CKF - Collins Foods

[McLovin]

Just can't quite pin down the corresponding balance sheet item for the payables. Most retailer's balance sheet should show inventory against the payables... but CKF is not storing a lot of chicken. It is possible that KFC is asking the chicken farmers to fund their inventory via generous payment terms. But with CKF being a recent private equity sale - you just don't know if there are some temp arrangement that makes the balance sheet look different than how it would going forward.

You do have a point, the working capital is very negative. You'd at least expect the cash balance to be a bit higher if they're sellling stuff and not paying for it. Considering it was $43m in May. The FY reports should have more detail. I'm wondering if the mid-month balance date has something to do with it.

They do address it briefly in 3.7.1.4 of the prospectus.

http://asx.com.au/asxpdf/20110715/pdf/41zsygbqrm968d.pdf

 

[So_Cynical]

Amazing how this stock held up today, in the late morning the SP was actually up on a day when you would expect a stock that is in a clear down trend to take a hit...it didn't.

Sellers exhausted. :dunno:

 

[studmuffin]

Amazing how this stock held up today, in the late morning the SP was actually up on a day when you would expect a stock that is in a clear down trend to take a hit...it didn't.

Sellers exhausted. :dunno:

I thought the same thing but alas another day another 52 week low.

 

[McCoy Pauley]

I've not analysed this company in any great detail but if that analysis on the cashflow is correct, then I'd be concerned.

Seriously, this company should not be having any cashflow concerns. Its customers pay cash up front for their meals. Their suppliers should be on 7/14/28/30/60/90 day terms. The cash should be cycling through the company at a great rate of knots.

 

[So_Cynical]

(7th-May-2012) Amazing how this stock held up today, in the late morning the SP was actually up on a day when you would expect a stock that is in a clear down trend to take a hit...it didn't.

Sellers exhausted. :dunno:

Seems as if i was more right and wrong when i made the above statement 2 weeks ago, falling volumes and a very small up trend have emerged..i reckon the volume is significant....no over 400,000 days in over 5 weeks, while the general market has been correcting and sentiment has been horrid.

I think the bottoms in... at least until we get another negative announcement.
~

 

[skc]

Seems as if i was more right and wrong when i made the above statement 2 weeks ago, falling volumes and a very small up trend have emerged..i reckon the volume is significant....no over 400,000 days in over 5 weeks, while the general market has been correcting and sentiment has been horrid.

I think the bottoms in... at least until we get another negative announcement.
~

Looks like a bearish flag if you ask me.

http://chart-patterns.netfirms.com/bearflag.htm

 

[So_Cynical]

Looks like a bearish flag if you ask me.

http://chart-patterns.netfirms.com/bearflag.htm

I played with your bearish flag chart. i like my interpretation better.

Price held up again today (low1.045) on flat volume.
~

 

[Ves]

Looks like a bearish flag if you ask me.

http://chart-patterns.netfirms.com/bearflag.htm

I don't think the volume of the decline is strong enough to call a bearish flag, after reading the definition. But if you are correct, would the price target be about 85-90c?

 

[skc]

I played with your bearish flag chart. i like my interpretation better.

Price held up again today (low1.045) on flat volume.
~

I should it also has the potential to form a bearish flag. It's only a bearish flag after it breaks down as confirmation.

I don't think the volume of the decline is strong enough to call a bearish flag, after reading the definition. But if you are correct, would the price target be about 85-90c?

The target seems to be a reasonable call.

 

[catfish]

Hey all,

I got into this one at 1.07 today before the buyers went crazy. Any ideas what sparked it? although volumes were not huge.

I have been paying high price for quality recently and thought this was a good play with significant upside. Refreshing to get something cheap and happy to hold for a while.

Diaster for investors who participated in the float, and for management. Great to see conviction from the CEO and willingness to 'suffer' with shareholders.

I would have thought this was a reasonably defensive business, although same store sales declines tell a different story. It will be interesting to see the medium term effect of store refurbishment on sales growth.

Great insight from the members on the first page of this thread. Thanks

Next time my mates are hungry, I will be suggesting KFC.

 

[McLovin]

Catfish, did you see the discussion re the quality of this company in the Robusta thread?

Starts about here. Well worth the read

https://www.aussiestockforums.com/forums/showthread.php?t=23106&page=24

 

[catfish]

Catfish, did you see the discussion re the quality of this company in the Robusta thread?

Starts about here. Well worth the read

https://www.aussiestockforums.com/forums/showthread.php?t=23106&page=24

Thanks for that mclovin

 

[So_Cynical]

Catfish, did you see the discussion re the quality of this company in the Robusta thread?

