BFW - Brugerfuel Worldwide [Archive]

GTM 3442

21-05-2012, 11:46 PM

Got some of these on the initial ipo years ago. Held with computershare?
Now I want out since they have reach parity
.

Why'd you want out now, when there's a reasonable chance of the price keeping on rising ?
3 years ago 30c-odd, now $1-odd, in another 3 years - when RBD mount the takeover - say $2.50-odd ?

Not unlike Charlies and A2 Milk - a sleeper with potential.

22-05-2012, 07:12 AM

Do you have an account with a Broker? If so contact them. If not, contact one. I think Direct Brokering do one off trades - you will need to verify ID etc.

How many did you get? just the minimum $1k? If so remember there will be brokerage. Minimum of $30 for online normally but if you have to do a one-off trade, they will probably charge you more.

But why sell now. They are go up. They are expanding overseas which brings in new revenue. Sales of NZ stores are up this year on last year and they are planning on opening more NZ stores _ I think they already have one under contract and looking for more.

What will you do with the proceeds? New big screen TV or more shares?

percy

22-05-2012, 07:24 AM

Sauce

22-05-2012, 10:23 AM

MrMonkey.
A lot of punters sell a share to get their money back.Often you find when all those punters have sold out,the share takes off.As other posters have remarked things look pretty good for them.You have managed without you funds,so why not enjoy the party? I would be thinking of buying more rather than selling any.

I agree Percy,

They have become profitable and a lot of the risk is now removed. Not one for my dollar, but if it was, now would be a WAY more optimal time to buy than at the float.

I have a sneaking suspicion that BurgerFuel will go on to become quite a success story.

MrMonkey: There are two emotional reactions when a share loses value that are both as destructive as each other; One is holding on to a losing bet hoping that it will eventually return to your original price so you can sell it, when there are much better comparative investments you would be better off switching your remaining equity into. The other one is capitulating and selling at the very bottom because everyone else is selling, when in actual fact the business is sound and the market is just being irrational.

The trick to avoiding this type of destructive decision making is to take your cues from the underlying business, NOT the share price or the consensus opinion (although the consensus opinion may well be right, you have to qualify this for yourself and ignore the market).

I think Percy is right on the money (as usual). Things are looking up for BurgerFuel now, and if you made an investment decision that the business was a good one originally, perhaps now is a good time to re-visit your thesis and see if things have changed for the better or worse before making your decision to sell.

Remember, an investment never owes you anything.

Regards,
Sauce

Sauce

22-05-2012, 10:27 AM

Remember, an investment never owes you anything

Sorry, to be clear; what I mean by this is that a 'losing bet' doesn't owe you anything. Holding on to a sinking ship because you are under water is irrational. Its assessing whether it is sinking or not and then bailing out or sticking with it that is important. And assessing opportunity cost i.e. is there a better (less risky, greater return potential) use of the remaining capital elsewhere at that point and time.

MrMonkey

22-05-2012, 10:45 AM

Not too worry. All is well. Order has been placed. Got to love asb securities customer service. Had to phone it in since its on the nzax, my only holding on the ax hence my frustration at trying to sell it normally because it wouldn't let me do it.

777

22-05-2012, 11:04 AM

Why did you buy the shares in the first place. You obviously have no knowledge of the mechanics of buying and selling of shares nor any interest was taken on the process when you initially bought. Very poor investment decision to buy and now a poor decision to sell. History repeating itself

22-05-2012, 11:46 AM

Why did you buy the shares in the first place.
I think all employees at the time of IPO got issued shares - I could be wrong. I know all Franchisees were allocated some so maybe he didn't 'buy' them in the first place?

Or maybe it was just the fact you could buy them on your credit card.

David B - I was interested in buying some as well but the volumes were so small and the price kept increasing in jumps that I never went for it.

It will be interesting to see what their plan is now. They are cashflow positive (up $1m) and one must assume that going forward this should be maintained. Will they become a dividend stock or will they use the cash to establish new stores which are owned by the company, potentially flicking them off to franchisees once established. I think Ponsonby is the only 'owned' store now but they have set up a store and onsold in the past.

