MFB - My Food Bag

[Sideshow Bob]

Will be interesting to see if there are any synergies/savings/economies of scale with commissioning their own assembly facilities.

Or if they are another millstone around their neck.....

[Rawz]

If EBITDA going to be $17m for FY23 then npat:

$17m
less interest $1.2m
Less tax $3m
less depreciation $3.42m (double half year)
less amortization $2.04m (double half year)

NPAT= $7.3M

Lets say $7m because its sliding downhill.
No. of shares =242m so EPS= 0.029

SP= $0.275 / EPS= $0.029 = 9.5 PE ratio.

OMG still expensive and the recession still hasnt hit. Expect another couple of downgrades, SP can still fall heaps :(

[huxley]

If EBITDA going to be $17m for FY23 then npat:

$17m
less interest $1.2m
Less tax $3m
less depreciation $3.42m (double half year)
less amortization $2.04m (double half year)

NPAT= $7.3M

Lets say $7m because its sliding downhill.
No. of shares =242m so EPS= 0.029

SP= $0.275 / EPS= $0.029 = 9.5 PE ratio.

OMG still expensive and the recession still hasnt hit. Expect another couple of downgrades, SP can still fall heaps :(

And what did they list this business for? ~$450,000,000?

So the transaction represents a transfer of some $380,000,000 from the previous owners to the new shareholders, who were largely made up of retail investors!

[Balance]

And what did they list this business for? ~$450,000,000?

So the transaction represents a transfer of some $380,000,000 from the previous owners to the new shareholders, who were largely made up of retail investors!

Wealth flows uphill.

[huxley]

Wealth flows uphill.

Sure puts Nadia's Farm into perspective. Such fun watching her husband, Carlos Bagrie run around trying to sell some homemade products from their Royalburn Station for $10 at the local farmers market . Hope we sell enough, or we might not make any money! We’re just like you, ordinary NZ person :)

[sb9]

If EBITDA going to be $17m for FY23 then npat:

$17m
less interest $1.2m
Less tax $3m
less depreciation $3.42m (double half year)
less amortization $2.04m (double half year)

NPAT= $7.3M

Lets say $7m because its sliding downhill.
No. of shares =242m so EPS= 0.029

SP= $0.275 / EPS= $0.029 = 9.5 PE ratio.

OMG still expensive and the recession still hasnt hit. Expect another couple of downgrades, SP can still fall heaps :(

Yeah bit scary right, might drift down to 20c range over the short term.

[Rawz]

24.93% dividend yield according to shareies :eek2::eek2::eek2:

[sb9]

That'll suck in few uninformed gullible ones...

[Balance]

Comment by Carter at half year :

“Full year earnings will be lower than last year, and as a consequence the Board anticipates the final dividend will also be lower than the prior year.

“Action is being taken to improve trading performance with a priority on growing active customer numbers and retention, and cost pressures continue to be managed and mitigated, where possible.”

Don’t count on him or the management to deliver on anything! The staff may be good at delivering the food packs only!

[Rawz]

I agree balance. They should have got out in front of it at half year and completely lowered investors expectations. Giving hope of a dividend was a bad move.

Now investors have to suffer multiple downgrades of false promises until total capitulation.

And also lets not forget more hope given today with dividends to return next year.. hmmmm sure

[Sideshow Bob]

Beautiful graph......oh whoops, I'll turn it around the right way.....

14464

[Habits]

There was a reason these were previously sitting at 40c. I know someone who was buying at that price thinking they were getting a bargain. Encouraging me to do the same. I will just wait till they hit one cent.

[X-men]

Wtf....listed $1.85....now 26c....who to blame? The broker or the management?

[Balance]

Wtf....listed $1.85....now 26c....who to blame? The broker or the management?

The punters for being so dumb to buy this IPO.

[silu]

The punters for being so dumb to buy this IPO.

You could say the punters were titillated........................................ ...............I'll get me coat

[Bill Smith]

Looks like Simon Henry was on target.

[Aaron]

The punters for being so dumb to buy this IPO.

Can't say they were not warned. Here on share trader and more publicly your mate Simon Henry although his wording got him in a lot of hot water.

I guess it is the world we live in Simon Henry, although not a nice guy necessarily, he gets pilloried and harrassed by the media for insensitively pointing out MFB was a $380,000,000 (per Huxley's calc) swindle disguised by eurasian fluff and a small amount of cleveage, while the perpetrators are embraced by the media and society at large.

We know Teresa does not like the egalitarian ideal and as a woman of action she took millions off a whole bunch of retail investors. I wonder if she did it to prove a point that wealth does flow uphill as Balance points out.

[Onemootpoint]

I only offer this stock the odd glance…..eg when it makes headlines as referred to by others. Very sad looking chart. Not interested.

[SPC]

Yes the old 'marketing confusion' strategy, works every time.

[clearasmud]

Can't say they were not warned. Here on share trader and more publicly your mate Simon Henry although his wording got him in a lot of hot water.

I guess it is the world we live in Simon Henry, although not a nice guy necessarily, he gets pilloried and harrassed by the media for insensitively pointing out MFB was a $380,000,000 (per Huxley's calc) swindle disguised by eurasian fluff and a small amount of cleveage, while the perpetrators are embraced by the media and society at large.

We know Teresa does not like the egalitarian ideal and as a woman of action she took millions off a whole bunch of retail investors. I wonder if she did it to prove a point that wealth does flow uphill as Balance points out.
Ha ha, Winner called it my spew bag didn't he.

[Balance]

Can't say they were not warned. Here on share trader and more publicly your mate Simon Henry although his wording got him in a lot of hot water.

I guess it is the world we live in Simon Henry, although not a nice guy necessarily, he gets pilloried and harrassed by the media for insensitively pointing out MFB was a $380,000,000 (per Huxley's calc) swindle disguised by eurasian fluff and a small amount of cleveage, while the perpetrators are embraced by the media and society at large.

We know Teresa does not like the egalitarian ideal and as a woman of action she took millions off a whole bunch of retail investors. I wonder if she did it to prove a point that wealth does flow uphill as Balance points out.

Simon Henry is a low life who did not warn about the IPO but criticised it well well after the fact to try and boost his ‘successful’ IPO.

MFB was floated in Feb 2021 and Simon Whimp came out criticising it in May 2022 - after the sp had already tanked.

The late Brian Gaynor was scathing of the IPO at the time of the float - punters were also warned on numerous occasions by others.

The really big money was made by Waterman Capital, not Teresa or Nadia. Sure they did ok but they did take the risk initially to set up the business and made it successful.

I know Waterman Capital and I have dealt with them. They know their game very very well.

[Rawz]

Ha ha, Winner called it my spew bag didn't he.

Winner bought in i think. wonder if he is still holding?

lol joking i know he sold them after shorting them

[Balance]

Winner bought in i think. wonder if he is still holding?

lol joking i know he sold them after shorting them

He did it for a trade so would have bailed out day 1 when the ‘surprise’ upgrade to come was leaked by Bowler (Baconiser).

What a a crock of shxt.

[Recaster]

Part of the problem is that New Zealand doesn't have a functioning financial media. Brain-dead really. The last real financial journalist, Brian Gaynor has sadly passed.

Some recent IPO hits; WIN close to 1/2 billion loss, NZA 75% loss, MFB 85% loss for investors.

The current financial press will not go anywhere near a company with female founders. As has been seen right through the post-listing MFB saga. They will instead run photos of a founder frolicking with lambs on her investor-funded farm. Or perhaps a recipe or two.

Compare the New Zealand financial press to say, a real journalism publication; the FT for example.

Until there is a functioning press in New Zealand private equity, promoters and their ilk will continue to shoot investor fish in a barrel.

Unfortunately, real journalism costs money and the decline of newspapers hasn't helped.

What about the massive level of intangibles? Are we looking at large coming impairments/write-offs here? If so what's going to happen to equity (or perhaps even one branch of solvency)?

Today's legacy media articles mention inflation and reduced spending generally by customers as reasons for earnings fall. Competition was not listed as an issue. Competition seems to be an important factor however.

[nztx]

Ha ha, Winner called it my spew bag didn't he.


I reckon the bottom will further fall out of the bag on supply issues coming up .. all that produce
floating down the rivers .. cant see growers getting things back up to supply all that fast

The feelgood spouting of dividend in 2024 may be wishful thinking from the the board .. and it would not surprise if large scale impairment of intangibles rips the guts out of the balance sheet as things implode further .. anyone fancy a heavily discounted rescue Cap Raise to try lift this lame pony out of the deep sticky muck ? ;)

Hope you're riding this one facing the right way Mark - the journey could start to get a bit rough
for you lot perched around the board table .. and best pray she don't buck .. otherwise anyone's guess
where things might wind up landing :)

[Entrep]

How can directors pay a dividend with debt? That can’t be in the best interests of the company?

[shareman]

MFB is and always was a straight con job

[Toddy]

It will be interesting to see where the next support level is.
I guess we will find out over the next few trading sessions.
There will be volume holders wanting out.

[winner69]

It will be interesting to see where the next support level is.
I guess we will find out over the next few trading sessions.
There will be volume holders wanting out.

Support when it catches to Metro Glass

Similarity between the two in performance and share price is really spooky

[Entrep]

It will be interesting to see where the next support level is.
I guess we will find out over the next few trading sessions.
There will be volume holders wanting out.

I’m hearing zero is solid support

[troyvdh]

Brian Gaynor.I believe we have yet to fully appreciate who he was and the wisdom he displayed.RIP.

Who is the next Brian Gaynor ?.

[Toddy]

Have a read of the impairment test assumptions in the financials.

Based on the published assumptions, then it would be reasonable to assume that goodwill and brand valuations will be under pressure.

[nztx]

Have a read of the impairment test assumptions in the financials.

Based on the published assumptions, then it would be reasonable to assume that goodwill and brand valuations will be under pressure.


could be some very interesting conversations between the Auditors & MFB Audit Committee (assuming they have one, which hasn't disappeared down the plughole with the last washing up or out with the scraps) coming up soon :)

[nztx]

Wonder how the darkening Economic storm clouds are likely to affect MFB Revenues

Have to call the latest weather events as further potential hits on the MFB kitchen
in the making one way or another :)

Upping the prices may do much for retaining customers as the economy tightens,
pressure goes on employment affordability and swathe of other costs borne by customers
and businesses wear fiercer inflationary tides ;)

Anywhere we can short this potentially imploding spew bag ? ;)

[huxley]

Wonder how the darkening Economic storm clouds are likely to affect MFB Revenues

Have to call the latest weather events as further potential hits on the MFB kitchen
in the making one way or another :)

Upping the prices may do much for retaining customers as the economy tightens,
pressure goes on employment affordability and swathe of other costs borne by customers
and businesses wear fiercer inflationary tides ;)

Anywhere we can short this potentially imploding spew bag ? ;)

Go for it:

https://www.forsythbarr.co.nz/assets/Leveraged-Equities/Leveraged-Equities-Short-Selling-Brochure.pdf

[Snoopy]

Go for it:

https://www.forsythbarr.co.nz/assets/Leveraged-Equities/Leveraged-Equities-Short-Selling-Brochure.pdf

Am I reading that brochure correctly? On page 4 of the document
"A LVR of 120% is attached to the borrowing facility."

So if you want to short $12,000 worth of shares, it is necessary to put up a $10,000 cash deposit first. Then if the share price goes down further, against your expectations, for every 12% your share goes down in value , you have to front up with 10% more cash. And if you can't meet that new cash deposit level, your 'short' gets taken out of the market as you are forced to buy back in at a loss?

SNOOPY

[nztx]

Am I reading that brochure correctly? On page 4 of the document
"A LVR of 120% is attached to the borrowing facility."

So if you want to short $12,000 worth of shares, it is necessary to put up a $10,000 cash deposit first. Then if the share price goes down further, against your expectations, for every 12% your share goes down in value , you have to front up with 10% more cash. And if you can't meet that new cash deposit level, your 'short' gets taken out of the market as you are forced to buy back in at a loss?

SNOOPY


where can we buy shares in this ForBarr Leveraged Finance outfit ? :)

[Snoopy]

where can we buy shares in this ForBarr Leveraged Finance outfit ? :)

I know what you mean. Get free cash to use for a few months or weeks, for which you do not have to pay interest. if the underlying asset you are lending on is looking shaky (perversely with a short, this means doing better than expected), get your customer to throw in more cash. And if all else fails, buying the customer out of his contract -while passing on any losses incurred- gets you back to square one. It is a great business model, and yes you can apply to be part of it. There is a restriction though. You must possess the surname 'Forsyth' or 'Barr' ;-P

SNOOPY

[nztx]

I know what you mean. Get free cash to use for a few months or weeks, for which you do not have to pay interest. if the underlying asset you are lending on is looking shaky (perversely with a short, this means doing better than expected), get your customer to throw in more cash. And if all else fails, buying the customer out of his contract -while passing on any losses incurred- gets you back to square one. It is a great business model, and yes you can apply to be part of it. There is a restriction though. You must possess the surname 'Forsyth' or 'Barr' ;-P

SNOOPY


but wait - there's more - Forbarr get to extract Hefty brokerage out of each buy in, sell down or liquidate
the poor unfortunate target's holding which left them sitting high and dry out of the water :)


A sharp eye for deeply undervalued potential multibaggers elsewhere still seems best prospect in a sea of hungry crocs waiting to clip the ticket as soon as it shows slightest sign of a twitch ;)

Now for the next 50 or 100 bagger elsewhere waiting to be harvested ..

[Rawz]

but wait - there's more - Forbarr get to extract Hefty brokerage out of each buy in, sell down or liquidate
the poor unfortunate target's holding which left them sitting high and dry out of the water :)


A sharp eye for deeply undervalued potential multibaggers elsewhere still seems best prospect in a sea of hungry crocs waiting to clip the ticket as soon as it shows slightest sign of a twitch ;)

Now for the next 50 or 100 bagger elsewhere waiting to be harvested ..

What’s the ticker?

[troyvdh]

woof woof.

[nztx]

What’s the ticker?


now that would be telling .. tell you what .. will let you know when the 50% mark gets reached .. :)

it's a stock which has a share register a bit like HLG but tighter with potentially a very high pressure hose attached and limited available script on the loose :)

I have kept it out of my picks too ..

