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Flame Tree Group 2019
rwitre
#1 Posted : Tuesday, August 27, 2019 10:58:49 AM
Rank: Member


Joined: 3/8/2018
Posts: 426
Location: Nairobi
FTGH HY 2019

Quote:

- H1 2019 reported revenue Kes 1,255M
- Gross Profit reached 399M, with gross margin at 32%
- EBITDA was 68.9M, 5.5% over sales and a decrease of -39% vs. LY


Pretax profits went down by 75% to KSh9.6 million from KSh 39.9 million in the first half of 2018.

Notable sharp increase in Selling & Distribution costs in the Plastics Division (+27% and +30MM vs.
LY), mainly linked to transport costs and sales teams.

Quote:

Highlights H1
The group has made significant improvements in production, staff & logistics and marketing:
- Inauguration of new factory in Ethiopia, now fully operative.
- New store of Suzie Beauty in Sarit Center.
- Distribution of cosmetics in Mozambique and considerable increase in exports to Rwanda.
- Several new machines: blancher and oil filter in Chirag, PET machine & compressor and second injection moulding machine in Jojo, new HDPE pipe machine in Rwanda to meet demand of projects in agriculture, homogenizer machine in Flame Tree Africa.
- Additional investment in 9 trucks to reduce logistic costs in Kenya
- New media promotion with Bahati as Brand Ambassador for ZOE Men’s range, several promos and
marketing actions like launch of 5 new products on the Churchill Show - Laugh Festival including our Zoe
fragrance lotions & Men’s Shampoo, merchandising actions and focus on product value.
- Launch of new Chigs Corn Crunch range in the snacks line.
- Revaluation of assets made by an independent company brought 216,2 million KES of additional value to
the Trial Balance.



tom_boy
#2 Posted : Wednesday, August 28, 2019 8:11:20 AM
Rank: Member


Joined: 2/20/2007
Posts: 753
Chugging along. I like that they are investing, growing capacity and marketing despite the tough operating enviroment.

Also seem to have maintained their finance costs at same levels as last yr.

Management, I feel, is trustworthy, being a major shareholder.

Might just load up some more and hope that the sun will rise some day.

I am more concerned about the macro business environment and how slow down of economy will affect their sales. However, they are well diversified across Africa though major market remains KE.
They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
Fyatu
#3 Posted : Wednesday, August 28, 2019 9:45:11 AM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,705
Location: Nakuru
I would like to see their snacks on Naivas shelves.I would also like to see more of their cosmetics in Naivas and Tuskies. I don't know about FTGH product representation in carrefour..Someone living in Nairobi can tell us if Zoe shapoo is stocked huko?

Also, i would like to see more of rino and jojo tanks in hardware stores in high growth areas such as dustbowl and Githurai
Dumb money becomes dumb only when it listens to smart money
obiero
#4 Posted : Wednesday, August 28, 2019 10:04:03 AM
Rank: Elder


Joined: 6/23/2009
Posts: 12,680
Location: nairobi
Fyatu wrote:
I would like to see their snacks on Naivas shelves.I would also like to see more of their cosmetics in Naivas and Tuskies. I don't know about FTGH product representation in carrefour..Someone living in Nairobi can tell us if Zoe shapoo is stocked huko?

Also, i would like to see more of rino and jojo tanks in hardware stores in high growth areas such as dustbowl and Githurai

The FMCG space is soo competitive and fickle.. Very hard to get a decent return especially with all the major wholesaler failings
www.winda.co.ke
tom_boy
#5 Posted : Wednesday, August 28, 2019 10:08:41 AM
Rank: Member


Joined: 2/20/2007
Posts: 753
Fyatu wrote:
I would like to see their snacks on Naivas shelves.I would also like to see more of their cosmetics in Naivas and Tuskies. I don't know about FTGH product representation in carrefour..Someone living in Nairobi can tell us if Zoe shapoo is stocked huko?

Also, i would like to see more of rino and jojo tanks in hardware stores in high growth areas such as dustbowl and Githurai


In Kenya, their brand is Roto if I am not mistaken
They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
Fyatu
#6 Posted : Wednesday, August 28, 2019 11:04:23 AM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,705
Location: Nakuru
tom_boy wrote:
Fyatu wrote:
I would like to see their snacks on Naivas shelves.I would also like to see more of their cosmetics in Naivas and Tuskies. I don't know about FTGH product representation in carrefour..Someone living in Nairobi can tell us if Zoe shapoo is stocked huko?

Also, i would like to see more of rino and jojo tanks in hardware stores in high growth areas such as dustbowl and Githurai


In Kenya, their brand is Roto if I am not mistaken



Shukran...yes, i meant Roto.
Dumb money becomes dumb only when it listens to smart money
Fyatu
#7 Posted : Wednesday, August 28, 2019 11:16:08 AM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,705
Location: Nakuru
obiero wrote:
Fyatu wrote:
I would like to see their snacks on Naivas shelves.I would also like to see more of their cosmetics in Naivas and Tuskies. I don't know about FTGH product representation in carrefour..Someone living in Nairobi can tell us if Zoe shapoo is stocked huko?

