASTING! I should know.

BAA

Which is exactly what I reckon shareholders are going to get ;) It might be worth 84 cents if the forecasted numbers work out, that's a big "IF" in my opinion.

[winner69]

Shareholders should rush out and buy a whole year's worth of Quick Eze for the ongoing pain and indigestion this no growth company will give them. Big difference between the price of fresh spring lamb and tough old mutton.

No growth companies should list on a PE of 11 in my pinion which is half the PE they did list on. That takes fair value back to $1.85 / 2 = 92.5 cents per share in my opinion, assuming the forecasted figures are reasonable and achievable, ((I have serious doubts whether they are).

Bacon Bowler stuffed it up letting on forecasts were a bit light .....beating prospectus numbers in May is a give .....and no chance of a surprise earnings upgrade now......so all the exciting things to keep share price going up has gone.

Even I said it would probably end up like Metro Glass over time ...after it had gone to 230 like Metro did.

As you are always right and never wrong no doubt one day the share price will be 95 cents

[winner69]

Pity the expected greater fools didn’t turn up .....still might though ;)

[Beagle]

Bacon Bowler stuffed it up letting on forecasts were a bit light .....beating prospectus numbers in May is a give .....and no chance of a surprise earnings upgrade now......so all the exciting things to keep share price going up has gone.

Even I said it would probably end up like Metro Glass over time ...after it had gone to 230 like Metro did.

As you are always right and never wrong no doubt one day the share price will be 95%

I make mistakes like everyone else does but I try and keep my batting average up as high as possible by avoiding the obvious and as many of the less obvious pitfalls I can possibly foresee. Thankfully the good Lord gave me a pretty good nose for finding dog food and sniffing out trouble, (for which I am very grateful).

Yes, I think this is quite likely to follow the share price trajectory of MPG, (albeit without the initial pop you were hoping for like what happened with that listing).

[Arbroath]

Interesting quote from Joshua Wang who has been doing some impressive analysis (fundamental and technical) on Youtube.

"They really timed this IPO well on the back of the pandemic tailwind and euphoric market. They intend to pay a dividend at a payout ratio of 90%, which means not a lot of reinvestment going into this business. I'm not paying more than 84 cents for this company!"

For me I wouldn’t own it at any price. That’s not because it’s worthless. It’s because it’s not worth wasting time and energy on a company that is likely to give me grief from an investment perspective. You only have so much energy and time and I think it’s better spent on higher quality businesses.

[Rawz]

Pity the expected greater fools didn’t turn up .....still might though ;)

The bigger fools could be the shareies army but I think they are a bit gun shy on newly listed co's after losing a truck load on the Harmoney and Rua Bioscience listings. I cant see the army coming to holders rescue on this one.

For what it's worth I thought there was a good chance for a stag on listing day, especially when all the news about scaling came out. There was lots of talk about people buying on the FB groups. Hyped up.

Was a bit surprised it was sold off so quick. Hindsight is a wonderful thing.

[Balance]

Have a look at the turnover on ASX - so pathetically low that it’s clear that even the dingoes over there smelled a dead rat and avoided the issue.

[winner69]

Many years ago I was the only punter in the whole world to have lost money on Heartland

I bought some at the then all time high of 98 cents (only trade at that price at the time) and the share price drifted back to something like 93/94 cents. Took a while for me to lose thar pr record.

Turned out OK

[Baa_Baa]

Many years ago I was the only punter in the whole world to have lost money on Heartland

I bought some at the then all time high of 98 cents (only trade at that price at the time) and the share price drifted back to something like 93/94 cents

Turned out OK

If you're buying a company that isn't going bust, it usually it works out ok in the long run. I've had a few, all managed to sell sometime later at a profit, albeit modest.

Mate, don't take it personally, these ST folks love to poke the borax.

imho. not holding.

[Scrunch]

Tough old mutton is still WAY better than fresh spring lamb, after a LOooooNG LOW & SLOW ROASTING! I should know.

BAA

Is that also a pick that the share price will continue to get roasted?

[Baa_Baa]

Is that also a pick that the share price will continue to get roasted?