[mistaTea]

Not a MFB shareholder, nor have I even looked into the financials (buying any IPO is usually a bad idea, and based on some of the commentary it seems that MFB is no exception!).

I have just recently become a customer though. Was previously using Hello Fresh - a name that should be on a Tui billboard. They started off ok, but then the product just got worse and worse. I would get a delivery and the carrots would already be floppy, the bagged spinach and mesculun mix already looking sad...another day or two in and it would be rotting. I had to throw away some chicken a few days in on one occassion because it reeked when I opened the bag - even though it was a few days before the expiry date.

More like "Hello Sh1t" if you ask me. Also, HF have way too many menu items to choose from. Probably part of their problem.

So anyway, I do like the idea of these companies though because:



They introduce variety in your diet (left to our own devices many of us just end up eating the same quick and easy 2-3 meals a week)
Increases confidence in the kitchen as you learn how to make different dishes
Generally healthy meals which is obviously good
Exposes you to a wider range of vegetables that you wouldn't normally know what to do with (this is fantstic for the gut microbiome and has many positive flow on effects).
I truly believe you save money. In theory you could save money by just buying the ingredients yourself and recreating the recipes. But in practice I don't think it works because in additon to adding incidentals you don't really need during a shop, left to your own devices your portion control will likely get out of whack. So you actually spend more money because you buy damn near twice the food you need for a given meal. HF and MFB have been very very good for educating me on how big a portion should actually be etc.


The process for signing up to MFB was simple, selecting the meals was a breeze (because unlike HF, there is a smaller set to choose from each week), the meal options are a bit nicer/(fancier?), the delivery was bang on time and all of the produce is incredibly fresh. I cooked a 'Kung Pao stir fry' last night - it was pretty straightforward, only took maybe 30 mins and was absolutely delicious.

MFB probably works out to be about $20 a week more than HF for me but, so far, worth every cent.

I will have to keep an eye on how the company performs to see if it is a wortwhile investment, but I love what they do - I think their product/service is beneficial to society and so I hope the new team are able to succeed tremendously.

[ralph]

Got to agree with you there Mista tea , I was a big knocker of my sick Bag as I referred to mfb but when a customer had one delivered unpacked it and fed me I had to eat my words .
The whole packing & produce quality where they had been sourced quality of ingredients etc .was top notch nothing left to chance .
That's Life you get what you pay for & a lot of customers know that .

[percy]

Got to agree with you there Mista tea , I was a big knocker of my sick Bag as I referred to mfb but when a customer had one delivered unpacked it and fed me I had to eat my words .
The whole packing & produce quality where they had been sourced quality of ingredients etc .was top notch nothing left to chance .
That's Life you get what you pay for & a lot of customers know that .

No.2 daughter gets them and enjoys them too.

[clearasmud]

No.2 daughter gets them and enjoys them too.
Oh guys this could be the buy of the year coming!

[Traderx]

As with others, I like the product, and wish them success. Promotional/discounting activity has greatly increased to me recently, margins will be tight for a while as they seek to maintain revenue.

Three potential catalists for business turnaround (NB no position)

-Exit of subscale food bag/box poviders that have proliferated in recent years - I think this will be a slow burn, there might only be space for only one or two players with the procurement and logistics scale to ultimately succeed in NZ market
-Hello Fresh reining in their agggresive promotional activity (those who have signed up know how many cheap or free promotionals they throw around - (never pay full price for HF)
-MFB demostrating that can cross sell groceries effectively - pricing I've seen is still a little off the pace - will supermarket supply chain access reforms help?

Worth a read of the hello fresh financials - EUR 2m of NPAT on EUR 1.9B of revenue in last quarter! At some point they will need to seek improved profitability.. Will MFB be roadkill in their bid for continued topline growth?

https://ir.hellofreshgroup.com/download/companies/hellofresh/Presentations/Earnings_Presentation_3Q_2022.pdf

[troyvdh]

woof...gnarl.

[Sideshow Bob]

Harbour Asset Management selling down.....1.7m gone.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFB/407084/389024.pdf

They last disclosed in March last year, when had been increasing their holdings, and would have paid 90c+.

But don't worry, they've had a dividend feed since then.....!! :blink:

[nztx]

Harbour Asset Management selling down.....1.7m gone.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFB/407084/389024.pdf

They last disclosed in March last year, when had been increasing their holdings, and would have paid 90c+.

But don't worry, they've had a dividend feed since then.....!! :blink:


but still running out the back door instead of being shoved out instead ? :)

What have they seen that they dont like ?

[winner69]

Harbour /Jarden the clever ones who bought heaps at the IPO …what was price again?

Always pays to follow the smart money

[nztx]

Harbour /Jarden the clever ones who bought heaps at the IPO …what was price again?

Always pays to follow the smart money


Only $1.85 a shot, if memory serves correct back in February 2021 :)

what has taken them so long to wake up ?


the strategy has only resulted in a loss of near on 86% in around 2 years :)

[winner69]

Only $1.85 a shot, if memory serves correct back in February 2021 :)

what has taken them so long to wake up ?


the strategy has only resulted in a loss of near on 86% in around 2 years :)

Doing OK with their zillions of PEB shares though

[Cuz]

Has anyone noticed that the CMO (Jo Mitchell) has quietly left in the last few weeks. Her LinkedIn say early Jan and they have updated the senior leadership team on their website but no announcement. Very sneaky.

[huxley]

Down to 24 cents now, at what stage would this become a take over target (and by whom)

[Recaster]

Down to 24 cents now, at what stage would this become a take over target (and by whom)

Yes, heading up for $400m in IPO losses. 85+% down the gurgler. Perhaps when there are sustainable and not falling profits or at least a clear path to them. Possibly supermarket chains, overseas food preparation and delivery service perhaps?

Todays price 24.5 cents. But this is not really 24.5 cents because since listing the first year CPI inflation was roughly 5.9% and the second year inflation roughly 7.2%. Multiplying this out yields a real (purchasing) price now of 21.6 cents. Even worse the inflation figures are not correct; they are higher, some say double including rent etc.

So not only are you getting destroyed on the share price, you are obviously also getting doubly destroyed by the people who control New Zealand's fiat currency.

A few thoughts on MFB:

Note on MFB (https://recastinvestor.substack.com/p/note-my-food-bag-mfbnzx-mfbasx)

[Cuz]

Yes, heading up for $400m in IPO losses. 85+% down the gurgler. Perhaps when there are sustainable and not falling profits or at least a clear path to them. Possibly supermarket chains, overseas food preparation and delivery service perhaps?

A few thoughts on MFB:

Note on MFB (https://recastinvestor.substack.com/p/note-my-food-bag-mfbnzx-mfbasx)


CMO has quietly resigned over the last few weeks. It will be interesting to see if they continue to hide these types of things.

[nztx]

https://www.stuff.co.nz/business/300820813/hummus-recall-widens-to-include-my-food-bag-products


Hummus recall widens to include My Food Bag products



My Food Bag has been recalling its own branded and Turkish Kitchen products containing tahini, including miso dressing, babaganoush crema and tahini yoghurt.

Just a slight problem - Josephine :)

[Onemootpoint]

https://www.stuff.co.nz/business/300820813/hummus-recall-widens-to-include-my-food-bag-products


Hummus recall widens to include My Food Bag products

Just a slight problem - Josephine :)


Timely….just as we’d thought to test their product.
That is the product, not the stock.

[Lola]

Down to 24 cents now, at what stage would this become a take over target (and by whom)

Theresa with Waterman at less than 10 cents.?

[nztx]

Theresa with Waterman at less than 10 cents.?


Now that might have quite a few spewing in their bags ;)


possibly closer to what it was worth before the bicycle pump got pulled out
readying things to be tossed out onto the market in a public bag offering ;)

[huxley]

Consensus EPS estimates fall by 25%
The consensus outlook for earnings per share (EPS) in fiscal year 2023 has deteriorated.

2023 revenue forecast decreased from NZ$178.9m to NZ$176.3m.
EPS estimate also fell from NZ$0.046 per share to NZ$0.034 per share.
Net income forecast to shrink 46% next year vs 1.4% growth forecast for Consumer Retailing industry in New Zealand .
Consensus price target of NZ$0.55 unchanged from last update.
Share price rose 6.1% to NZ$0.26 over the past week.

[nztx]

Goodness .. fancy that - still a 55c MFB target SP after that ? :)

Are there some hidden unperishables in a cupboard out back, or are the pots & pans or
further secret recipes due for a revaluation upwards ? ;)

[SBQ]

It seems many were left holding the bag on My Food Bag. No pun intended :)

My cousin's husband works in corporate at MFB but he's been quiet for the past 2 years. I forget his exact role but it has to do with online sales / digital internet transaction kind of deal.

The writing was clear with Nadia selling her state to buy farmland instead. Wise move for her... but not for MFB shareholders.

I like my NYSE/Nasdaq shares and i'm not gonna get conned like those Naked Brands shareholders did when they switched from sports clothing apparel to making commercial EVs:

CENN (Cenntro Electric Group Ltd) Last: 0.4066 04-0.0024 -0.5868% (Vol: 1,084,986) | Daily Range: 0.3905-0.4145 | 52-Week Range: 0.26-2.59 | Cap: $106.248M

[Rawz]

Mrs Rawz signed us back up to MFB, starting next week. Been awhile. Hellofresh doesnt get a look in.. everything is the same with them apparently.

Anyways, happy to be buying from a NZ company

[ralph]

Very discerning Mrs rawz then ,she is definitely a keeper

[nztx]

Looks a bit grim isn't it ? Is another Shareholder Menu update due out soon ? :)

Someone must have got an early whiff of something ..

[Rawz]

Just had a relook at the interim report and still can’t believe they used debt to pay a dividend. Shocking really with the cost of living crisis (or whatever you want to call it) that they knew, or should have known, we were heading into

[nztx]

Just had a relook at the interim report and still can’t believe they used debt to pay a dividend. Shocking really with the cost of living crisis (or whatever you want to call it) that they knew, or should have known, we were heading into


And that was even after the Interim Shareholders Funds had declined by $3.8 m in the 6 months 30 Sep 2022 over 31 March 2022 FY

Also being $3.4 M in O/D at 30 Sep 2022 - a decline of $9.3 m into the red over 31 March 2022 Cash in Kitty

and this from the Chair:


Whilst the current volatile economic environment and inflationary pressures present challenges, the Board and I remain confident about the opportunities ahead for My Food Bag.


The period pre November 2022 was likely better times than now too


No prizes on where the $7.3 million for the 15 Dec 2022 dividend came from

Would MFB's trade across Oct 2022 - half Dec 2022 have been good enough to pull a dividend
that size out of the Chef's bag ? ;)


Net Profit after tax for the 30 Sep 22 Half was only $5.8 million or $0.02 per share



Hang on a moment - MFB made $5.8 m in the September 2022 six months


But were still $3.4 million out the back door in Overdraft after that ??



Things must still be okay, with the Chefs making regular drop offs to the Bank Manager .. no sign of any Directors jumping overboard yet :)


Things must have been sufficiently solvent back in November with some additional Hock thrown into
the mixing bowl for Board to sign off their Certificates to hand $7.3 m in dividends out to all the boys and girls with their bags eagerly outstretched ..


At worst, the friendly bank might be quite hokey dory with a few large baskets of deeply discounted MFB
chips thrown their way for preferential catering arrangements .. if push started looking a bit unfriendlier ;)


Hope the Chair & boardroom mates didn't have to put the Bach and Farm too heavily on the block to the friendly bankers to make the 3.0c interim job possible ;)

[SBQ]

Just had a relook at the interim report and still can’t believe they used debt to pay a dividend. Shocking really with the cost of living crisis (or whatever you want to call it) that they knew, or should have known, we were heading into

I'm not surprised. In NZ, the emphasis for dividend payment is so critical that they're willing to take a massive hit on the book value in hoping that shareholders don't understand how accounting works, and all they care is they're 'still' receiving a dividend. In a high interest rate environment, financing debt is never a good idea to meet some silly dividend payment obligation.

@nztx:
Net Profit after tax for the 30 Sep 22 Half was only $5.8 million or $0.02 per share


I would say differences in reporting. EBITDA is the problem.

[nztx]

I'm not surprised. In NZ, the emphasis for dividend payment is so critical that they're willing to take a massive hit on the book value in hoping that shareholders don't understand how accounting works, and all they care is they're 'still' receiving a dividend. In a high interest rate environment, financing debt is never a good idea to meet some silly dividend payment obligation.

@nztx:

I would say differences in reporting. EBITDA is the problem.





Aren't Directors responsible if the job turns turtle & things even remotely look hazardous
when and if a post mortem becomes necessary ? ;)


Don't worry - the bankers at ASB seem to have extended a very generous credit line $35m wasn't it ? ..
so if things start to get a bit strapped for available coin, lots more to tap into for a repeat of juicy handouts
even if things look a bit short on the NPAT side and prevailing economic winds blow volatile :)


must be a tinge of gold somewhere among the vast curtains of intangibles that were installed by the previous holders before she got launched off the blocks into the sheltered seas of NZX


When do the Auditors start surveying for signs of wear, tear and Impearment among the clouds of Intangibles .. or will next month's new recipe launch cover any adjustments on the job ? ;)

[SBQ]

Aren't Directors responsible if the job turns turtle & things even remotely look hazardous
when and if a post mortem becomes necessary ? ;)


Don't worry - the bankers at ASB seem to have extended a very generous credit line $35m wasn't it ? ..
so if things start to get a bit strapped for available coin, lots more to tap into for a repeat of juicy handouts
even if things look a bit short on the NPAT side and prevailing economic winds blow volatile :)


must be a tinge of gold somewhere among the vast curtains of intangibles that were installed by the previous holders before she got launched off the blocks into the sheltered seas of NZX


When do the Auditors start surveying for signs of wear, tear and Impearment among the clouds of Intangibles .. or will next month's new recipe launch cover any adjustments on the job ? ;)

Warren Buffet and Charlie Munger have said this time and time again. The days where business schools at college / uni that taught about real business has been gone long long ago. So the end result is simple, you have directors that are clueless on how to run a business and they have ways to trick banks and shareholders to give them the goods $$$.

https://www.youtube.com/watch?v=l82kIjqBtqw

By the time the auditors find something (if you get that far), it's too late. Watching the share price lose 95% of it's value in 2 or 3 years should be sufficient proof that something is wrong. You also can't blame so and so or the Kiwi Saver fund that has a holding in these companies because people (the public and on most part, the NZ gov't) is lead to believe we must invest in NZ companies instead of buying proven companies with international exposure such as Costco. Our tax structure incentivises those to buy NZ listed shares instead of overseas NYSE/Nasdaq listings that attract FIF. The writing on the wall has been so clear to me that I vow to never touch anything NZ. You know, NZ corporate tax at 28% vs 15% in Canada and 21% for USA.