MrMonkey

22-05-2012, 06:42 PM

GTM 3442

22-05-2012, 08:38 PM

I don't like the AX so I'm out once the order is filled

Perhaps you could expand on this, Mr M - just for curiosity's sake. Ta

Hoop

22-05-2012, 11:07 PM

I was at BurgerFuel when the ipo was happening. Decided to get a whack of them with my fries. Don't usually venture into the NZAX so it's been a while. I don't like the AX so I'm out once the order is filled

Price
No.
Quantity

120
4
6,000https://www.directbroking.co.nz/directtrade/images/spacer.gif

135
1
9,250https://www.directbroking.co.nz/directtrade/images/depth_before.gif

140
2
20,000https://www.directbroking.co.nz/directtrade/images/depth_before.gif

Above is the depth at the close today....Mr Monkey I'm assuming your order is one of the 120c's....Good chance that it will snapped up at the opening tommorrow and maybe you will come out with a small profit after fees. Congratulations...Usually impulse buying anything at a checkout is a bad buy decision...so you were lucky...Lesson learn't ..eh...no more impulse buying???

Shhhhhh..I won't mention "relief" selling.

EDIT:...some very valuable comments on this thread..and free too

MrMonkey

23-05-2012, 11:44 AM

Not so keen on slow sticky stocks on the NZAX. However bfw has been an interesting test case for me to play with. First and probably last time I fill out an application form for shares when buying a burger.

23-05-2012, 12:04 PM

GTM 3442

23-05-2012, 06:09 PM

03-12-2012, 01:26 PM

A good jump and on reasonable volume (for them anyway). I was interested earlier in the year at about the $1 mark but trading was very thin and normally on volumes of 500 or 100 shares. To get a meaning holding, I would have taken out all the sellers and raised the price about 20c. A couple of points:

- As you point out in post #12, the issue with this stock is liquidity, in part because the founders hold 82%. Add in all employees (all stores at time of listing have shares too) and it is even higher. How they can inject more liquidity into the stock without sending a negative message.
- Re Saudi vs Australia, the difference is with the middle east, they have had to use a regional master franchise. This would lower the returns from the stores there but in turn would also mean head office costs are lower than they would be if they didn't have a master franchisee. If they went big for Australia, they could do it alone. Much of a muchness in the end but given they have good momentum in the ME, and Australians dont support Kiwis unless they claim as their own, their strategy is probably right.
- NZ rollout - I am a bit disappointed with the speed of the NZ rollout. I know population isn't big but I think they need to keep rolling it out to increase the brand further. Its success in NZ is also crucial in its ability to sell new master franchises (why would you buy into a business that isn't expanding in its home market)..

Balance

03-12-2012, 01:48 PM

It is great to see a New Zealand success story.

Well done, Burgerfuel.

Xerof

03-12-2012, 02:43 PM

Yes, it seems to gathering momentum, as all these food types do.

I believe that the stores in Saudi Arabia should be branded BURKAFUEL

:cool::rolleyes:

03-12-2012, 03:23 PM

I believe that the stores in Saudi Arabia should be branded BURKAFUELWhen I was in Morocco, McD's had the McArabic burger. Given I had no idea what was in it, I stuck to the tagine's.

19-12-2012, 03:04 PM

Well if you want in now, there is only one seller at $1.6!

I was planning on getting in around $1 but decided against as I thought I would only be left with 1,000 shares. Maybe I should have at least tried as it did fluctuate around that mark for a while.

Having Gaynor on board is a good vote of confidence and also increases the liquidity.

21-12-2012, 09:35 AM

The potential backdoor listing of 'The Mad Butcher' will be an interesting comparison for BFW.

Mad Butcher has total system sales of $150m and the Franchiser has been valued at $40m
BurgerFuel has total system sales of $38m and the Franchiser has a market cap of $83m

Even allowing for Burgerfuels better growth potential, BFW seems to be overvalued. Of course we have no detail on the Mad Butcher yet such as what Royalty % they charge (Note: BFW charges 6% of sales + 4% for marketing for a total of 10% of sales - this is for NZ stores, not sure what it does for overseas stores).

David B (and anyone else that holds or has researched), I would be interested in your thoughts.

