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Food Junction
22-12-2010, 12:46 AM.
Post: #31
RE: Food Junction
FJ gave out these membership cards in one of the earlier AGM i attended
so mebbe can go this yr's AGM to take Tongue
but to play safe, pls call and ask if they gg to give any such freebies

they also attached some food vouchers in the AR they mailed out back then

of cos a 1 cent drop in their sh px will wipe out more value
buyer beware as usual

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09-01-2011, 01:13 PM.
Post: #32
RE: Food Junction
FJH appears to be facing pretty tough headwinds. I was first looking at it because of the food court business and supposedly high returns on capital.

In the short term: For the last 5 quarters, since June 2009, their net margins have shrunk from 10% to 3%. TTM profits are down 25%, largely driven by an increase in operating lease expenses (new restaurants & rent hikes) that are not bringing in revenue.
In the mid term: Since 2005, profits have fallen 2/3, in part driven by increases in personnel costs and in the near term by operating leases.

For their 2 segments:
Food Courts: Return on Capital looks good but dropping because of falling margins - which is difficult to understand when they should be passing on the costs to their tenants. If we look at their operating leases: they rent their premises from their landlords for about 2-5 years, and then out to the food stalls for 1-2 years, so in an environment of generally rising rents, they should be renewing their leases at better terms.
The one option is growth outside Singapore, and they seem to have some reasonable success in Msia, although a strong backer like Lippo can be very helpful in getting prime sites and understanding the local culture.

Restaurants: this is the typical business with low barriers to entry, unlike food courts which needs substantial outlay. There should be no reason to pony up for intangible assets unless it's something like McDonald's or KFC. Margins are razor thin: for FY 2009 & 2008, we have 1-2%, and although it's not broken down in the last 3 quarters, we don't find any improvement accruing to the income statement even when times are better and people should be spending more on food.

There is minimal value in replacement costs to the food courts, as unlike some corner coffeeshop/kopitiam, FJH doesn't own them. What they carry on their balance sheet is the food equipment and the capitalized renovation costs (which are worth 0 if they have to abandon their lease). Yes Auric Pacific / Lippo paid abut $0.55 in Sep 08, but the latest FY 07 had 2x the current profit as now, even so Auric Pacific has not been doing too well with Delifrance, dotcoms, communications businesses etc.

Management should sell the restaurants and concentrate on their food courts, where barriers to entry in terms of financial capacity and management are higher. If they can grow this business anywhere (like outside Singapore together with Lippo), well and good, otherwise they should just return the capital to shareholders.

The odds are high that management won't / can't reverse all these, so it's probably worth somewhere around net tangible assets.

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10-01-2011, 08:12 AM.
Post: #33
RE: Food Junction
Went to FJ's food court at nex yest at 3pm n it was not as crowded as food republic's better located one. Ordered from their toast@work n their half boiled eggs are not consistently cooked, ..one too raw and another slightly overcooked. Disappointing...

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15-02-2011, 05:59 PM.
Post: #34
RE: Food Junction
Taking advantage of some loose-footed shareholders who turned sellers in a depressed market-day today (15Feb11), Food Junction again activated its share buy-back mandate and managed to buy back 101 lots at $0.205/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument

While the recently released FY10 (ended 31Dec10) full-year result and the declared $0.0025/share Final dividend are nothing to shout about.....
http://info.sgx.com/webcoranncatth.nsf/V...penelement
Food Junction's established foodcourt and related businesses are decent enough to own for its regular twice-a-year dividends and future profits.

Based on the last done share price of $0.205 and the remaining 128.164m issued shares (after accounting for the shares bought back and held as treasury shares), the current market cap. of only $26.27m is quite obviously not a fair valuation of the underlying businesses.

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15-02-2011, 09:22 PM.
Post: #35
RE: Food Junction
(10-01-2011, 08:12 AM)MrValue Wrote: Went to FJ's food court at nex yest at 3pm n it was not as crowded as food republic's better located one. Ordered from their toast@work n their half boiled eggs are not consistently cooked, ..one too raw and another slightly overcooked. Disappointing...

FJ at Harbourfront is usually less crowded as compared to Food Republic at Vivo. I have the impression that FJ is losing out on competition with Food Republic.


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15-02-2011, 09:45 PM.
Post: #36
RE: Food Junction
how much is the underlying business that keeps underperforming worth? not much assets really not much intangible brand as well.
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16-02-2011, 09:26 AM.
Post: #37
RE: Food Junction
(15-02-2011, 09:45 PM)Drizzt Wrote: how much is the underlying business that keeps underperforming worth? not much assets really not much intangible brand as well.

Hi Drizzt, don't quite understand what you mean, care to explain more?

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16-02-2011, 11:01 PM.
Post: #38
RE: Food Junction
sometimes i wonder if comparing food courts business between food republic and food junction is akin to comparing SMRT with SBS.


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17-02-2011, 09:00 PM.
Post: #39
RE: Food Junction
Food Junction bought back another 80 lots at $0.20/share today (17Feb11).....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
, out of a total 270 lots transacted at $0.20 in one single sale done in the morning, and the counter closed the day at $0.205.

Anyone lucky enough to pick up some cheap Food Junction shares today?

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17-02-2011, 10:24 PM.
Post: #40
RE: Food Junction
i picked up some lots, half of them at $0.20 and the other half at $0.205 this week.

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