[Dlownz]

Big boys selling down their holding and the share price goes up. Lol. I'd be running

[nztx]

Warren Buffet and Charlie Munger have said this time and time again. The days where business schools at college / uni that taught about real business has been gone long long ago. So the end result is simple, you have directors that are clueless on how to run a business and they have ways to trick banks and shareholders to give them the goods $$$.

https://www.youtube.com/watch?v=l82kIjqBtqw

By the time the auditors find something (if you get that far), it's too late. Watching the share price lose 95% of it's value in 2 or 3 years should be sufficient proof that something is wrong. You also can't blame so and so or the Kiwi Saver fund that has a holding in these companies because people (the public and on most part, the NZ gov't) is lead to believe we must invest in NZ companies instead of buying proven companies with international exposure such as Costco. Our tax structure incentivises those to buy NZ listed shares instead of overseas NYSE/Nasdaq listings that attract FIF. The writing on the wall has been so clear to me that I vow to never touch anything NZ. You know, NZ corporate tax at 28% vs 15% in Canada and 21% for USA.


Very good points SBQ

[nztx]

Big boys selling down their holding and the share price goes up. Lol. I'd be running


but whose sitting out there paying silly money for this thing ? :)

[Balance]

but who’s sitting out there paying silly money for this thing ? :)

Same players who paid $1.85 at the IPO.

If $1.85 was good buying for them, the current sp must be an absolute steal!

[SBQ]

For the record, this coming Monday my cousin's husband will be down visiting. I know for years it's kinda been a taboo subject to ask him directly on how MFB is doing (as he works in corporate in the executive team). Perhaps my uncle would be more vocal asking as he knows that the price went from like $2+ to 22 cents which is such a huge let down for a son in law to perform.

If I hear anything juicy about MFB, I post here. :O

[huxley]

Thanks, it’ll be interesting to see if they share anything. However just to be clear MFB has never traded anything near $2+


It’s offer price (IPO) was $1.85 per share, which was an implied market capitalisation of $448.5 million.


On its first day on the NZX it closed at $1.74 and has been in a sustained (death) spiral since then. It closed at $0.235 yesterday with a current market capitalisation of $59.56 million.


$287.3 million went from participants in the IPO to selling shareholders: $193.9 million to Waterman, and
$93.4 million to the other founders/shareholders.


As Margaret Thatcher famously said:


“There’s No Such Thing as Society, Only Dumb Retail Investors to Ruthlessly Exploit”

[nztx]

No one want to kick the battered MFB tin down the road any more ? :)


not much interest anywhere to see if any bounce left in it


the cooks within forgotten how to cook up a good cullinary storm already ?


be worse than last week's creased newspapers soon and many will be suffering a real bad gut's ache ;)


must be all about Adrian ORR-SOME'S curious take on inflation .. some things go up ... and other
things .. sometimes go flop ;)

[Getty]

It's pancaked, because everyone has deserted it.

[bottomfeeder]

Bought a Made Meals collection a few weeks back when they offered me $20 off. The beef and mozzarella pie had meat in it with quite a lot of fat attached. Never encountered it before. I hope this is not their cost cutting exercise. Cheaper cuts and ingredients will only serve to degrade their product further. They need a reset and a revamp of their product.

That said I can't see them going bust. Instead I see the major shareholders taking this company private.

[Rawz]

they wont go bust as long as they dont wrack up debt paying silly dividends during a cost of living crisis which is causing a margin squeeze and customer numbers to drop away.

we are a customer and enjoy their meals. from the 15min ones to the 45min cooks. very good

[nztx]

they wont go bust as long as they dont wrack up debt paying silly dividends during a cost of living crisis which is causing a margin squeeze and customer numbers to drop away.

we are a customer and enjoy their meals. from the 15min ones to the 45min cooks. very good


Based on the Share Price slump .. the Board should be paying the Company back all fees and a hefty seat price
on top for the privilege of presiding over such a wholesome Wealth Destruction exercise ..

After all, what have the Board achieved that represents any significant value enhancement since listing ?

[bottomfeeder]

they wont go bust as long as they dont wrack up debt paying silly dividends during a cost of living crisis which is causing a margin squeeze and customer numbers to drop away.

we are a customer and enjoy their meals. from the 15min ones to the 45min cooks. very good

Well I dipped my toes in the water today at 21.5.

This is based on the premise (a) that people are expecting price rises (b) they will cut the dividend yield to 10%, which may be sustainable (c) competitors are going to fall by the wayside as their margins are also being squeezed. (d) some competitors just haven't got the economies of scale. to keep going and lastly they are ripe fir privatisation or takeover. Now no matter what shareholder rip offs were going on in the past, 22 cents for an IPO that managed to list at $1.85 would have to be a punt.

Might have to make some orders to help this puppy along. Chicken pies are still good value.

[stoploss]

Well I dipped my toes in the water today at 21.5.

This is based on the premise (a) that people are expecting price rises (b) they will cut the dividend yield to 10%, which may be sustainable (c) competitors are going to fall by the wayside as their margins are also being squeezed. (d) some competitors just haven't got the economies of scale. to keep going and lastly they are ripe fir privatisation or takeover. Now no matter what shareholder rip offs were going on in the past, 22 cents for an IPO that managed to list at $1.85 would have to be a punt.

Might have to make some orders to help this puppy along. Chicken pies are still good value.
Hi BF, I have picked a few up down here as well. Think it will take some time but we will be rewarded. Interesting Hello fresh pulled out of Japan but are continuing here ...Everytime I open social media there seems to be a $ 120 off code for them .At some stage does this become anti competitive ?

[nztx]

5 for a buck now at close .. did the chefs bu&&*r up a recipe or two ? ;)

better offer next week ? .. 10 for a buck to take shares off some poor unfortunates hands ? ;)

Any nibbles ?

or something else ? ;)


is someone watching the smoke & steam signals coming out of the chimney stack ? ;)

at this rate the Chair might need new rubber grundies to deflect all the hotter than hot
being prepared outside the kitchen for possible use in due course ..

[Rawz]

5 for a buck now at close .. did the chefs bu&&*r up a recipe or two ? ;)

better offer next week ? .. 10 for a buck to take shares off some poor unfortunates hands ? ;)

Any nibbles ?

or something else ? ;)


is someone watching the smoke & steam signals coming out of the chimney stack ? ;)

at this rate the Chair might need new rubber grundies to deflect all the hotter than hot
being prepared outside the kitchen for possible use in due course ..
What does this post mean?

[nztx]

What does this post mean?


watch the smoke & steam signals coming up ? ;)

[Habits]

Recent update: My Food Bag remains a profitable Kiwi business, has low levels of debt and continues to generate positive cashflow. The business continues to progress strategic initiatives in order to pursue growth. We are carefully reviewing our cost base and exploring cost-saving initiatives. Our investment in pick technology will deliver a material reduction in operating costs when fully commissioned.


Buy high sell low for those instos who bought through the float and currently offloading.
If I bought a house for 1,850,000 in late 2021 and now sell for virtually one-tenth that or 210,000 you would question my sanity

[nztx]

Holy smoke -- wasn't there a bit of a massage before this ?

Any slight sniff of dividend might cause confusion & a bit of guts ache in places ;)



MFB

$0.198

-$0.002 / -1.00%

52 Week Change: -$0.693 / -78.56%

[Nigelk]

I have a rule - "Never buy if Private Equity is selling". So wouldn't go near the IPO for this.
I think it's oversold now. They've lost some price-sensitive customers, but will retain a core of more affluent ones who still need to eat.
Inflation here will decline as it is in other countries. They're in a strong position vs. competitors too.
I think if you're patient enough to hold a year or two until dividends resume, you'll be well rewarded.
DYOR

[Lego_Man]

I have a rule - "Never buy if Private Equity is selling". So wouldn't go near the IPO for this.
I think it's oversold now. They've lost some price-sensitive customers, but will retain a core of more affluent ones who still need to eat.
Inflation here will decline as it is in other countries. They're in a strong position vs. competitors too.
I think if you're patient enough to hold a year or two until dividends resume, you'll be well rewarded.
DYOR

Ditto, well worth a punt down here. Absolutely hated by investors, people laugh at me for even talking about buying it. That's often a good signal to start.

Meanwhile their product offering is actually very good, especially compared to Hellofresh which is bland low quality garbage. Hellofresh have shown they can happily cut and run from an unprofitable market with the Japan departure, and if they were to leave here that's a massive positive. Alternatively they could buy MFB given how cheap the company is. It's a bit of a game of chicken and either way MFB shareholders win.

All it takes in the next couple of months is a whiff of "less bad" news, and we're 30c again.

[SailorRob]

Ditto, well worth a punt down here. Absolutely hated by investors, people laugh at me for even talking about buying it. That's often a good signal to start.

Meanwhile their product offering is actually very good, especially compared to Hellofresh which is bland low quality garbage. Hellofresh have shown they can happily cut and run from an unprofitable market with the Japan departure, and if they were to leave here that's a massive positive. Alternatively they could buy MFB given how cheap the company is. It's a bit of a game of chicken and either way MFB shareholders win.

All it takes in the next couple of months is a whiff of "less bad" news, and we're 30c again.


If Lim got the girls out again in a glossy center page it could be off to the races.

Agreed this situation warrants deeper investigation.

'Absolutely hated by investors, people laugh at me for even talking about buying it', Yes a classic signal, reminds me buying Coal in 2020.

[Sideshow Bob]

https://www.nzx.com/announcements/410703

They announce on the 19th of May, so not too long to the next update.....

[Balance]

Jaws of the crocodile …. Revenues falling and costs relentlessly going up.

Who is brave or foolish enough to put their head between the jaws?

[Rawz]

I love checking MFB on the sharesies platform.

Gross dividend yield: 48.86%
P.E ratio: 2.93

They really need a big red flashing disclaiming- Basically what Balance said above. Revenues falling and costs going up. Hope the sharesies army DYOR

[SailorRob]

Jaws of the crocodile …. Revenues falling and costs relentlessly going up.

Who is brave or foolish enough to put their head between the jaws?


Question is how much could you slash revenue by and completely destroy margins and it would still work at this price.

Answer is a LOT.

[Leemsip]

Agree on the profit and loss stuff above. Margins holding up, generally seems likely to be profitable in foreseeable future.

Balance sheet is pretty awful. Current liabilities 3 times current assets. They will need to stop paying dividends to ensure sufficient cash and also to invest in the new picking tech.

All seems pretty priced in though at 20c per share and 48m total value. Massive falling knife here but at some point worth catching it.

I'm not buying yet...

[ValueNZ]

Agree on the profit and loss stuff above. Margins holding up, generally seems likely to be profitable in foreseeable future.

Balance sheet is pretty awful. Current liabilities 3 times current assets. They will need to stop paying dividends to ensure sufficient cash and also to invest in the new picking tech.

All seems pretty priced in though at 20c per share and 48m total value. Massive falling knife here but at some point worth catching it.

I'm not buying yet...
I don't think MFB is paying a dividend this year.

"As a consequence of these ongoing challenges, EBITDA for FY23 is currently expected to be between $17m and $19m. At this stage, the Board does not intend to pay a final dividend for FY23, having already declared and paid a fully imputed interim dividend of 3.0 cents per share."

[SailorRob]

Cut revenues 50% from here.

Then wash out margins to 4%.

Then assume this will be the new normal.

Then apply these numbers to current cap.

[winner69]

Harbour two SSH notices this week

Quitting big time

[SailorRob]

Harbour two SSH notices this week
Quitting big time

Lim needs to get the girls out.

[Baa_Baa]

Harbour two SSH notices this week

Quitting big time

Is 4m shares quitting big time? Still have 20.45m 8.4% to go. These are off-market as well, so wonder who's buying them.

[Habits]

Lim needs to get the girls out.

Do you mean Nadia Lim's breasts?
If so that's not a nice comment

[Rawz]

Sheesh when will the bleeding stop.

Wouldnt mind investing a little bit but talk about catching a falling knife

[nztx]

Do you mean Nadia Lim's breasts?
If so that's not a nice comment


Are there any tender loins left in the freezer ? ;)

or do they get trotted out for 10c week ? :)

[ralph]

Sheesh when will the bleeding stop.

Wouldnt mind investing a little bit but talk about catching a falling knife

Well you only have eight days to make your mind up ,then it could go from falling knife to missed opportunity. Hmm who knows for sure no one on this forum

[X-men]

Her tits are flat...trust me ... I worked with her once

[ralph]

Her tits are flat...trust me ... I worked with her once
I trust you Xmen thousands would not :eek2:

[SailorRob]

Do you mean Nadia Lim's breasts?
If so that's not a nice comment

Was ripping off thousands of admittedly extremely foolish people, hundreds of millions of dollars very nice?

[percy]

Harbour two SSH notices this week

Quitting big time

Yet no announcement as to who has been buying.

[Lego_Man]

Was ripping off thousands of admittedly extremely foolish people, hundreds of millions of dollars very nice?

Willing buyer, willing seller. By the IPO stage Lim was a small shareholder and Waterman were driving the float. If you want to blame anyone, blame them and the promoters (Jarden and Craig's IB) who set the price.

Lim is a successful NZ businesswoman who deserves respect.

[X-men]

I would blame all m**fkers that involved with this scam.

