Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: mranski on January 31, 2011, 03:59:30 PM

Title: MTY - MTY Food Group
Post by: mranski on January 31, 2011, 03:59:30 PM
I like the look of this company. Anyone have a contrary or corroborating opinion or a post previously.

STRENGTHS
Ongoing fee based franchse income, minimal company staff.
Some decent brands, a few cigar butts, some I don't know, diversity of brands.
Excellent ROE
Low Debt
Decent Growth
Conservative management, shareholder oriented, good track record

WEAKNESSES
Tough sector food retailing
Integration risk of new brands, acquisitions
Price a bit ahead of results.

Any opinion would be appreciated

Title: Re: MTY - MTY Food Group
Post by: jeffmori7 on January 31, 2011, 05:35:27 PM
I am a shareholder too.

What I like about this company is as you said, some decent brands first : Sushi Shop, Thai Express, Cultures, etc. are all brands really popular here in Montreal. We see them a lot in the commercial centers. With the recent trend of "healthy" fast food (unlike burgers or pizza), I think these brands will stay popular and there were there in the beginning so customers are now used to these names.

I also like the management, with Stanley Ma possessing 27% of the share I think and a conservative management financing new acquisition with cash flow only, without using debt.

They grow mainly by acquisition, but I think there is still room to expand the different brands all across Canada. From what I know, they are mainly present in Quebec and Ontario for now. I know they have some restaurants in Middle East too!

On the negative side, sales are not that strong on a year over year basis for existing places.

Good to know that I am not alone as a shareholder on this board!
Title: Re: MTY - MTY Food Group
Post by: beerbaron on January 31, 2011, 06:19:39 PM
Not exactly a value stock
Title: Re: MTY - MTY Food Group
Post by: mranski on January 31, 2011, 09:04:15 PM
Didn't mean to suggest i'm a shareholder, i am seriously looking at it.

Seems overvalued at $14 as I think beerbaron is suggesting.
Title: Re: MTY - MTY Food Group
Post by: jeffmori7 on February 01, 2011, 03:47:43 PM
Didn't say either that it is a good investment at the current price. I'm just saying that it is a good "growth" company.

Also, it just started paying a dividend this year to return a part of the always increasing benefit to the shareholders. I prefer that than too expansive acquisition.
Title: Re: MTY - MTY Food Group
Post by: mranski on October 10, 2011, 10:53:11 AM
An article about the man. Will be interesting to see if Mr Sub can be revitalized.

http://www.theglobeandmail.com/report-on-business/careers/careers-leadership/the-lunch/stanley-ma-an-empire-on-a-plastic-tray/article2195065/

Title: Re: MTY - MTY Food Group
Post by: mranski on February 01, 2012, 02:20:38 PM
MTY controls its own food court. Probably done before but i haven't heard of this idea.

http://www.theglobeandmail.com/globe-investor/news-sources/?date=20120201&archive=cnw&slug=C8532

Title: Re: MTY - MTY Food Group
Post by: ItsAValueTrap on October 25, 2013, 06:59:30 PM
I figure I'd bump this thread even though I don't own any shares.  Congratulations to anybody who bought and held this stock.

The history of MTY Food Group is *really* interesting in my opinion.  It started out on the Vancouver Stock Exchange (now the TSX Venture), which is kinda shady.  I think back then conglomerates may have been a big thing for these small shady stocks.  Northfield Capital started out that way.  Maybe should who was around back then could give more information on that.

Anyways, for roughly a decade the stock went nowhere.  Stanley Ma owned less than 5% of the company.  MTY back then was involved in a number of other businesses such as selling parking equipment in China.  The other ventures eventually all lost money.  They definitely chased the Internet bubble back then.  Then the bubble burst and the stock started trading below book value.  2003 was a landmark year for Ma as he turned MTY into a pure-play restaurant business and got rid of the Internet bubble business.  He also bought a huge chunk of the company in a large private transaction, boosting his ownership to around a quarter of the company.  He probably didn't anticipate what would come next, but his shares went up 130X times.