Starts about here. Well worth the read

https://www.aussiestockforums.com/forums/showthread.php?t=23106&page=24

"Well worth the read" ~ jeez i don't know...a bunch of mostly value investors failing to see value i thought that the quality of the comments made about the quality of this company wasn't of a very high quality. i seem to remember people claiming that KFC was in decline, Franchises didn't make money and people didn't like fried Chicken. yer right.

But what do i know :dunno:....im just a punter looking for profits, buying the lows and making my own decisions.

---------------

Oh by the way how about today's 7.14% Share price jump.

 

[Ves]

Did you selectively forget the bit about the debt convenants? How about the part about the inherent risk in the financial structure?

 

[So_Cynical]

Did you selectively forget the bit about the debt convenants? How about the part about the inherent risk in the financial structure?

I tend to try and look at the big picture when summing up the pros and cons of my current and potential investments...on balance there's more to like about CKF (at my buy in price) than there is to not like about the company.

If debt covenants and refinancing was a big issue the SP would be like 10c same as Hastie and Centro were...so the market isn't pricing in a total disaster however the market is pricing in uncertainty and fear and it is still a bear market.

I know this is a somewhat risky investment and i also know that one decent announcement combined with seller exhaustion and the 10 month down trend could easily see this stock jump 10 or 15% over a very small time frame...and that's all i need.

 

[ROE]

I may be Bias but the way I see it
this business isn't as bad as most people made it out to be ...

All these problems some seem fairly significant but it boil down to floating problems.

1. they dress up a bit to make it look good for the float ....we didn't buy
at the float price 50% cheaper so this problem solved with inflated price

2. Management stuffed up the forecast, I think this is more to do with them
being new to a public listing company...I have not seen them done anything that
destroyed shareholder value or management act dishonestly.

the cut cost memo I see nothing wrong with it, you do what you have to do
to build market confident and cut cost after you made a forecasting blunder

3. High debt this is a problem but fast food especially KFC, Macas has very reliable
cash flow so I'm confident they can easily service debt, their cash not going to dropped off the cliff but maybe seasonal variation...Management need to start paying down debt to build a better buffer...do like what RFG did, they are under a mountain load of debt going into GFC, again reliable cash flow enable them to paid down debt
every half since then..

CKF have a bad start in life and without these issues you can not get them for $1
I think all these issues are easily fixable and I'm confident in my research that they can
in 3 years time.

CCP during its dark day look like it going down the toilet with hundred of million in debt....people on the forum called for its doom day...but I look at their automatic payment book, it is big and it is beautiful and it can easily service debt and I make a calculated bet that with this reliable cash coming in they will pay down debt....

I make the same judgement on CKF now...their cash flow will eventually give them room to pay down debt and prosper...

We shall visit here in a few years and see how it pan out

 

[ParleVouFrancois]

I went back and had a look at all the annual reports since 2009... Interesting reading to say the least. CKF has been a troubled child of a company, even before it was listed. As far as I can tell it's been loaded up with debt, and while the underlying business of selling KFC is great and profitable (I love KFC, I even used to work at one for a few months in highschool), being the 'last in line' for the cashflows (debt & royalties take their cut first) I don't see much scope for shareholder wealth creation in this company.

 

[Ves]

being the 'last in line' for the cashflows (debt & royalties take their cut first) I don't see much scope for shareholder wealth creation in this company.

Don't forgot lease payments and capex to keep the stores fresh.

 

[So_Cynical]

(4th-May-2012) im in today at $1.06

Exactly 1 Month later and i have sold most of my holding today @ $1.11 ~ as usual i have left the profit in (A Tiny 2.8%) with a little capital...the smallest holding in my portfolio by a long way.

Again amazing how the CKF share price held up today.

(8th-May-2012) I thought the same thing but alas another day another 52 week low.

Another day, well a day when 164 ASX listed stocks hit new 12 month lows...and CKF wasn't one of them .

 

[ROE]

Exactly 1 Month later and i have sold most of my holding today @ $1.11 ~ as usual i have left the profit in (A Tiny 2.8%) with a little capital...the smallest holding in my portfolio by a long way.

Again amazing how the CKF share price held up today.



Another day, well a day when 164 ASX listed stocks hit new 12 month lows...and CKF wasn't one of them .

Nice to see you get some profitable trade when all the bad news has factor in and seller disappear there isn't much more down side at once stage it went up 3% today someone is probably accumulating without wanting to sound alarming bell...

I'm in for a long haul like most of my stocks, the day will come when I know when to exit