Can u imagine u invest $10000, now maybe worth $2000 left....gosh.... would u blame all of them? I would

[SailorRob]

Willing buyer, willing seller. By the IPO stage Lim was a small shareholder and Waterman were driving the float. If you want to blame anyone, blame them and the promoters (Jarden and Craig's IB) who set the price.

Lim is a successful NZ businesswoman who deserves respect.

The market sets the price.

And it was conned by shameless promotion as you say, yeah probably wasn't much to do with her.

You can use the same argument to defend the trucks that cruise around housing NZ estates selling crap on tick at massively elevated prices as willing buyer and seller. Or a whole range of other transactions where people are ultimately taken advantage of.

Willing buyers as they were ultimately lied to and massively ignorant.

[SailorRob]

But... At some point she's a bargain and for it not to work at these prices you need grim assumptions indeed.

[Baa_Baa]

I would blame all m**fkers that involved with this scam.

Can u imagine u invest $10000, now maybe worth $2000 left....gosh.... would u blame all of them? I would

Get your calculator out, if someone bought $10,000 at the IPO open at $1.75, that's 5,714 shares * today's SP close $0.187 = $1,068. That's a 90% LOSS.

Despicable and shame on NZX for letting it happen.

Many Sharetraders here saw through the sham IPO and the listing price, pumped up by the promoters when it was obviously just an exit strategy for the incumbent bigger early money, worse still the promotion extended to staff, and customers, presumably many who had no idea what they were doing buying MFB, let alone that they were about to be sucked in and ripped-off big time.

The market has served up a number of very important investing lessons here, most of them were well forecast by Sharetrader's experienced investors.

And if you think this is 'cheap' now, then you haven't learned the lessons, it could easily go to fundamental value which is a lot lower than the market currently price it at. The company might not even make it.

Are you trading price, or buying value? The price is a pure gamble at this point, the value is a lot lower than here and still has enormous ongoing viability risks.

[ValueNZ]

Get your calculator out, if someone bought $10,000 at the IPO open at $1.75, that's 5,714 shares * today's SP close $0.187 = $1,068. That's a 90% LOSS.

Despicable and shame on NZX for letting it happen.

Many Sharetraders here saw through the sham IPO and the listing price, pumped up by the promoters when it was obviously just an exit strategy for the incumbent bigger early money, worse still the promotion extended to staff, and customers, presumably many who had no idea what they were doing buying MFB, let alone that they were about to be sucked in and ripped-off big time.

The market has served up a number of very important investing lessons here, most of them were well forecast by Sharetrader's experienced investors.

And if you think this is 'cheap' now, then you haven't learned the lessons, it could easily go to fundamental value which is a lot lower than the market currently price it at. The company might not even make it.

Are you trading price, or buying value? The price is a pure gamble at this point, the value is a lot lower than here and still has enormous ongoing viability risks.
What do you deem to be its fundamental value?

[ValueNZ]

I would blame all m**fkers that involved with this scam.

Can u imagine u invest $10000, now maybe worth $2000 left....gosh.... would u blame all of them? I would
I would blame the idiots buying the stock at IPO prices

[Recaster]

It's a good lesson for new investors. Hopefully the lesson won't keep new investors out of the markets.

Brokers are mostly sociopaths. Many of them will be giggling with each other over drinkies about this share issue. I've seen this kind of behaviour from them many times.

But if you are aware of this you can modify your attitudes towards them and what they tell you. Your average used car dealer knows more about the products they sell than do sharebrokers.

And the old days of an almost guaranteed IPO premium on listing on the NZX are long gone.

[Lego_Man]

It's a good lesson for new investors. Hopefully the lesson won't keep new investors out of the markets.

Brokers are mostly sociopaths. Many of them will be giggling with each other over drinkies about this share issue. I've seen this kind of behaviour from them many times.

But if you are aware of this you can modify your attitudes towards them and what they tell you. Your average used car dealer knows more about the products they sell than do sharebrokers.

And the old days of an almost guaranteed IPO premium on listing on the NZX are long gone.


The rule of thumb is that if it's being actively promoted to you, it's a dog. If you barely hear about it (Vulcan Steel, DGL) it's a gem.

[Balance]

Excellent observation, Lego man.

[Lola]

Excellent observation, Lego man.

I think Lego Man must have been a broker in his/her day .

[SailorRob]

I would blame the idiots buying the stock at IPO prices


Yes there is that, but then there is the 82 year old father of a friend of mine who was convinced to buy it by Yovich of Whangarei.

Yovich also pushed many elderly retail investors in to the Refinery at just under $4.

[SailorRob]

The rule of thumb is that if it's being actively promoted to you, it's a dog. If you barely hear about it (Vulcan Steel, DGL) it's a gem.


Exactly right, as I told a friend of mine, if the opportunity is so good, you would not get near it as nobody with money and contacts would let you have a sniff.

If they need aggressive promotion to retail, it's a dog.

[SailorRob]

Get your calculator out, if someone bought $10,000 at the IPO open at $1.75, that's 5,714 shares * today's SP close $0.187 = $1,068. That's a 90% LOSS.

Despicable and shame on NZX for letting it happen.

Many Sharetraders here saw through the sham IPO and the listing price, pumped up by the promoters when it was obviously just an exit strategy for the incumbent bigger early money, worse still the promotion extended to staff, and customers, presumably many who had no idea what they were doing buying MFB, let alone that they were about to be sucked in and ripped-off big time.

The market has served up a number of very important investing lessons here, most of them were well forecast by Sharetrader's experienced investors.

And if you think this is 'cheap' now, then you haven't learned the lessons, it could easily go to fundamental value which is a lot lower than the market currently price it at. The company might not even make it.

Are you trading price, or buying value? The price is a pure gamble at this point, the value is a lot lower than here and still has enormous ongoing viability risks.


Great post,

Like ValueNZ I'd be interested in what you see as fundamental value.

Not my area of expertise nor do I know the company, but youd have to take a serious hatchet to revenue and margins here for it to still be expensive.

Where do you see revenues leveling out and where do you see margins and roughly why for each?

[Rawz]

Im not sure i would say MFB has enormous ongoing viability risks. Not quite at that level

[Baa_Baa]

Great post,

Like ValueNZ I'd be interested in what you see as fundamental value.

Not my area of expertise nor do I know the company, but youd have to take a serious hatchet to revenue and margins here for it to still be expensive.

Where do you see revenues leveling out and where do you see margins and roughly why for each?

Current market cap is about $46m, my calc enterprise value is about $38m or $0.16 per share. Revenue '21-'22 already levelled out = no/low growth, expecting margin squeeze on rising input costs. Will rerun the numbers on FY23 annual report.

[Lego_Man]

I think Lego Man must have been a broker in his/her day .

Not exactly, but i've been on the other side of the desk from them. Incentives are everything, and when you're paid to sell something, you will always view it with rose tinted glasses and find ways of justifying it to yourself and others. I remember being interested in Vulcan Steel around the IPO period and noone would talk to me about it, gave every excuse in the book and palmed me off to someone else. Then post IPO you see that Milford etc had hoovered it all up. DGL was a bit similar but then Henry screwed the pooch, now no fund manager with an ESG policy will ever touch it.

[Habits]

Current market cap is about $46m, my calc enterprise value is about $38m or $0.16 per share. Revenue '21-'22 already levelled out = no/low growth, expecting margin squeeze on rising input costs. Will rerun the numbers on FY23 annual report.

Its been a rough year for costs for various reasons, one of which is veg prices up over 22 percent.

Many things are levelling up and steadying again, unless there are more floods in growing regions and another pandemic.

[SailorRob]

Current market cap is about $46m, my calc enterprise value is about $38m or $0.16 per share. Revenue '21-'22 already levelled out = no/low growth, expecting margin squeeze on rising input costs. Will rerun the numbers on FY23 annual report.


Yeah I agree,

What did you mean by it could easily go to fundamental value which is a lot lower than the market currently price it at then?

[SailorRob]

Not exactly, but i've been on the other side of the desk from them. Incentives are everything, and when you're paid to sell something, you will always view it with rose tinted glasses and find ways of justifying it to yourself and others. I remember being interested in Vulcan Steel around the IPO period and noone would talk to me about it, gave every excuse in the book and palmed me off to someone else. Then post IPO you see that Milford etc had hoovered it all up. DGL was a bit similar but then Henry screwed the pooch, now no fund manager with an ESG policy will ever touch it.


Yeah that's awesome.

Imagine finding a money printing machine that everyone else was allergic due to some F'd up disease to apart from you, what a great situation.

It's how I was able to buy ARLP 3 years ago for it's current annual dividend let alone earnings.

300% return per annum on my purchase price.

[Baa_Baa]

Yeah I agree,

What did you mean by it could easily go to fundamental value which is a lot lower than the market currently price it at then?

From my calc another $8m less market cap, 16% down from here

[SailorRob]

From my calc another $8m less market cap, 16% down from here


Ok cheers, I thought by a lot lower you meant more than 16%.

But I agree 16% down would be a good point to take a serious look. Still perhaps more speculative than I am used to but potential reward higher as well.

[Habits]

Price up today over 2 percent. We got our first Box yesterday and my partner is making something nice. So far so good

[Sideshow Bob]

https://www.nzx.com/announcements/411678

• Revenue of $175.7 million, down 9.4% compared to FY22
• EBITDA of $18.2 million, compared to $34.0 million in FY22
• NPAT of $7.9 million, compared to $20.0 million in FY22
• NZ’s most affordable meal kit, Bargain Box, grew active customers by 12% year-on-year
• Transformational investment in automated pick technology rolled out at assembly centres
• Cost reduction initiatives implemented to ensure alignment with current demand

Subscription-based meal kit and food solutions business, My Food Bag Group Limited, today reported EBITDA of $18.2 million for the twelve months to 31 March 2023 (FY23), in line with the trading update provided to the market in February 2023.

FY23 ingredient margin was 48.4%, down slightly on 49.3% in FY22. This is an extremely strong result given food prices rose 12.1% in New Zealand during the year ending March 2023, and was achieved without compromising customer value.

Responding to economic conditions

Tony Carter, Chairman of My Food Bag, says the business has navigated a challenging year driven by the changing economic environment.

“Inflationary pressure on households and low consumer confidence have resulted in subdued demand, driving diseconomies of scale within the business.

“As a result, we have undertaken a reset of our business spanning our leadership, supply chain and brand positioning, all focused on strengthening My Food Bag to deliver.

“Our investment in pick technology, initiatives to increase choice, flexibility, customisation and value for customers, and our focus on cost, will drive performance in FY24 and will position us for further growth into the future,” says Carter.

My Food Bag’s free cash flow was impacted in FY23 by the subdued demand seen, as well as strategic investment in pick technology and some one-off costs. Given this, the Board has taken the prudent approach not to pay a final dividend for the FY23 year. The interim cash dividend for FY23 of 3.0 cents per share represents a pay-out of $7.3 million.

“We expect to see free cash flow strengthen over FY24 and to resume dividend payments in the coming year,” says Carter.

Business highlights

Mark Winter, CEO of My Food Bag, says: “While we have seen some softening of demand in FY23 across the business, we’ve invested in Bargain Box to support growth. As New Zealand’s most affordable meal kit, it is well placed to grow during current economic conditions. During FY23, Bargain Box active customers grew by 12%, and overall deliveries grew by 2% year-on-year.”

In addition to a focus on Bargain Box, we continue to drive performance across all our consumer brands and the company delivered in excess of 15.8 million meals across the year at an average order value of $130.11, up 2.7% on $126.63 in FY22.

During the year, My Food Bag also made a transformational investment in automated pick technology to unlock growth. This proven technology enables a vast improvement in customer choice, productivity, and quality.

The technology is expected to underpin significant simplification of operating processes, unlocking productivity and cost efficiencies in FY24 and beyond.
Alongside the pick technology, the business implemented other initiatives to reduce costs in FY24 and beyond.

“We’ve reviewed and adjusted our costs to ensure they are aligned with current levels of demand. This has included reducing the number of people across our non-operational team by approximately 10% and commencing the delisting process from the ASX to reduce compliance costs, given the poor liquidity seen.

“This will be an ongoing focus for us, and we will continue to review and reduce costs where prudent,” says Winter.

Outlook

Winter says he is confident the changes the business has made means it can deliver during these times.

“We have adapted, and will continue to adapt, our business for the current climate, ensuring our ability to deliver and perform now, as well as continuing to strengthen our position. We are a profitable business with a strong brand and customer offer. In FY24 our intent is to stabilise sales and execute a disciplined plan to deliver sustainable active customer growth, focused on driving our portfolio of brands, growing choice and flexibility, as well as operational efficiencies.

“We look forward to FY24 where we can demonstrate the strength of the business – with a focus on leveraging our deep understanding of Kiwis’ needs, our digital platform and our nationwide supply chain to grow demand,” says Winter.

Ends

(1) EBITDA (earnings before interest, tax, depreciation and amortisation) is a non-GAAP measure. A reconciliation from GAAP NPBT to non-GAAP EBITDA can be found in the FY23 Annual Report.
(2) Active customers are customers that have taken at least one delivery in the 13 weeks prior.
For investor relations queries:
Leanne Dekker
+64 29 770 8189
ir@myfoodbag.co.n

[Lego_Man]

https://www.nzx.com/announcements/411678

• Revenue of $175.7 million, down 9.4% compared to FY22
• EBITDA of $18.2 million, compared to $34.0 million in FY22
• NPAT of $7.9 million, compared to $20.0 million in FY22
• NZ’s most affordable meal kit, Bargain Box, grew active customers by 12% year-on-year
• Transformational investment in automated pick technology rolled out at assembly centres
• Cost reduction initiatives implemented to ensure alignment with current demand

Subscription-based meal kit and food solutions business, My Food Bag Group Limited, today reported EBITDA of $18.2 million for the twelve months to 31 March 2023 (FY23), in line with the trading update provided to the market in February 2023.

FY23 ingredient margin was 48.4%, down slightly on 49.3% in FY22. This is an extremely strong result given food prices rose 12.1% in New Zealand during the year ending March 2023, and was achieved without compromising customer value.

Responding to economic conditions

Tony Carter, Chairman of My Food Bag, says the business has navigated a challenging year driven by the changing economic environment.

“Inflationary pressure on households and low consumer confidence have resulted in subdued demand, driving diseconomies of scale within the business.

