TFL - TasFoods (was ONC - On-card International)

[steve fleming]

Looks interesting.....

m/cap @21c = $4.4m

Cash 30 June = $5.3m

Net assets 30 June = $4.7m

Yesterday announced the acquisition of an artisan Tasmanian premium dairy and cream products:

http://www.meandervalleydairy.com.au/

Announced appointments to the ONC board of:

Rob Woolley - longstanding BAL chairman
Roger McBain - husband of longstanding BAL CEO - Laura McBain

Hugh Robertson rounds out a very impressive board for a $4m m/cap company.

New directors/execs to put in funds at 21c and 42c.

Read more about BAL/ Mcbains / Woolley :
http://pubacct.org.au/chinese-export-bonanza/ (http://pubacct.org.au/chinese-export-bonanza/)


They have quickly turned BAL into a $600m company, (branded, organic baby food products), wonder what they can do with this cashed up little $4m company in terms of monetising premium "branded" Tasmanian dairy products??

[stoploss]

Welcome back Steve , I was a shareholder in Open country Dairy in NZ till it was taken over .....
Personally I think the smaller companies can be a bit more nimble with supply etc , also quicker to market with new products / ranges . Be interesting to see how these guys go , the Fonterra example doesn't have a lot of friends at the moment ......

[steve fleming]

Welcome back Steve , I was a shareholder in Open country Dairy in NZ till it was taken over .....
Personally I think the smaller companies can be a bit more nimble with supply etc , also quicker to market with new products / ranges . Be interesting to see how these guys go , the Fonterra example doesn't have a lot of friends at the moment ......

Hi S/L

BAL has been the success story on the ASX over the last 6 - 12 months.

Will be interesting if the team can now apply their BAL learnings / experience to premium artisan food products, leveraging the whole "brand Tasmania" clean organic image.

[Wolf]

Cheers for sharing Steve, looks interesting alright.
Alot of potential with BAL managment involved.

FY 2015:
Meander Valley’s revenue: $1.34 million
Net profit before tax: $0.11m
Already profitable.

22.5m shares on issue post acquisition. With a heap of proposed options to be issued to directors/senior exec's.
10m options at 0.21c
10m options at 0.42c
They also said they were going to do a share purchase plan. So a bit of dilution ahead.

[steve fleming]

BAL has been a top performer. But on the opposite side of the coin there is A2 - equally as successful product/market wise, and the share price has been in the toilet (barring the recent flutter on news of a takeover).
http://www.theage.com.au/business/retail/battle-for-the-bottle--the-fight-to-feed-chinas-babies-20150903-gje6kp

The different performance of the two companies means that a company needs to do more than just sell a lot of dairy products. Heck, even Harvey Norman has now gone and bought a dairy farm!

I would be interested in hearing your thoughts (SF) on what is making BAL fly while A2M sinks? And does ONC possess that magic factor?

There was a fair bit of being in the right place at the right time for BAL, having said that, from the article that I referenced above, there has been a lot of groundwork in positioning BAL for overseas (China) expansion.

Essentially, apart from a bit of product differentiation around the edges, they are offering what is a homogenous product. So BAL's competitive advantage comes from its brand positioning and marketing as a niche premium product. BAL is basically a marketing company. From personal experience, I know my wife happily buys plenty of BAL product, but walks past A2 products in the supermarket (different products I know).

As for whether the success can be repeated, there is strong evidence that a team trying to replicate a successful endeavour second time round has a higher chance of failure, given they are likely to be overconfident, and have a tendency for impatience to lead to poor decision making. You would, however, hope that the learnings from BAL and the doors it will open will be significant.

Whether they manage to successfully take "Meander Valley" or whatever organic, artisan Tasmanian brand they choose to go with, global is something that won't be known for some time. In the meantime, I look at ONC for what it is:

$4m m/cap
High profile board with plenty of followers likely to come on board
Trading below cash/ asset backing
Good cash balance
Low shares on issue
Directors who will put in funds at (21c) or above (42c) current market price
An interesting feel good story, in an attractive sector.

