Market Watch: Sky City Entertainment/Freightways Ltd

Interesting that both Sky City Entertainment Group [SKC.NZ] and Freightways Ltd [FRE.NZ] respective share prices are both approaching the price at which their recent capital raisings were issued at.

Lets have a wee look at Sky City first.

Today the stock closed at NZ$2.62 (see 2 month SKC chart below) just 1c above the $2.61 Share Purchase Plan (SPP) price, a purchase plan that I participated in just a month ago.

At the time I moaned and bitched that my current Sky City shareholding was going to be diluted, only getting just shy of 2000 shares in the offer. I had a feeling that the share price was going to take a dip because of economic circumstances (gee I am a genius), so I am going to take the opportunity to grab a few more thousand shares to top up my holding to 40000 or more .

Naturally I am very pleased about this turn of events in the market.

Likewise Freightways. I got gypped there too, and will be looking for at least another 1000 more shares to top up my holding to 10000. The current share price is $2.84 as of market close today so there is still another 40c to go before it will trigger a buy at the SPP of $2.44 but if you look at the Freightway's 2 month chart below you will see, like Sky City, the share price trajectory is in a downwards direction, so is possible that my buy price will be reached.



Time to put some cashflow to good use.


Freightways @ Share Investor

Freightway's Capital Raising more of the same crap for small shareholders
Long VS Short: Freightways Ltd
Freightway's keeps delivering
Why did you but that stock: Freightways Ltd
Freightway's delivers
Freightway's packages up a good result


Discuss this company @ Share Investor Forum


Sky City @ Share Investor

Sky City share offer confusing and unfair for small shareholders
Sky City CEO doubles down
Sky City Entertainment 2009 Interim Profit Review
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss this company @ Share Investor Forum


Related Amazon Reading


Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage by Mary Buffett
Buy new: $16.47 / Used from: $13.38
Usually ships in 24 hours

c Share Investor 2009

Stock of the Week: Burger Fuel Worldwide

This Stock of the Week will be a surprise to many because I have been very critical of this company since its IPO listing in July 2007. Burger Fuel Worldwide [BFW.NZ], the "gourmet" burger franchisor company that collects royalties off franchisees as a means of revenue -but currently derives more than half its revenue from food and beverage sales at two company owned stores-and has limped from a failed, over-priced IPO and incurred big but dwindling losses along the way.

Its cash reserves are almost exhausted and its stated reason for their IPO, attracting more franchisees to gain revenue growth for the franchisor, has come to a grinding halt because of "capital restraints".

All negative so far, but wait there's more! Some positive stuff!

There is a chance that Burger Fuel, management could pull things off sometime in the future and make a good sustained profit.

One of the reasons I picked this stock was its share price. It is getting close but not yet at, its true value. At 32c it is roughly a third of its $1 IPO price. There is little interest in and few buyers lined up as at market close on Friday 19, with the first cab off the rank offering 10c a share and the lowest 1c - the lowest ever bids for this stock, so a clear opportunity exists.

Burger Fuel isn't one of those solid stocks you would buy and not expect to lose money, it is purely speculative and high risk but if you have, like me , been watching the trials and tribulations of this company over the last 2 years, and thinking about buying some, now would be the opportune time to start thinking about it.

Anything less than 15c would be a good starting point.

Good luck!


Stock of the Week Series

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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
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Burger Fuel: Inside info?
Burger Fool IPO: Burger Fool?
Exclusive Interview with Burger Fuel's Josef Roberts
Burger Fuel's Daytime drama
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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





c Share Investor 2009

Sir Robert Jones in his Autumn of Content

I am a contrarian investor of sorts. I say this because while I am buying stocks right now and looking at buying more, I also bought them while the market was at a higher level.

I have written about a couple over the last week, Michael hill and Doris Mousdale, and there are a couple of other New Zealand notables, Jan Cameron and Bricoe Group's [BGR.NZ], Rod Duke who are contrarians by nature.

Perhaps one of the worlds most famous contrarian investors is the world's richest man, Warren Buffett - he loves the current market turmoil, proclaiming such gems that he feels like a "Kid in a candy store" or a "Teenager in a whorehouse", when it comes to the prices he is paying for beaten down assets.