“As a result, we have undertaken a reset of our business spanning our leadership, supply chain and brand positioning, all focused on strengthening My Food Bag to deliver.

“Our investment in pick technology, initiatives to increase choice, flexibility, customisation and value for customers, and our focus on cost, will drive performance in FY24 and will position us for further growth into the future,” says Carter.

My Food Bag’s free cash flow was impacted in FY23 by the subdued demand seen, as well as strategic investment in pick technology and some one-off costs. Given this, the Board has taken the prudent approach not to pay a final dividend for the FY23 year. The interim cash dividend for FY23 of 3.0 cents per share represents a pay-out of $7.3 million.

“We expect to see free cash flow strengthen over FY24 and to resume dividend payments in the coming year,” says Carter.

Business highlights

Mark Winter, CEO of My Food Bag, says: “While we have seen some softening of demand in FY23 across the business, we’ve invested in Bargain Box to support growth. As New Zealand’s most affordable meal kit, it is well placed to grow during current economic conditions. During FY23, Bargain Box active customers grew by 12%, and overall deliveries grew by 2% year-on-year.”

In addition to a focus on Bargain Box, we continue to drive performance across all our consumer brands and the company delivered in excess of 15.8 million meals across the year at an average order value of $130.11, up 2.7% on $126.63 in FY22.

During the year, My Food Bag also made a transformational investment in automated pick technology to unlock growth. This proven technology enables a vast improvement in customer choice, productivity, and quality.

The technology is expected to underpin significant simplification of operating processes, unlocking productivity and cost efficiencies in FY24 and beyond.
Alongside the pick technology, the business implemented other initiatives to reduce costs in FY24 and beyond.

“We’ve reviewed and adjusted our costs to ensure they are aligned with current levels of demand. This has included reducing the number of people across our non-operational team by approximately 10% and commencing the delisting process from the ASX to reduce compliance costs, given the poor liquidity seen.

“This will be an ongoing focus for us, and we will continue to review and reduce costs where prudent,” says Winter.

Outlook

Winter says he is confident the changes the business has made means it can deliver during these times.

“We have adapted, and will continue to adapt, our business for the current climate, ensuring our ability to deliver and perform now, as well as continuing to strengthen our position. We are a profitable business with a strong brand and customer offer. In FY24 our intent is to stabilise sales and execute a disciplined plan to deliver sustainable active customer growth, focused on driving our portfolio of brands, growing choice and flexibility, as well as operational efficiencies.

“We look forward to FY24 where we can demonstrate the strength of the business – with a focus on leveraging our deep understanding of Kiwis’ needs, our digital platform and our nationwide supply chain to grow demand,” says Winter.

Ends

(1) EBITDA (earnings before interest, tax, depreciation and amortisation) is a non-GAAP measure. A reconciliation from GAAP NPBT to non-GAAP EBITDA can be found in the FY23 Annual Report.
(2) Active customers are customers that have taken at least one delivery in the 13 weeks prior.
For investor relations queries:
Leanne Dekker
+64 29 770 8189
ir@myfoodbag.co.n

Nice. Stock should rally

[Rawz]

Aside from the numbers it kinda reads well like they know the situation they are in and they are adjusting the business the best they can to get through to better days

[sideliner]

Not sure why you would say the price would rally?

Surely the announcement is verification of why the share price has fallen??

Whilst investment in pick technology is a progressive move forward, i would have thought this was financed 100% to keep debt:equity 1:1, may reduce labour costs but so we have the details on the cost saving???? - saves human error and mangement, lets hope there are no catastrophic issues.

MFB not a new kid on the block anymore, i would have thought its now well and truly entrenched in the food supply market where commoditisation is a reality. At some stage when are we going to look closer at the intangible assets on its balance sheet, ask the question - how is this valued so high???


I invite comment on this thought - MFB chat always goes around Nadias involvment, from a branding perspective, and from an idiots POV, MFB is brand Nadia, Now is sure she is past any restraint of trade she may of had, so why on earth does existing management expose themselves the the clear weakness of keeping MFB as brand Nadia?- seems insanity to me.


I would say MFB fairly priced atm????? maybe a tad high ?





Share Issued
242437524


EBITDA
$ 18,200,000.00


Per share
$ 0.08


ratio 2x
$ 0.15


ratio 3x
$ 0.23


ration 4 x
$ 0.30

[Sideshow Bob]

Also delisting from the ASX (not surprising as can't see much benefit and probably a hangover for the PE IPO):

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MFB/411679/394644.pdf

[Habits]

• NZ’s most affordable meal kit, Bargain Box, grew active customers by 12% year-on-year

MFB holding out the welcome mat!

A bit like Sky introducing SSN and initiating a turnaround in the business through lower entry, more affordable options

Prior to MFB listing they talked about spin off businesses using their large customer base. That was a bit of hype and hope from the looks of things

Very good update and result, congrats to the hard-working individuals and team at MFB

[sideliner]

Can somebody explain to me why MFB still brand themselves as brand Nadia?

Surely this is an insane weakness in strategy.

She sold out of her share, shes not the main shareholder, i would imagine there are limited restraints of trade in place,

If your gunna brand urself surely you would want to own the face? - How much of the massively rated intangible assets are brand nadia????


"Hey Nadia, its countdown here, were starting food deliveries, wanna make up some menus and join us??? we have the infrastructure in place too......." - oh yeh barrier to entry of competitors is almost non existent

The announcement looks like what we all expected??? - the market is pricing MFB shares around the right price i would have thought- still the balance sheet is very odd to me those intangibles being so high.




Share Issued
242437524


EBITDA
$ 18,200,000.00


Per share
$ 0.08


ratio 2x
$ 0.15


ratio 3x
$ 0.23


ration 4 x
$ 0.30

[percy]

I read the result and thought they had adjusted the business well.
However reading the annual report alarmed me.
Total equity is $57,978 mil,however taking out the $85,263 mil of intangibles it becomes a negative -$27,285 mil.
Really showing $85 mil of intangibles ?
However the real issue is current liabilities of $25,162 mil compared to only $4,608 mil of current assets.

[Sideshow Bob]

First trade through at $0.20

Brave.....

[Lego_Man]

The Aussie de-listing is a double edged sword. Yes it saves a bit of money, but it also shrinks the pool of people willing/able to buy the stock (given everyone in NZ hates it)

[blackcap]

I read the result and thought they had adjusted the business well.
However reading the annual report alarmed me.
Total equity is $57,978 mil,however taking out the $85,263 mil of intangibles it becomes a negative -$27,285 mil.
Really showing $85 mil of intangibles ?
However the real issue is current liabilities of $25,162 mil compared to only $4,608 mil of current assets.

That looks terrible. I wonder how they got the "going concern" bit past the auditors with a current asset v current liability ratio like that.

However that said, last year it was $10m current assets v $25m current liabilities, so somehow they must be able to manage the cashflow and meet commitments on time.

The negative equity is a real worry though. No real assets to speak of, just the "brand" $18m and Goodwill $63m. Looks like someone (goodwill) paid far too much....

[bottomfeeder]

Profit of around 16% of market cap, with active cost saving initiatives to come. Should keep the SP at at least current levels in the 20 cents or above.

[SailorRob]

I read the result and thought they had adjusted the business well.
However reading the annual report alarmed me.
Total equity is $57,978 mil,however taking out the $85,263 mil of intangibles it becomes a negative -$27,285 mil.
Really showing $85 mil of intangibles ?
However the real issue is current liabilities of $25,162 mil compared to only $4,608 mil of current assets.

I haven't read anything yet Percy, but I would have thought that they would have needed to write down intangibles?

[Rawz]

Impairment testing carried out for goodwill and indefinite life brands with no impairment required

[SailorRob]

Impairment testing carried out for goodwill and indefinite life brands with no impairment required

Damn......

[kiwikeith]

Profit of around 16% of market cap, with active cost saving initiatives to come. Should keep the SP at at least current levels in the 20 cents or above.

NPAT of $8m and a market cap of $48m puts it on a PE of 6. Now that seems a bargain. Problem is both sales and profits are falling. Looking forward there is competition from the likes of Hello Fresh and Woop but Countdown and New World are lurking as well. Will MFB be around in 10 years? As they say on Dragons den "I'm out".

[Rawz]

Not much on the buy side and a big wall at 20cents on the sell side. Could drift lower throughout the day

[SBQ]

So what are the chances for this stock to go back to $1.75?

[Sideshow Bob]

So what are the chances for this stock to go back to $1.75?

Depends if you are talking New Zealand dollars or Zimbabwean dollars......;):scared::sneaky2:

[Lego_Man]

So what are the chances for this stock to go back to $1.75?

Zero. But it might get to 50c

[sideliner]

no one worried about liquidity issues?

[bottomfeeder]

I wonder what the chances of this being taken over and taken private by the promoters. Pocket a cool $300 mill over a couple of years. To be resurected in a few years for another IPO.

[winner69]

Interesting bit in BusinessDesk ….what a combo though

However, NZ’s My Food Bag, which today reported that it profit had nosedived 60% and would delist from the ASX to save money, would neither confirm nor deny whether it was looking at Jenny Craig.

It’s chief executive Mark Winter said: “look, M and A is one of those things that it’s never really helpful to sort of confirm or deny either way”.

[silverblizzard888]

At this level its an alright stock, they admit they will continue to lose customers, but they are cutting cost and mostly finished with their capital spend. If they can produce a consistent $5-10 million profit a year, then the stocks not bad value, though no one can really say if the turmoil is really over just yet.

[SailorRob]

At this level its an alright stock, they admit they will continue to lose customers, but they are cutting cost and mostly finished with their capital spend. If they can produce a consistent $5-10 million profit a year, then the stocks not bad value, though no one can really say if the turmoil is really over just yet.

That's a massive difference in the two profit numbers.

One is a 10% return, the other a 20% return.

[silverblizzard888]

That's a massive difference in the two profit numbers.

One is a 10% return, the other a 20% return.

Its just a rough range of what you probably want if the company was to be good value at the current price. In the institutional world it would be a constantly changing number depend on the interest rates, cost of capital and opportunity cost.

[troyvdh]

Sideshow Bob.I possess a bone fide 50 Trillion bank note issued by the Reserve Bank of Zimbabwe.
I could pay of the US debt and have have 10 trillion dollars left.
Thats 50 000 000 000 000.

[SBQ]

Zero. But it might get to 50c

I like this one:

https://youtu.be/NCx5Ph7EAxg?t=158

[SailorRob]

Its just a rough range of what you probably want if the company was to be good value at the current price. In the institutional world it would be a constantly changing number depend on the interest rates, cost of capital and opportunity cost.


Yeah in other words BS. Same institutional world that net provides zero value.

Went through the NZ super fund report the other day. Bloody hell...

But I agree with you on the numbers.

[silverblizzard888]

Yeah in other words BS. Same institutional world that net provides zero value.

Went through the NZ super fund report the other day. Bloody hell...

But I agree with you on the numbers.

In the absence of certainty nothing can be exact, in most cases you really just work with estimates and a lot of risk management. There is a reason so many institutions exist to manage peoples finances, because most aren't cut out for it or simply don't have an interest. Usually investing is called an art more than it is a science because you could have a million different outcomes. Reason Buffett likes products with strong moats is because the certainty people will buy their product is much higher and provides more certainty and consistency that each year will be similar if not better.

Does My Food Bag have a moat? A very small moat if any. The only thing keeping it going at a steady pace is the lack of big competition apart from Hellofresh and no local player with resources big enough to challenge it.

[mistaTea]

Does My Food Bag have a moat? A very small moat if any. The only thing keeping it going is a steady pace is the lack of big competition apart from Hellofresh and no local player with resources big enough to challenge it.

Yes and the quality of the produce provided by MFB is significantly better than HF.

I started with HF and switched to MFB because I would get a HF delivery and the vegetables would already be starting to look sad on the day I got them. Sometimes the meat smell would be so off-putting I would not dare to eat it.

I have none of those issues with MFB, and I think their menu items taste better yet happen to be healthier too (in terms of the ingredients they use).

So I think they have somewhat of a network moat - their supplier network is very strong and I don’t think it would be that easy for a competitor to duplicate. I could be wrong.

I don’t own shares in MFB as their cashflow profile is far from certain - but as a consumer I wish them every success and hope they do well.

They actually provide a wonderful service to NZ - they provide a way for everyday, working kiwis to include variety in their diet (great for the gut micro biom) by providing easy to make menu items (most can be prepared in 30 mins) that contain high quality ingredients.

[Habits]

Now that we have started MFB deliveries we will keep doing so but not every week. Without going and costing every item the deal seems extra good value and large sized meals.

As a shareholder, I'm worried how they will pay their supplier creditors. Over the year they've spent their cash balance and now have a monster overdraft.

[Getty]

Her tits are flat...trust me ... I worked with her once

If MFB goes tits up, it will leave a few in Limbo with Nada.

[SBQ]

If MFB goes tits up, it will leave a few in Limbo with Nada.

From what i've been told (others can verify), there will be NO skin lost in the game for Nadia. During the IPO she cashed out and used the funds to invest into a separate farmland project. Anotherwords took the shareholder's $$ and moved it into her business trust that does her end of the food business. Call that theft? It's called the insiders never lose at this game.

[Rawz]

The profit they managed in FY22 willl not be repeated for many many years imo.

It was peak consumer spending cycle and included covid customers that wanted to minimize the amount of time they spent in crowded places.

Maybe $10-$12m npat is a nice target to aim for in 3-5 years time

[Muse]

It was peak consumer spending cycle and included covid customers that wanted to minimize the amount of time they spent in crowded places.


That 100% but also shouldn't underestimate the impact HelloFresh is having on this business. HF have a global mandate to dominate markets where they enter, operating on far skinner margins and box return expectations to MFB, and are gobbling mktshare. Their model is even more effective in taking share in an inflationary environment as well, IMO.

Like many I love MFB's product. Happy if sometimes sporadic users.

[stoploss]

From what i've been told (others can verify), there will be NO skin lost in the game for Nadia. During the IPO she cashed out and used the funds to invest into a separate farmland project. Anotherwords took the shareholder's $$ and moved it into her business trust that does her end of the food business. Call that theft? It's called the insiders never lose at this game.
As of March 2023 it would appear her husband still has close to 4 million shares ,maybe she has a holding in Nominee that can't be seen. So I think it's fair to say she still has skin in the game.

