A 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.’

Good afternoon.

It really amazes me that some people cant take a hint and dont know when to stop.

I thought I had given a balanced answer to Proteus.

Obviously it was not quite good enough.

So lets us try this one: Coffeheaven and its supporters boast the fact that the company has money to spend.

However few say that this money has come from selling more shares than selling coffee.

Without these new placings, which had the effect of further seriously diluting shareholder value, COH would be in debt today, or to be fair all round, very very close to it.

I keep on stressing the value of the need for profits, profits, profts, yet my appeals always seem to be falling a deaf ears, despite the fact that COH has no intrisic profit based value!

This is an essential ingredient in any PLC valuation process. Numis oviously got a little over excited over COH and ended up having to, eat crow, as did the investors who bought on the hype of the recent placing without---looking hard enough as they probably did before they lept in but failing to be observant enough to open their eyes before the big jump into the instant RED abyss of a disasterous placing..

Therefore let me conclude by reaffirming my position on future forecasts for COH---without a solid profit base, its impossible to do this with any accuracy, so the exercise on guestimates would be futile, and therefore best left to the specialist of mystic predictions---the brokers.

However, what I can say and with a degree of certainty, is that without the two cash calls COH would be in serious trouble if not bust.

In this game it is often said to be sound abvice to the follow the moves of the boss.

I believe that the boss in this case, the shrewed man you all say that he is, knew when to sell for the best price and did so. I further believe that all board memebers are fully aware of the effect on the compnay when they sell its stock.

Therefore for Mr Worthington to keep on sending out positive vibs to shareholders such as the admirably loyal Mr AdieH and to be doing so while selling hus very own shares, is not really what I would call cricket.

But then cricket has changed out of all recognition from the Sunday gentleman's outting on the green that it used to be.

I trust that you all are enjoying having a little paddle this bank hollie.

In other words you are not willing or capable of producing any figures to back up your claims.I repeat,the market judges the share price on present and future profit/loss.What do you think next years figures will be ? No drawn out waffle,a simple range will suffice,if you are capable.Stage 1.Here's a start,how many stores will they have this year and what is the likely sales / store.Multiplying them together gives an estimate of next years sales.Can't be simpler can it.

It's a little damp for cricket, David, though I'm sure you'd enjoy an "outing on the green with other gentlemen".
As for COH, I see you once again avoided giving any forecast which would help to reinforce your pessimistic view of the firm. Instead, like a jilted lover you continue to devote yourself to "dissing" the management - even over such things as share sales, which almost every director does from time to time.
I really don't know why you have such a "downer" on RW and COH. After all, it's not as if you have any money on the table, is it?
Rather than pretending to be an interested onlooker, perhaps you're just a sour coot with rather too much time on your hands.

Whatever my capabilitiesmay of may not be, they are unimportant as the market, as you rightly say judges the SP.

WELL SIR THE VERDICT IS OUT!!

The market has spoken on COH and the SP has fallen

The the figures that you persistantly request are clearly within the Numis brokers note, and they surely must be a better and more authoritative source than I.

Therefore I suggest that you consult their lastest BN which has forecasts all the way up to 2011.

So you are not capable of backing up your claims then ?

He there Paulj

I do feel most sincerely that you would be better following the professional brokers for the forecast you require as I may go to the other extreme and claim they may start closing stores etc.

As for your other ungainly suppositions, well to be fair and equitable you may well be right, but on the other hand I could just have a genuine interest in warning, no alerting is the better choice of a word, any potential new shareholders to look very closely at COH and it chairman.

Nothing to be lost in doing one's research is there?

May I respectfully suggest that you utilise your time more lucratively over this damp squid bank holiday and try to find some flaw in MLR.

MLR will I believe start to fly this week!

WE ARE HERE TO MAKE MONEY AFTER ALL ARE WE NOT?

So noble, David. And here I was thinking you were bitter and twisted when, all along, you were performing a civic duty for which we should all be grateful. Keep up the good work!

PROTEUS LAST WORD ON THE TOPIC.

PLEASE TAKE YOUR LEAD FROM THE NUMIS NOTE AS IT IS FAR MOR FAVOURABLE THAN WHAT I WOULD STATE..

Thank paulj, that you for your kind words of encouragement.

So state yours then,we're all interested to know how you come up with figures that show the price is too high.Here's a little help with the first line.The sales / store has risen each year as the stores mature.Last year they were 157k / store,Now do you think they will be say 163k / store or does that underestimate their growth rate ?The target is 90 stores so multiplying 90 by 163 would give you 14.67m sales.Simple isn't it or do you want to reconsider the 163 / store. I can help you with this if you want.

Come on sir you press the 9 then the zero then the cross,then the1,6 and 3 on the calculator.I this does not give you the figure you want you then justify whether the 90 or 163 are wrong.Easy isn't it.

Sir it is so easy even Numis can do it.

But I am not really interested in sales per store, but profit per store in the search for the all important intrinsic value.

