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Coffee Heaven - A heavenly share for penny punters ? (COH)     

overgrowth - 06 Oct 2003 22:47

underground01_2.jpgA busy day in the Warsaw Underground ! Not just another coffee shop chain - this one is a brand leader and is only trading in Eastern/Central Europe (i.e. the countries recently admitted to the EU destined for substantial business growth). The company is creating new outlets at a fair old pace and take a look at their website - these are quality stores in high-profile locations like major airports, railway stations etc. Website: http://www.coffeeheaven.eu.com

APRIL 2006 TRADING UPDATE!!! Total Gross Revenues for 12 months to 31st March up 66% to £6.3M (2005: £3.8M) Lots more info. on new markets and stores click here to read the full details. Stores: 43 (up from 32) stores currently trading (Poland: 30 (up from 23), Czech Republic: 6 (Up from 2), Latvia: 7 with a further 5 units under construction including Bulgaria and sites secured in Romania (subject contract). Bulgaria & Romania are seeking to join the EU from January 2007. Sites located in key high street, shopping malls or Airport locations. Company growth target: increase number of units by at least 20 units to some 63 units by 31 March 2007. Aim being to achieve this level of growth within present Cash resources.Cash balances at 31 March 2006 were approximately £2.9M (2005: £0.7M). Debt was nil (2005: £ 2.5M): Nil Debt! Positive EBITDA: For the year ending 31 March 2006, Group EBITDA expected to be firmly positive after charging UK and new market development costs but before exceptional costs relating to the cancellation of bonds (previous Debt). Forecasts: Based on present trading conditions and current exchange rates we anticipate indicative sales of £9.3M for the year to 31 March 2007. This includes indicative sales of £0.4M from Bulgaria, which will be reported but not consolidated. From Richard Worthington (Chairman and Chief Executive): ‘The new financial year has started well. There is no doubt that the significant economic improvement in our markets is feeding through to consumer confidence and spending. The strength of the coffeeheaven brand ensures we are ideally positioned to benefit from our customers' increasing prosperity.’

Chart.aspx?Provider=Intra&Code=COH&Size=Chart.aspx?Provider=EODIntra&Code=COH&Si

bmw325 - 26 May 2007 16:06 - 844 of 2037

Dave the Rave...this will be back to 40p+ very soon, where as CFE will go down when the news dries up.

Have a nice day.

David10B - 26 May 2007 16:11 - 845 of 2037

Be nice just to wait and see.

bmw325 - 26 May 2007 16:16 - 846 of 2037

Well I'm off for an afternoon tipple....but I will be back.

David10B - 26 May 2007 16:18 - 847 of 2037

Please do enjoy one and have one for me.

proteus - 26 May 2007 16:31 - 848 of 2037

Maybe you should make 1k / week net in the UK who knows. It's interesting to note the Polish GDP / head last year was $14100 vs UK at $31400.If you apply that ratio to the 1k week it works back to a fair price of 45p based on next years earnings.The market always over/under shoots so it overshot at 50p and has now dropped back too far at 37p.I think without checking the Numis figure for store numbers in 2010/2011 that would also fit with their 1 target.

David10B - 26 May 2007 17:27 - 849 of 2037

Yes I know the figures thanks, but also I am fully aware of COH statement that the former Eastern Bloc are prepared to spend to emulate the Western life style, and it has become so very fasionable to enjoy the smell and taste of coffee, that why I suppose there are so many new stores opening up there-

alanatml2 - 27 May 2007 13:16 - 850 of 2037

There was a recent ussue of shares at 43p which was fully taken up. This was followed by a major shareholder taking profits by placing 10million shares on the market which I believe caused the recent downturn. Insider info has not been suspected.

However it has been reported that Lehmans has taken around 3.5% of the shares and their influence should become apparent as they are said to be 'advisers' to STARBUCKS'. COH reports significant growth and is cash positive to take the company forward following the recent dip. I hold.

David10B - 27 May 2007 13:31 - 851 of 2037

Bravely spoken! Your money Sir, is by far the braver when sided with mine.

AdieH - 27 May 2007 14:48 - 852 of 2037

Well said...

proteus - 27 May 2007 14:58 - 853 of 2037

So 10B, When can we have the next year or two's forcasts to discuss ?

David10B - 27 May 2007 15:59 - 854 of 2037

I have given you what I think the state of play should be.

Nothing further to add.

