Burger Fuel Worldwide Ltd: FY 2011 Profit Commentary

You might think that since Burger Fuel Worldwide Ltd [BFW.NZX] have made a maiden profit of just under $34,000.00 in the year to March 31 2011 after 4 years of trying and millions spent getting there that I would be starting to sing the company's praises from the roof-tops but I am still pretty damb negative even after their first result with black ink.

Lets have a look at some of the key figures:

Profit of $33,513.00 up on last years $552,983.00 loss.

Revenue of $8.326 million down on last years $8.722 million

Middle East stores performing well.

$1,213,785 in cash & no debt.

On first look and if you ignore that it took 4 years to get here, the signs look OK.

Heres the fly on the burger bun though, while the losses have been pared back by more than half a million that has been done by cost cutting rather than an improvement in the operation of the business and in absence of revenue growth, the company, who is a franshisor and gets it revenue from a portion of sales from franchisees, continues to put the focus in its profit releases on how much sales at their franchisees stores have increased rather than focusing on the bottom-line at the parent company.

Fine, revenue is supposed to increase as sales at its franchisees stores grow but we just haven't seen this yet and investors need to know just when the current $8.2 million odd is going to be translated into a decent sustained profit.

Management are very bullish about expansion in the Middle East but investors should note that we have seen this kind of exuberance before - in terms of bullish growth projections in Australasia pre-IPO - and it has turned into nothing but broken promises.

We need to see some good sustained profits before I can give this company a pass mark.

4 out of 10.


Burger Fuel Worldwide @ Share Investor


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Roy Morgan Political Poll: 10 June 2011

It looks like the latest Roy Morgan Poll could be a rogue one with support for the Nats down around 4% overall. It is important to watch the trend of polls over the last 3 years and they have been consistently well above 50%:

The latest New Zealand Roy Morgan Poll shows support for Prime Minister John Key’s National-led Government is at 53.5% (down 4%). Support for Key’s National Party is 49% (down 4%), the Maori Party 2.5% (up 0.5%), ACT NZ 1.5% (down 0.5%) and United Future 0.5% (unchanged).

Support for Opposition Parties is at 46.5% (up 4%) – Labour Party 36% (up 8%), Greens 6.5%, (down 3.5%), New Zealand First 2.5% (down 0.5%), Progressive Party 0% (down 0.5%) and Others 1.5% (up 0.5%).

If a National Election were held today the National Party would easily be returned to Government.

The latest New Zealand Roy Morgan Government Confidence Rating has risen 0.5 points to 127 with 55% (down 1.5%) of New Zealanders saying New Zealand is ‘heading in the right direction’ compared to 28% (down 2%) that say New Zealand is ‘heading in the wrong direction.’

Full poll here.

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c Darren Rickard 2011

Darren Hughes Saga: Lies and Cover-ups

Who believes Darren Hughes is squeaky clean over his late night, drunken, naked tryst with a young boy? Something unlawful cannot be proven but this incident DID happen, and it is at the very least grubby and untoward of somebody who might some day be representing others as a politician.

Most of us knew where there was smoke there was fire except the deluded, false, moral free left, who are backing him to the hilt. The victim of Hughes affections, the young boy he put the hard word on, has been labeled as a liar and a person not to be trusted. This accusation is one that fits Hughes, not the young boy.

So Mr Hughes has been lying from the beginning over this incident and as the police are not able to prove anything illegal happened Hughes has taken that as vindication of his innocence and in a statement 2 days ago pointed the finger at the boy.

The public must remember he has a history of drunkenness and loose behavior and the incident with this young lad, while not illegal, has vicious shades of influence from an older experienced man who the victim looked up to and if the victim was female there just may have been a different outcome from the police investigation.

I wonder if the complainant might like to undertake a private prosecution or at the very least do some sort of media assault?

Darren needs to come clean about what happened before it comes out some other way. It was a filthy, nasty night that ended in one persons reputation being ruined and another backpedaling as fast as he can to cover his well padded arse.

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c Darren Rickard 2011

Share Price Alert: Pumpkin Patch Ltd 3

Since my last Share Price Alert on Pumpkin Patch Ltd [PPL.NZX] back in March at $1.31, PPL shares have sunk another another 16c or 15% to close at a 52 week low of $1.15 yesterday.

The principle reason for this is negativity over the whole retail sector that comes off the back of a poor profit result out in March that was down 44% on last years result.

Of course the market knew of this back in January when a profit downgrade was announced to the market .

PPL shares have lost approx 46c this year so far and since an April 2010 high of $2.30 they have shed more than 55% of their value.

This presents an opportunity to buy PPL on the cheapish side.

I would be patient though, because management don't seem very clear about the future of the company (commentary in the profit release was confusing to me) and its trading proposition over the calendar year and further pressure is likely to come over the rest of 2011 as people close their wallets and head for cheaper less brand oriented fare.

This will not last however, PPL is a good brand and once the economy gets going again - whenever that is - we will see this company doing better as mums start to look for brands again.

Again, be patient and look for further weakness to buy.


Disc I own PPL shares in the Share Investor Portfolio

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c Share Investor 2011