I wonder what they're smoking to see that value through the fumes ;)
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But the friendly promotors told customers to "dig in" and gorge themselves like it was a free feed, (or words to a similar effect), and many of these naïve customers wouldn't understand the metrics and have simply looked at the pretty pictures and liked the name and believed in the product and the rest as they say is history.
The market will remember Waterman next time they float something ….come to think of it they prob thinknWaterman good guys
A mildly contrary view. Maiden dividend mentioned for December. New and big Christchurch distribution centre on the way. Small recent price rises. Online shopping spiking due to, you know, and some new customers will stick.
May be a buying opportunity. Or not.
No need to panic .... all on track
Good buy today
The Board is in the position to reaffirm its FY22 revenue and earnings forecast, as outlined in the PFI
provided to investors in connection with the IPO. The Board also reconfirms that it intends to declare an
interim dividend to be paid in December.
http://nzx-prod-s7fsd7f98s.s3-websit...992/356974.pdf
May give the sp a lift, to be sold down again later in the month when the lack of sex appeal wears down the stock again.
Maybe the directors & management could show their commitment by buying heaps of shares? Like lots & lots since it must be so very cheap compared to the $1.85 they helped to convince Mum & Dad investors to load up 6 months ago?
Looks positive but “caveat emptor” Thay say
In addition to those costs directly attributable to operating safely during higher Alert Levels, we have experienced inflationary pressure in recent months, particularly in ingredients and labour costs. We have sought to mitigate the impact of these higher costs through a price increase on selected Bags in early October.
My read is they won’t no for some time if the price increases have been successful without reducing demand..
Reading a new analyst report from Jarden this morning. Have reconfirmed their 1.80 TP and a few comments about how it is slightly ahead of their 1H revenue forecast. FY22E gross yield of 7%, net yield 5%, and FY23E net yield of 5.6%.
One item that sticks out is the 5% net yield. 5% is a magic number from JLM/retail/shareholder perspective as ultimately floats in the last year have all gravitated towards yield with all other implied valuation metrics a distant or forgotten consideration. Where the float went wrong (from my perspective) is the JLMs all fixated on the 5% yield but the WRONG yield - they thought 5% gross and 3.5% net was what the market was after when in fact what the market demanded was a 5% net yield. I think MFB is fairly price now at that metric.
Do we know if MFB are delivering on their planned variable cost savings per the IPO? Or is that ancient history?
All the stagged stags will be deerly missing their free lunch of venison stew in hind sight.
That’s the big question! Officially (per the company) all is on track to the prospectus forecast. But we still have a second half to go in unusual times.
I see Craigs just downgraded from 1.85 to 1.68 (12 month target price) with a spot valuation of 1.59. Current year forecast broadly unchanged but longer term (FY23 & FY24) they have EBITDA flat lining at around 35 & 35.7 (vs FY22E of 34).
A decent cash yield at 1.20. About where i got it. Dont see it going up too fast anytime soon.
Sometimes NZ Herald does some cool graphics …like this today
Easy to see where this is heading
I hear she does a mean brunch https://www.youtube.com/watch?v=_fqg4zal230
Somebody got hungry at close today ....
https://www.scoop.co.nz/stories/BU21...ed-startup.htm
Here’s one (ex COO) who took his money & ran. Now helping to set up another entity which no doubt will be sold to Mom & Dad mugs in due course?
I really genuinely feel sorry for Nadia - hope she is getting paid well to be associated with MFB.
Anyone who considers investing in this company should have a look at Marley Spoon on the asx, who do the same thing. Was a market darling and now A$.90 and down 14 percent after result. States that customers are not ordering as much as lock downs ends.
Still haven't cracked the magic buck level yet .. may have to sit back & play elsewhere for a bit longer :)
still be looking for the next curious announcement that bashes MFB under the 120 bits on the plate ;)
@Shareguy Check out Blue Apron in the USA for an even better example. Was a ~$2b company at IPO a few years ago now barely a going concern.
