Sunday, June 24, 2007

Burger Fuel Worldwide: Inside Info?

There maybe mostly bad press going around about the internet concerning the BurgerFuel Worldwide [BFW.NZ] IPO but it is a VERY popular search on the search engines "Burger Fuel IPO" comes up for my blog search on a regular basis.

Interest is very high.

A poster calling him/herself "Fuel Employee" has said the following very recently in response to the following post of mine:

Burger Fuel IPO: Dont buy...yet.

The upcoming Burger Fuel IPO poses some interesting questions.

They are asking for 15M for a 25% of the company and value the whole shooting match at 60M. That is steep for a company with only 3M sales and a 250,000 loss.

20 outlets makes the unit sales an average of around $150,000 turnover a unit. Not good at all. You should be looking for at least $500,000 a unit for an outlet like that.

The 15M raised is going to be used on expansion and there is of course the possibility that the majority owners will want continuing cash inputs to keep growing.

I think at $1 a share you could pick up this puppy for less than that once we see continued losses mount.

There is alot of competition in this sector, in NZ and abroad, where BF intend to do business.

Having said that, the long-term future of the company could be worth a punt but I have reservations. I like companies to be making profits from day one and for expansion to be funded from profit.

I would avoid at this stage.

I wont be buying at the IPO, perhaps later.

Fuel Employee wrote

I think you'll find the the 3M sales and the $250,000 odd loss is a reflection of Burger Fuel head office only. The Ponsonby store alone turns over between 1.5 and 2M per annum.

I replied

With the noticable lack of info from the Burger Fuel boys how are we to know what you say is true, im not accusing you of being less than honest though.

Your figures would give BF conservative sales of $40M a much better prospect, if what you say can be validated.

As far as I can tell though ,the companies revenue-and the company at the centre of the IPO- be it food sales or royalties from frachisees the stated income is just over 3M with a loss of 250,000 odd.

Until we we out here in the unwashed uninformed world(it appears you are better informed than us)hear anything different then we can only go by what we know.

Can you enlighten us further?

The poster colours himself/herself as an insider.

A question to pose is. If "Fuel Employee" is a genuine employee then why would he/she risk management ire if caught? Then again if this individual is part of management are they just trying to counter the overwhelming bad press that this Burger Fuel IPO has garnered thus far and would you want to be involved with management that sneaks out info to the public instead of fully divulging it from the outset.

Share Investor smells a rat in the burger kitchen.

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