His first decade was miserable and then his shares just shot to the moon.

http://glennchan.wordpress.com/2013/10/22/mty-food-group-mty-to-fast-food-faster-growth/
Title: Re: MTY - MTY Food Group
Post by: buylowersellhigh on January 20, 2014, 05:39:01 PM
I figure I'd bump this thread even though I don't own any shares.  Congratulations to anybody who bought and held this stock.

The history of MTY Food Group is *really* interesting in my opinion.  It started out on the Vancouver Stock Exchange (now the TSX Venture), which is kinda shady.  I think back then conglomerates may have been a big thing for these small shady stocks.  Northfield Capital started out that way.  Maybe should who was around back then could give more information on that.

Anyways, for roughly a decade the stock went nowhere.  Stanley Ma owned less than 5% of the company.  MTY back then was involved in a number of other businesses such as selling parking equipment in China.  The other ventures eventually all lost money.  They definitely chased the Internet bubble back then.  Then the bubble burst and the stock started trading below book value.  2003 was a landmark year for Ma as he turned MTY into a pure-play restaurant business and got rid of the Internet bubble business.  He also bought a huge chunk of the company in a large private transaction, boosting his ownership to around a quarter of the company.  He probably didn't anticipate what would come next, but his shares went up 130X times.

His first decade was miserable and then his shares just shot to the moon.

http://glennchan.wordpress.com/2013/10/22/mty-food-group-mty-to-fast-food-faster-growth/


Now it's at 32. Definitely not cheap...
Title: Re: MTY - MTY Food Group
Post by: notorious546 on October 09, 2015, 09:11:09 AM
Q3/15 results are out

http://mtygroup.com/wp-content/uploads/2015/06/MTY-Food-Group-August-31-2015-final-e.pdf

Title: Re: MTY - MTY Food Group
Post by: notorious546 on March 11, 2016, 09:37:23 AM
MTY Food Group (MTY.TO)

Montreal-based MTY has consistently earned an ROE in excess of 20 per cent over the past decade. MTY operates a number of fast food restaurant chains in Canada, and with the stock having been in consolidation mode for the past year and a half, now trades on 12.5x 2016 earnings, which we think is very reasonable for a steady growth company with an unlevered balance sheet.

http://www.theglobeandmail.com/globe-investor/investment-ideas/three-top-stock-picks-from-donville-kents-jason-donville/article29070170/
Title: Re: MTY - MTY Food Group
Post by: notorious546 on May 25, 2016, 07:14:39 AM
MTY announced acquisition of Kahala Brands

http://mtygroup.com/wp-content/uploads/2015/06/20160525-MTY-enters-into-an-agreement-to-acquire-the-shares-of-Kahala-Brands-v7.pdf

Quote
During the 12 months following the acquisition, the combined entity is expected to generate over C$90 million in EBITDA,
C$250 million in revenues and C$2 billion in system sales. The transaction is expected to be immediately accretive. The
combined entity will have a portfolio of approximately 5,500 stores under 57 brands

Quote
Total consideration for the transaction is estimated at US$300 million, satisfied by the issuance of 2,253,930 shares of MTY and
the payment of US$240 million in cash. The final purchase price remains subject to customary working capital adjustments. The
cash component of the consideration will be financed by MTY’s cash on hand and by the new credit facility that is presently being
arranged. TD Securities will act as the sole Lead Arranger and Bookrunner for a syndicate of lenders. The new credit facility is
expected to provide enough flexibility for MTY to complete additional acquisitions in respect of future opportunities that might
become available to MTY and continue to pay and adjust its dividend in accordance with its dividend policy.
Title: Re: MTY - MTY Food Group
Post by: frommi on May 25, 2016, 07:28:15 AM
Really interesting that this is flying under the radar, its still small, has compounded @20% for a long time and even after the merger its still available at nearly fair prices. Based on my calculation its value has gone up nearly 25% with the merger, so the jump in the stock price is warranted.
Title: Re: MTY - MTY Food Group
Post by: Liberty on May 25, 2016, 07:58:11 AM
Really interesting that this is flying under the radar, its still small, has compounded @20% for a long time and even after the merger its still available at nearly fair prices. Based on my calculation its value has gone up nearly 25% with the merger, so the jump in the stock price is warranted.