Actually it's a fact, low'n slow cooked mutton or hogget always beats lamb, but it's a metaphor for what might unfold for MFB.

Who knows really Scrunch, the market will decide what it's worth. Currently that's unfolding, far be it for me to pick a low but instinct tells me this was an overpriced IPO and there is more disappointment to come.

That said, there was some price basing today from a technical sentiment perspective. Early days, let's see how it goes, easier said from a non-holding though from who might be interested to buy into a plateau.

[Beagle]

Actually it's a fact, low'n slow cooked mutton or hogget always beats lamb, but it's a metaphor for what might unfold for MFB.

Who knows really Scrunch, the market will decide what it's worth. Currently that's unfolding, far be it for me to pick a low but instinct tells me this was an overpriced IPO and there is more disappointment to come.

That said, there was some price basing today from a technical sentiment perspective. Early days, let's see how it goes, easier said from a non-holding though from who might be interested to buy into a plateau.

Your instinct for not being the subject matter of the low slow roasting appear to be working pretty well ;) P.S. Slow roasted lamb shanks are one of this dog's most favorite tucker. Just show me where to "tuck in" to that.

Speaking of slow roastings...market is down for 6 weeks in a row. https://www.goodreturns.co.nz/article/976518253/f-p-healthcare-pulls-nzx-50-lower.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+8+Mar+2 021

[Balance]

https://www.stuff.co.nz/business/300248143/my-food-bag-share-price-dragged-down-by-wider-market-softness

Spinning the tale that it's all the market's fault - everything is just great at MFB so W69 & other punters should relax, sp will be back up to $1.85 in no time.

Then it's all but blue skies, smoked salmon, caviar & champagne from there.

[Balance]

Good to see Jarden & Harbour (using some of the very substantial fees they earned from the IPO) to support the sp - buying 2.7m shares or 42% of all shares traded in first 2 days of trading.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFB/368848/342039.pdf

If they keep supporting the sp, there could be an opportunity when window dressing day comes around on 31 March 2021 that punters may get out at IPO price?

Window is going to be very small so get ready to go!

[nztx]

Good to see Jarden & Harbour (using some of the very substantial fees they earned from the IPO) to support the sp - buying 2.7m shares or 42% of all shares traded in first 2 days of trading.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFB/368848/342039.pdf

If they keep supporting the sp, there could be an opportunity when window dressing day comes around on 31 March 2021 that punters may get out at IPO price?

Window is going to be very small so get ready to go!


Did some say a bit of a jack up needed or good cook up to possibly cover
possible IPO co*k-ups intended or otherwise .. ? ;)

[nztx]

https://www.stuff.co.nz/business/300248143/my-food-bag-share-price-dragged-down-by-wider-market-softness

Spinning the tale that it's all the market's fault - everything is just great at MFB so W69 & other punters should relax, sp will be back up to $1.85 in no time.

Then it's all but blue skies, smoked salmon, caviar & champagne from there.


Yeah Nah .. the fault's were reportedly seen hoofing it off on distant horizon with fairly well stacked briefcases .. ;)

[Lola]

Good to see Jarden & Harbour (using some of the very substantial fees they earned from the IPO) to support the sp - buying 2.7m shares or 42% of all shares traded in first 2 days of trading.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFB/368848/342039.pdf

If they keep supporting the sp, there could be an opportunity when window dressing day comes around on 31 March 2021 that punters may get out at IPO price?

Window is going to be very small so get ready to go!

Getting through that window will be difficult. Theresa has blocked it.
Telecom 2

[Baa_Baa]

Good to see Jarden & Harbour (using some of the very substantial fees they earned from the IPO) to support the sp - buying 2.7m shares or 42% of all shares traded in first 2 days of trading.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFB/368848/342039.pdf

If they keep supporting the sp, there could be an opportunity when window dressing day comes around on 31 March 2021 that punters may get out at IPO price?

Window is going to be very small so get ready to go!