21-12-2012, 10:21 AM

David - Agree in part. My point was that even if you accept fantastic growth by BFW up to $150m (4x growth), that values it at $40m (per Mad butcher). So system sales have to go to ~$300m. What is BurgerFuels target? I dont think I have seen this? (eg Xero has 100k customers which doesn't justify price but its target of 1m+ does).

Re Milford Funds/Gaynors investment, I also note that they have increased their holdings in RBD (SHH today). They are obviously optimistic of the fast food market.

Dej

21-12-2012, 10:27 AM

They are obviously optimistic of the fast food market.

They're making the increasing trend in obesity profitable ;)

:p

kizame

21-12-2012, 11:18 AM

They're making the increasing trend in obesity profitable ;)

:p

I think their burgers are a lot healthier than the likes of Mc...t and the others,they are a meal in themselves so negate the need to order extras.

Dej

21-12-2012, 11:22 AM

I think their burgers are a lot healthier than the likes of Mc...t and the others,they are a meal in themselves so negate the need to order extras.

Wasn't really refering to BFW specifically but more about Milfords holding of RBD in the Active Fund.

Personally, Burger Fuel is easily the best fast food joint in NZ, and agreed that it is a lot healthier than most!

21-12-2012, 11:23 AM

I think their burgers are a lot healthier than the likes of Mc...t and the others,they are a meal in themselves so negate the need to order extras.The definately use high quality ingredients. Depending on which version of 'good nutrition' you follow, the Bun is the most unhealthy part of the burger. Kumara fries are also good, though I would need to investigate what sort of oil is used.

Tauranga is serviced by two great stores too so you are much luckier than those in the South Island.

kizame

21-12-2012, 12:48 PM

I don't think they have made public a set target for sales at this stage, (or if they have I've missed it) so who knows what that might actually be. But is the Mad Butcher the right choice to use as a valuation metric for a company like BFW? Butcher shops/ burgers and fast food, I'm not sure?

But hey, who doesn't love fast food? Well food snobs, dieticians and people who only eat vegetables I suppose. They'd all be fun at a party.

I think they are very similar co's particularly if MB expands into Aussie (slowly!!!)
They are both retailers,one sells a necessity the other is very much discretionary spending.
MB will always have a larger turnover per store as it is a mini supermarket,but the profit in those burgers must be huge,when compared to selling burgers for $2.50-$4.00.
e.g the B.......d burger is $12 or so if I remember rightly.

21-12-2012, 12:57 PM

But is the Mad Butcher the right choice to use as a valuation metric for a company like BFW? As Franshisor, they both get a % of total store sales as a royalty. The actual profitability/margins of the Franchisee are irrelevant other than the fact you want them to stay in business such that the royalty keeps flowing in. Agree growth prospects/ etc are different but I still think it will be an interesting comparison once the offer documents come out.

I think they are very similar co's particularly if MB expands into Aussie (slowly!!!)If the Aussie Butcher can expand into NZ, then surely the Mad Butcher can expand into Australia. Just start around those NZ suburbs of Bondi and the GC.

emearg

21-12-2012, 01:29 PM

They are both retailers,one sells a necessity the other is very much discretionary spending.

Which one is which? Or do you think it depends on the customer? I suggest there would be plenty of teens, twenties and possibly beyond that eat a lot of takeaways and would very rarely visit a butcher.

Also, MB isn't a hit with vegetarians where as I'm guessing BFW have vego burgers.

kizame

21-12-2012, 02:04 PM

Which one is which? Or do you think it depends on the customer? I suggest there would be plenty of teens, twenties and possibly beyond that eat a lot of takeaways and would very rarely visit a butcher.

Also, MB isn't a hit with vegetarians where as I'm guessing BFW have vego burgers.

Emearg IMOP they are still similar as being food retailers,expanding and offering the franchise model,although catering to different markets. MB as the necesity retailer (of course not to everyone but to most),BF as the discretionary spend.
Yes you are correct most teens would never venture through MB s' doors,but that is how it stands and there are plenty of customers at MB who would never venture and pay premium for burgers,but as we don't have same food type listings then I think it is close enough to compare them.

