ValuePickr Forum

Future Consumer Enterprises Ltd

(Raj A A) #165

May be some Accounts Pro can enlighten us on this issue.

(Varun) #166

It’s just an accounting entry.

Equity consists of reserves and paid up share capital and balance of p&l account. If balance of one account is transferred to another, it really does not make any difference as they all are part of equity. However, optically balance sheets looks cleaner.

Also, securities premium account can not be used to distribute profits (dividend), however, general reserve or p&l balance can be. So, this may mean dividends. But, be very careful and this should not be taken as positive in my opinion.

(Marathondreams) #167

Q1 results

Growing sales but loss continues… This quarter is very similar to Q4 FY 18.

(Krishnendu) #168

Future Consumer reported healthy set of numbers for the quarter with losses narrowing down on yoy basis. Consolidated revenue grew by 26.9% yoy to Rs840.6cr. EBITDA reported 133.4% yoy jump to Rs20.1cr against Rs8.6cr in Q1FY18. Led by savings in other expenses as percent of net sales, EBITDA margin expanded by 109bps yoy to 2.4%. Further, company’s loss narrowed down to Rs6.1cr against loss of Rs10.2cr in Q1FY18.

Other expense as percent of net sales was down by 87bps yoy aiding expansion in the EBITDA margin.
Both depreciation and interest expenses for the company grew on yoy basis by 36.7% and 24.3% respectively.
Other income grew by 43% yoy to Rs8.3cr.
However, losses from associates and JVs increased during the quarter at Rs6.3cr against Rs2.8cr in Q1FY18. JV losses narrowed sequentially.
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(Darkwanderer79) #169
(vinay_new07) #170

@varun037 Pretty much sums up the accounting side of things.

From my understanding, it appears that the company is positive that it will be able to report profit going forward. Therefore, instead of showing less negative reserves (current negative reserves being reduced by future profits), the company wants to begin on a clean slate so that any new investor judges the company on the new numbers.

I’d see it a positive exercise as it indicates that we may see profits going ahead.

Disclosure: Invested

(Aditya Mehta) #171

Although the growth rate is still good but as compared to previous quarters growth rates of around 50% in FY18 the results seems to be little disappointing.
Future Retail was targeting to open 3 stores a day in Q1 that should hv given boost to future consumer topline but somehow it didn’t happen.
Now in order to justify its valuation it should either regain its growth rate or show profits.
Mr. Kishore Biyani stated target of Rs.20K cr sales for Future consumer, which i think is surely unfeasible n being overambitious but even if they achieve half of it with reasonable margins then it could provide good returns over next 2-3years.

(inonix) #172

Narendra Baheti 's salary increased from 63.13 to 148.50 ( 135% increase) . But % increase in renumeration is showing as Not applicable…

(sjsandesh) #173

Q1 2019 Results presentation:

(Krishnendu) #174
(Krishnendu) #175
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(Krishnendu) #176
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(Krishnendu) #177
(SMondal15) #178

Finally cleaning up the mess. Right move…

(adiparihar) #179
(rvetri) #180

The key message here is that - FCs market share within FR… KB wants to take it to 70% in next 5 yrs from the 20% now…
That’s a big kicker to the stock…

(ShrenikGandhi) #182

I can’t wrap my head around one thing about this company. Why is it’s Cost of goods sold so high at around 80% of Sales while peer companies like Britannia’s is at 60-65%. Also among that Purchase of Traded goods is much higher than Raw materials Consumed which is the nature of trading company & not FMCG. so this creates a big confusion. Are they not producing in-house ? Are the profits being manipulated ?

(Krishnendu) #183

If this will come true then it will be a big plus for Future Consumer Lts as well.

(SMondal15) #184

I know some of the bakery product they sell supplied from local vendor.They just put label.will not be ideal to compare with established business like Brittania. Profit is not false. Recent report in media highlighted that 20% of big bazar sell come from Future Consumer.Recently they have monetised noncore asset to the tune of 49 cr. Unless Biyani gone mad and let the existing asset sweat hard we can see bottom line improve from here on.Margin of product like Golden Harvest is very less probably.

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(ShrenikGandhi) #185

If you go on their website, They have so many range of in house products & brands. So I am still not clear as to why they show purchase of traded goods so high. Two stand out brands for me are Sunkist & Nilgiris which imo have potential to do business worth thousands of crores. I dont know why they havent been marketing Sunkist at all because they have so good products.