FFI - FFI Holdings

[galumay]

Not enough info to speculate on why the deal failed their DD. Pretty difficult to finalise DD prior to offer in current market, you would likely not get an offer in if your completed DD prior. Given the long history of disciplined capital allocation its not something I am losing any sleep over!

 

[divs4ever]

just seems strange to me for a business with a long history of operating in that area ( not as though they are junior explorers trying out a new country )

i won't lose sleep either , but could be a signal of something unusual happening in WA ( remember they had the issue of compulsory acquisition of land not that long back )

( i hold several WA based companies )

 

[divs4ever]

PROFIT GUIDANCE
FOR THE YEAR ENDED 30th JUNE 2022
F.F.I. Holdings Ltd. (the Company) wishes to provide the following profit guidance
update. Based on unaudited draft financial reports, the Company expects to report a net
profit before tax of approximately $1.60 million for the year ended 30th June 2022.
The updated earnings guidance is lower than the previous net profit before tax guidance
of $1.80 million provided on 7 June 2022, reflecting ongoing difficult trading conditions.
The Company has been impacted by significant increases in many of its major input
costs, including raw materials, freight and labour during the year. The expected result has
also been affected by problems with raw materials and inventory recoveries and supply
chain disruptions.
The Company’s management team is continuing to work with customers and suppliers to
restore profit margins while improvements to internal processes and controls are expected
to increase raw material recoveries in the future.


=========================================================

DYOR

i hold FFI

well above my 'top-up' target currently

 

[galumay]

Full year continued the very difficult business conditions for FFI, now no final divvy this year and a huge drop in profit. I am comfortable they will weather the storm and there will be a reversion to mean in business conditions. Just have to be patient. Once again, a lovely, clean report, no photos no bull**** earnings, just the financials and some brief commentary.

 

[The Triangle]

FFI sitting around $4/share puts the MC roughly equal to net assets at $43/44 million.

I'm still interested but don't think it's worth the risk right now to enter at book value when they have not yet confirmed that they've been able to pass along cost increases to customers and return to decent profitability. AGM presentation was pretty limited, but the SP climbed after the AGM last month so maybe something positive was said in the actual meeting.

Inventory levels crept up pretty high but most of it is for raw ingredients (which I presume hold their value just fine) but the 'finished' goods are also up a fair bit and I'm surprised the value is that high for some jams and cakes which wouldn't last very long and may need to be discounted to be moved. In 2019 finished goods were only $1.3 million vs $3.6 million 3 years later - the have explained this as supply chain issues - which given all the covid mess and WA's fortress mentality - is reasonable. If I see good cashflow and inventory drop in the half yearly then I'll probably consider buying shares, but otherwise I'll stay on the sidelines.

 

[divs4ever]

is currently a few cents below my average buying price

the icing on the cake ( for me ) is the discount on the DRP

not very exciting ( most of the time ) sits in that bottom drawer growing a little and giving out franking credits

about $3.50 would tempt me to add a few more ( just a nibble , though )

 

[galumay]

Nice trading update from FFI my little confectionary/REIT. Choccy & pr0padee is a great combo!

 

[Dona Ferentes]

Nice trading update from FFI my little confectionary/REIT. Choccy & propadee is a great combo!

View attachment 160137

and maintaining the theme

PURCHASE OF INDUSTRIAL LAND
FFI Holdings has entered into a contract to purchase a 1.39 hectare (13,859 square metres) vacant industrial site at Jandakot in Perth, Western Australia. The land is part of the Cockburn Central East Industrial Area in which the Company currently owns 6.98 hectare of industrial and commercial property.

Strategically the acquisition is an important development for the Company. The site is in close approximately (proximity??) to the Company’s existing factory and ideally located for industrial food manufacturing or property investment activities. The property is being acquired from its current long term private owners Mr L.J. and Mrs D.R. Sinton.

The purchase expands the Company’s industrial and commercial property portfolio in the area to 83,688 square metres in total area. The cost of the purchase is $5.0 million and final settlement is expected to be on or before 27 June 2024.

As at 31 December 2023, the Company had net assets of $44.9 million, no debt and cash reserves of $2.9 million. Given the Company’s strong financial position, the Company intends to fund the purchase with a debt facility.

About F.F.I. Holdings Ltd.
F.F.I. Holdings Ltd is a WA based food company with manufacturing, processing and packing operations covering the following areas –
- “Chocolate Products of Australia” – chocolate and related products.
- “Nemar Cake Toppings” – cake toppings and confectionery products.
- “Prepact”- contract packing and blending.
- “Fresh Food Industries” – bakers jams and fruit fillings.

In addition to the food operations, the Company has a significant investment in prime industrial and commercial property which is held for investment purposes.

- snug add-on

 

[galumay]

Not keen on the debt going on the books, but probably the best option for a business like FFI.

