One big issue I've had with FFF for some time (refer my last post) is the fact they have borrowed for everything. Look at their half year balance sheet. Over $60M of borrowings.
The more recent CBA debt has simply transferred the lower risk debt from a few lenders to one.
IMO, EBITDA might be ok however with such high debt the company does not justify trading at any decent EBITDA multiple. As such, same as last year, I still fail to see what will re-rate this stock at present.
Other issues I see are as follows:
* The number of purchases make it VERY difficult to see what growth has come organically, and what level from acquired business. However given the company has not commented (that I can see) on organic growth ... draw ur own conclusion there. * As per a previous post, I question the price paid for at least some acquisitions. * It is a bit like a patchwork quilt. Buying different names. If any brand had value it is hard to realise many synergies. Buying adds limited value unless they can drive organic growth at higher rates or pay below value for it.
I state "no sentiment" as I haven't looked further into it than the above. More businesses that are easier to see lower risk and better value in.
MJS
FFF Price at posting:
5.4¢ Sentiment: None Disclosure: Not Held