For anyone following MFB I've just posted a deep dive write up (linked below). It includes some info about the fall of Blue Apron and some of the parallels I see to MFB's situation. The biggest risk being it'll be mighty hard to keep these 15%+ EBITDA margins long term
https://fundamentalgoob.com/2021/10/...-sinking-ship/
Goob just read your article. Fantastic. Well researched with great balanced information. You have summed it up well in my opinion. I think they will report forecast this half year but that’s it. Increased costs and a good chance that demand will decrease with lockdowns ending and the food bag will be the first to go if the economy goes into recession. All holders should read your article.
Might have mentioned this before, but a young couple in the family are MFB regulars. Under 25, both working. They reckon cost is similar to what they were spending on UberEats etc, better quality, much healthier, plenty of variety and no waste. There is cooking involved of course, but they usually choose a couple of the ready-in-15-minute options for time poor days.
MFB has now expanded its range to cover a lot of add ons - pantry items, ready made meals, baking mixes, artisan products. They would be good for profit margins as fixed costs already covered and they can increase or reduce items and volumes easily to follow demand. Ours have added on for example $12 for a pizza kit - 4 bases, sauce and grated 3 cheese, add own protein, veggies or whatever.
I know about their choices as the delivery comes to mine, their place not suitable for delivery.
They might not be the original target market, but maybe a sign of a different market. And also that the range is extending weekly, though range of meal options has shrunk as well mainly since covid last year.
It used to be that when Milford bought into a stock, many (including me) would consider that as a good sign and most likely, invest too.
Those days are long gone, it seems with Milford being the only volume buyer supporting MFB's sagging share price.
http://nzx-prod-s7fsd7f98s.s3-websit...823/359214.pdf
My Food Bag achieves record earnings; confirms dividend - NZX, New Zealand’s Exchange
My Food Bag is pleased to release its half year results for the six months ended 30 September 2021. These results demonstrate a strong first half of the year for the business, underpinned by a combination of operational achievements and further product innovation.
Highlights include:
• NPAT of $9.4 million, up 24.6% on H1 FY21
• EBITDA of $16.0 million, up 11.6% on H1 FY21
• Active customers up 3.3% compared to the end of H1 FY21
• High value active customers up 3.1% year-on-year
• Revenue of $98.4 million, down 6.5% year-on-year due to 2020 nationwide lockdown spike
• Launch of My Food Bag Kitchen, the business’ first significant step outside of weeknight meals
• Expanded recipe choice to include Bargain Box and Fresh Start brands
• Fully imputed interim dividend of 3.0 cents per share declared
Tony Carter, Chairman of My Food Bag says “These results mark the halfway point of our first full year as a publicly listed company and demonstrate clear progress, and the achievement of some important milestones, as we grow within New Zealand’s $37 billion retail food sector.
Bob ...you are meant to highlight the Record earnings bit
MFB has a supply chain advantage in that its future demand is locked and paid for. Plenty of companies would give their eye teeth.
Makes you wonder where there market seems fair value for this stock. Analysts way over estimated, such as Jarden etc. Still no support or volume buyers at these levels 1.15. Does it need to settle in sub $1 for any real interest to be sparked. Bit of an anomaly that the SP has declined so much from the IPO. The company does have a lot of competition in the space which have obviously hindered, such as Hello Fresh etc etc. Also My Food Bag isn't the cheapest option, so with the cost of living increasing maybe investors are concerned consumers will second guess weather to spend that much extra for the convenience of My food bags model. Thats the only real sense why the share has not found any real support since it's launch.
Looking at the chart since it listed there are some early indications it is starting to find support at around the current level ~ $1.20.
Annualizing the recent half year result gives NPAT of 18.8m on 242.4m shares = eps of 7.75 cps and has them on a forward PE of 15.5.
I would argue this is the price they should have floated at.
For mine, Its very early days. I'd need to see more evidence its built a base at around this price before deciding if there is genuine merit in their business model and it really can grow from here over time or whether Covid is giving this business model an artificial boost, (which I suspect is the case).
At least MFB didn’t close on the days low ….but 111 is pretty low
Wonder how the Xmas feast orders are going?