That’s a lot of shares at a discount to IPO, same will be selling into the bid when or if it gets back near IPO, let’s say 10 cents on the trade, nice windfall for the borkers

[Balance]

That’s a lot of shares at a discount to IPO, same will be selling into the bid when or if it gets back near IPO, let’s say 10 cents on the trade, nice windfall for the borkers

7.2m shares traded in last 3 days so there’s potentially a lot of shares to unleash onto unsuspecting momentum traders when the window dressing dance routine starts.

[Baa_Baa]

7.2m shares traded in last 3 days so there’s potentially a lot of shares to unleash onto unsuspecting momentum traders when the window dressing dance routine starts.

Feel for all the customers who bought shares but have zero idea of the market game. All are under water while the borkers are lining their pockets! Or will be!!

[Balance]

Feel for all the customers who bought shares but have zero idea of the market game. All are under water while the borkers are lining their pockets! Or will be!!

Sadly, looks like most of the shares (just like with Feltex) ended up in the hands of retail punters.

[Baa_Baa]

Sadly, looks like most of the shares (just like with Feltex) ended up in the hands of retail punters.

Well yes but as you say a truck load have been bought by the borkers, below IPO and they look like they’ve been popping up the SP as a result, so they have a pile of shares more than they planned on and are the sellers into any uplift. Mums and dads have no idea what’s going on.

[Balance]

Well yes but as you say a truck load have been bought by the borkers, below IPO and they look like they’ve been popping up the SP as a result, so they have a pile of shares more than they planned on and are the sellers into any uplift. Mums and dads have no idea what’s going on.

MFB is precisely the sort of stock retail punters should not invest in - huge amount of goodwill, huge profits for the promoters and mostly based upon name recognition.

https://www.rnz.co.nz/programmes/the-detail/story/2018785271/how-tasty-is-the-my-food-bag-ipo-offer

"Why are these owners selling? Where's the vote of confidence that this company will grow, and its share price will grow?"

There are a lot of variables in this offering: the IPO happening at the height of the meal kit industry, which has enjoyed a huge boom since the advent of Covid-19.


Additionally, while My Food Bag was the first in this market, competitors are starting to circle: German giant HelloFresh has entered the market with a hiss and a roar, and supermarket chains are also getting in on the ready meal kit action.

On the other hand the boom in online app-based investment platforms like Sharesies and Robinhood means companies with high name recognition and favourability, like My Food Bag, are well-placed to win casual investors.

[Beagle]

Agree 100%, pricing and timing look extremely opportunistic. Vaccine roll-out and new competition could see MFB dramatically undershoot their very optimistic FY22 forecast.
I expect a steady downtrend steadily gnawing away at investors capital.

I reckon investors should simply suck it up, eat the dead rat sandwich, swallow the loss and move on.

[bottomfeeder]

Just a get rich quick scheme for prior owners. The gossip is that companies list on the SE to get access to capital for expansion, or the other reason that is getting far to common and abhorrent. (ie making money for existing shareholders and promoters, at the expense of unsuspecting investors). Wouldn't touch these with a long burnt stick. The IPO only got off the ground because of low interest rates, and the personalities involved. I can see this settling down at 50 cents in a year or two.

[Getty]

Agree 100%, pricing and timing look extremely opportunistic. Vaccine roll-out and new competition could see MFB dramatically undershoot their very optimistic FY22 forecast.
I expect a steady downtrend steadily gnawing away at investors capital.

I reckon investors should simply suck it up, eat the dead rat sandwich, swallow the loss and move on.

Crikey, what a recipe for indigestion that is.

Should solve their constipation issues tho..

[Getty]

Actually, when I was in Vietnam, I had to eat some dead rats.

It is survivable, I come out the other side.

[Beagle]

We went on an Air New Zealand mystery luxury lodge weekend deal many years ago that included dinner. Ended up having gourmet rabbit pie at a small boutique lodge in Cromwell, (closest I have come to eating vermin). Henry Blowfield gave an after dinner speech recalling his memories as a cricket commentator. Nice bottle of wine...was a very pleasant evening.
Not much luxury to the lodge but it was quaint and interesting, as was the cuisine.

Paying gourmet meal prices to be served a dead rat sandwich on the other hand is most unappealing.