[SailorRob]

As of March 2023 it would appear her husband still has close to 4 million shares ,maybe she has a holding in Nominee that can't be seen. So I think it's fair to say she still has skin in the game.


Think more accurate to say she's taken all her skin out of the game and left a fingernail.

[RRR]

Now that we have started MFB deliveries we will keep doing so but not every week. Without going and costing every item the deal seems extra good value and large sized meals.

As a shareholder, I'm worried how they will pay their supplier creditors. Over the year they've spent their cash balance and now have a monster overdraft.

I suggest you read their annual report - you will find answers to your questions.
Customers pay every week in advance, they pay their suppliers every month - negative working capital (which is good).

They still made 7.9 million profit in a bad year!
Cashflow was affected leading to increased debt (15 million) - according to the management this was due to income tax for previous FY paid in 2023FY, capital investment in pick technology etc..they have said they will aim to reduce debt this year
They have also reduced their staff count by 10%
MFB business model is very simple, financial statements are very easy to read (I don't understand intangibles - I usually delete intangibles from my calculations anyway)

Disc - shareholder, adding more

[SailorRob]

I suggest you read their annual report - you will find answers to your questions.
Customers pay every week in advance, they pay their suppliers every month - negative working capital (which is good).

They still made 7.9 million profit in a bad year!
Cashflow was affected leading to increased debt (15 million) - according to the management this was due to income tax for previous FY paid in 2023FY, capital investment in pick technology etc..they have said they will aim to reduce debt this year
They have also reduced their staff count by 10%
MFB business model is very simple, financial statements are very easy to read (I don't understand intangibles - I usually delete intangibles from my calculations anyway)

Disc - shareholder, adding more


Good post, any interested parties must read the IPO document and every subsequent report.

You absolutely must understand intangibles, I strongly recommend 12 Months full time study just on this topic alone as they are the most important thing to understand. MFB's intangibles may or may not be worth anything.

I recently bought some tea bags. First time ever. I bought Choysa as I remember it from TV adverts in the 1990's. The cost of those adverts were expensed in the financial year 1994.


Think very carefully about that.


We bought See’s for $25 million when its sales were $30 million and pre-tax earnings were less than $5 million. The capital then required to conduct the business was $8 million. (Modest seasonal debt was also needed for a few months each year.) Consequently, the company was earning 60% pre-tax on invested capital. Two factors helped to minimize the funds required for operations. First, the product was sold for cash, and that eliminated accounts receivable. Second, the production and distribution cycle was short, which minimized inventories. Last year See’s sales were $383 million, and pre-tax profits were $82 million. The capital now required to run the business is $40 million. This means we have had to reinvest only $32 million since 1972 to handle the modest physical growth – and somewhat immodest financial growth – of the business. In the meantime pre-tax earnings have totaled $1.35 billion.

All of that, except for the $32 million, has been sent to Berkshire (or, in the early years, to Blue Chip). After paying corporate taxes on the profits, we have used the rest to buy other attractive businesses. Just as Adam and Eve kick-started an activity that led to six billion humans, See’s has given birth to multiple new streams of cash for us. (The biblical command to “be fruitful and multiply” is one we take seriously at Berkshire.) There aren’t many See’s in Corporate America. Typically, companies that increase their earnings from $5 million to $82 million require, say, $400 million or so of capital investment to finance their growth. That’s because growing businesses have both working capital needs that increase in proportion to sales growth and significant requirements for fixed asset investments.

A company that needs large increases in capital to engender its growth may well prove to be a satisfactory investment. There is, to follow through on our example, nothing shabby about earning $82 million pre-tax on $400 million of net tangible assets. But that equation for the owner is vastly different from the See’s situation. It’s far better to have an ever-increasing stream of earnings with virtually no major capital requirements. Ask Microsoft or Google.

[Rawz]

I suggest you read their annual report - you will find answers to your questions.
Customers pay every week in advance, they pay their suppliers every month - negative working capital (which is good).

They still made 7.9 million profit in a bad year!
Cashflow was affected leading to increased debt (15 million) - according to the management this was due to income tax for previous FY paid in 2023FY, capital investment in pick technology etc..they have said they will aim to reduce debt this year
They have also reduced their staff count by 10%
MFB business model is very simple, financial statements are very easy to read (I don't understand intangibles - I usually delete intangibles from my calculations anyway)

Disc - shareholder, adding more

Thanks for that info pulled from the report

[Habits]

I suggest you read their annual report - you will find answers to your questions.
Customers pay every week in advance, they pay their suppliers every month - negative working capital (which is good).

They still made 7.9 million profit in a bad year!
Cashflow was affected leading to increased debt (15 million) - according to the management this was due to income tax for previous FY paid in 2023FY, capital investment in pick technology etc..they have said they will aim to reduce debt this year
They have also reduced their staff count by 10%
MFB business model is very simple, financial statements are very easy to read (I don't understand intangibles - I usually delete intangibles from my calculations anyway)

Disc - shareholder, adding more

Making turnover of 175m or 14m per month. They have over 12m of trade creditors and 150k of cash on hand. Yes they are using cashflow to cover their ongoing costs but it seems they have very little fire-power to fall back on. They have a 4m overdraft which is 10m worse off from 12 mths ago

[RRR]

They paid $ 2.1 million for pick technology (460K more to pay depending on the targets achieved)
$7.1 million income tax paid for FY22 and dividends paid $7 million odd
The above 3 reasons why their debt went higher to 15 million
Next year their cashflow will be much better, debt will reduce, staff cost will also reduce... and they will be able to resume paying dividends

[bottomfeeder]

They paid $ 2.1 million for pick technology (460K more to pay depending on the targets achieved)
$7.1 million income tax paid for FY22 and dividends paid $7 million odd
The above 3 reasons why their debt went higher to 15 million
Next year their cashflow will be much better, debt will reduce, staff cost will also reduce... and they will be able to resume paying dividends

The problem with the company is of the promoters doing. The SP last year was going down the toilet, so they thought keep up the dividends. Yep they thought, that will keep the SP up so we won't look like opportunist money grubbers. They knew that they had the tax bill to pay and should have cancelled the dividend last year. So they just pushed the inevitable to this year. Now the SP, will never recover to the dizzying heights of the IPO, and cash flow is now causing the problem. Where this will lead the company, who knows. Perhaps the promoters should make an interest free loan to the company over a ten year period to cover the cash flow difficulties and pay some dividends to the beleaguered shareholders, particularly those still around from the IPO. The promoters left the company with not enough cash to manage any downturn. Very greedy.

[SBQ]

The problem with the company is of the promoters doing. The SP last year was going down the toilet, so they thought keep up the dividends. Yep they thought, that will keep the SP up so we won't look like opportunist money grubbers. They knew that they had the tax bill to pay and should have cancelled the dividend last year. So they just pushed the inevitable to this year. Now the SP, will never recover to the dizzying heights of the IPO, and cash flow is now causing the problem. Where this will lead the company, who knows. Perhaps the promoters should make an interest free loan to the company over a ten year period to cover the cash flow difficulties and pay some dividends to the beleaguered shareholders, particularly those still around from the IPO. The promoters left the company with not enough cash to manage any downturn. Very greedy.

If you got no promotion, then how will you keep returning customers ? This is not like Tesla where they don't even advertise and people already know by simply visiting their website. The problem with MFB is people can't stay hooked on it so there needs to be incentives to keep the cash flow coming.

As a disclaimer, i've never tried their product (despite having a close family relative that works in their corporate office). They know they royally screwed the shareholders but that's how it is when you buy NZ shares. I cook most of the time at home and most of the dishes I know can't be executed in MFB style. I'm fussy on picking the meat cuts for eg. crispy skin pork belly. Finding the right cut of the pork belly and to ensure the skin has been dried with cuts that don't pierce through the fat layer is important to achieving a perfect crispy skin (when using a salt covering).

Where is any mention on the impact of inflation affecting the MFB business? If 1 slice of rib-eye is $12 at Pak N Save, then how will MFB bring that same piece of steak to the home at a comparable price? They won't because top cuts go to the steak houses and how do these steak houses cook their beef? They certainly don't Nadia Lim it. It's done in a non-evasive way by omitting the stupid marinades, spices, or sauces that Nadia may try to sell on you. Likewise with the salmon, too many ingredients in the fry pan and you don't know what the salmon tastes like.

[stoploss]

If you got no promotion, then how will you keep returning customers ? This is not like Tesla where they don't even advertise and people already know by simply visiting their website. The problem with MFB is people can't stay hooked on it so there needs to be incentives to keep the cash flow coming.

As a disclaimer, i've never tried their product (despite having a close family relative that works in their corporate office). They know they royally screwed the shareholders but that's how it is when you buy NZ shares. I cook most of the time at home and most of the dishes I know can't be executed in MFB style. I'm fussy on picking the meat cuts for eg. crispy skin pork belly. Finding the right cut of the pork belly and to ensure the skin has been dried with cuts that don't pierce through the fat layer is important to achieving a perfect crispy skin (when using a salt covering).

Where is any mention on the impact of inflation affecting the MFB business? If 1 slice of rib-eye is $12 at Pak N Save, then how will MFB bring that same piece of steak to the home at a comparable price? They won't because top cuts go to the steak houses and how do these steak houses cook their beef? They certainly don't Nadia Lim it. It's done in a non-evasive way by omitting the stupid marinades, spices, or sauces that Nadia may try to sell on you. Likewise with the salmon, too many ingredients in the fry pan and you don't know what the salmon tastes like.
SBQ-Did you miss this bit ?
Responding to economic conditions

Tony Carter, Chairman of My Food Bag, says the business has navigated a challenging year driven by the changing economic environment.

“Inflationary pressure on households and low consumer confidence have resulted in subdued demand, driving diseconomies of scale within the business.

“As a result, we have undertaken a reset of our business spanning our leadership, supply chain and brand positioning, all focused on strengthening My Food Bag to deliver.
“Our investment in pick technology, initiatives to increase choice, flexibility, customisation and value for customers, and our focus on cost, will drive performance in FY24 and will position us for further growth into the future,” says Carter.

[Daytr]

I thought MFB made a mistake from day one by having an overweight kid on their first TV campaign. I don't think it sent a great message to parents. I .e you eat MFB and you to can have overweight kids.
It displayed very poor judgment imo.

[SailorRob]

I thought MFB made a mistake from day one by having an overweight kid on their first TV campaign. I don't think it sent a great message to parents. I .e you eat MFB and you to can have overweight kids.
It displayed very poor judgment imo.

Definitely explains their demise.

[mistaTea]

Definitely explains their demise.

Oh for sure. They totally shot themselves in the foot when they showed parents how their product could improve the health of their children.

Dumb arses!

[Habits]

My express Food Bag looks interesting on YT.
MFB seemed to get a dream run through Covid and were given priority home delivery clearance when people went mad to do home baking and cooking. Thats changed since however I wouldn't say their FY23 sales have dropped radically.

There might have been a bigger drop the year before.

[bottomfeeder]

If you got no promotion, then how will you keep returning customers ? This is not like Tesla where they don't even advertise and people already know by simply visiting their website. The problem with MFB is people can't stay hooked on it so there needs to be incentives to keep the cash flow coming.

As a disclaimer, i've never tried their product (despite having a close family relative that works in their corporate office). They know they royally screwed the shareholders but that's how it is when you buy NZ shares. I cook most of the time at home and most of the dishes I know can't be executed in MFB style. I'm fussy on picking the meat cuts for eg. crispy skin pork belly. Finding the right cut of the pork belly and to ensure the skin has been dried with cuts that don't pierce through the fat layer is important to achieving a perfect crispy skin (when using a salt covering).

Where is any mention on the impact of inflation affecting the MFB business? If 1 slice of rib-eye is $12 at Pak N Save, then how will MFB bring that same piece of steak to the home at a comparable price? They won't because top cuts go to the steak houses and how do these steak houses cook their beef? They certainly don't Nadia Lim it. It's done in a non-evasive way by omitting the stupid marinades, spices, or sauces that Nadia may try to sell on you. Likewise with the salmon, too many ingredients in the fry pan and you don't know what the salmon tastes like.

A promoter are the people responsible for the IPO. In this context my comment did not refer to advertising, marketing, or promotion of the brand or product.

[SBQ]

A promoter are the people responsible for the IPO. In this context my comment did not refer to advertising, marketing, or promotion of the brand or product.

The term i'm more familiar with, would be called the 'underwriters'. Either way it was very clear they screwed the shareholders from start to finish.

On way back from grocery shopping this morning was some investment talk for retirement. A complete joke in my mind how the avg balance of $30K since the start of the investment scheme. They talk about things like conservative vs aggressive allocations. Things that Buffett would not support. How come he's not talking about how an individual under KS faces FIF/taxes and mgt fees while if the person buys directly in a self directed fund, has a $50K total capital exemption if they buy the SAME ETF such as the Vanguard VOO. Ok nothing to do with MFB but I will tell you this, there's no shortage of Kiwis taking the advice of these financial advisors who point to buy IPOs like MFB.

[bottomfeeder]

The term i'm more familiar with, would be called the 'underwriters'. Either way it was very clear they screwed the shareholders from start to finish.

On way back from grocery shopping this morning was some investment talk for retirement. A complete joke in my mind how the avg balance of $30K since the start of the investment scheme. They talk about things like conservative vs aggressive allocations. Things that Buffett would not support. How come he's not talking about how an individual under KS faces FIF/taxes and mgt fees while if the person buys directly in a self directed fund, has a $50K total capital exemption if they buy the SAME ETF such as the Vanguard VOO. Ok nothing to do with MFB but I will tell you this, there's no shortage of Kiwis taking the advice of these financial advisors who point to buy IPOs like MFB.

Ex Cornell University. Google it "Promoter Corporate"

"In corporate law, a promoter is the founder or organizer of a corporation or business venture; the person who takes the initiative to create or organize a business. The term is mostly used in the context of incorporation. A promoter would perform the conduct required for incorporating the business venture."