21-12-2012, 05:13 PM

David - agree. Wouldn't back them into Australia. Would be interesting to see where they think their growth will come from.

kizame

21-12-2012, 06:27 PM

David - agree. Wouldn't back them into Australia. Would be interesting to see where they think their growth will come from.

I tend to think they can do it. If you look at the way it was done in the past,i.e the warehouse it was all in a mad rush buying chains and converting.
But others whom have trod carefully i.e michael hill,pascos(although with aussie brands),pumpkin patch have succeded.
I think if they take it slowly and just open a store,get it running right then gradually open another,not the speedy openings we might at first presume with the associated advertising.
kiwis seem to be more open to other chains arriving here to offer their wares and the variety that brings.

Time will tell.

22-01-2013, 03:25 PM

Why are you out of the market completely? - NZX is in a big uptrend - should be fully invested.

Big uptrend for BFW but still on very low volume. They had a good christmas trade from what I have heard. Will be interesting to see the next results to see if it justifies a market cap of $100m

22-01-2013, 03:53 PM

I'm what you would call a very quick trader, usually in and out of stocks over a period of a few days where I see opportunities. I've taken my profits and am looking for the next best thing but can't find anything as of yet...makes sense.

Volumes on BFW probably too small to consider then - average of 4k per day which even with the price creaping up, is still only $7k.

23-01-2013, 12:26 PM

Up 10 c today on volume of 526 = $999.4 so not even $1000 worth

kizame

25-01-2013, 08:49 AM

Support and resistance are easily seen on charts,they are likely high or low points that the share price may respect,and therefore bounce back from,sometimes these points are hit more than once.If you draw a line across they will either touch or be very close horizontally.But with the likes of a stock such as BFW it hasn't been there before so it will come down to fundamentals,whether or not the market thinks that price is just a bit too far for the medium term prospects.

25-01-2013, 09:39 AM

Resturant Brands has a P/E of 17ish (per Google) with a market cap of $280m.

BFW now has a market cap of $100m. What earnings are the expecting in say 5 years time and does that justify a share price of $1.95 now.

Personally I think it has got a bit ahead of itself but given the low liquidity, I dont think I would be selling if I did hold some.

At least the are what they advertise unlike subways "foot-long" TM, and they dont use horse meat unlike Burger King in the UK (Though they have used Boar before?).

25-01-2013, 11:19 AM

At the current market cap, each BFW store is valued at around ~$2M. Can you expand on this comment? Not sure what you mean given it is a franchise.

Re slow growth, I have been critical in this thread. I do agree that it needs to be slow and methodical but I do question if they have been too slow. None in the south island and only one at the top end of the Auckland CBD (there should be one downtown) seems to be an oversight for a company this established. However, in that time they have been focusing on the middle east and that looks to be paying off (next results will be interesting).

My main reason for not investing in lack of liquidity. Even a small holding of $5000 would push the price up to much (I was looking back when they were in the $1 - 1.20 range). If I could have got the full 5000 shares at the sell price of $1 (the sell price at the time) I would have hit go but looking at the depth, I would have pushed the price upto 1.45 (not such a bad price in hindsight).

25-01-2013, 12:54 PM

lol, I knew you would come back to me on that! :p

All I'm really saying is that each store has a value to the company. The more stores (within reason) the more value the company has. What value should you place on each store when considering the market cap? 250K, 1M, 2M? Think of it with a DCF type model. So each store pays 10% of turnover (6% royalty/4% advertising). Most stores would turnover $1m to $2m per year.Assume all advertising goes to advertising and half royalty goes to head office costs (currently it is all going to head office costs (ie. break even) which is why they need to keep expanding) so each store provides $30-60k of profit long term. DCF that and I think you get a bit short of $2m per store.

However, that is only NZ stores (currently 30?). On top of that you have:

- Royalties from their overseas master franshisers
- Profits on their owned stores (Ponsonby and Australia?)
- Profits on goods sales (ie. I assume they make a mark up on Aoili etc??)

The biggy is the overseas master franchisees so will be good to get more info on them.