Also, i would like to see more of rino and jojo tanks in hardware stores in high growth areas such as dustbowl and Githurai

The FMCG space is soo competitive and fickle.. Very hard to get a decent return especially with all the major wholesaler failings



I have made it a habit/hobby to find out from supermarket attendants from every supermarket i visit how FTGH products are moving. For example, i will ask an attendant at Mulleys supermarket in Emali to advise on which product she would recommend i buy between Zoe lotion/shampoo(FTGH) and Amara(Haco industries). I would do the same in the spices section and snacks section. This weekend i will be there checking what the back to school kids are purchasing.

To cut a long story short, i have come to realize that there are brands that are leaders in their category. e.g., "Natures own" spices are a favorite with wazua middle class and sells quick. Zoe shampoo moves quick and i have also seen it being used regularly in my Kinyozi that doubles up as a salon.


Hapo kwa cosmetics Haco products and the Niveas of this world give serious competition to my company's products but with advertising this will change. I like that the CEO in HY2019 report has spoken about stepped-up advertising but there is room for improvement
Dumb money becomes dumb only when it listens to smart money
tom_boy
#8 Posted : Thursday, September 26, 2019 7:17:02 PM
Rank: Member


Joined: 2/20/2007
Posts: 753
I think hapa kuna story hatuelewi. Rain started beating them hard in HY2018 and the thrashing has been relentless. Its hard to decide which way they are headed. No moat. If things dont change, end yr will be a loss
They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
VituVingiSana
#9 Posted : Thursday, September 26, 2019 8:07:59 PM
Rank: Chief


Joined: 1/3/2007
Posts: 16,969
Location: Nairobi
tom_boy wrote:
I think hapa kuna story hatuelewi. Rain started beating them hard in HY2018 and the thrashing has been relentless. Its hard to decide which way they are headed. No moat. If things dont change, end yr will be a loss
Manufacturing in KE is tough when it is so much easier to import goods vs
- setting up a factory
- building a brand
- dealing with KRA, County, NEMA, etc
- workers/labor/COTU, etc

It will not be easy but I hope FTG can build a sustainable business. I like to see KE manufacturing firms succeeding.
Hope is not a strategy!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Fyatu
#10 Posted : Friday, September 27, 2019 1:22:04 PM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,705
Location: Nakuru
tom_boy wrote:
I think hapa kuna story hatuelewi. Rain started beating them hard in HY2018 and the thrashing has been relentless. Its hard to decide which way they are headed. No moat. If things dont change, end yr will be a loss



I moped quite a chunk of this one when there was heavy supply at Kshs. 2.2 last year. Nowadays getting supply of even 10000 units is rare like a muhindi's grave(Kaburi la Baniani). The fundamentals here are strong. Wake me up when interest rate cap is repealed.
Dumb money becomes dumb only when it listens to smart money
tom_boy
#11 Posted : Friday, September 27, 2019 7:36:49 PM
Rank: Member


Joined: 2/20/2007
Posts: 753
Fyatu wrote:
tom_boy wrote:
I think hapa kuna story hatuelewi. Rain started beating them hard in HY2018 and the thrashing has been relentless. Its hard to decide which way they are headed. No moat. If things dont change, end yr will be a loss



I moped quite a chunk of this one when there was heavy supply at Kshs. 2.2 last year. Nowadays getting supply of even 10000 units is rare like a muhindi's grave(Kaburi la Baniani). The fundamentals here are strong. Wake me up when interest rate cap is repealed.


Why do you think fundamentals are strong.
They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
Fyatu
#12 Posted : Friday, September 27, 2019 8:42:20 PM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,705
Location: Nakuru
tom_boy wrote:
Fyatu wrote:
tom_boy wrote:
I think hapa kuna story hatuelewi. Rain started beating them hard in HY2018 and the thrashing has been relentless. Its hard to decide which way they are headed. No moat. If things dont change, end yr will be a loss



I moped quite a chunk of this one when there was heavy supply at Kshs. 2.2 last year. Nowadays getting supply of even 10000 units is rare like a muhindi's grave(Kaburi la Baniani). The fundamentals here are strong. Wake me up when interest rate cap is repealed.


Why do you think fundamentals are strong.



1. FTGH products are being sold in most supermarkets and cosmetic shops.(You can check at your local supermarket tomorrow if you doubt this).

2. The population is growing. FTGH also manufactures in Ethiopia

3. Cosmetic and beauty market is big business and just like food, cosmetics will always have buyers. Elementary business education describes food,shelter and clothing as basic needs. Cosmetics and beauty are also basic needs.