New Zealand has its own Waren Buffett in Sir Robert Jones.

He is as happy as a tar baby in a sandpit because the property tycoon has been buying property when everyone else is selling - NZ$100 million of deals done so far this year.

Some prescient quotes to a recent audience of property professionals show just how excited Sir Bob is:

"From a self- interest point of view, we look forward to a recession."

"We are not going broke. We buy buildings and those buildings are cheaper."

"Land developers go broke, building developers go broke, and for very good reasons, but they're too dumb to work it out for themselves."

"Why do banks keep financing them? Because the bankers get younger every year."

"I've survived more property cycles than most of you, so where's property going? Nowhere - property doesn't move."

You cannot get a more experienced commercial property man in Australasia than Sir Bob, as he points out he has seen this all before and no doubt capitalised on the troughs.

I recall him selling a large office block during one the boom times only to buy the same block back years latter for a much lower price - from memory it was a building in the 1980's Chase development, the full city block the "Finance Centre" in Auckland.

Sir Bob likens the economic cycles to the four seasons, with Winter the low point and Summer the high. He reckons we are in the Autumn of this cycle.

I think he is right and there is worse to come before it gets better but he certainly is making his autumn/early winter one of content rather than the alternative.

You should too if you have the cash.


Related Links

Listener Sir Bob Interview


Recent Share Investor Reading

• List of Bruce Sheppard's top NZX listed company debt worries
  
• Morgan's book "After the Panic" timely
• Charlies Group: A Triumph of Style over Substance
• MICHAEL HILL - Toughen Up: What I've Learned About the Tough Times
  
• Burger Fuel doesn't rule out capital raising
• Share Investor Portfolio: June 15 2009

Discuss this Topic @ Share Investor Forum


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NZ $28.64 @ Fishpond.co.nz

c Share Investor 2009

Burger Fuel Worldwide: Download full company analysis from Thomson First-Call

If you want to see how the Burger Fuel Worldwide [BFW.NZ] financial's stack up I have included a full collection of data out June 19, 2009 courtesy of Thomson Financial First Call Global/ASB Securities.

You will find balance sheets, ratios, charts, shareholder returns and all the Burger Fuel info you could poke a hot chip at. (see teaser below but download the full package at Share Investor Forum - you must join to download. It is free and takes less than a minute. I might do this for other companies if there is sufficient interest.

I only mention this because the company is getting close to my purchase price. Last sold at 32c and the next bid in at 10c (a low for the company) with one optimistic fellow offering 1c per share for 100,000 shares!

Key Measures for Burger Fuel Worldwide Value N/R Risk 2 Lower risk Growth N/R Income 5 Lowest VALUE Company Market Sector Aspect Earnings Model -- 0.89 0.88 P/E ratio -- 7.44 12.0 P/B ratio 4.38 0.85 1.68 P/E Growth Ratio -- 1.68 1.67 P/S Ratio 2.18 1.64 0.39 INCOME Company Market Sector Dividend Yield -- 7.7% 5.2% Franking -- -- -- Tax adj Dividend Yield -- 5.6% 4.1% Dividend Stability 0.0% 0.0% 89.3% RISK Company Market Sector Beta 0.67 0.98 0.74 Current Ratio 3.13 3.85 1.09 Quick Ratio 2.86 3.12 0.39 Earnings Stability -- 54.5% 53.7% Debt/Equity ratio 3.6% 0.0% 50.5% Interest coverage (x) -42.8 4.49 2.28 GROWTH RATES 10yr 5yr 1yr 2yr Fcst Sales -- -- 76.1% -- Cash Flow -- -- 52.6% -- Earnings -- -- 66.8% -- Dividends -- -- -- -- Book Value -- -- -16.4% -- Previous Close 52 week high 52 week low $0.32 $0.64 $0.20 P/E Ratio -- Sector Food & Staples Retailing Market Cap $17.0 Million Key Dates Listed 27/07/2007 Balance Date 31 March AGM -- Total Shareholder Return (avg annual rate) 1yr 3yr 5yr 10yr -20.0% -- -- -- Earnings and Dividends Forecast (cents per share) Curr -- -- EPS -1.3 -- -- PE(x) -- -- -- DPS 0.0 -- -- Yield(%) -- -- -- Source: Thomson First Call Global Estimates

Burger Fuel Worldwide @ Share Investor


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 this Topic @ Share Investor Forum




c Share Investor 2009

ING & ANZ duped "investors" can take their own action

Unfortunately this is about financial skulduggery again.