25-01-2013, 02:00 PM

Well, CJ and Drongo, if you don't like the company, you don't have to invest in it you know! And for those of us where it has already been a two, three or nearly a four-bagger, we can go away and dwell upon the error of our ways!I do like the company but any company, good or bad, can be under or over valued. As I said above, I think it highly unlike the price will go down given the lack of liquidity. Just not sure it is a raging buy, though it was back at $1.

fungus pudding

30-01-2013, 10:54 AM

Yes. Sensibly they are not wasting their time with Australia, its not big enough.

You must be facing downhill.

kizame

30-01-2013, 11:01 AM

I think maybe the rentals in Aus are just too high,and waiting is a good plan.Aussie has 20 million odd people who said it's too small,crikey mate Sydney is bigger than our whole country.

30-01-2013, 12:09 PM

I think maybe the rentals in Aus are just too high,and waiting is a good plan.Aussie has 20 million odd people who said it's too small,crikey mate Sydney is bigger than our whole country.Most stores only need a population of 20-30k to support. Look at the likes of albany, glenfeild, takapuna all closely bunched on the shore.

The difficult in Australia is getting critical mass for the advertising to work. Plus, trying to sell NZ to the Australians is hard.

30-01-2013, 12:44 PM

Maybe they should market China and the USA then. Clean green NZ still has an impact over there...

Edit: Maybe not China after this week regarding Fonterra and DCD!I understand they have choosen the middle east as they are in a way Anti-USA but the rich want the US things. So McD etc dont have a foot hold yet and BFW isn't american so is more socially accepted. Its that sort of twisted logic that makes sense.

kizame

30-01-2013, 01:11 PM

Most stores only need a population of 20-30k to support. Look at the likes of albany, glenfeild, takapuna all closely bunched on the shore.

The difficult in Australia is getting critical mass for the advertising to work. Plus, trying to sell NZ to the Australians is hard.
I disagree. You can start in Aus without the mass advertising,as company owned stores,like they did here at startup.
Also why are they selling NZ to the aussies,there isn't anything in the brand that says they are kiwi or selling anything kiwi,afterall if the food is really that good and has got them this far,do you think the aussies won't like it?

kizame

30-01-2013, 04:10 PM

Ummm, it portrays it pretty blatantly from the first screen of their website that they are in fact Kiwi...

http://www.burgerfuel.com/

Ummm yes ok Im wrong on that front but,I still don't see it as a problem,look at michael hill,and pumpkin patch,and regardless of whether they say they are kiwi on their web sites or not,they have done very well there.Honestly when i buy a burger, despite whether there is a promotion saying i should do so,I don't visit their web sites,so can't see that as being the issue.

kizame

30-01-2013, 06:12 PM

Well these chains could be the reason for the tentative attack on the Aussie market.

http://stubbyholder.blogspot.co.nz/2012/11/the-gourmet-burger-craze.html

31-01-2013, 07:23 AM

Well these chains could be the reason for the tentative attack on the Aussie market.

http://stubbyholder.blogspot.co.nz/2012/11/the-gourmet-burger-craze.htmlI think this shows why there is no point trying to expand in Australia. They should start in Asia next - just like the Middle Easy it would be a new food style for them so it can be pitched as a premium product.

31-01-2013, 09:30 AM

They have given up on oz...probably rightly so but it was a major point in their expansion 4 years ago.They are down to one store (fro 2) and my guess is they will probably exit that when it is a good time (lease expired and fitout needs replacing). They saw their mistake quickly and moved to green pastures - a much better way than the Warehouses, go all in and lose big.

Snoopy

01-03-2013, 04:27 PM

Decided to pay a visit to BFW, while in Wellington. With Creedy from RBD telling us that Carl Jrs is the next sure thing, I thought I would take a taste of the competition. The kumara shortage has bitten so no kumara chips on the menu any more. A strike out for one of the signature sides. Settled on one of their vegetarian burgers. Was thinking of buying a combo, but the menu options were not very clear, so I guess they lost a percentage of their sale (bought burger only). Burger was good, although difficult to eat without bits spilling out of the bun. Just as well I had the dog with(in) me. A reasonable experience, but some of the seating I thought was a bit cramped. It will be interesting to see if Carl Jrs is any better when I get to try it.