Maybe start the new year sub $1
Definitely not the IPO of the year
Looks like the faint signs of support @ $1.20 were a classic trap for the unwary. Beagle too old and cautious to buy into early faint signs of a base being built and far to cunning to buy into a confirmed downtrend.
Waiting for the downtrend to definitely be over by a break up through the 100 day MA, (if that ever happens) seems like the safest strategy now.
The share price needs to be priced as MFB "My friggen bargain" before I'd touch it.
60-70 cents where the real value lies ?
Wonder if the inhouse MFB Baconator has even noticed yet ? ;)
not even so much as a clumsy spin or cough emitted so far .. is he still onboard, awake and
not sound asleep snoring off some early Christmas celebrations under one of the kitchen benches ? ;)
Promotors extoling the virtues of this company and strongly encouraging naïve first time investors who were customers of MFB to invest with the phrase "Tuck In" was egregiously disgraceful.
All the love Cecilia Robibson's getting at the moment, but she never gets asked about this dog.
Harbour Asset Management had a big helping (9%), and swallowed more (now 11%) and this is what Shane Solly of the fund said today on NZ Hersld:
"My Food Bag has been a bit disappointing - at a time when they have continued to grow market share it has not resonated with investors. The business is doing what said they were going to do. They have both got opportunities to get better."
Guess they should keep buying more than as the shares are getting cheaper!
Harbour see 'improvement' ... that's good
IPO failed when that idiot of a CEO Bowler opened his big mouth before listing and said the forecasts were conservative ...thereby eliminating the ploy of coming out with an upgrade shortly after listing and keeping the punters excited ....before the inevitable decline.
I said at time list at 175 or whatever ... profit upgrade takes share price over 200 .... and then probably do a Metro (175 to 225 and now 36)
And Bowler keeps his job
Disc... shouldn't have bought at 130 to return the borrowed shares .... bugger
You made money, W69 so that’s a good outcome vs all the retail punters whose meals from MFB became more and more expensive as the sp went lower & lower.
No.2 daughter gets the odd month's supply.
Gave me a Lamb Shepherd's Pie. Was very tastie.
My Food Bag picks up this year’s CourierPost Certificate for missed deliveryafter the food package service’s hotly anticipated IPO, the NZX’s largest since 2014, was served cold. Having listed at $1.85 a share, valuing it at $449m, its share price has since fallen as low as $1.11 in December, even with the supposed lockdown tailwinds driving grocery shoppers online. This gruel will need Nadia Lim’s most creative recipes yet to turn around in 2022.
Poor WOOP - leaving a stream of pissed off customers by not delivering their expensive Christmas boxes.
Mind you we had a MFB Christmas Meal a few years ago -- they left one of the entrees out of the boxes (for everybody)
WOOP has created bad goodwill for the whole industry
https://www.stuff.co.nz/business/ind...s-fail-to-show
Best Christmas lunch I've ever had when 5 of us (3 vegeterians) went to Logan Brown. They waited upon us with a seven course meal - magnificent and not that expensive when it came down to it.
Came down to what?
NZH's review of 2021 IPO's gives MFB a further rap over the knuckles
https://www.nzherald.co.nz/business/...KDFEPXKHB5XW4/
IPO hits and misses: The good, the bad and the ugly
(NZH premium content)
Kev (the resident MFB Chief Bacon) will really love this NZH sub heading:
My Food Bag's poor delivery
Have we discussed MFB hiking it's prices here in the past ? ;)
Or only Kev's efficiency strategies which hardly see a mention now .. :)
Lots of price rises everywhere these days, probably going to get worse. MFB are not targeting the 'watch every penny' market. More the 'time is the new money' market.
MFB is likely to pick up some customers from a competitor that may struggle to survive after recent troubles.
One noticeable change over at MFB is the steady increase in grocery and ready made items available to be added to an order. Well over 100 items now, mostly top end / artisan though pricing is same or similar from supermarket if available there, eg Lewis Road Creamery, Collective yoghurt, Culley's condiments.