If they cant reach a 1000 pounds per store NETT, then for my money they are in the wrong game.

Looks like a night down the pub tonight so have fun chaps.

proteus - 27 May 2007 16:01 - 855 of 2037

In other words you haven't a clue how to do any analysis.Sir you are a fraud.

David10B - 27 May 2007 16:27 - 856 of 2037

What ever you may think please think it, it would appear based on your observations NUMIS is in the same boat also.

Look my simplistc friend there is enough information floating around these BB to write a book on a Fundamental or Technical analysis of COH.

I prefer the former.You dont seem happy with that so thats that.

Using my analysis I have concluded that COH needs to go a lot further in aggressively marketing its product and brand name as it is in danger of losing the little market share it currently enjoys. You do not appear happy with that so thats that.

I have conclude that a 1000 pounds per week NETT per store should be an achieveable meab average, and that COH is working way below the achievement that perhaps a more innovated management style would demand.

The figuers banded about by Numis for 2011 are there for all to see and need no further illuminatation. However without a profit history they are pure conjecture and highly speculativeas I believe that for COH faced with increasing competition it will be reaching for the sky without an areoplane.

I do not believe in making highly speculative posts based on outlandish prefabricated models which tend to churn out whatever figure one may convenient desire.

However if you want projections for a decent company such as MLR I will be more than happy to furnish them. My COH projections would make me look rather foolish when considring NUMIS and other and what is already on iii.


However I am more than happy to be a minority

If that makes me a fraud then so be it, I am also happy to be one.

paulj - 27 May 2007 16:58 - 857 of 2037

Well, that clears that up, then. Are you sure you should be going down the pub, David. You know what the experts say about mixing alcohol, medication and darts. You ARE on medication, aren't you? Please tell me you're not one of those poor "care in the community" cases who have been so callously left to cope with their illnesses themselves!

proteus - 27 May 2007 17:02 - 858 of 2037

I have read through your posts here and it seems that you have a personal grouse about the management.I'm not interested in that at all. I'm only interested in what profit/loss COH will make in the future.You say it's overvalued and cannot give a projection as it will make you look foolish.So there you have it,unwilling to give a forcast.I am now convinced you are incapable of seeing past your personal issues.

paulj - 27 May 2007 17:11 - 859 of 2037

If I were working at COH's Uckfield HQ, I'd be a very worried man. Not because of the wobbling sp or profit projections but because I'd fear a visit from a very disgruntled non-investor. Forget running a thriving business, RW, be on the look-out for an old codger bearing a grudge... it could be our David.

bmw325 - 27 May 2007 18:14 - 860 of 2037

paulj and Dave the Rave are the same old codger>>>

David10B - 27 May 2007 18:55 - 861 of 2037

It really become so very sad when a limited perspective tries to force its views upon a cautious approach to a projected profit forecast.

Before I would commit myself to such for COH, I would have to consider so many vague intangibles.

Mr Worthington has stated that he is too busy runing his coffee shops to be the real estate business. Does this mean no new coffee bars, as I questioned previously above here somewher?

Then of course there will be the impact of the ever increasing competition, which is a vastly unknown quantity and sure to stunt any projected earnings forecast.

Then to consider if LFL sales will continue to increase or decrease if COH open not so profitable(what profit) bars, as the good location are drying up.

Mr Worthington must be in a right old quandry over these issues, but not I dare say a sweat.

But then why though should he be?

Up to now the COH bank balance is far more dependant on shareholders funds than profits from working the coffee bars.

Frankly I dont see that situation changing than much in the near furture as the above mentioned competition surely creeps in and the cost of new leases continue to go berserk.

Also another important factor to local trading---the novelity factor may beging to wear off.

Now I must go rain of not.

Have a pleasant eveing one and all.

paulj - 27 May 2007 20:24 - 862 of 2037

I may be sad, bmw, but i'm not THAT sad! (on second thoughts, maybe I SHOULD have something better to do on a Sunday evening... like playing darts with David).

proteus - 27 May 2007 22:00 - 863 of 2037

Amazing,people put values on companies far more complex such as BP with the unknowns of Gazprom trying to take their Russian assets , VOD with the unknown effect of VOIP,RIO is the copper/China bubble going to burst,but you cannot produce even a view on next years turnover on COH.I get more concerned that you are only trying to criticise the management and this is not backed up by figures as they would as you say make you look silly.
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