SNOOPY

Snoopy

01-03-2013, 05:41 PM

You need a Doofer next time Snoopy, great contraption for holding the massive ones, especially the Greedy B**tard! ;)

That 'doofer'? Was that the cardboard piece of origami that came with the burger? Thought it was some kind of free gift for kids that I made up. Wasn't impressed so put it in the bin with the burger scraps. The traditional flying crane is really so much better.

SNOOPY

kizame

02-03-2013, 09:35 AM

You need a Doofer next time Snoopy, great contraption for holding the massive ones, especially the Greedy B**tard! ;)

It's called the Bastard Burger,that's the only 1 I buy,and is unbeatable in my opinion,but I am not Greedy just a biggish eater of these haha,and found one day when actually being Greedy that two of them was way too much and felt sick haha.

kizame

02-03-2013, 10:35 AM

lol, you tried to gobble TWO? Jeez I had trouble finishing one the time I tried it, work was unproductive the rest of the day!

Haha one rare time my eyes were too big for my stomach haha.

11-04-2013, 04:32 PM

Well, BFW ain't looking to healthy these days, starting to come off its highs $1.95 with a new seller at $1.40 and a single buyer at $1.28. What happened to the optimism that exuded from this company only a few months ago, and where have all the buyers gone?!?!Why would you look to buy when you will only get $1,000 worth of shares at a time. Will be very costly to accumulate a worthwhile holding.

Definitely not for traders.

Somehow they need to increase liquidity but that needs to come from the founders but that would be a bad look - catch 22.

11-04-2013, 04:42 PM

SPP at $1.30 to fund expansion and increase liquidity (of course with not too much dilution!). Problem solved :PI dont think they need funds. They raised $3m from Milford fund last year, which should be plenty. Remember that the Franchisee funds the expansion provided you continue to expand. Its that expansion that has been their problem.

Incidentally, that was at $1.25 so that would be a good buy price if you trust Brian Gaynor. If it gets sell gets close to that I may be tempted to take it out. Further to my comment above #124, the parcel sizes appear to be getting bigger, rather than the 500 and 1000 that we previously saw, more are up to 5000.

Nigel

26-04-2013, 05:28 PM

Off topic, and it's probably been discussed before... but does it bother anyone else that the title to this thread is "Brugerfuel" and not "Burgerfuel"?

15-05-2013, 12:01 PM

Looks like the market has bounced BFW a bit in anticipation of a good result in the next week or two. Went by my local story last night and they now have two old school cars done up with advertising and a few people in the shop. Must be doing well!Store sales in NZ are generally doing well but they haven't added many stores so I wouldn't expect significant growth there. Overseas is where the big growth comes from but that is much harder to gauge for obvious reasons.

I expect profit to have grown but whether that level of growth justifies a $81m value, I dont know.

17-05-2013, 09:28 AM

Interesting, one Josef Christopher Roberts of JCR Trust Investments has been making call options on BFW with a strike price of $1.42. Think that might explain the sudden low-volume rise on BFW over the past few days to make zee Trust a little better looking on paper. I will wait until the Full Year report is out before making any calls on this one!I have read the notices and have absolutely no idea what is happening.

NO consideration from what I can tell so are you sure it isn't just a personal restructure?

17-05-2013, 01:35 PM

And now we have "Gifting of Shares by way of off-market transaction" for the same amount of shares and at the same price, plus another 10,000 parcel in the same way.

WTF is going on? Anyone able to enlighten us?I could be wrong but it could just be resettling of the founders shareholding . The entity disposing appears to be a bare trustee for Roberts (the money man) and Mason (the founder). It seems weird for two unrelated founders to hold jointly so they could be separating their holdings?

andysh

17-05-2013, 01:55 PM

From what I get:

Mason Roberts Holdings (to which the CEO is shareholder and director) acquired 2.65m shares by way of "Conditional Call option" - What is this?
Then, Mason Roberts Holdings sold (By way of off market gifting) 1,010,000 shares for $1,434,200. Who they gifted the shares to is anyone's guess.

Think the option to call the shares has something to go with this: https://www.nzx.com/files/attachments/144716.pdf This is just info from a quick google search, didn't have an indepth read.