[steve fleming]

http://www.theaustralian.com.au/business/margin-call/mantach-staffer-jocelen-griffiths-heads-to-wa/story-fnp4m2h5-1227516896181

Milking the market

First mining billionaire Gina Rinehart, then retailer Gerry Harvey via his Harvey Norman.
Now logistics and stevedoring rich lister Peter Scanlon is getting in on the act.
Everyone thinks dairy — whether it’s the cows that make the milk or the factories that churn the cheese — is the hottest investment in town.
Scanlon through his private vehicle Taverners Group controls the listed OnCard International, which is spending $2.1 million to buy Tassie’s Meander Valley Dairy.
It’s part of OnCard getting out of technology investments in favour of food, and since Scanlon did the dairy deal OnCard shares have almost doubled.
Scanlon’s Taverner is run by Ross Burney, who used to work for Sir Ron Brierley at GPG and is on the OnCard board, along with broker Hugh Robertson.
OnCard is also getting a new chairman in Rob Woolley. He chairs listed Tassie food group Bellamy’s Organic, which further highlights that food is where OnCard sees its growth.
Bellamy’s boss Laura McBain describes Woolley as her mentor and to complete the loop in the small Tassie market, her husband Roger McBain, a Launceston-based partner at Deloitte, is also set to join the OnCard board

[percy]

Great to see you sharing your wonderful knowledge with us again.
I have really missed you.
Never die of boredom with any of your recommendations.!
Always right on the money. I have made a lot money by buying shares you have mentioned on sharetrader.Again thank you.
As you have pointed out "share prices follow earnings...... buy EPS growth" really works.So simple,so true.
I brought a small parcel of ONC on Monday.So find myself ,as always "well positioned" to add to my holding, when they do a SPP .

[NZSilver]

Yeh cheers SF, I really like the value add dairy space, and AUS has a decent domestic market so a "niche" company can do well without exporting. I picked up a few of these the other day so at the least I can get into the SPP - good spec play considering BAL links. Anyway just checked price - up 40% since I bought in, silly stuff really but I'm not complaining.

[h2so4]

Yes SF genius stock picker you've done it again.

Good heavens outrunning the bears by a mile.

[percy]

Yes SF genius stock picker you've done it again.

Good heavens outrunning the bears by a mile.

Absolutely incredible.!!
Up 43.5% today.
44.5 cents as I post.!!

[stoploss]

Took a small position @ 28 cents . Not the biggest fan of this industry currently , but S/F has a few runs on the board so went with it ... what a legend .
Got to be a speeding ticket on the way 46 cents trading, currently up 48 % on the day !!!!

[stoploss]

SPP details ... http://www.asx.com.au/asxpdf/20151009/pdf/431z0xy3rjh4nv.pdf

[percy]

SPP details ... http://www.asx.com.au/asxpdf/20151009/pdf/431z0xy3rjh4nv.pdf

Thanks for posting that stoploss..
I am holding myself at the ready for the SPP.
Being ever hopeful, I wonder whether I will get two bites at the cherry,as some how I have ended up with two holdings.???

[h2so4]

That is a substantial dairy farm they are looking at http://www.vdlfarms.com.au/about

[h2so4]

That is a substantial dairy farm they are looking at.http://www.vdlfarms.com.au/about

[percy]

That is a substantial dairy farm they are looking at.http://www.vdlfarms.com.au/about

Just trying to remember the NZ connection via Tasman Farms.
The late Dunedin businessman Howard Paterson may have been involved??
I think it is a very well run dairying business.

[stoploss]

Just trying to remember the NZ connection via Tasman Farms.
The late Dunedin businessman Howard Paterson may have been involved??
I think it is a very well run dairying business.

All on their website Percy , bit of history there for Tasmania , they may have to make more than one capital raise for this ???

VDL became part of the New Zealand publicly listed company Tasman Agriculture Ltd in 1993.
Tasman Agriculture Ltd was put into voluntary liquidation on 31 October 2001, following a restructuring of its New Zealand Farms, and its shareholders received one share in Tasman Farms Limited for every share held in TasAg by way of an in-specie distribution.
In June 2004 VDL purchased all the shares in Tasman Farmdale Limited, which owned a further 11 dairy units (http://www.vdlfarms.com.au/farming-operations)in the Circular Head region of North-West Tasmania.
Tasman Farms Limited, a New Zealand Company, is the current majority shareholder of VDL, owning 98.42% of shares on issue.
Management of VDL is undertaken from a small, modern office located in Smithton, within 40 minutes of all farms.
VDL has 75,500,000 shares on issue.
In late 2007 the New Plymouth District Council (NPDC), based in the Taranaki region of New Zealand, launched a takeover bid of Tasman Farms Limited. In February 2008 this bid was finalised with the NPDC purchasing 74.33% of Tasman Farms Limited. NPDC has since increased its Shareholding to 100%.

