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Agree with your sentiments CEREUS. Hovis has been around since 1886 - comes from the latin Hominis Vis - Strength of Man! It was only a brown wheatgerm loaf for many years. There's a lot of heritage in this name. A while back Premier saw the benefit in the branding and now we have Hovis White, Hovis Wholemeal, Hovis Granary. Hovis used to bake such lines as crumpets, muffins, pancakes, scones, finger rolls, burger buns. For bakers these morning lines are usually quite profitable. There's other bread products they could consider nowadays as well. When they stopped baking these lines to focus on the core product - bread, they also closed down the relevant bakeries and plant and machinery. The challenge would be to convince them to reinvest to produce and deliver. Alternatively could licence out to quality independent bakeries. With their increase in market share from 20 to 22 %, GP increase about 5% - and now eating at home more, you have to think there are opportunities they could explore. May drop them an email Kallumama. BTW Ridley Scott directed the 'Boy on the bike' advert - Gold Hill in Dorset - not up North at all.
It had a slump but now it's ok. It's the bread I buy out of choice. Please don't sell it. But I don't eat shop bought baked beans any more they all have too much sugar in.
We should not sell the business , the name as the suitors rightly say has a reputation of good wholesome food , and instead of selling we should be making capital out of it , by producing more bakery products under the brand name . Innovation is what we lack , along with foresight , a British malaise . Look what we have got rid of , Rolls Royce , Bentley , Mini , the list is endless , and surprise surprise the foreign owners make a go of them , even daring to make a huge profit.. We should take stock and have a pride in our past , and build on that reputation , not dump it .
Sorry to be ignorant but could somebody please explain what price I should be looking for to break even having bought shares in 2011/2012 but which were devalued by a share consolidation of 10 to 1. I acquired overall some 100,000 shares at an average price of 11.8p/share but which was then subject to the consolidation. Would I be correct in thinking therefore that the average price then became £1.18/share and that this is what I need to see it achieve before selling at a breakeven level? Thanks for any thoughts on this.
"Darby sold Half (51% ) of the Hovis business for £31 Million"
Actually it was sold for £15m, the second £15m was never paid. also Darby loaned £16M. so far £8m of the loan has been returned.
Yes, that is how the process works.
With Gores having the majority holding wouldn’t it be them calling the shots?
has PFD put a deadline on offers ?
Well it was just over 6 years ago since Darby sold
Half (51% ) of the Hovis business for £31 Million
https://www.proactiveinvestors.co.uk/companies/news/55134/premier-foods-gives-up-51-slice-of-hovis-for-30mln-65204.html
At the risk of sounding stupid. I assume the bid and hopefully other bids would be for the whole of hovis and not just the controlling interest
https://uk.investing.com/news/stock-market-news/italys-newlat-food-has-offered-bid-for-britains-hovis--source-2225970
The news is starting to spread. Should see lots of traders turning up soon.
It’s going to be an interesting week !
The Italian group is ready to spend as much as 100 million pounds for the bread maker
https://uk.reuters.com/article/uk-hovis-m-a-newlat/italys-newlat-food-has-offered-bid-for-britains-hovis-source-idUKKBN26P0PQ?il=0
have to do better than that
Anyone know when the deal will be done ? In time for the results update?
just read that myself will bump the price of hovis up even further. & off course PFD
Reporting that Italian food group Newlat have joined the pursuit for Hovis
Still, at 70m fcf, a 4% cash flow yield on EV (comparable to a P/E ratio of 25 for debt free companies) gives a share price of 160p.
and this is not a "takeout" valuation. its an earnings based valuation. big diff b/w the two.
"once it's debt free" is the problem there. That's why it makes more sense to look at free cash flow than ebitda here. Interest is significant. I also think you should be comparing free cash flow to enterprise value rather than market cap kalamumma. That cash is going to pay back debt, not into shareholders pockets or being reinvested.
Having said that, Ev/fcf multiples still look very good at these levels. On 65m fcf in 2019, I agree with your assessment of 70m+(+) for 2020 and beyond.
Thanks for that spreadsheet Kallumama, it's very interesting. For a stable consumer brands company like this I'd expect to trade at a bit more than 10x EBITDA once debt free, but I understand the desire to be conservative.
If it stays at £1+ I might get smashed as well tonight !!!!!!!!!!!!
I expected to see a drop (PFD long term holders will understand) today, but holding well. Its what we have said for a while that this company is under valued. Agree we have some way to go, and i know others have said this, but there is no better place for your money at the moment. Still holiding,not....selling
£1 in my 11 years of holding I never thought I’d get my investment back now this! Must do lottery tonight GLA and WELL DONE all those long term ‘sufferers’ who wished for this day ??
Didn't expect this to rise to a £1 this fast this time last year...glad I didn't sell out last year when I sold a lot of my other loss making ones....but gutted I didn't invest more when this was in the 20's...keep on rising...
Interesting to speculate to what extent the Hovis sale is now priced in ?
Let’s hope the sale doesn’t collapse ! Some of us have been in here long enough to remember what happened when the McCormick deal fell through.