It is fairly popular among investors in Canada (or at least in the East), along with Couche Tard (ATD.B). Probably not that well known outside of the country, though.
Title: Re: MTY - MTY Food Group
Post by: gary17 on May 25, 2016, 08:29:19 AM
it hasn't done much over the last year so the share price has been 'cheaper' than some of the higher profile names like CSU .... on a pE basis.....   i have a small position and am glad to see this acquisition. 

not sure the acquired company has much debt - not much info provided.


Gary
Title: Re: MTY - MTY Food Group
Post by: frommi on May 25, 2016, 09:07:49 AM
it hasn't done much over the last year so the share price has been 'cheaper' than some of the higher profile names like CSU .... on a pE basis.....   i have a small position and am glad to see this acquisition. 

not sure the acquired company has much debt - not much info provided.


Gary

I was really lucky here, found it over the weekend while reading a book about 100 baggers which mentioned Donville. He profiled it in one of his latest letters. Because it is a dividend grower i was immediatly interested and after reading about the company for around one hour i built a 4% position yesterday. So my return on reading the book is already approaching several thousand percent. :)

Regarding the debt i assumed that the purchase price includes that and that MTY has ~290 million CAD$ in debt after the transaction.
Title: Re: MTY - MTY Food Group
Post by: Liberty on May 25, 2016, 11:55:54 AM
You built a 4% position after knowing the company for 1 hour? I suppose that's what's called firing from the hip. Glad it's working out well for you.
Title: Re: MTY - MTY Food Group
Post by: frommi on May 25, 2016, 11:57:34 AM
It is fairly popular among investors in Canada (or at least in the East), along with Couche Tard (ATD.B). Probably not that well known outside of the country, though.

Thanks for dropping the ticker, i added ATD to my list. Looks like i should look more at compounders in canada.
Title: Re: MTY - MTY Food Group
Post by: frommi on May 25, 2016, 12:09:03 PM
You built a 4% position after knowing the company for 1 hour? I suppose that's what's called firing from the hip. Glad it's working out well for you.

What do you get out of the n`th hour researching a stock? I look up the history of the numbers in morningstar or gurufocus, think about the business (moat, etc.) for some minutes, fly over the annual report reading whats interesting to me and then add the numbers to my spreadsheet. After that i maybe read some SA articles or look if i find a writeup in VIC. Most of the time i know enough to pull the trigger after that. But with 4% positions i have room for mistakes and i mainly clone others, so my picks are already filtered.
I doubt that more information is helpful to make better returns, probably the opposite is the case. Its impossible to know what happens exactly in the future, so more information probably leads only to overconfidence.
Title: Re: MTY - MTY Food Group
Post by: Liberty on May 25, 2016, 12:11:30 PM
You built a 4% position after knowing the company for 1 hour? I suppose that's what's called firing from the hip. Glad it's working out well for you.

What do you get out of the n`th hour researching a stock? I look up the history of the numbers in morningstar or gurufocus, think about the business (moat, etc.) for some minutes, fly over the annual report reading whats interesting to me and then add the numbers to my spreadsheet. After that i maybe read some SA articles or look if i find a writeup in VIC. Most of the time i know enough to pull the trigger after that. But with 4% positions i have room for mistakes and i mainly clone others, so my picks are already filtered.
I doubt that more information is helpful to make better returns, probably the opposite is the case. Its impossible to know what happens exactly in the future, so more information probably leads only to overconfidence.

I think it's useful to know the industry dynamics, the management's approach, who the competitors are, any potential regulatory problems on the horizon, looking at the filings and transcripts, etc. But to each their own.
Title: Re: MTY - MTY Food Group
Post by: frommi on May 25, 2016, 12:28:23 PM
I think it's useful to know the industry dynamics, the management's approach, who the competitors are, any potential regulatory problems on the horizon looks at the filings and transcripts, etc. But to each their own.

