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.’

Yes of course you are right its all pot luck and I know nothing so I just come along and guess the SP will fall.

No bad is it.

And yes I need help as I cant read the COH accounts so please continue to do so.

I really know nothing about COH what so ever.

But what I do know is that based on a family member having a few fast food franchises is that if they do not make the magic 1000 pounds a week nett then they can not get any quality franchisors interested in investing .

How COH investors seem quite content to throw their money into COH' coffers unquestioning is beyond me and I guess they must still be in a fantasy heaven.

There is good reason why COH has not made any profit since its conception and that is that its all wrong...Empik thought so and walked and they are there on the ground.

To me it looks like Mr Worhting failed in the UK, then took as much as he could, and went to Poland, then after a few years there and a mountain of debt in high interest bearing notes as he was only buying leases and bank perfer freeholds, then came back for more money to pay then off and the shareholders gave it to him. At that time COH had not made a profit, it was all a gamble.

But then I know nothing.

According you COH shareholders I am a cretin, a lying towrag and whatever else you like to say or call me.

So with all that done a dusted. I know suggest that we leave the SP do both the talking and proving.

Frankly now I have lost interest in COH, although that said its a lucky company to have such blind loyal shareholders. But I am not interest in you lot.

Its the uninitiated newcomers I feel a pity for, like those who listened to the incessant ramping and bought in a 50p and there were loads of them

Those buying in over 40p are in for a tough time as the competition is coming and growing.

Those buying in around 50p have my condolences

Indigenous local and Turkish coffee chains are enetering the market place. Starbucks, CFE and many more will be there soon. COH with its few outlets will struggle to make ends meet.

My opinion is that its a loser.

If I am wrong then I am wrong.

However, if I am right press button B to try to get back what money you can.

Its darts tonight, have fun and dont worry to much, I will and I dont.

I've no idea whether 1000 / wk net is good or bad.Is this a UK figure or are your family in Poland.What is a reasonable figure for Poland ? Do you have any figures for Polish stores.If not your figures are meaningless.

For you cynic,
Here are some figures for gross margin.GM as a percentage sales has increased year on year from 04 - 19.8%,21.4%,22.8% and at H1 24.2% COH take raw materials but also other shop costs as variable costs eg labour.Sales / established store are around 200k.As volumes increase you do not necessarily have to increase staff as to a point they just serve more cups / employee.So as volumes increase the GM should increase as the labour costs will not increase proportionately.Also as volumes increase their buyers should be able to get a better price.COH said sales for this financial year will be 10.2m and sales are set to increase 50% in the coming year. i.e. 15.3m sales next year.IF the GM continues its improvement with volume next year they could see 25.6% GM. RW has said he has 25% as a target.So GM for 2007 should be 2.4m and for 2008 3.9m.

i shall be buying neither COH nor CFE as i think they are far too small and will go belly-up in due course

Proteus well done old chap, you too can can get a pretty good idea from RW who is first class at saying this that and the other, but nothing on Nett profits and that where the whole show falls down.

The art of busines is to extract the best prosible nett from the gross.

I doubt though, and very much so, if COH can even begin to match the fantasic sales projection figures, as no one ever mentions the increasing competition in their calculations.

Forecasting targets are OK, I have no problem with any encomic modeling games, but as we are are aware there are so many intangibles to consider when practicing this highly speculative art.

But come Sir, let us not banter any further, there are other dragons to slay, and besides these matters are best left for the market to postulate over the fate of COH.

Indeed the market called it down yesterday. I wonder if your time, and obvious expertise, would be better spent in considering if this is the continuation of the downward tread pattern, and if so at what stage to step out?

Have a really nice day.

Good post from George on iii(with full acknowledgement)

Its a pity that Mr Worthington was not so forthcoming over the EMPIK dumping!


From iii

Re: Starbucks George889
Communication with small private shareholders is an honourable quality in the leader of COH but playing devil's advocate may be he shouldn't be used on such a regular basis just to clarify or settle various points emanating from this forum
--------------------------------------------------------------------------------

10B

If you give no figures you have no credability.Do you want more help ? Don't sulk,as someone from the education field you should know the benefits of being educated.

cynic

No problem,I don't know which way it will go but at least an analysis helps.On what basis to you state it will go belly up or CFE for that matter?

No need for further comment, kindly use the NUMIS figures and then deduct 99%

Come now 10b do you understand percentages or do you need a little more help.% is not just a button you press on a calculator. Do you need help with the concept of averages I can help there as well.

no real need for further comment is there as you will not be expounding upon anything that is not already well within the public domain!

However, please carry on if you wish.

OK I agree we can only discuss what's in the public domain or do you have other information ? Now taking your figure of 99%,that means your estimate is 1% of the Numis value for NPV - That's net present value.They calculate 66p / share so your figure is 0.66p / share.At the last set of results they had cash equivalent to 2.5p / share.Surely they cannot be worth less than their cash. Do you need help with your calculations ,they're not difficult you know ?

Nice one, but dont over look that its not their cash, hense my figure.

So how do you calculate your NPV on actual earnings or cash calls.

I really would welcome you calculations.

It's their cash in the same way that any company BP,VOD etc hold cash.Do you need help with the concept.If you're struggling I'll try to find a reference to NPV if you want ?

proteus,

It is impossible to converse with a committed basher, especially one who has no interest in the stock other than to 'hack away'. By doing so you only offer the opportunity for further nugatory dialogue. 10B has little or no knowledge of the markets, doesn't do fundies nor TA. Effectively he feeds off BB posts, copying and pasting to suit, leaping onto whatever bandwagon happens to be rolling by. Best thing you can do is press the squelch button and ignore him.

pth

but thats my very point, and thank you!

You can not compare LFL, a company that earns its money to on who takes it off the shareholders.

Nett earnings offer a track record to work from, cash calls blankett a lot of things

In other words a valuation based upon Cash Calls gives you nothing.

Well said Mt Holden well said, its nice to realise that COH shareholders are blinded to learning anything.


Thats why they were in a state of shock when the price fell, while I was content that it was simply following my predictions.

The day gets better.

You really should all note that the only research that I follow is for value, plain simple, old fashioned intrinsic asset backed value.

Modern day anacronyms and their application mean nothing, absolutly nothing to me.

As far as I remember due to writing off goodwill VOD has not made a profit at one level.You're saying therefore they're worthless.You really need some help ,why don't you ask as a teacher you should know that.Now how about justifying your 0.66p value for the benefit of the readers.

Yes but thats my point, how do put a hard cash value on good will?

Clearly goodwill is one of the most manipulative intangibles in the whole accounting process.

You must have a good earnings yield and this is where I use the ratio of a pre tax operating earnings, or as you would say EBIT to the whole enterprise value which of couse is the SP. I prefer using this ratio to the P/E as that can be manupulated at will.

To me its all rather a simple exercise to find out how much the business is actual worth, ie how much it really earnt in hard nett, relative to the purchase price of the business.

It gets a little more deeper if you wish to delve further. But basically ask your self what did the COH shareholders pay for the business and what return on capital employed are they getting today?---its not a pretty answer using my valuation methods.

But I am not here to gamble,and with the current "flexible" accounting rules and a stagnant FSA, you really need a very shap pencil, if you are of course playing to win.

If you are a gambler then of course that moves the goalposts.

OK,what's it worth with figures if it's a simple exercise why are you so shy in producing them ?