This time regarding ING and ANZ fund's products that have been frozen had investors put in financial limbo until they can decide whether to accept ING's latest offer of 60 or 62 cents in the dollar and five years in an ANZ call account at 8.3% , take matters into their own hands and take legal action or continue to hold units in their respective funds.

This is because it seems the Commerce Commission/Securities Commission doesn't have the balls/motivation to do anything about it in a sufficiently expedient manner.








Depending on the level of duplicity or what most would consider fraud, that your advisor/ING or ANZ sold you these higher risk products in the first place, if any, will motivate you to take your own action.

Most will probably opt to take the money and run but not me.

If you have been falsely sold a product and you have documentation then you have a case, you don't have to wait for various lobby groups or any Commission to do anything on your behalf.

Depending on your level of investment you can take a case to the disputes tribunal up to $7500 with scope to increase that figure if agreed upon between the two parties. It will cost you 50 bucks.

A breech of the Fair Trading Act is where you should start but consult a lawyer and if you cant afford one go to your free community lawyer through the Citizens Advice Bureau

If your investment is a large one you have a case against the defendant but it will cost you to go to court.

If you got your advice from ANZ your beef is with them NOT ING and if it is an "independent" financial adviser, you go after them. Straight from ING, you go after those bastards.

Too many of these pricks have got away with shoddy and corrupt financial practices in the past and it is time someone took a stand and made an example of these ***ts.


Timetable for ING/ANZ investors

* Investors have until Monday, July 13 to decide on ING's proposal.

* Investors who went through the ANZ Bank have until July 31 to make a formal complaint.

* Investors who accept the offer should gain access to their money by August 28.

* Those who don't accept the offer will continue to own units in the funds.

* Investigations by the Commerce Commission are ongoing but won't be completed by the decision deadline.

* Complaints have also been made to the Securities Commission asking it to delay the offer until the Commerce Commission has ruled but the commission said yesterday it had no ability to stop the offer going ahead because the offer is not misleading or deceptive.


Related Links

Citizens Advice Bureau
Disputes Tribunal
Fair Trading Act


Recent Share Investor Reading

• List of Bruce Sheppard's top NZX listed company debt worries
• Morgan's book "After the Panic" timely
• Charlies Group: A Triumph of Style over Substance
• MICHAEL HILL - Toughen Up: What I've Learned About the Hard Times
• Burger Fuel doesn't rule out capital raising

Discuss this Topic @ Share Investor Forum




c Share Investor 2009

Morgan's book "After the Panic" timely

Media - Video | Text

It is a little too late when you look back having lost your life savings to get it back, but anything that improves investor education and puts the spotlight on dodgy financial practices so you don't perpetuate the same mistake has got to be a positive thing.

Gareth Morgan, the well known economist/socialist has finally come back on track, pulled his finger out of his backside after his embarrassing book on so-called "global warming" and produced a book the average investor should read called After the Panic: Surviving bad investments and bad advice.
His book names collapsed companies and those individuals who are responsible for some of the finance companies that have been buried, along with nearly NZ$ 2 billion of investor money buried along with them.

I am not sure if it includes names of "financial advisers", the financial world equivalent of global warming zealots, but these individuals take a large part of the blame.

The book provides documents from said finance companies that reinforced their "stability" to the investor public while behind the scenes trusts were re-organised, bank accounts were siphoned, money was given to mistresses and tickets to Australia were purchased -my emphasis.

This excerpt from the book is but one example:

"You can have peace of mind when investing with Provincial Finance as you're dealing with an experienced, dedicated finance company," Provincial Finance said in a prospectus in 2005.

"... when you invest with Provincial Finance you'll enjoy high levels of personal service, regular, easy to understand performance reports, attention to risk, and a good rate of return over the term of your investment".

Disclosure was only the beginning of the dodgy dealing of finance companies of course, there was also the massive inter-related party lending to bolster the books, the selling of property that didn't exist, money siphoned from company accounts to pay for lavish personal expenses and a whole host of small crimes and massive mis-demeanor's.