4. Top-line has been growing year-in year-out for the past three years.
Dumb money becomes dumb only when it listens to smart money
tom_boy
#13 Posted : Friday, September 27, 2019 8:59:06 PM
Rank: Member


Joined: 2/20/2007
Posts: 753
Fyatu wrote:
tom_boy wrote:
Fyatu wrote:
tom_boy wrote:
I think hapa kuna story hatuelewi. Rain started beating them hard in HY2018 and the thrashing has been relentless. Its hard to decide which way they are headed. No moat. If things dont change, end yr will be a loss



I moped quite a chunk of this one when there was heavy supply at Kshs. 2.2 last year. Nowadays getting supply of even 10000 units is rare like a muhindi's grave(Kaburi la Baniani). The fundamentals here are strong. Wake me up when interest rate cap is repealed.


Why do you think fundamentals are strong.



1. FTGH products are being sold in most supermarkets and cosmetic shops.(You can check at your local supermarket tomorrow if you doubt this).

2. The population is growing. FTGH also manufactures in Ethiopia

3. Cosmetic and beauty market is big business and just like food, cosmetics will always have buyers. Elementary business education describes food,shelter and clothing as basic needs. Cosmetics and beauty are also basic needs.

4. Top-line has been growing year-in year-out for the past three years.


Hapo kwa topline is not true. Sales have been flat since 2017.
They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
Fyatu
#14 Posted : Friday, September 27, 2019 9:26:47 PM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,705
Location: Nakuru
Quote:


Hapo kwa topline is not true. Sales have been flat since 2017.



You are right...the past 3 years have been just a rough patch with the demise of a major retailer like Nakumatt. I would be more worried if there was a steady decline in the topline. The future is bright with Ethiopia operations.
Dumb money becomes dumb only when it listens to smart money
VituVingiSana
#15 Posted : Saturday, September 28, 2019 10:40:57 PM
Rank: Chief


Joined: 1/3/2007
Posts: 16,969
Location: Nairobi
Fyatu wrote:
Quote:


Hapo kwa topline is not true. Sales have been flat since 2017.

You are right...the past 3 years have been just a rough patch with the demise of a major retailer like Nakumatt. I would be more worried if there was a steady decline in the topline. The future is bright with Ethiopia operations.
These businesses take time to mature and require a lot of hard work and cash in the early years.

Acquire (or rent) land.
Build a factory and warehouse. (Or rent)
Equip the factory. Working capital. Hire and train staff.
Retail availability has to be established.
Build up the brands.
Sell and collect money/debts.

All this in a country with volatile dynamics. I think there is an election coming up and it could be divisive.

BUT the CEO has a lot of skin in the game.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Fyatu
#16 Posted : Wednesday, October 16, 2019 11:19:37 AM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,705
Location: Nakuru
Fyatu wrote:
tom_boy wrote:
I think hapa kuna story hatuelewi. Rain started beating them hard in HY2018 and the thrashing has been relentless. Its hard to decide which way they are headed. No moat. If things dont change, end yr will be a loss



I moped quite a chunk of this one when there was heavy supply at Kshs. 2.2 last year. Nowadays getting supply of even 10000 units is rare like a muhindi's grave(Kaburi la Baniani). The fundamentals here are strong. Wake me up when interest rate cap is repealed.



Heavy supply is back at very affordable prices. Hurry while stocks last!!
Dumb money becomes dumb only when it listens to smart money
cyruskulei
#17 Posted : Wednesday, October 16, 2019 11:35:28 AM
Rank: Member


Joined: 3/9/2010
Posts: 246
Location: kenya
Fyatu wrote:
Fyatu wrote:
tom_boy wrote:
I think hapa kuna story hatuelewi. Rain started beating them hard in HY2018 and the thrashing has been relentless. Its hard to decide which way they are headed. No moat. If things dont change, end yr will be a loss



I moped quite a chunk of this one when there was heavy supply at Kshs. 2.2 last year. Nowadays getting supply of even 10000 units is rare like a muhindi's grave(Kaburi la Baniani). The fundamentals here are strong. Wake me up when interest rate cap is repealed.



Heavy supply is back at very affordable prices. Hurry while stocks last!!


Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly
Work hard at your job and you can make a living. Work hard on yourself and you can make a fortune.

Receptor
#18 Posted : Monday, January 13, 2020 2:09:59 PM
Rank: New-farer


Joined: 7/1/2019
Posts: 47
Another ARM cement kind of situation loading.....run for your wife
sparkly
#19 Posted : Monday, January 13, 2020 10:27:29 PM
Rank: Elder


Joined: 9/23/2009
Posts: 7,713
Location: Enk are Nyirobi
Receptor wrote:
Another ARM cement kind of situation loading.....run for your wife


Laughing out loudly Laughing out loudly Laughing out loudly
Life is short. Live passionately.
VituVingiSana
#20 Posted : Monday, January 13, 2020 11:11:13 PM
Rank: Chief


Joined: 1/3/2007
Posts: 16,969
Location: Nairobi
sparkly wrote:
Receptor wrote:
Another ARM cement kind of situation loading.....run for your wife


Laughing out loudly Laughing out loudly Laughing out loudly
Laughing out loudly
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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