Since the model is based on confirmed and paid for orders a week in advance there is no inventory risk involved, and little extra effort since the logistics are already in place. Assume therefore it is profitable and also highly flexible as demand fluctuates.
I read somewhere a while back the MFB is the third largest grocery supplier in NZ.
We’ve been using MFB to buy additional grocery items, the range is good and prices are comparable to supermarkets. I’ve taken a position in MFB recently, I think they’ll be able to pay a 7c imputed dividend for the next few years, this is where the IPO should have been priced imo.
My Food Bag - Q3 FY22 Trading Update - NZX, New Zealand’s Exchange
My Food Bag Group Limited (MFB) provides this brief update in the interests of keeping the market informed of trading and operations following the conclusion of the third quarter of FY22 (Q3).
Q3 performance
My Food Bag has continued to perform strongly. The preliminary net sales value (being revenue net of any customer credits and discounts) for the quarter was $52.1m, up 15% on the prior comparable period (Q3 FY21). Deliveries for this period were approximately 388,000, up 9%.
At the end of Q3, My Food Bag had 71,085 active customers, up 1.5% on the prior comparable period.
The highlight for the quarter was undoubtedly the success of My Food Bag's Christmas offering. More Kiwis than ever trusted My Food Bag to deliver a Christmas box, with deliveries up 11.8% on the prior Christmas. The feedback from customers has been overwhelmingly positive and the business is delighted to have played its part in helping Kiwis celebrate Christmas with family and friends.
We also continue to see growth in the Kitchen and are working to develop it further as a source of highly valued solutions, beyond meals, for our customers.
Heading into the final quarter of FY22 (Q4), My Food Bag's lead indicators in terms of order value, order frequency and brand mix continue to track positively. The latest 'Fresh Start' campaign has also been launched and is performing strongly, with record deliveries being achieved for this brand.
Inflationary pressure
Like all businesses, My Food Bag is experiencing increased inflationary pressure. This is especially evident in labour costs and produce pricing, the latter of which is expected to be further impacted by the drier conditions being experienced in New Zealand over the summer period. My Food Bag has plans in place to manage these cost pressures, but this remains a key area of focus in Q4.
From an operational perspective, My Food Bag continues to operate safely in accordance with its COVID-19 response protocols. Management is also taking the time now to prepare for a likely surge in Omicron cases in the community and expects to work closely with its suppliers and staff if and when that outbreak occurs to minimise the risk of any disruption to normal operations.
Senior leadership team
As announced in December, My Food Bag has appointed a new Chief Supply Chain Officer, Paul Kelly, who is scheduled to start in March 2022. With Jo Mitchell (Chief Customer Customer) commencing during Q3, the My Food Bag senior leadership team has now been reset with experience and capability to help My Food Bag grow through its next phase as a listed company.
We look forward to introducing the newest members of My Food Bag's senior leadership team to investors at this year's annual meeting in August.
Outlook
Given the performance through the first three quarters of FY22 and the positive early trading in January, the Board is pleased to reaffirm its FY22 earnings guidance, as outlined in the Prospective Financial Information (PFI) provided at the time of the IPO. Consistent with statements made at My Food Bag's interim results in November, revenue is now anticipated to be slightly improved on the PFI, albeit this is not expected to result in an increase in earnings for the period given higher input costs and operating expenses associated with operating safely during the pandemic and introducing new product initiatives.
My Food Bag's FY22 results will be released in May 2022, with details to follow in the coming months.
Authorised by:
Board of Directors of My Food Bag Group Limited.
Ends
Could My Food Bag become this years market darling?
Reasons? I agree, actually, reasons being I see it as more an income play rather than growth. And more likely to tick along as long as they keep adding customers and products.
Apparently supermarkets make too much profit, so the government tells us, and we can assume that MFB makes a similar order of (too much) profit for its size helped by a very different business model. Good for shareholders!
More or less same as you. It's not a bad company per se (not a great one either), just was a terrible investment at IPO. Only moat is its brand & first mover advantage, whatever that is worth. It's got yield and it has an option value associated with a takeover at some point. My first ever post on ST was on MFB, and my concerns were all around cost and operational performance.