Ok maybe i exaggerated a bit, don`t know if it was just one hour, maybe two but surely not more.
In this case there was a writeup in Donville`s letter, an annual report/ letter,  one or two conference call transscripts, a VIC writeup and i think 2 or 3 SA articles. But you are right, to each his own. :)
Title: Re: MTY - MTY Food Group
Post by: gary17 on May 25, 2016, 12:37:52 PM
I think the biggest risk to this business is if people stop going to shopping malls to eat

Gary
Title: Re: MTY - MTY Food Group
Post by: notorious546 on May 25, 2016, 01:26:33 PM
I think the biggest risk to this business is if people stop going to shopping malls to eat
Gary

I think this is definitely a trend but i'm not too sure on how many of the company's locations are in lower quality malls which are likely to be hit the hardest.

If anyone has any datasets to share i'd be interested in seeing.
Title: Re: MTY - MTY Food Group
Post by: ScottHall on May 25, 2016, 01:43:41 PM
I haven't looked closely at this one, but I'm impressed at what they've managed to do.

The biggest concern that strikes out at me is that - at least recently - there are more franchisees shutting down than opening up. They've only grown store count recently from acquisitions.

On a related note, systemwide comps have been negative for quite a while. How many franchisees are just barely hanging on? Maybe these concepts are big in Canada, I have no idea, but a lot of them seem like they could be second or third tier ideas.

Franchise businesses can have great economics, just like this one does. But you often don't know how the underlying franchisees are doing, which is what the long term sustainability of such a business is based on. I haven't taken a close look at the filings to see if any of this is disclosed beyond what I just covered. Has anyone else?

The disclosed terms of the Coldstone deal seem pretty good for MTY. I'm not sure if the stock is cheap or not here, but it seems at least worth a closer look.
Title: Re: MTY - MTY Food Group
Post by: notorious546 on May 26, 2016, 10:58:48 AM
http://business.financialpost.com/news/retail-marketing/cultures-thai-express-owner-mty-foods-set-to-double-in-size-with-acquisition-of-arizonas-kahala-chain

Quote
Although there is some risk involved in stepping into the U.S. market, Jesse Gamble, an associate portfolio manager at Donville Kent Asset Management, says the conservative nature of MTY’s management team makes him confident this is a well-planned decision.

“We’ve known something like this has been coming for a while … we understood that if they did a deal it would be the right deal and we trust in them,” said Gamble.

“This is just a game they have to play because they are a growth by acquisition company and as you get bigger, you have to do bigger deals.”

Following the news of the acquisition, MTY’s stock popped 16.48 per cent to $41.56 by 12:03 and even at these levels Gamble says the stock is undervalued as the company has now doubled its size and issued just 20 per cent equity.

“Based on simple numbers like this you know how much value this is going to create,” he said.
Title: Re: MTY - MTY Food Group
Post by: Liberty on May 26, 2016, 11:21:30 AM
I'm sorry, this is off-topic, but this associate portfolio manager is named Jesse Gamble? Talk about a name that probably doesn't project "conservative asset allocation" to the LPs :)
Title: Re: MTY - MTY Food Group
Post by: mranski on June 01, 2016, 09:41:10 AM
My guess is that Cold Stone Creamery itself is a struggling brand. They forced it into Tim Hortons a few years ago and then abandoned the concept.
Title: Re: MTY - MTY Food Group
Post by: notorious546 on June 01, 2016, 05:37:06 PM
My guess is that Cold Stone Creamery itself is a struggling brand. They forced it into Tim Hortons a few years ago and then abandoned the concept.

why do you say forced? do you have any numbers that imply profitability for this chain?
Title: Re: MTY - MTY Food Group
Post by: mranski on June 01, 2016, 06:30:58 PM
By forced, I meant they physically squeezed them into the existing Tim Hortons layout. I don't have any numbers on the Stone Cold franchise.
Title: Re: MTY - MTY Food Group
Post by: mranski on June 26, 2016, 01:30:25 PM

Article below about Serruyas and acquired company Kahala brands in Forbes

http://www.forbes.com/sites/amyfeldman/2016/06/19/how-canadas-serruya-family-made-some-300-million-off-a-bunch-of-faded-food-service-brands/#34b772685513
Title: Re: MTY - MTY Food Group
Post by: mranski on June 26, 2016, 01:59:01 PM
Strange lawsuit I believe regarding kahala family owners.  Not sure what their involvement will be with MTY going forward.

