15/9/20
Purchased a small parcel of FFI, Fresh Food Industries, a WA business that manufactures and distributes confectionary products.
Further, the company owns industrial and commercial property for investment purposes. It serves bakers and pastry cooks, and supermarkets, as well as ice cream and dairy, confectionery, chocolate, and food services industries. The company was founded in 1979 and is headquartered in Jandakot, Australia.
Its typical of the sort of company I like to uncover, deeply illiquid, owner operated, very tight registry, profitable over the long term, hidden unrealised assets. I paid up for this, probably more than my range of intrinsic value, but I think businesses like this never look cheap.
Its consistently paid a dividend for the last 10 years, has steadily grown revenue, and has had a steady and high ROE, ROC & ROIIC.
Its never going to be a fast growth business, but its hard not to see it still around in ten years, and there is the potential for significant value to be unlocked from the property portfolio. A Strawberry jam REIT!
I am struggling to think what could go wrong with this business, its recession proof, its disruption proof, its boring, its got no debt, and management seem competent. The biggest risk is probably liquidity - might not be possible to exit.
Why will this business be around in 10 years? -Because people still going to be eating cake & chocolate! Been around for 40 years too.
