MFB - My Food Bag

[LoungeLizard]

That would be the same families struggling with rising interest rates and inflation? MFB's customers numbers haven't budged for ages - their "revival" has been based purely on cutting costs, which you can only do so much before staff morale and product quality suffers.

[Stoploss]

That would be the same families struggling with rising interest rates and inflation? MFB's customers numbers haven't budged for ages - their "revival" has been based purely on cutting costs, which you can only do so much before staff morale and product quality suffers.

It's hard to put a dent in staff morale when your staff are Robots . That's what they use to pack the boxes , so quality is uniform and things don't get missed out .   

[Basil]

Next weeks annual meeting on Wednesday 19th should be interesting.  I plan to slip quietly out of the Turners annual meeting held below in the same building so I can attend.  The after meeting refreshments are considerably better at MFB than Turners lol...but I am more interested in the update on Cameron Partners involvement as well as the trading update. 

[LoungeLizard]

Damage limitation exercise from this morning's announcement that MFB have failed to find anyone to "invest" in this no-growth company. So instead they are apparently going to embark on a new growth strategy whilst at the same time giving 90% of profits as dividend and a potential return of capital to shareholders. So that would be a growth strategy that doesn't involve spending any money? Clearly they have run out of ideas which of course is the reason they tried to offload the business in the first place.

This is a company that is running faster to stand still - it hasn't been able to grow customers or margins for years and has made as much cuts as they can to free cash in order to satisfy shareholders need for a dividend. It's a recipe for another collapse which MFB shareholders have endured before. History is about to repeat itself I feel.

[lorraina]

The market reacted to this mornings announcement pushing MFB's share price to a 2 year high.
The share price is well above both the 90 day and 180 day moving averages.
RSI is positive too at 69.94.
Look forward to their dividend announcement later this month.

[LoungeLizard]

https://www.thepress.co.nz/business/361110841/my-food-bag-decides-it-has-raw-ingredients-stay-listed-standalone-company

An IPO of $1.85 and now 31.5c. But hey, this time it's different...

[Basil]

MFB was outstanding buying earlier this year at 20 cents, (up more than 50% in about 6 months) and the metrics are still compelling at the current price.  Huge dividend feeds in the years ahead means those who tucked in the the right price will be very happy holders.

I have them on a forward PE of just on 10 and a 12% gross yield.  Compelling metrics for dividend hounds.

[LoungeLizard]

A lot of people took the bait of a "strategic review" hook line and sinker. Could be a sell-down now that the prospect of a quick buck has gone.
All the true metrics of revenue, customer numbers, profits and EPS are at a standstill and management have papered over the cracks by cutting costs. Classic dividend trap in my view.

[lorraina]

https://www.thepress.co.nz/business/361110841/my-food-bag-decides-it-has-raw-ingredients-stay-listed-standalone-company

An IPO of $1.85 and now 31.5c. But hey, this time it's different...

Very much like me why I sold remainder books.
Poor sales when released at $49.95 or $59.95 ,but sold like rockets at $19.95 or $29.95.
And no I never bothered at IPO.

[Basil]

I am forecasting 3.0 cents EPS and 2.7 DPS for FY27. 2.7 cps fully imputed is worth 2.7 / 0.72 = 3.75 cps which gives a forecast FY27 gross yield of 12.3% and PE of 10 at 30.5 cps[/b]. Worth also noting as you have mentioned the pre-xmas dividend is included in the current price and I am expecting ~ 1.0 - 1.25 cps fully imputed.

In addition to the above there's the organic growth in the years ahead and its also worth noting that special dividends or buy-backs are clearly on the cards going forward. Nobody is going to go hungry for a huge dividend feed with MFB that's for sure !  I tucked in at 20 cents but I reckon its not too late.

[LoungeLizard]

MFB customer numbers:

FY26 (2026)   57,100
FY25 (2025)   57,000
FY24 (2024)   56,800
FY23 (2023)   57,500
FY22 (2022)   61,731

Doesn't look like much organic growth going on to me. So if you can't increase your customer base, where is the growth going to come from? The economy will either stay the same or tighten further and discretionary item businesses are the first to suffer when things get tough.
 
At the end of the day, it's a matter of trust. Do investors, in the current macroeconomic environment, trust MFB management with their money? Forget the Pavlov's dog reaction to the prospect of a juicy bone. That's just conditioning. What's the point of a 3 cent dividend if your capital is at risk of a 20% haircut?
Which, I'm afraid to say, it is.