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.

Burger Fuel Worldwide @ Share Investor

Burgerfuel: Dubai Marketing Hype!!!

Burger Fuel 2010 Full Year Profit Analysis
Burger Fuel 2010 Full Year Profit Preview
Burger Fuel Worldwide: 2009 Half Year profit analysis
Stock of the Week: Burger Fuel Worldwide
Download full company analysis from Thomson First-Call
Burger Fuel doesn't rule out capital raising
Burger Fuel Worldwide: Closer look at Company Accounts

Analysis - Burger Fuel Worldwide: FY profit to 31/03/09
Burger Fuel: Running on Empty
Burger Fuel leaves investors hungry

Burger Fuel management cagey over company progress
Burger Fuel cooks up Dubai deal
NZX share trades with strings attached
Don't buy Burger Fuel, yet
Burger Fuel: Inside info?
Burger Fool IPO: Burger Fool?
Exclusive Interview with Burger Fuel's Josef Roberts
Burger Fuel's Daytime drama
Burger Fuel share price out of gas
Beefing up store numbers
Director explains share price drop
Burger Fuel slims down in value
Burger Fuel and Coke
Marketing Burger Fuel's future
Pumpkin Patch VS Burger Fuel
Burger Fuel results and commentary

Discuss BFW @ Share Investor Forum - Register free
Download BFW Company Reports

c Share Investor 2007

1 comment:

  1. BurgerFuel - ‘Official Response’


    Ok, first things first. This is an ‘Official’ BurgerFuel response. But don’t worry this isn’t a generic response as we’re taking on board what people are saying about our IPO. Neither are we responding to take pot shots at you, we are fully aware that this investment is not for everyone and that all are entitled to their opinion on the BurgerFuel IPO.

    Now, down to the numbers (which is what I’m sure you’re most interested in). The press release has some but not all the information contained in the prospectus (which we suggest anyone interested in the BurgerFuel IPO or expanding their portfolio in general should read – hard copies available in-store).

    There are a few figures in your post which need to be corrected first to make sure we are all working off the same figures. Our Total System Sales (that is, the total sales of all the BurgerFuel stores) last financial year was $16.4M (plus GST). At the end of 31 March 2007 we had 19 stores. We can’t just divide $16.4M (plus GST) by 19 to get an average as stores open up at different times during the year. Our average sales (not including any stores not open for more than 6 months in the year) were $20,727 per week (plus GST). So we are way above the $150k a unit turnover (closer to $1M-$1.1M per year as an average). You can see page 53 of the Prospectus for more info on our averages and sales totals.

    The $3.1M you refer to is the revenue coming into Burger Fuel Limited (for the 9 month period to 31 Dec 2006), it is not the sales figure for all our stores. BurgerFuel Limited had an operating surplus. You may argue that the surplus is not a large one, but as we’ve outlined in the prospectus, significant investments have been made into marketing our brand, securing intellectual property, developing our systems and preparing the company to go global. The $250k loss relates to Burger Fuel International Limited which carries a head office and satellite kitchen infrastructure for our one Australian store. Essentially, we have already geared Australian operations so that they are ready for us to start expanding as soon as we’ve raised funds. The site plans for our 2nd Australian store in King’s Cross have already been submitted to the council.

    We are certainly not trying to hide anything from the public, there is a lot of information in the prospectus (including the above figures) clearly set out. Again we suggest that anyone looking at the BurgerFuel IPO should obtain a prospectus and read it – hard copies are now available in-store.

    Potential investors should look at the fact that the decision to list has been made in conjunction with Grant Samuel who have modeled the company and its prospects. Potential investors should also look at the Board of Directors (pages 45 & 46 of the prospectus) – these are not the kind of people that would get involved with a company without a thorough analysis of its potential.

    Lastly, we know that the BurgerFuel IPO is not for everyone. We want people who believe in the brand (and there are a lot out there) to invest if they think we’ve got what it takes to go global.

    If you’d like any more information please read the prospectus or, if you’d like, we’d be happy to answer any other questions (within reason) or organise a phone interview for you.

    For the many that view this blog, here is some press that will hopefully balance your opinions on things.

    TVONE - Brian Gaynor on ASB Business (comments on BF IPO around the 2:20 mark):

    In the end, however, just remember that the NZAX is “specifically designed for fast-growing, developing companies” and that’s what BurgerFuel is.

    Either way, thanks for talking about us, we appreciate your opinion.

    The team at BurgerFuel

    PS: Regarding the ‘Fuel Employee’, we’re not sure that it was one of ours. However, all our employees are extremely passionate about the brand and the company so we know that many of them would want to make sure that key facts were correctly represented.


Comment on Share Investor Stuff