PGW - PGG Wrightson

[IAK]

Yep, I was in the same hostel as the Dewd at university. He's certainly done alright for himself although he's lagging behind another student villager Mark Wilson CE of Aviiva on $10m a year. Certainly better recompensed than a career in science lol.
http://www.stuff.co.nz/business/9113...ce-giant-aviva

[winner69]

Another optimistic forecast that isn't delivered on

So ebitda $70m last year but only $62m odd this year .....hmmm

But there are 'silver linings' and next year year will be all honky dory

Property sales will ensure a decent dividend again this year - that's good

So really no worries

https://www.nzx.com/files/attachments/259885.pdf

[winner69]

Suppose beauty is in the eye of the beholder

Alan says a credible result for F17

[Beagle]

April was incredibly wet mate...can't recall it being that wet, (at least in the Auckland area and by accounts I've read throughout much of N.Z.) for a VERY long time.
Key takeaway here is no matter how well diversified an agri stock is, it isn't ever worth more than the time honored PE of 10 for a cyclical stock.
Shares have got well ahead of themselves. Disc: Don't own but might consider holding on a pullback to ~ 50 cents.
Wonder how they're getting on with their huge legacy burden of their superannuation fund ?
Dewd leaving and now the guidance downgrade, notice how they could have announced both on the same day but chose not too ! Classic case of managing disappointing information flow. If they had of announced both on the same day the effect on the SP would probably have been more pronounced.

[James108]

The industry I work in can be very weather dependant. I believe we have had the wettest march and April on record. I know of a large infrastructure job where this has added a year to the completion of earthworks.

Would have been very surprised if this didn't affect farmers.

[arc]

So all those sudden sales at 60c were.... well timed ?

[sb9]

April was incredibly wet mate...can't recall it being that wet, (at least in the Auckland area and by accounts I've read throughout much of N.Z.) for a VERY long time.
Key takeaway here is no matter how well diversified an agri stock is, it isn't ever worth more than the time honored PE of 10 for a cyclical stock.
Shares have got well ahead of themselves. Disc: Don't own but might consider holding on a pullback to ~ 50 cents.
Wonder how they're getting on with their huge legacy burden of their superannuation fund ?
Dewd leaving and now the guidance downgrade, notice how they could have announced both on the same day but chose not too ! Classic case of managing disappointing information flow. If they had of announced both on the same day the effect on the SP would probably have been more pronounced.

Surely they didn't want to put out two negative pieces of news on the same day...

PS - Like your new user name Roger (the "Beagle")

[Pmdv77]

March was an okay month but April absolutely hammered us - and we were some of the lucky ones farming in the Central North Island. The greater Waikato got hit bad and the commentary in the release lines up with reality. That said, I do not know how PGW intend to grow their earnings. It seems that they are relying on all stars being aligned to maximise earnings in each sector rather than any other strategy.

[Snoopy]

I do not know how PGW intend to grow their earnings. It seems that they are relying on all stars being aligned to maximise earnings in each sector rather than any other strategy.

PGW do not have any spare capital, so they can't grow their earnings (apart from the cyclical ups and downs). Let me expand on "can't". PGW have tough competition from the co-ops and much of their retail business is on razor thin margins. While a good single season is possible, long term their competitors are as nimble as they are and PGW has no unique compelling advantage going forwards. So cross selling across their sales teams with the 'one PGW' mantra is the best they can hope for and a sensible strategy going forwards in my view.

Before Mark Dewdney came on board, PGW had a pretty patchy record and the long shadow of the Craig Norgate failed grand plan meant even some reputable analysts simply turned off their radar as far as PGW was concerned. The best hope for shareholders was for the company to get back to their knitting and learn to knit well. This is essentially what 'the Dewd' has done for the company, by reengaging the frontline staff from the ground up. All is not lost to shareholders from here though. If PGW can demonstrate that they can handle the ups and downs of the business cycle better, there is every chance they will be re-rated in PE terms. This, the consistent high yield, and lack of correlation with other shares in my portfolio is the reason I still hold.

SNOOPY

[Beagle]

If PGW can demonstrate that they can handle the ups and downs of the business cycle better, there is every chance they will be re-rated in PE terms. This, the consistent high yield, and lack of correlation with other shares in my portfolio is the reason I still hold.

I am curious why you would think that an agri service industry with all the cyclical elements that implies and given their long history of cyclical earnings would warrant a PE re-rating ?