An underwriter is the person or group that for a fee, guarantees to take on shares, bonds or interests, that when issued there is a shortfall.

Promoters usually retain controlling interests and therefore are the "power" behind the company, not underwriters.

The promoters of MFB are the ones who have tried to maintain the SP, by dubious and self serving business practices, so that they dont lose credibility or face. However the inevitable has come, as this sort of financial finagling ultimately doesnt work, and reality has to settle sooner or later.

Reminds me of corner pizza shop put up for sale, and the seller let the prospective buyers in for a few weeks to gauge the business. During those weeks the seller gave money to all his friends to buy Pizza, effectively showing a turnover that is not sustainable. Was the turnover of MFB sustainable during the period of the IPO. Very hard to prove that it wasnt. But hindsight sure does show that it wasnt sustainable, in its format and cost base.

Benefit of hindsight is a wonderful thing you may say. But when you are selling your business for hundreds of millions of Dollars you have to be an expert in all things as well as telling the future with some accuracy. I doubt the persons who invested in the IPO are saying, "poor promoters, they couldnt have known"

Everyone at the time was disgusted with the cash taken out from the IPO by the promoters.

[RRR]

When waterman private equity invested in MFB in 2016 (?) the valuation for MFB was 80 million! Current market cap 50 million..they are profitable, capital-light, debt is manageable..you guys are hard to please:eek2:
Agree IPO price was too high..

[SailorRob]

When waterman private equity invested in MFB in 2016 (?) the valuation for MFB was 80 million! Current market cap 50 million..they are profitable, capital-light, debt is manageable..you guys are hard to please:eek2:
Agree IPO price was too high..

Good point.

[Valuegrowth]

In my opinion, main reason for their poor performance is high cost of doing business thanks to rising assets prices which includes food. Until asset prices come to equilibrium and improve purchasing power, many businesses can have below average performance.

[SailorRob]

In my opinion, main reason for their poor performance is high cost of doing business thanks to rising assets prices which includes food. Until asset prices come to equilibrium and improve purchasing power, many businesses can have below average performance.


Sport, do you mean rising asset prices as well as food?

When was food included as an asset price, is this something implemented by the government today?

Which assets are you specifically referring to?

They weren't much higher in 2021 than now?

Which asset prices are higher now, particularly nominally?

[Valuegrowth]

Sport, do you mean rising asset prices as well as food?

When was food included as an asset price, is this something implemented by the government today?

Which assets are you specifically referring to?

They weren't much higher in 2021 than now?

Which asset prices are higher now, particularly nominally?

https://www.mannatreepartners.com/food-as-an-asset-class-resilient-and-growing/#:~:text=Food%20has%20proven%20to%20be,anywhere%2D %20it%20is%20however%20changing (https://www.mannatreepartners.com/food-as-an-asset-class-resilient-and-growing/#:~:text=Food%20has%20proven%20to%20be,anywhere%2D %20it%20is%20however%20changing.).

Food as an asset class. Food is also a commodity

[Valuegrowth]

Sport, do you mean rising asset prices as well as food?

When was food included as an asset price, is this something implemented by the government today?

Which assets are you specifically referring to?

They weren't much higher in 2021 than now?

Which asset prices are higher now, particularly nominally?

https://figure.nz/chart/azFwYTVvUcrcxT3m-Cn6TyuSQBZ8Kacee (https://figure.nz/chart/azFwYTVvUcrcxT3m-Cn6TyuSQBZ8Kacee)
Median weekly rent in New ZealandAll residential property types, Jan 2013–Jan 2023, NZD per week
https://www.macrotrends.net/1476/copper-prices-historical-chart-data (https://www.macrotrends.net/1476/copper-prices-historical-chart-data)

Copper chart


https://www.stats.govt.nz/topics/food-price-index (https://www.stats.govt.nz/topics/food-price-index)

Food price index

https://www.theguardian.com/world/datablog/ng-interactive/2023/apr/19/food-costs-soar-in-new-zealand-see-how-prices-have-changed-with-this-interactive-chart (https://www.theguardian.com/world/datablog/ng-interactive/2023/apr/19/food-costs-soar-in-new-zealand-see-how-prices-have-changed-with-this-interactive-chart)
Food costs soar in New Zealand: see how prices have changed with this interactive chart

https://www.businesswest.co.uk/blog/rising-cost-doing-business (https://www.businesswest.co.uk/blog/rising-cost-doing-business)

Quoted from the above link.

“We’re all now familiar with the cost of living crisis - how households are struggling to keep up with bills and afford the rapidly rising cost of food, fuel and other essentials.

But there’s another crisis which is dramatically hitting businesses, and that’s the ‘cost of doing business’ crisis. Firms across the country are being confronted by rapidly rising costs of vital raw materials, fuel, wages and, of course, energy.”

[ralph]

Good point.
Definitely a good point .
I am so sick of people harping on about the I P O, as if anyone has not heard that **** before get over & over it unless you lost a lot of money there then just winge to yourself .& Input some fresh thoughts .
Its not even like its the only Bad I P O in the last few years .
Thanks for some fresh thought on the subject triple R:t_up:,Instead of following the sheep

[troyvdh]

Again...if you live in CHCH...just head down Marshlands Rd...2 options avaliable ...one on Mairehau road...

KISS ?

[ralph]

Again...if you live in CHCH...just head down Marshlands Rd...2 options avaliable ...one on Mairehau road...

KISS ?
Oh dear kfc again simple enough

[Habits]

I've never heard of a major supermarket closing down, until now. Located in working class suburb

Save our supermarket - locals want to know why Countdown Nawton is closing down | Stuff.co.nz
https://i.stuff.co.nz/national/300850298/save-our-supermarket--locals-want-to-know-why-countdown-nawton-is-closing-down

[SailorRob]

Definitely a good point .
I am so sick of people harping on about the I P O, as if anyone has not heard that **** before get over & over it unless you lost a lot of money there then just winge to yourself .& Input some fresh thoughts .
Its not even like its the only Bad I P O in the last few years .
Thanks for some fresh thought on the subject triple R:t_up:,Instead of following the sheep


Yes, the opportunity in front of us is not the IPO...

We get the chance to pick up the pieces from others gullibility and their money too.

[bottomfeeder]

Definitely a good point .
I am so sick of people harping on about the I P O, as if anyone has not heard that **** before get over & over it unless you lost a lot of money there then just winge to yourself .& Input some fresh thoughts .
Its not even like its the only Bad I P O in the last few years .
Thanks for some fresh thought on the subject triple R:t_up:,Instead of following the sheep

Yep the IPO has been done and dusted.Luckily I wasnt a part if it. But the fallout will be with us for a long time to come. It is obvious shareholders are considerably miffed that they feel ripped off. It will always be in the back of the minds of the directors involved in the IPO. As such their decisions will be made by having that taint uppermost. They should have cancelled the dividend last year, and we wouldnt have the cash flow problems today. Or they could have had a capital raise when the SP was 95 cents. That may have been prudent. No doubt they they discounted that as not a good look after the slew of cash leaving the company after the IPO.

[Sideshow Bob]

I've never heard of a major supermarket closing down, until now. Located in working class suburb

Save our supermarket - locals want to know why Countdown Nawton is closing down | Stuff.co.nz
https://i.stuff.co.nz/national/300850298/save-our-supermarket--locals-want-to-know-why-countdown-nawton-is-closing-down

I never heard of a Countdown store referred to as 'beloved'!

[Balance]

Wait, the newish CEO has a strategy for turning MFB around!

It's about people having to eat and so, MFB cannot but survive and do well.

Last I heard, people have to travel and therefore, UBER cannot but do well!

https://www.nbr.co.nz/shoeshine/people-have-to-eat-turning-around-my-food-bag/

https://d2xgqyuql1olth.cloudfront.net/assets/Mark-Winter-CEO-of-My-Food-Bag-and-Tony-Carter-Chair-of-My-Food-Bag-web.jpeg

Poor Tony Carter, he looks like he lost his glasses? Or is it his vision?

[nztx]

Wait, the newish CEO has a strategy for turning MFB around!

It's about people having to eat and so, MFB cannot but survive and do well.

Last I heard, people have to travel and therefore, UBER cannot but do well!

https://www.nbr.co.nz/shoeshine/people-have-to-eat-turning-around-my-food-bag/

https://d2xgqyuql1olth.cloudfront.net/assets/Mark-Winter-CEO-of-My-Food-Bag-and-Tony-Carter-Chair-of-My-Food-Bag-web.jpeg

Poor Tony Carter, he looks like he lost his glasses? Or is it his vision?



The last New Menu concoction is still in development phases

Initial experiments have been an eye popping, mindboggling, ear deafening initial round,

as all can see from MFB's latest photo taken after the Menu upgrade experiment :)


Anyone who finds MFB branded pot lids, utensils and sampling plates in their garden, please return
them to us, so that further experiments can be undertaken and date set for a new blast off :)

Full service will resume once a successful blast off occurs and new special strength replacement glasses arrive ..

[bottomfeeder]

Reading an article about restaurant prices. Chateau Briand $138. Who would order that. After all half your cooked meal is discarded. But most of the mains are $60 to $80. MFB is starting to sound cheap. I ordered a few Made Meals today. Price is about $15 each meal. Sounds expensive, but not near what it costs go go out to dinner. You cant even get KFC or Maccas for one for $15 any more.

If MFB can hold its prices for a bit longer, I think we will see a resurgence. Having said that we are used to seeing price increases, so another possible resurgence.

[samjaynz]

Reading an article about restaurant prices. Chateau Briand $138. Who would order that. After all half your cooked meal is discarded. But most of the mains are $60 to $80. MFB is starting to sound cheap. I ordered a few Made Meals today. Price is about $15 each meal. Sounds expensive, but not near what it costs go go out to dinner. You cant even get KFC or Maccas for one for $15 any more.

If MFB can hold its prices for a bit longer, I think we will see a resurgence. Having said that we are used to seeing price increases, so another possible resurgence.

Get yourself the McDonalds app and you can get a decent feed (in terms of quantity of food) for less than $10 most days. Got lunch for two for about $14 the other day, and honestly with the way that quality is dipping in some nicer restaurants - particularly compared to price - we were happy.

[blackcap]

Get yourself the McDonalds app and you can get a decent feed (in terms of quantity of food) for less than $10 most days. Got lunch for two for about $14 the other day, and honestly with the way that quality is dipping in some nicer restaurants - particularly compared to price - we were happy.

Are you seriously saying McDonalds is a decent feed? (Sorry, just saw you qualifier around quantity). But quantity does not equal quality.

I would be loathe to call McDonalds food. It is processed rubbish.

[Rawz]

Are you seriously saying McDonalds is a decent feed? (Sorry, just saw you qualifier around quantity). But quantity does not equal quality.

I would be loathe to call McDonalds food. It is processed rubbish.
Wash your mouth out with some of that Big Mac special sauce.

Nothing like a feed a maccas after a dozen beers (low carb lol)

[blackcap]

Wash your mouth out with some of that Big Mac special sauce.

Nothing like a feed a maccas after a dozen beers (low carb lol)

Haha totally, when I was younger I would frequent this establishment possibly once a week. In Uni days, it was many times a week. Now not so much. The Big Mac special sauce is good. (but its still a long bow to call it food)

[blackcap]

Wash your mouth out with some of that Big Mac special sauce.

Nothing like a feed a maccas after a dozen beers (low carb lol)

Haha totally, when I was younger I would frequent this establishment possibly once a week. In Uni days, it was many times a week. Now not so much. The Big Mac special sauce is good. (but its still a long bow to call it food)

[Toddy]

Im not an investor in this stock. But have read the thread. Maybe the question should then be, why doesn't MFB also offer a junk food option ?

This would be a great way to hook in the kids that aren't so keen on eating broccoli for dinner.

[Onemootpoint]

Im not an investor in this stock. But have read the thread. Maybe the question should then be, why doesn't MFB also offer a junk food option ?

This would be a great way to hook in the kids that aren't so keen on eating broccoli for dinner.

Maybe but probably doesn’t fit with what the founders had in mind when they started MFB.

[Toddy]

Probably the same discussion in the board room when McD and KFC put some healthier options on their menu's.

[bottomfeeder]

Lone star ribs. (small) for 4 costs $160. MFB costs a lot less. And Lone Star is one of the cheapest restaurants around. I think MFB is due for a reset.

[SailorRob]

Lone star ribs. (small) for 4 costs $160. MFB costs a lot less. And Lone Star is one of the cheapest restaurants around. I think MFB is due for a reset.


Does MFB cook for you, provide a venue and clean up after you though...

[ralph]

Does MFB cook for you, provide a venue and clean up after you though....

Also they do not supply any abuse, bad service or loud mouth yobs this would be extra .

[clip]

Lone star ribs. (small) for 4 costs $160. MFB costs a lot less. And Lone Star is one of the cheapest restaurants around. I think MFB is due for a reset.

A restaurant charging $40 for a small serving of ribs is far, far, far from the cheapest restaurant around, and Lonestar is far, far, far from being the best value for money too, and far from being great food while it's at it! Interesting example! Of course this is my opinion only I guess

[blackcap]

Lone star ribs. (small) for 4 costs $160. MFB costs a lot less. And Lone Star is one of the cheapest restaurants around. I think MFB is due for a reset.

You cannot compare a restaurant with MFB.

Its like saying, PaknSave for 4 costs $18 which is a lot cheaper than MFB.

[Slartibartfast]

A restaurant charging $40 for a small serving of ribs is far, far, far from the cheapest restaurant around, and Lonestar is far, far, far from being the best value for money too, and far from being great food while it's at it! Interesting example! Of course this is my opinion only I guess
I haven't been to Lone Star for years, but they were pretty big portions back then!

[Rawz]

The ole lassoo of hog was always good

MFB sp will continue to drift lower until half year.

[SailorRob]

Current market cap is about $46m, my calc enterprise value is about $38m or $0.16 per share. Revenue '21-'22 already levelled out = no/low growth, expecting margin squeeze on rising input costs. Will rerun the numbers on FY23 annual report.


About here then.

Are we buying?

[Baa_Baa]

About here then.

Are we buying?