[percy]

Thanks Stoploss.
Yes most probably some "interesting" venues for capital raising.

[NZSilver]

thats a fairly large aquisition! they will need a lot more cash now??

[percy]

From NBR article.
Van Diemen's Land Company is Australia's oldest dairying company.
This will be only the third time in about 200 years of production the property has changed hands.
VDL has almost 30,000 cows on 19,000 hectacres producing nearly 8 million kilograms of milk solids this year.
According to VDL director Mike Trousselot VDL is valued over $250 million.

[Xerof]

Just trying to remember the NZ connection via Tasman Farms.
The late Dunedin businessman Howard Paterson may have been involved??
I think it is a very well run dairying business.

Yes, I think you're right percy - try Southern Capital/Hirequip/Pegasus town? and Tasman Agriculture all in the mix at one time or other. Graeme Wong was another name coming to mind.

[NZSilver]

if i sell all my ONC shares today, will i still be eligible for the SPP?

[percy]

if i sell all my ONC shares today, will i still be eligible for the SPP?

Possibly you would, as the record date was 9th October.
But what would hold me back, is the fact they are not despatching SPP details until the 20th November.
My worry would be if you are not on the register when they despatch the SPP details you may miss out.
Maybe the way round it would be to not sell your whole holding,retain 500 or so.

[NZSilver]

Possibly you would, as the record date was 9th October.
But what would hold me back, is the fact they are not despatching SPP details until the 20th November.
My worry would be if you are not on the register when they despatch the SPP details you may miss out.
Maybe the way round it would be to not sell your whole holding,retain 500 or so.

Yeh I was thinking that but I'm sure if the record date says the 9th, I should be given the SPP info. Will let you know!

[stoploss]

http://www.asx.com.au/asxpdf/20151029/pdf/432hz66d8sy12d.pdf

[percy]

Game on.!!!
Bring it on.!

[percy]

Any dairy company paying too high a price [farm gate] for their supply will run at a loss.
Any dairy farmer who can keep their costs well below their selling price will make a profit.
Any dairy company that can sell their product at a "premium"and has the marketing and logistics in place will most probably make a profit.
To me it looks as though VDL dairy farms are located in the wet west of Tasmania,and depending on borrowing costs ,should be low cost producer.Hopefully there will be a tie up with BAL and their product will be sold at a premium.

[NZSilver]

Corporate dairy farms usually have higher production costs than smaller owner operator. I don't like the look of this. Better to buy the milk and make the product.

[kiora]

Any dairy company paying too high a price [farm gate] for their supply will run at a loss.
Any dairy farmer who can keep their costs well below their selling price will make a profit.
Any dairy company that can sell their product at a "premium"and has the marketing and logistics in place will most probably make a profit.
To me it looks as though VDL dairy farms are located in the wet west of Tasmania,and depending on borrowing costs ,should be low cost producer.Hopefully there will be a tie up with BAL and their product will be sold at a premium.

You might like to ask the New Plymouth District Council if it was profitable (from money raised selling their lines company to Powerco)

[kiora]

And very difficult not to get a 20% drop in production when converting to organic supply

[percy]

You might like to ask the New Plymouth District Council if it was profitable (from money raised selling their lines company to Powerco)

Hopefully you will ask the New Plymouth D C in a couple of years time why they could not make a reasonable profit from VDL when ONC is making a healthy profit.!
KW.Hopefully BAL can bring their experience in marketing and logistics to ONC.If it works for organic it will work for other premium milk products.I am thinking here of Blackmores/Bega joint venture type of arrangements.
Is baby milk supplement a product to be distributed by a dairy company, Fonterra,or a health food company like Blackmores,or a medical supply firm such as Ebos.? The goal posts are shifting in this sector.
What ever,possibly a lot to look forward to.?
ps.
Going from the article in The Age. headed "Baby formula makers address shortage", there appears to be a lot of mileage left in this sector.

[NZSilver]

You might like to ask the New Plymouth District Council if it was profitable (from money raised selling their lines company to Powerco)

Well from what I have herd that was a very silly stupid move by the npdc

[percy]

You might like to ask the New Plymouth District Council if it was profitable (from money raised selling their lines company to Powerco)

Well from what I have herd that was a very silly stupid move by the npdc

That's what we all heard,but we may hear a different tune once NPDC have received payment.