Gareth has written a book of its time and inexperienced/experienced prospective investors alike, in any asset class, should have a read of his book, if only to see where the bodies are buried.

You can be sure though, just as some of these individuals who have participated in this financial rape of the greedy, the hapless, the elderly and the mis-advised, came out of the ashes of similar shell games from the financial collapse of the sharemarket in the 1980s, they will rise again sometime in the future to do it all again.

Gareth's book looks like another tool that investors can use to stop them from becoming financial prey, again.

Related Video

Gareth Morgan Interview - One News

Recent Share Investor Reading

• Charlies Group: A Triumph of Style over Substance
• MICHAEL HILL - Toughen Up: What I've Learned About the Hard Times
  
• Burger Fuel doesn't rule out capital raising
• Share Investor Portfolio: June 15 2009
• Stock of the Week: Michael Hill International
• Contrarian Investor: Doris Mousdale

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$32.99 from Fishpond - 13% off


c Share Investor 2009

The Continued Fascism of New Zealand Governance

Since when did people like me vote in a fascist in November that has first decided that he wont give Auckland voters the right to decide whether they want their council's combined and then yesterday and again today tell us that even if New Zealand citizens decided to give the anti smacking bill a good beating in a referendum then he would ignore the result because he thinks it is working.

Regardless of which side of each debate you fall on- the anti smacking bill is clearly a failure and the coming supercity is debatable- we must have the right to decide in a free democracy important life changing events.

We have processes and democratic rights which must be upheld and while the previous administration trampled all over these in the last 9 years, more than any other Government in New Zealand history, I certainly didn't vote for more of the same.

I will be reassessing my vote in 2011. In its current guise it wont be for Labour and if John Key ignores my referendum tick then it wont be for him either.

Doesn't leave me with much does it?

c Political Animal 2009

Charlies Group: A Triumph of Style over Substance

There was much fanfare, overwhelming hype and plenty of free publicity when Charlies Group [CHA.NZ] listed on the NZX through the back door in 2005 and that has been the way the company has operated for the last 4 years.

They had Marc Ellis as its largely titular head and Stefan Lepionka in the back room squeezing the juice and running the business side.

Shareholders who got in at the entry point have lost millions and are unlikely to get it back and many of these same people would have participated in the 42 below IPO a few years back expecting Charlies to pay back the same way that deal finally did.

We have learnt that the company is looking at raising capital in some way to enable them to continue to function as a going concern and their original idea to build up the company to sell it off to a major beverage player has failed because they cannot get what they think it is worth in the current economic climate.

Burger Fuel Worldwide [BFW.NZ] which is contemplating capital raising itself, is another one of those flash harries that investors got hyped up in and ended up largely kissing goodbye to the 2 million that was raised from them in that particular IPO in 2007.

These companies all share a sense of style over substance and should be avoided at all costs by those without money to lose and that should be pointed out clearly before virgin investors plunk down their cash.

The fact that these sort of IPOs were pitched to those without much financial nous and got caught up in the hype is a testament to Kiwis lack of financial skill and those that were raising funds were counting on when they targeted the financially illiterate for their hard earned moola.

Fare enough for Ellis & Co to take a big risk in business but to pitch there IPO without spelling out there was a fair chance the business would fail is, once again, a triumph of style over substance.

Footnote: Charlies have just issued a press release to the NZX softening up shareholders for more money.


Charlies Group @ Share Investor

Takeover Documents

Charlies Group Ltd: Asahi make takeover offer
Share Price Alert: Charlies Group Ltd
Share Investor Q & A: Charlies Group CEO Stefan Lepionka
Chart of the Day: Charlies Group Ltd
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum
Download CHA Company Reports

From Fishpond.co.nz



Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz




c Share Investor 2009

MICHAEL HILL - Toughen Up: What I've Learned About Surviving Tough Times

I have been taking an increasing interest in Michael Hill the man and the Jewelry company that he runs over the last few weeks.

I picked his company Michael Hill International [MHI.NZ] as Stock of the Week this week and covered off an interview with him on TV3's 60 minutes aired last Monday.

