Tegel IPO

[winner69]

Not the clearest of Notes in the AR but assumptions supporting the intangible number are EBITDA growth of 6% pa for the next 5 years and then 3% pa forever. They used a cost of capital of 9.3%

Seeing H217 EBITDA is expected to be +20% on H216 assumptions look conservative eh

[JoeGrogan]

NTA according to the company is 44 cents a share - but NZX /ANZ says 38.6 cents (so depends on how you count it eh)

What's wrong with high intangibles anyway - in this case it is the 'value of the brand' per see. Without a brand they don't have a business

Yeah the NZX/ANZ calculations also factor in liabilities which my calculation did not. Just noticed ANZ securities reuters tab say NTA is $1.10 per share... hmm.

I don't normally have anything against intangibles but i find the amount of goodwill on Tegel's books to be excessive and used as a tool to justify such a high price on IPO day. However, i'm not saying it should be zero either.

[winner69]

Yeah the NZX/ANZ calculations also factor in liabilities which my calculation did not. Just noticed ANZ securities reuters tab say NTA is $1.10 per share... hmm.

I don't normally have anything against intangibles but i find the amount of goodwill on Tegel's books to be excessive and used as a tool to justify such a high price on IPO day. However, i'm not saying it should be zero either.

The intangibles go back to the time when Ross Group acquired NZ Poultry in 2011 for $250m odd (plus debt)

It has been subject to review each year since and found to be 'acceptable' each time ....at least from a private company point of view.

It was not jacked up to support the IPO - been the carrying value for a few years. Some may think it was too high but punters were aware of what they were offered.

Fy17 should see a ROIC of about 8% - not that flash (if they reckon cost of capital of 9%) but sort of justifies the asset values reported

[kiwidollabill]

Turkeys are normally raised in the open. Calling them cage free is a wasted adjective.

Boop boop de do
Marilyn

'Conventional' poultry chicken is raised in Barns. Only cages they ever see (and that goes for the FR ones also) is on the truck from the farm to the abattoir

[bottomfeeder]

Just read an old article about the IPO. "The first shares of Tegel will sell for $1-55, well short of the $2-50 high it predicted, but the IPO has been oversubscribed". Predicted, perhaps wishing for, or talking it up. Just how did they expect to get $2-50, That would have included a further massive amount of Goodwill.

[sb9]

The slide continues....

disc-like their chicken not their shares though

[bottomfeeder]

Liking their shares better as time goes by. Always liked their chicken.

[Balance]

Liking their shares better as time goes by. Always liked their chicken.

If the chicken portions they supply KFC become any smaller, they might as well use nibbles as drumsticks!

[bottomfeeder]

If the chicken portions they supply KFC become any smaller, they might as well use nibbles as drumsticks!

Ahh more profit for Tegel, they may need every penny.

[h2so4]

Liking their shares better as time goes by. Always liked their chicken.

Basil "A happy customer, quick stuff it."