Quote:
Long time lurker, first time poster here - hi everyone!
First post on My Food Bag - maybe a risky proposition (both the wisdom of my first post and MFB shares!).
I too like most was highly skeptical of MFB both both when it was being talked up years before the float and when the pricing was set. Clearly most of the discussion was around the sustainability of its revenue and outlook from a high watermark (so won't repeat) but what concerned me more was the potential for EBITDA margin compression and its valuation. MFB is quite a labour intensive business with all the assembly that is required and wages were already rising with minimum wage increasing, and wages above but near M.W. needed to lift proportionately to keep favour w/ the employee. Food prices are also volatile and can go up but a big portion of food costs at the 'near retail' level are labour costs from the producers, and fuel. MFB isn't cheap and competes with supermarkets who have massive cost advantages so I wondered if it had sufficient headroom to absorb costs. One of the listed comparables in Australia has just seen its margins decrease by around a third, so I think that risk remains real. I'm more comfortable on the revenue front.
The risk that worries me is an operational failure. It's a big supply chain through to end distribution and one that is pretty specialised so I assume MFB may have been working with lots of excel spreadsheets and random & non bespoke ERMs. It would be pretty easy to see duplicate orders get sent out, un recovered and not delivered raw materials, etc. Pretty dependent on a few people to get right and I see they have had some exits is area. I see that as being derisked over time as being in the public eye will bring more board focus on investment on systems and processes.
Obviously price a lot of it comes down to price and the IPO was woefully overvalued and surprised the instos took it - they didn't act very cartel like in fighting for better pricing. I did take a very small shareholding last week at 1.26 just before the AGM as I was hoping for and rec'd a reconfirmation on trading. In my mind in recent price bands the the business is okay for investment. It's still an interesting opportunity - superb cashflows, good margins, brand with consumers, long term growth expected in the industry. MFB continuing to carve out and defend its niche and margins key to all that which is why I have avoided investing anything meaninful into it.
Basilcat though your analysis on the price growth from 2016 to now a bit flawed. In 2016 with PE invested into MFB, the value of the *business* as a whole (IE its enterprise value) was a lot more than $50m. We know the value of the equity at purchase but not the debt. It's like someone trying to figure out how much you paid for a house by seeing what your deposit was without knowing what mortgage you took out to buy the whole thing. Same with waterman invested. THe value of the business then on an enterprise value to now is less dramatic, but still dramatic. Which shouldn't be too surprising as MFB was probably one of the biggest beneficiaries of Covid in NZ, 2nd to FPH.
Disc: recently purchased shares in MFB for first time, no other connections past or present.
Jeez, carnage on NZX continues ...I see MFB is getting very close to the $1.00 mark
Hasn't even had its first anniversary of being listed
My Antennae say still a bit north of what would be a good Meal Deal Steal :)
The SP graph trend is consistent - no two ways about it - hopefully like the service :)
Hey Moose
I put up an analysis last year, which is here, and there are some other follow up posts. In addition nxtz also put in some work plus a few posts after that too. I'm not sure much has changed since then but there might come a point where the SP reflects good value.
You mentioned in your own quoted post about the use of spreadsheets etc and concerns over logistics etc. Back then you said "The risk that worries me is an operational failure. It's a big supply chain through to end distribution and one that is pretty specialised so I assume MFB may have been working with lots of excel spreadsheets and random & non bespoke ERMs."
I see the operational side of the business as a strength, rather than a risk. Granted access to labour may become an issue with imposed isolation for staff, but that is distinct from their logistical systems and processes. Per my post #271 I explored that side of things, and I had this to say back then:
I'm not aware of any logistical failures at MFB so I believe the logic still stands. One measure will be inventory turn, another will be DIFOT but we may not get to see that (haven't checked). There are good mid-range systems nowadays for exactly this sort of thing, and the fact they pump out so many meals every day is testament to their systems and processes. We would want to see continuity of staff in these areas to ensure the logistics side of the business operates like a well-oiled machine.Quote:
FY21 has a projected inventory turn of 107 times per year, or 8.9 times a month and FY22 is 6.8 times a month. In other words they have on average less than 1 weeks inventory on hand. Granted that is the nature of shifting fresh food but IMO it is actually impressive. A good proportion of the inventories on hand will have a longer shelf life such as packaging and spices etc. which will inflate inventories, but these sorts of numbers show a high degree of logistical coordination. Earlier comparisons to a supermarket by others are not too wide of the mark.