His high profile in the media in the last week has been mainly due to a book of his, Toughen Up: What I've Learned About Surviving Tough Times that was launched today .

I received an advanced copy of the book and have read just a brief part of the first chapter.

Suffice to say it sounds like Michael from the get go (it has his "voice") - positive to the point of being unfashionably earnest and eager to tell his story to the rest of us.

As I pointed out in my comments about his TV3 interview and of course gaining much about the content of his book from the title, this book is not only revelation to today's economic condition's but also timeless in its old-fashioned approach to business and indeed life in general.

Hill sees our current economic valley as an opportunity to change, move forward and above all grow business and our economic livelihood in the process.

From the press release for the book:

Michael Hill believes the looming meltdown can be a good thing for businesses and entrepreneurs. It is possible to succeed in a downturn - in fact it is the perfect situation in which to perfect a business. Instead of fearing the side-effects of recession, wallowing in gloom and convincing ourselves the only safe haven is at home under the blankets, entrepreneurs can use this period to their advantage. With the right attitude, you can not only survive, but emerge from the crunch with a new feeling of prosperity and strength.

Over the years, Michael Hill has had just about every possible experience in business: from lie-awake-at-night nerves to the joy of unexpected success. He's reshaped the landscape under his feet and he has ventured into new territory. And at every moment, he has relished the excitement of it all. Once, he was an outsider in his industry; the cheeky startup whom nobody expected to succeed. The established players had no reason to view him as a threat. Now, his business is the establishment. It dominates the markets in which it operates. Michael Hill Jeweller is a respected part of the business culture in a large part of the world - and they are continuing to expand in both size and ambition.

Plain sailing through a business storm encapsulates the ingredients of Michael's philosophy. There are no secret herbs and spices. It is not a magic recipe - it is just a collection of solid ideas, firmly grounded in reality. All these concepts are remarkable only because they make common-sense - but you'd be amazed how rarely they are fully understood and embraced in the business world. Michael Hill believes the looming meltdown can be a good thing for businesses and entrepreneurs. It is possible to succeed in a downturn - in fact it is the perfect situation in which to perfect a business. Instead of fearing the side-effects of recession, wallowing in gloom and convincing ourselves the only safe haven is at home under the blankets, entrepreneurs can use this period to their advantage.

With the right attitude, you can not only survive, but emerge from the crunch with a new feeling of prosperity and strength. Over the years, Michael Hill has had just about every possible experience in business: from lie-awake-at-night nerves to the joy of unexpected success. He's reshaped the landscape under his feet and he has ventured into new territory. And at every moment, he has relished the excitement of it all. Once, he was an outsider in his industry; the cheeky startup whom nobody expected to succeed. The established players had no reason to view him as a threat. Now, his business is the establishment. It dominates the markets in which it operates. Michael Hill Jeweller is a respected part of the business culture in a large part of the world - and they are continuing to expand in both size and ambition. Plain sailing through a business storm encapsulates the ingredients of Michael's philosophy. There are no secret herbs and spices. It is not a magic recipe - it is just a collection of solid ideas, firmly grounded in reality. All these concepts are remarkable only because they make common-sense - but you'd be amazed how rarely they are fully understood and embraced in the business world.

I imagine this book is not just for those who are in business or have an interest in business but can be used as an inspiration by those who would like to get motivated, learn from someone who has been there and done that and made all the mistakes along the way and would like to put their ideas into action.

Like Michael, I would say all it takes is an idea - it doesn't even have to be a spectacularly bright one - very hard work and the tenacity to stick with if it is successful and know when to fold if it isn't.

Highly recommended. *

* just a wee footnote, a correspondent quite rightly pointed out in a comment below that how can I recommend a book if I haven't finished it and of course without explanation he is right. I answered thus:

CJ, what I should have said is that from what I have read and skimming over other parts of it I would recommend it-and I do -you know sometimes you start reading a book and you know it is going to be good. I have similar old-fashioned values and share much of his outlook on life, so I know I am going to enjoy the read.

I will of course finish it at some stage, and tell you if it disappoints. I doubt it will.


Disclosure I own Michael Hill International shares in the Share Investor Portfolio.