 

[divs4ever]

do what i can to keep their cash up ,by participating in the DRP

how much they pay in divs. and how many shares they issue is up to them

 

[divs4ever]

PURCHASE OF INDUSTRIAL LAND

FFI Holdings Limited (the “Company”) is pleased to advise that it has entered into a contract to purchase a 1.39 hectare (13,859 square metres) vacant industrial site at Jandakot in Perth, Western Australia.
The land is part of the Cockburn Central East Industrial Area in which the Company currently owns 6.98 hectare of industrial and commercial property.
Strategically the acquisition is an important development for the Company.
The site is in close approximately to the Company’s existing factory and ideally located for industrial food manufacturing or property investment activities.
The property is being acquired from its current long term private owners Mr L.J. and Mrs D.R. Sinton.
The purchase expands the Company’s industrial and commercial property portfolio in the area to 83,688 square metres in total area.
The cost of the purchase is $5.0 million and final settlement is expected to be on or before 27 June 2024.
As at 31 December 2023, the Company had net assets of $44.9 million, no debt and cash reserves of $2.9 million.

Given the Company’s strong financial position, the Company intends to fund the purchase with a debt facility.

i hold FFI

 

[divs4ever]

INVESTMENT PROPERTY

FFI Holdings Limited (the “Company”) provides the following update regarding the Company’s investment property portfolio.

The Company received rental income from its investment properties totalling $1.619 million for the year ended 30th June 2024.

This total included $1.244 million from a multi-national environmental services company under a lease that expires in November 2025.

In addition to the rent, the lessee contributed approximately $0.144 million towards the rates, taxes, insurance and other outgoings relating to the leased property.

The Company has been advised that the lessee does not intend to renew this lease when it expires in November 2025.

The Directors intend to actively pursue opportunities to maximise future cash flows from this property to minimise any impact from the termination of the existing lease.

The Company will update the market as more information becomes available.

i hold FFI

 

[galumay]

Nice long lead time to find a new tenant! Opportunity to re-assess the rent too.

 

[divs4ever]

Nice long lead time to find a new tenant! Opportunity to re-assess the rent too.

has been mostly a nice and steady stock , am very happy to have it stashed in 'the bottom drawer '

 

[galumay]

Same.

 

[peter2]

So FFI will lose one client that brings in 85% of it's income and you long timers are OK with that?

 

[divs4ever]

So FFI will lose one client that brings in 85% of it's income and you long timers are OK with that?

now i might read this incorrectly but the primary business of FFI is a food ingredient business , the property rental business is still a supplementary income , and sure a large tenant moving out is a worry but when i first invested here the ( non-core ) properties were vacant land held for capital gain or future expansion

, if i am right sure there is an income hit ( guessing a replacement tenant isn't found immediately ) but the core business should plod along like in has for the last 12 years

and MIGHT even provide allow entry point to add some extra shares


FFI Holdings Limited (FFI) engages in the processing, manufacturing, packaging and distribution of food products and services to the industries: Bakers and Pastrycooks, Ice cream and Dairy, Confectionery, Chocolate, and Supermarkets for the Australian markets. The FFI is also engaged in Food Operations and property investment.

courtesy of the Bell Direct platform

 

[galumay]

So FFI will lose one client that brings in 85% of it's income and you long timers are OK with that?

Yep, its not the primary business, revenue was nearly $50m last year. Its 85% of the income from investment properties. Highly unlikely they will not find a new tenant by the end of 2025. Either way its a rounding error.

 

[divs4ever]

So FFI will lose one client that brings in 85% of it's income and you long timers are OK with that?

yes , i invested in FFI because it was a niche manufacturer/supplier in WA ( which i still believe is still the superior growth area in Australia
)

i am up about 4% after investing in this for 13 years , but it is only a trivial part of the portfolio ( hence the ' bottom drawer status ' ) so the DRP discount and franking credits are just trinkets in the war chest UNLESS the Oz economy melts down , then it might become more important

now if this was 5% of the portfolio my mindset might be different

 

[divs4ever]

PROFIT GUIDANCE FOR THE YEAR ENDED 30 JUNE 2024

F.F.I. Holdings Ltd. (the Company) wishes to provide the following profit guidance update.Based on unaudited draft financial reports, the Company expects to report a net profit before tax of approximately $3.97 million for the year ended 30 June 2024.

The net profit before tax for the previous corresponding period was $2.33 million.
The Company’s corporate tax rate will increase from 25% to 30% for the year ended 30 June 2024.

As a result of the change in income tax rate, the Company’s net profit after tax will include higher income tax on current year earnings and a one-off provision for income tax on the restatement of the Company’s deferred tax liability.

A summary of the Company’s expected profit before and after tax is set out below.

Year Ended 30 June 2024 ................................ 2023 ,,,,,,,,,,,,,,,,, Change

Expected net profit before tax $3.97 million $2.33 million 70%

Current year income tax $1.19 million .............. $0.58 million

Income tax expense on restatement of deferred tax liability due to the change in the Company tax rate from 25% to 30%$1.04 million n/a

Expected net profit after tax $1.74 million ..... $1.75 million -1%


The Company expects to release its audit reviewed FY2024 financial statements on or about 30 August 2024.

i hold FFI