http://business.financialpost.com/news/fp-street/yogen-fruzs-serruya-family-sued-by-co-founders-brother-in-law-for-insider-trading
Title: Re: MTY - MTY Food Group
Post by: notorious546 on June 27, 2016, 06:47:30 AM
Strange lawsuit I believe regarding kahala family owners.  Not sure what their involvement will be with MTY going forward.

http://business.financialpost.com/news/fp-street/yogen-fruzs-serruya-family-sued-by-co-founders-brother-in-law-for-insider-trading

thanks mranski
Title: Re: MTY - MTY Food Group
Post by: notorious546 on July 22, 2016, 06:26:06 AM
SCOTTSDALE, Ariz., July 21, 2016 /PRNewswire/ -- Kahala Brands, Ltd.™ ("Kahala Brands") (OTC:KAHL) (www.KahalaBrands.com) announced that the proposed merger with a wholly-owned subsidiary of MTY Food Group, Inc., was approved by the company's shareholders during a special shareholder meeting today.

Title: Re: MTY - MTY Food Group
Post by: gary17 on August 23, 2016, 11:28:09 AM
Does anyone know why the stock has gone up 5% today? I can't find any associated news -  if this is market volatility then great lol
Title: Re: MTY - MTY Food Group
Post by: notorious546 on September 09, 2016, 11:05:52 AM
MTY enters into an agreement to acquire Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill
Friday, September 09, 2016 10:30:00 AM (GMT)

TSX Trading Symbol: "MTY"

MONTREAL, Sept. 9, 2016 /PRNewswire/ - MTY Food Group Inc. ("MTY" or the "Company") (TSX: MTY) announced today that one of its wholly-owned subsidiaries has signed an agreement to acquire all of the equity interest of BF Acquisition Holdings, LLC. ("BFAH") (www.bajafresh.com and www.lasalsa.com).

Stanley Ma, Chairman of the Board and Chief Executive Officer of MTY, said: "Following the addition of Kahala last month, MTY intends to continue and accelerate its growth throughout North America, leveraging both its US platforms and Canadian platforms to acquire profitable restaurant concepts.  The acquisition of Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill perfectly aligns with our growth strategy and is one more step towards building a bigger and better organization for the future."

Transaction and rationale

BFAH currently franchises and operates 162 Baja Fresh Mexican Grill ("Baja") and 23 La Salsa Fresh Mexican Grill ("La Salsa") restaurants in the USA, Dubai and Singapore. Of those 185 restaurants, 16 are corporately-owned and 169 are franchised. During 2015, the BFAH network generated over US$145 million in system sales.

The acquisition of Baja and La Salsa represents another major milestone for MTY as it solidifies its presence in the United States and confirms MTY's appetite for good quality acquisition opportunities regardless of the geographical location of their restaurants.

Following the transaction, BFAH's head office will be moved in MTY's office in Scottsdale, Arizona. The transition is expected to happen before the end of MTY's 2016 fiscal period.

Conditions and regulatory approvals

The agreement is binding but remains subject to multiple conditions, including standard regulatory approvals, financing and other conditions customary for a transaction of this nature.

Financing

Total consideration for the transaction is estimated at US$27 million in cash, to be financed using MTY's existing credit facilities. The final purchase price remains subject to customary working capital adjustments.

Closing of the transaction

The closing of the transaction is expected to happen within the next 30 days. There is no assurance the transaction will be completed as described above or at all, or that the anticipated closing date will materialize.

Non‑IFRS Measures
Title: Re: MTY - MTY Food Group
Post by: notorious546 on September 12, 2016, 10:41:19 AM
http://www.theglobeandmail.com/globe-investor/inside-the-market/restaurant-stocks-still-high-despite-the-fact-that-less-people-are-dining-out/article31806394/
Title: Re: MTY - MTY Food Group
Post by: notorious546 on September 16, 2016, 01:11:46 PM
Was doing a bit of work into la salsa. not entirely sure how this compares to other franchises but the investment to open one doesnt seem too high.