I don’t think I ever said I’d be buying at any price. You asked what I thought fundamental (enterprise) value was, that’s all. No reason I can see why the market won’t price this below that value. Anyway, the company doesn’t interest me as an investor.

[bottomfeeder]

Wow 16 cents. Must be some investors from the IPO really angry with TG.

[SailorRob]

I don’t think I ever said I’d be buying at any price. You asked what I thought fundamental (enterprise) value was, that’s all. No reason I can see why the market won’t price this below that value. Anyway, the company doesn’t interest me as an investor.


No you didn't say you'd be buying. Surely there would be a price that the company would interest you though?

[Baa_Baa]

No you didn't say you'd be buying. Surely there would be a price that the company would interest you though?

I have to firstly want to invest in a company, before the price of a share becomes a decision factor. Because I don’t want to invest in mfb, the share price is of no relevance to me. My only interest has been in studying the lessons of a private equity cash out exit and how ruthless that was and disastrous to subsequent shareholders. The business itself is of no interest to me.

[Habits]

No you didn't say you'd be buying. Surely there would be a price that the company would interest you though?

OCA logic says the cheaper it is the more valuable it becomes, or something like that.

[SailorRob]

OCA logic says the cheaper it is the more valuable it becomes, or something like that.


Not OCA logic, just basic math and investment.

The share price falling wont change the value of the business it will just mean a larger spread between price and value.

Think of it like this, you're looking for a car and the ones you are interested in are priced at $10,000.

You get the opportunity to purchase one at $5,000.

That makes more sense than paying 10k but the value is still 10k

[Habits]

Not OCA logic, just basic math and investment.

The share price falling wont change the value of the business it will just mean a larger spread between price and value.

Think of it like this, you're looking for a car and the ones you are interested in are priced at $10,000.

You get the opportunity to purchase one at $5,000.

That makes more sense than paying 10k but the value is still 10k


Right partly

A car worth $10,000 which you buy for half of, is possibly not worth 10k after all. The seller lead you to think that you are getting great buying value. But taking your example and its undersold, then you can immediately sell on the same market and make the 5k profit.

Try doing that with MFB

[SailorRob]

Right partly

A car worth $10,000 which you buy for half of, is possibly not worth 10k after all. The seller lead you to think that you are getting great buying value. But taking your example and its undersold, then you can immediately sell on the same market and make the 5k profit.

Try doing that with MFB


Correct, much more nuanced with equity market and much less knowable that you are in fact buying a 10k car for 5k.

Takes years to find out often.

[SBQ]

Right partly

A car worth $10,000 which you buy for half of, is possibly not worth 10k after all. The seller lead you to think that you are getting great buying value. But taking your example and its undersold, then you can immediately sell on the same market and make the 5k profit.

Try doing that with MFB

The problem is what 1 person believes the car is valued at $10K, most others do not believe it's worth $10K. Likewise, if you buying the car at $5K, how can you be so sure you will find someone that will buy it off you for $10K ?

MFB is nothing like that. The bid & ask prices are just that, the TRUE market value of the company. If it trades at 16 cents, then that's what it is worth. If the company does share dilution, then you'll find those 16 cents will be worth a lot less (supply and demand). Still MFB would not be the last one. I recall sports action apparel maker Naked Brands. A NZ company that somehow overnight, turned into an electric EV maker in America. Another words, how does the shareholders of Naked Brands end up having shares of CENN (Cenntro Electric Group: NASDAQ) ??? For those that care to look it up, they did a reverse split to keep their seat on the Nasdaq. My last recall it use to be at $12 stock:

CENN (Cenntro Electric Group Ltd) Last: 0.2946 04-0.0072 -2.3857% (Vol: 1,198,427) | Daily Range: 0.00-0.00 | 52-Week Range: 0.26-2.27 | Cap: $76.981M

I wonder who's the person with that bright idea to take Naked Brands and turn it into a joint venture to make EVs? Eitherway, the shareholders witnessed a 99% loss.

[SailorRob]

. If it trades at 16 cents, then that's what it is worth.

To me a company is worth the present value of net future cash flows at my personal discount rate and I often find companies trading at less than this value.

So if it trades at 16c that's all you could get for it on that day but what it's worth could be vastly different.

I guess if you had to sell a house in a single day you would get a vastly different price to what you considered it worth. All about liquidity too.

But this is the very essence of investing, paying less than something is worth. Which by your definition is impossible.

Semantics perhaps.

But the market price will often be wrong.

[Ferg]

The bid & ask prices are just that, the TRUE market value of the company.
The bid and ask prices are an indicator of the CURRENT market value, not necessarily the TRUE value. Semantics I know but the true value depends on many factors.

[Habits]

On FY result day everyone seemed rather relieved, the shareprice rose 13 percent. Then resumed back into its downtrend and lacking of confidence. For every seller there's a buyer on the other side, would be interesting to know the average seller loss

[nztx]

OCA logic says the cheaper it is the more valuable it becomes, or something like that.


I think I'll wait until we reach 5c on that logic :)

[Fortunecookie]

I don't actually think the meal prep delivery market is that massive.

I did a rough calculation previously, MFB made about $2mill the last six month. The next six to twelve months they will be squeezed. If you look hard enough if you can find the financials for Hellofresh NZ. Virtually identical revenue. The difference is they retained their earnings. Now they are trying to eliminate MFB through discounting. Compared to MFB the have a war chest in cash. Also not a good idea not to extrapolate performance during covid. They were unusual times.

[silverblizzard888]

The market size is pretty set now, so more or less just about retaining existing customers. MFB think Bargain Box (BB) will be the way to gain extra customer or keep existing ones, BB is also much cheaper, as a comparison BB cost $144.39 for a family of 4 for 4 meals including delivery while Hellofresh will cost $180. MFB also tries the premium route charging $205. To a point they each hit different categories. MFB is like the New World and Pak n save model, while Hellofresh is Countdown. Each have their customers and perform reasonable well.

I did a forecast of them with 15% less revenue and 20% gross margin and factored in:
Lowered financing cost through reduction of debt
Lowered wages through reduced staffing
Lowered listing cost from withdrawing from ASX

I get about $5m NPAT, which if they can achieve that and then payout 70% through dividends thats 1.44 cents or 9% return on the current 16 cents share price.
Though the worry is will they continue to lose customers and have revenue continue to drop. Active customer numbers in the next update will be key.

[blackcap]

From $1.85 to $0.16 and not sure its good buying at these levels. Seems that nice Mr Simon fellow might have been right after all. This was a fleece and a clever one at that. Well done Nadia and other PE that got out at the boom. I suppose the good thing is that its given Nadia money to buy that nice farm down south and give us hours of entertainment on the new TV show.

[silverblizzard888]

From $1.85 to $0.16 and not sure its good buying at these levels. Seems that nice Mr Simon fellow might have been right after all. This was a fleece and a clever one at that. Well done Nadia and other PE that got out at the boom. I suppose the good thing is that its given Nadia money to buy that nice farm down south and give us hours of entertainment on the new TV show.

As the saying goes when a person with money, but no experience meets a person with experience and no money, the person with the experience takes the money and the person with the money gains some experience. Ones richer and ones wiser. At 16 cents though that is a sad reality to debate about its value even at that level.

[Balance]

As the saying goes when a person with money, but no experience meets a person with experience and no money, the person with the experience takes the money and the person with the money gains some experience. Ones richer and ones wiser. At 16 cents though that is a sad reality to debate about its value even at that level.

Would not say that the 3 institutional funds who partook in the IPO (being Milford, Harbour and Investment Services are inexperienced or no experience!

And why the angst against Nadia? She was but the front person with a relatively small stake - the ones who really made out like robbers' dogs were Waterman (70% stake) and the IPO brokers (3 of them).

In any case, there were plenty of warnings from just about every quarters to avoid this IPO.

The real story which should emerge is this - why do 'investors' continue to buy into IPOs brought to them by brokers associated with Feltex, Wynyard, Intueri and Metro Glass??????????????????

[SailorRob]

Would not say that the 3 institutional funds who partook in the IPO (being Milford, Harbour and Investment Services are inexperienced or no experience!

And why the angst against Nadia? She was but the front person with a relatively small stake - the ones who really made out like robbers' dogs were Waterman (70% stake) and the IPO brokers (3 of them).

In any case, there were plenty of warnings from just about every quarters to avoid this IPO.

The real story which should emerge is this - why do 'investors' continue to buy into IPOs brought to them by brokers associated with Feltex, Wynyard, Intueri and Metro Glass??????????????????


The real story which should emerge is this - why do 'investors' continue to buy into IPOs... Period...

[Balance]

The real story which should emerge is this - why do 'investors' continue to buy into IPOs... Period...

Because there's huge gains to be made from good IPOs - think AIA, Freightways, Xero and the power companies in NZ.

[SailorRob]

Because there's huge gains to be made from good IPOs - think AIA, Freightways, Xero and the power companies in NZ.


Yes and huge losses.

We can all highlight huge gains from any scenario that doesn't make a lot of sense.

On any given day, is a sale by a very informed group of parties, to a less informed group of sellers, going to be the best deal out there?

'An IPO situation more closely approximates a negotiated deal. I mean, the seller decides when to come to market in most cases. And they don't pick a time necessarily that's good for you'.


"In my view, you're way more likely to get incredible bargains in an auction market. It's just the nature of things...Sometimes there will be IPOs in terrible markets, and they may come very cheap. But by and large, that is not when IPOs come. They come when the seller thinks that the market is ready for them. And they come with an informed seller thinking it's a pretty good time to go public. And, you know, you'll make better buys, in my view, in an auction market."


It's Probably Overpriced

[Fortunecookie]

At IPO time, asymmetric information is at its worst for the retail investor.

Is difficult enough during normal times. To determine any meaningful track record is near impossible. Yes some will work out. But the odds are not stacked in our favour.

[SailorRob]

I will say that buying off the government after the collapse of communism, which has essentially been the play with many NZ IPO's, has been a good strategy.

And one that has driven a lot of NZX returns.

[Balance]

Yes and huge losses.

We can all highlight huge gains from any scenario that doesn't make a lot of sense.

On any given day, is a sale by a very informed group of parties, to a less informed group of sellers, going to be the best deal out there?

[I]'An IPO situation more closely approximates a negotiated deal. I mean, the seller decides when to come to market in most cases. And they don't …. Etc

Speak for yourself - IPOs have been fantastic for many of us. Very very good returns over the years and all a question of being smart to pick the right ones.

Huge losses are made by mugs who participate in IPOs which even half-witted fools know to avoid!

Best you stay clear of them though as they are obviously not for you!

[SailorRob]

Speak for yourself - IPOs have been fantastic for many of us. Very very good returns over the years and all a question of being smart to pick the right ones.

Huge losses are made by mugs who participate in IPOs which even half-witted fools know to avoid!

Best you stay clear of them though as they are obviously not for you!

I have no question you have nailed IPO's over the years balance.

No question that your combined IPO efforts have allowed you to beat the market, placing you in the very upper echelon of amateur and professionals alike.

Given your exceptional IPO experience and success over the years, have you considered starting a fund that specialises in them?

Many here would give you capital.

What has your long term CAGR been from your total IPO investing?

You are so damn smart to pick the right ones, we could all learn a lot from you.

[Balance]

I have no question you have nailed IPO's over the years balance.

No question that your combined IPO efforts have allowed you to beat the market, placing you in the very upper echelon of amateur and professionals alike.

Given your exceptional IPO experience and success over the years, have you considered starting a fund that specialises in them?

Many here would give you capital.

What has your long term CAGR been from your total IPO investing?

You are so damn smart to pick the right ones, we could all learn a lot from you.

I still have the AIA shares from the IPO. Likewise, Genesis and Meridian.

Have not bought into any IPOs since the power company sell downs - a while ago.

But have made good money from picking up IPO stocks out of favour - Orion, Diligent & Serko and even, Tegel.

To each their own, really but it’s clear you should stay out of IPOs and stick to where you are making your zillions - like OCA.

Very very satisfying for us all to let invest to our strengths in the market, right?

[percy]

Apparently bought out by the equity spive jocks, after that leverage it up to the eye balls and then float it ,al la Feltex/ Dick Smiths, IMHO, !

Posted 18-10-2016.
#83 of this thread was the first real warning.
Up until then mainly very positive posts about the quality of the meals.l
I must have taken note as I avoided MFB float.

[ValueNZ]

I still have the AIA shares from the IPO. Likewise, Genesis and Meridian.

Have not bought into any IPOs since the power company sell downs - a while ago.

But have made good money from picking up IPO stocks out of favour - Orion, Diligent & Serko and even, Tegel.

To each their own, really but it’s clear you should stay out of IPOs and stick to where you are making your zillions - like OCA.

Very very satisfying for us all to let invest to our strengths in the market, right?
Congratulations on your IPO picks. If you disagree with those quotes which SailorRob posted, I'd be interested in hearing your counter argument.

[SailorRob]

Very very satisfying for us all to let invest to our strengths in the market, right?


It is. But only if our efforts beat the returns of the general market, otherwise it's a waste of time and you should just index.

So has your skill enabled you to beat the market over this 15 year plus time period?

Nailing multiple IPO's like that must have made you very wealthy and a paragon of virtue. You will have family, friends and acquaintances wanting you to run their money.

I and many others will pay you a huge sum of money to advise on IPO's if it can be proven that you have a long term track record of nailing them. It is a very rare skill than Warren freely admits he does not have.

OCA with conservative 20% CAGR for a few years at least is certainly attractive against a market that will struggle with mid single digits.

[ValueNZ]

I'd be interested in hearing what people think MFB's intrinsic value to be. I know Baa Baa thought $0.16 which its now at. If I were to have a educated guess, I think it is fairly valued in the 20-25 cents range.

I think there is a lot of upside potential here, but it certainly seems risky.

[SailorRob]

I'd be interested in hearing what people think MFB's intrinsic value to be. I know Baa Baa thought $0.16 which its now at. If I were to have a educated guess, I think it is fairly valued in the 20-25 cents range.

I think there is a lot of upside potential here, but it certainly seems risky.

Whenever anyone ever says what they think intrinsic value is, the first and most obvious question (that is never asked nor perhaps understood) is 'at what discount rate' ?