The manpower and computing power to achieve these numbers should not be underestimated. An investor would want to see continuity of systems and procurement people given logistics is the backbone of this business. Recent investment into better systems will likely be central to achieving cost reductions via better purchase planning and less wastage etc. [snip] From a logistics perspective, this is an interesting business [snip].
Disclosure: not a holder, but currently seeking value.
My observation on risk involving supply chain stemmed from them losing at least two (that I know of) senior senior operations managers over the last few years. I had heard around the traps that the systems and processes up until a few years ago weren't flash and involved more excel than desirable. New systems and processes implemented in the lead up to the IPO which is great and I noted that as derisking supply chain failure once bedded in, but always implementation risk while these are implemented over a period of time. I'd assume they are bedded in. Point remains its a huge supply chain with many moving pieces - easy to catch a bullet somewhere - more particularly with covid.
I agree if they achieve operational excellence it is a bit of a moat. That hasn't stopped those germans from growing marketshare far faster. I'd imagine the germans are pretty good with supply chains and ERM software
I don't have any particular issue MFB per se - I scratch my head and ponder it as an investment, once every few months, while I watch it continue to drop.
Inflation the big worry - labour at MFB, and input costs, and MFB's ability to pass it on.
As a longstanding customer I can attest to close to 100% DIFOT. A very very few times an item has been missed, usually not material eg packet of seasoning, but a couple of times over the years a more material ingredient. Dealt with by speedy credit. Deliveries can have more than 40 items so systems are pretty sharp. Rarely there is a mid week email to say that an item is not available and has been substituted. Recently one cut of bacon was substituted for another cut for example.
I have mentioned before on this thread that there is now a very long list of items that can be added to a delivery, pantry, heat and eat, bundles for eg BBQ, brunch, breakfasts, Valentines Day. The supply chain is almost a non issue as these items are ordered and paid for a week in advance so suppliers know exactly what and when to supply. And many are shelf stable anyway.
However, there was a delivery stuff up recently Not sure of the details as not affected, but with the following week's delivery a sorry, a recipe and code for those affected to add a free baking mix to the next order.
Sounds like as a customer you're impressed artemis. Not so good for customers who were strongly encouraged to "tuck into" the IPO though.
Very "impressive" chart. Just steadily down at virtually the same pace ever since it listed. Its pretty clear to me that it was the promotors who were the ones who "tucked in" to naïve investors, many of which may have been customers.
I think fear over Covid infection persists as a tailwind for the company for a while but those tailwinds can't last forever.
Common sense says avoid this until a bottom is clear in the share price and a new uptrend starts, (assuming this ever happens), such that there's a clear break up through the 100 day MA. Trying to pick a bottom before that is likely to lead to more pain.
Yep have to agree, Too much competition, while product is good, just a struggle to build up market share. Only way this stock will reach IPO is if the NZ Population doubled very quickly.
With a net (fully imputed) after tax return of 6.38% you’re just about keeping up with inflation :)
MFB is such a conjob, theres no way its worth $405mil !
And we’ve hit $1.00 (market cap $242,437,524).
Someone who invested $1,000 in the IPO has a holding worth $540 today, with expected annual dividend of $37.
Great result.
A stock that drops like this and has strong profitability and dividends which support a much higher share price, in my experience, will eventually have some bad tidings to share with investors.
Competition
https://woop.co.nz
It’s a new company and in the press for all the wrong reasons…
https://i.stuff.co.nz/business/indus...s-fail-to-show
MFB is a conjob and they've destroyed hundreds of millions of other people's money....how sad