Qualifications
$200,000 liquid cash per restaurant, $500,000 net worth per restaurant
Restaurant experience or an operating partner with at least 10% ownership, who has restaurant experience
Franchise Fee: $50,000 per restaurant
Royalty Fee: 5%
Franchise Agreement: 10 years

http://lasalsa.com/franchise/
Title: Re: MTY - MTY Food Group
Post by: notorious546 on October 12, 2016, 02:45:42 PM
MTY announced acquisition of Kahala Brands

http://mtygroup.com/wp-content/uploads/2015/06/20160525-MTY-enters-into-an-agreement-to-acquire-the-shares-of-Kahala-Brands-v7.pdf

Quote
During the 12 months following the acquisition, the combined entity is expected to generate over C$90 million in EBITDA,
C$250 million in revenues and C$2 billion in system sales. The transaction is expected to be immediately accretive. The
combined entity will have a portfolio of approximately 5,500 stores under 57 brands

Quote
Total consideration for the transaction is estimated at US$300 million, satisfied by the issuance of 2,253,930 shares of MTY and
the payment of US$240 million in cash. The final purchase price remains subject to customary working capital adjustments. The
cash component of the consideration will be financed by MTY’s cash on hand and by the new credit facility that is presently being
arranged. TD Securities will act as the sole Lead Arranger and Bookrunner for a syndicate of lenders. The new credit facility is
expected to provide enough flexibility for MTY to complete additional acquisitions in respect of future opportunities that might
become available to MTY and continue to pay and adjust its dividend in accordance with its dividend policy.

On July 25th, 2016, the Company completed the acquisition of Kahala Brands Ltd. for an estimated total consideration of $389 million.

- i think this number is quoted higher cause the shares moved up in value or working capital adjustments. Can anyone confirm?
-
Title: Re: MTY - MTY Food Group
Post by: KCLarkin on October 12, 2016, 05:07:15 PM
On July 25th, 2016, the Company completed the acquisition of Kahala Brands Ltd. for an estimated total consideration of $389 million.

- i think this number is quoted higher cause the shares moved up in value or working capital adjustments. Can anyone confirm?
-

Mostly currency translation, I assume. Acquisition was in USD. I assume the $389 million is CAD.
http://mtygroup.com/wp-content/uploads/2016/07/20160726-MTY-Acquisition-of-Kahala-Brands-EN-corrected.pdf
Title: Re: MTY - MTY Food Group
Post by: notorious546 on October 28, 2016, 11:20:44 AM
http://business.financialpost.com/investing/trading-desk/mty-food-group-ready-to-serve-up-growth-in-the-u-s-says-national-bank-analyst?__lsa=bb64-17bf
Title: Re: MTY - MTY Food Group
Post by: finetrader on May 17, 2018, 10:55:33 AM
I recently initiated a significant position (>5%) in  MTY.

I believe the actual P/E, sitting between 15-20, pretty interesting for a company of this quality.
Title: Re: MTY - MTY Food Group
Post by: finetrader on July 11, 2018, 09:15:58 PM
2018 Q2 released. Stock up 10%


https://mtygroup.com/wp-content/uploads/2018/07/20180711-MTY-reports-results-second-quarter-of-2018-ENG.pdf

N.B. This position is now 20% of my portfolio
Title: Re: MTY - MTY Food Group
Post by: finetrader on October 11, 2018, 01:35:27 PM
2018 Q3 released. Stock up 6%

https://www.newswire.ca/news-releases/mty-reports-2018-third-quarter-results-696540091.html

This position is now 26% of my portfolio

My P/FCF estimates is now about 16-17
Title: Re: MTY - MTY Food Group
Post by: longlake95 on October 11, 2018, 01:58:14 PM
Nicely done Fine. I’ve watched MTY for a longtime and I am very fond of Stanley Ma. I missed the boat for now. What do you think MTY is worth?

LL
Title: Re: MTY - MTY Food Group
Post by: finetrader on January 31, 2019, 05:33:18 PM
Thanks longlake95,

Sorry for the late reply, I just saw your post.