You quote an average sales figue per store, and perhaps this is what is wrong with COH, as it would be more beneficial for us to know what stores are not making the grade and need to be closed. hense my earlier commentt of closing stores rather then opening new ones----I trust you can get it.

COH need to be telling us it bottom line profit expectations for each store.

Profit is the bye word LFL sales means little in this resepct as the its the bottom line profit figure that movea the SP and give a company value.

It would be good to know also what stores are not making your figure of 157K, what stores are surpassing it, and what stores are running on a loss.

Well Sir I did it, I pressed the 9 then the zero then the cross,then the1,6 and 3 on the calculator.
nHowever I came up with a number of loss making stores which would render the LFL sales figures pretty useless when looking for true value.

I wonder if you would kindly illuminate on that please.

When doing please give a target nett profit figure for each store and those exceeding that target and those that are not.

You see the EBITDA figures can so easliy mislead us, what we need is the
E(AFTER)ITDA, ie the nett profit figure when looking for the basis of all true company valuations, ie intrinsic value......anything else it would appear are bird peckings.

How do you calculate loss making stores,I'm interested

loss making? profit making? ..... either way, the chart says certainly no hurry to buy

OK you're a little shy,we'll work down to profit but we must start somewhere,i.e. total sales.Yes some stores will be making a lower turnover than others that's why it's called an average.The sales / store I quoted for last year was obtained by dividing the sales by the number of stores from the accounts.Now if some stores were performing poorly some must be doing better that's what averages are.If more stores were going backwards you would expect the average to fall but it's rising so things are improving.With me so far ? The average sales / store over the last 3 years has been 105k,148k and 157k. Not all stores will have the same turnover as some will only just have opened in the year.So let's say it takes a year to get up to speed.We can take a new store as say one third of an established store.In 05 they had 22 established stores + 1/3 of 14 new stores i.e. 26.7 established store equivalents.Sales were 3789k i.e. 142k / established store equivalent.In 06 the same calculation comes to 166k and this years figures 203k.Next year they say they're targeting 90 stores so we would have 65 established + 25 at 1/3 i.e. 73 store equivalents.At last years figure of 203k / store that would give a turnover of 14.9m.Now that assumes no LFL growth which was 28% at the interims.So you could pick a figure anywhere up to 28% higher.

Very good indeed solid effort, first class.

However, may I respectfully ask you why you are still talking sales and not in NETT profit?

Let me ask you please fOr the cost of runing each store, IE the working overhead costs.

Perhaps we can get somewhere tha way.

At least it would prove an interesting exercise for you.

We may even end up putting COH on the road to profit.

Cynic well said.


A Simple equation applies here viz:

NO NETT PROFITS = NO CHARTING BREAKOUT.

Q.E.D

from the headline .......

"Forecasts: Based on present trading conditions and current exchange rates we anticipate indicative sales of 9.3M for the year to 31 March 2007."

perhaps someone confusing turnover with profit, for there is no mention of the latter.

Well said cynic!

Exactly my point, and this is why so many of the smaller shareholders get suckered as they are bamboozeled with fancy impressive looking anacronyms that they never seem to even want to rememeber the basic element of stock valuation which of course is good old fashioned nett profit.

An earnings profit before deductions can look very impressive indeed, but as the hard nosed cigar chewing epitomy of good old fashioned USA styled capitalism always says as he spits the chunk of cigar that he was chewing to the floor----whats the bottom line Mac?

An anachronistic presentation of accounts and the acceptance thereof usually spell a disaster.

Look at this as cynic rightly points out, what the hell does it mean?

Humpty Dumpty has a 100 jelly beans or just five?-------COH actually put this imformation out-----"Forecasts: Based on present trading conditions and current exchange rates we anticipate indicative sales of 9.3M for the year to 31 March 2007."---it tells you "absolutley nothing" about what the company is actually make---all I am asking you to do is to stop and think about it.

The share game is about making money and that is done by creating actual wealth which means hard cash NETT PROFITS!

Which is always the best way to go.

Its from the Nett profit that the larger more establishED companies pay their divies---and not from anachronistic dream paper.

If you want value investments then there can only be one way to go The value way!!---and what would that all said be worth without a plug for my favorite penny share?---

Please look at the ACCORUS DEAL, and smell the bottom line as its flavoured with good established nett profits which makes the SP fly.

That is what I base my investments on and of course the occasional flutter.

Have a great opening in the morning one and all-----

AND KEEP YOUR SPARE EYE ON MLR THIS WEEK!

Penny Shares can make you rich, very rich indeed if you call them right.

COH has done well for many and I take my hat off to the share price rise over the past two years. But its done its work!!

It rose on nothing but hype the naturAl progressive path of any SP calls for a stop and possible fall back as the share "ITSELF" takes its own stock on its true value---just as the MARKET DEMANDS THAT IT DOES.

Have a wonderful day yesterday, as my two great old friends of the fickering Silver Screen would say, but we all knew they meant tomorrow and still roared with laughter.!