Michael Hill International @ Share Investor

Long Term View: Michael Hill International Ltd
Michael Hill Downsizes USA Operation
Michael Hill International: 2010 half year profit commentary
Michael Hill Makeover kicks off
Michael Hill International: 2009 full year profit commentary
Toughen Up: What I have learned from the hard times
Stock of the Week: Michael Hill International
Michael Hill TV3 60 Minutes Interview
Long VS Short: Michael Hill International
Marketwatch: Michael Hill International
Michael Hill's profit shines
Michael Hill takes on the windy city
Why did you buy that stock? [Michael Hill International]
MHI has defined growth strategy
MHI profit sparkles

Discuss MHI @ Share Investor Forum

Download MHI Company Reports


Buy Toughen Up: What I've Learned About Surviving Tough Times



Toughen Up - Fishpond.co.nz



c Share Investor 2009

VIDEO: Evening Market Reports & Market Updates from TV3/ASB Securities

Evening Stockmarket Reports & Market Updates from TV3/ASB Securities

c Share Investor 2009

Burger Fuel doesn't rule out capital raising

I took a look at the Burger Fuel Worldwide [BFW.NZ] profit for the Full Year to 31 March 2009 last week and one of the concerns for me was that the cash position was more than halved over the year to just over NZ$1.5 million.

Chris Mason, Burger Fuel CEO noted in the release in the "BFW Outlook" part of the document that:

The board of directors have advised that the BFW strategy remains consistent with the previous year. The group is focused on three main areas:

1) Continued growth of the total system sales in NZ, by way of increased store sales as well as an increased number of stores. However, the board is mindful of the current economic climate.

2) Continuing to build up trading in both Australian stores to ensure future profitable expansion can ultimately occur in Australia.

3) Negotiating Area Development or Master Franchise agreements in other identified countries to earn royalties and other revenue by licensing the BurgerFuel system.

Given the global and local economic situation, a key focus has been on reducing costs to ensure that the group can preserve cash and eventually reach profitability. In the last six months to 31 March 2009 the company was close to breaking even. Costs will continue to be managed in accordance with board policy, however further losses are expected in the 6 months to 30 September 2009, due to the requirement to support international markets and also continue to expand NZ. Chris Mason, Burger Fuel CEO.

With cost cutting and wise capital management a primary issue for BF management, I thought a few questions to Josef Roberts, a Burger Fuel Executive director, were warranted, concerning the subject of dwindling cash reserves and the possibility that extra capital could be warranted to continue IPO flagged expansion.


I had the following brief email exchange with Josef on the topic of capital raising.


Share Investor  Could BF investors learn how the company will expand as cash reserves are half what they were last year and getting very low as of 31/3/09.

Will the company have to borrow or ask for money from shareholders to grow?

Josef Roberts  As you aware I am not in a position to answer any questions like that. These are matters for public announcement if and when deemed appropriate by the board of directors.

S.I. That is fair enough but can you tell shareholders what expectations there are for growth given the rapidly dwindling cash position of BFW and therefore the possibility of a halt because of capital restraints?

J.R. Darren – like many company’s right now capital is scarce. We are no different and lack of capital affects growth – that’s for real, however, we have no debt and as you can see by our losses over the last 6 months, we can stem these by reducing investment. We would like more capital – of course we would – and it is certainly on our radar, we always wanted to raise $15M and we know that additional capital would speed up results. However, there are ways we can still grow on less capital and that’s what we are focusing on for now.

S.I. I am sure shareholders wouldn't mind investing more if there was a rights issue or some such capital raising. Now is a good opportunity to expand given cheaper leases and real estate costs.

J.R. You are right for sure – now is the time to invest in expansion. I will be sure to let you know if we decide to look at a capital raise and if this was done at a good price - well maybe we would get the uptake. Anyway - as I say these things are on the radar Darren.


Take it as you may readers but Josef is dead right, his company is in a position that many others are in and that some have faced already.

In my own portfolio for example 4 of my companies have already raised a total of more than $NZ 600 million in new capital and I have participated in 3 of them (1 2 3) to the tune of $7000.00.

Burger Fuel is no different.


Burger Fuel Worldwide @ Share Investor


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 this Topic @ Share Investor Forum



c Share Investor 2009