I estimate FCF at about 100M$/year.

Market Cap is 1.8B$.

So at 18 times I consider this fairly valued.

I think someone buying now can expect to make between 10-15% return long term.

Not bad on an investment knowing that you will sleep well having money in this.
Title: Re: MTY - MTY Food Group
Post by: finetrader on April 02, 2019, 06:21:17 AM
Stock declined from 70$ to 58$ this past month.

What I think contributed to this decline is this:
-Same store sales were slightly negative
- Management warned about same store sales being affected by competition in the future.

1) I am not too worried about it as it is not the first time same store sales were declining for MTY.
2) They have so many brands
3) MTY has always been about growth by acquisition.

Market Cap = 1.46B$
FCF was 96-99M$ in 2018 and will probably be around 105-110M$ in 2019.

P/FCF= 1.46B$/110M$= 13.2-13.9

Buying opportunity ?  I'll let you decide


Title: Re: MTY - MTY Food Group
Post by: longlake95 on April 02, 2019, 08:11:27 AM
Hi Fine,

you must have telepathic powers - I recently noticed the decline in MTY, and just downloaded the recent docs to get back up to speed. Give me a couple of days and I'd love to PM you on MTY.  On a cursory basis, seems cheap, and I like the move away from food courts.

LL
Title: Re: MTY - MTY Food Group
Post by: NorteCapital on April 11, 2019, 07:17:58 AM
https://www.vancourier.com/mty-food-group-buying-papa-murphy-s-holdings-in-deal-valued-at-253-2-million-1.23788226
Title: Re: MTY - MTY Food Group
Post by: longlake95 on April 11, 2019, 07:41:36 AM
The market doesn't like the deal...so far...
Title: Re: MTY - MTY Food Group
Post by: DTEJD1997 on April 11, 2019, 08:32:40 AM
The market doesn't like the deal...so far...

I am surprised at the merger.  Papa Murphy's was having TREMENDOUS difficulties.  They had disgruntled franchisees.  I looked at it a couple/few years ago and it did not look good.


Title: Re: MTY - MTY Food Group
Post by: finetrader on April 11, 2019, 10:56:06 AM
I don't know Papa Murphy but I will look at their past financial results.

From today's press release. They will add, 30M$ CAD to EBITDA. So about 20M$ CAD to FCF if the financial structure is similar to the rest of MTY.


https://mtygroup.com/wp-content/uploads/2019/04/Project-Columbia-Press-Release-2019.04.11-FINAL_EN-1.pdf


Title: Re: MTY - MTY Food Group
Post by: IanBezek on April 13, 2019, 12:35:37 PM
I think this is an awful deal, but I was short-biased on Papa Murphy's so that could just be me. 13 straight quarters of declining SSS in a booming economy is pretty terrible though.

As for FCF, MTY is taking on ~U$80 million in debt from Papa Murphy's so FCF may be lower than you expect based on EBITDA. The adjusted EBITDA number they use is pretty fishy as well as they've had recurring "one-time" charges for several years now, and given that they need to close more stores, these should recur again this year.
Title: Re: MTY - MTY Food Group
Post by: LaGrandeBelleza on October 15, 2019, 02:25:35 AM
Lastest results have been a bit of a disaster in my opinion. It's gonna take longer to integrate this last acquisition, although I've to admit I'm biased against Papa Murphy's purchase, too risky on my book however there are still synergies and cost savings to achieve. Once they trim down these corporate stores we'll have a clearer picture of the deal.

I'm surprised this doesn't grab more attention among the CoBF community. I would love to hear your thoughts on the co, specially if they are short biased.
Title: Re: MTY - MTY Food Group
Post by: finetrader on October 15, 2019, 08:20:39 AM
ya.

looking at FCF, they are on pace to achieve 100M.

Same as last year. So with all the acquisiton they did, mainly Papa Murphy,  FCF did not improve.

It is concerning
Title: Re: MTY - MTY Food Group
Post by: LaGrandeBelleza on February 14, 2020, 07:09:29 AM
Does anyone has an insight on what's going on with these 'whistleblower allegations' and how does that affect the accounts that have been delayed?