[stoploss]

73 Cents GYGT S/F absolute legend .

[kura]

Ouch, this is going to hurt come Monday
http://www.3news.co.nz/nznews/new-plymouth-farm-buyer-kept-anonymous-2015112113#axzz3s5k6xsh2

[percy]

Ouch, this is going to hurt come Monday
http://www.3news.co.nz/nznews/new-plymouth-farm-buyer-kept-anonymous-2015112113#axzz3s5k6xsh2

Ouch..Indeed.!!!
Oh dear.!!!
And it looked "game on."
Looks good for the New Plymouth rate payers.

[kura]

Back when S/F originally started this thread, he saw potential value when share price was about 20 cents.
Now wondering if there will be a typical over reaction to the bad news, that may give rise to a short term trading opportunity ?
Will follow price with interest.

Disc: Not a holder, as didn't like the idea that recapitalised company was going to be 95% owned by new shareholders with a fixed 25 cent entry price

[stoploss]

There is a possibility of legal action on this , so it could be a long drawn out affair .

http://www.theaustralian.com.au/news/nation/foreign-group-beats-off-250mdeal-for-van-diemens-land-dairy/story-e6frg6nf-1227617487462

[trackers]

Can't read that article unfortunately.

I was disappointed to miss on this one, because I keep a look out for Steve's posts and this certainly would have passed my DD fairly much straight away. But oh well.

Its going to be really interesting to see how they're planning to get out of the sale. The conditions in ONC's release all looked pretty straightforward, except for "consent to the disposal of assets by [NP DC]" perhaps?

At the least (to me) it looks like either NP DC is operating in extremely bad faith here.. OR, ONC management is completely incompetent, to suggest the sale was completed contingent on minor acceptances by ONC when really the door was wide open for NP DC to walk away

[stoploss]

http://www.stuff.co.nz/business/farming/74476961/moon-lake-buy-van-diemens-land-company-for-more-than-300-million

[NZSilver]

Percy SPP arrived even though I sold all my shares. Only problem now is the decision to participate is far from straight forward. Would appreciate anyone's research and thoughts...?

[NZSilver]

This is complex, the more I read the more I'm unsure. Will we get an update from ONC management? They must be stressing.

[percy]

Percy SPP arrived even though I sold all my shares. Only problem now is the decision to participate is far from straight forward. Would appreciate anyone's research and thoughts...?

I sold 1500 and retained my other holding of 500.
I received entitlements for both on Saturday.
SPP closes on 8/12/2015.
At this stage I see the only profit will be in taking up the entitlements and selling straight away.
I am not very keen on that short term type trade.I would prefer to buy at a SPP price, and hold long term.
Most farming stocks trade at a big discount to NTA,so paying a premium does not appeal to me,so I will not be taking part in the SPP.The TFL was 38 cents on Friday.So once the spp is out of the way,what will the sp be?My guess is it will be near 30 cents.So the chance of a 20% profit comes at a big risk.Maybe the sp will go closer to 19 cents? 19cents would be the same sort of discount REL[unlisted NZ] trades at.

[percy]

I am having second thoughts.Today TFL are trading at 45.5 cents and the SPP is at 25cents.
Looks to be well worth the risk.
Maybe I am not seeing something?

[NZSilver]

I am having second thoughts.Today TFL are trading at 45.5 cents and the SPP is at 25cents.
Looks to be well worth the risk.
Maybe I am not seeing something?

Yeh tricky one huh Percy, possibly this announcement yesterday -
http://www.asx.com.au/asxpdf/20151201/pdf/433h9gkt0kd9yw.pdf

see what tomorrow brings re court, then make a decision afterwards.. tricky

[h2so4]

I am having second thoughts.Today TFL are trading at 45.5 cents and the SPP is at 25cents.
Looks to be well worth the risk.
Maybe I am not seeing something?

Yeah I've placed it in Santas IPO bag.
Just another gamble.
.....but remember who started this thread.

[kura]

Wasn't SPP announced well before proposed purchase of VDL ? If so there should still be value there at 25 cents.
Even if they lose the court case, apart from legal fees & wasted time/effort the company has lost no significant assets.

[NZSilver]

43 c but will it hold. to SPP or not?

[stoploss]

43 c but will it hold. to SPP or not?

Personally I'm going in . I appreciate things ran ahead of fair value recently . However they need this SPP money for the previous purchase . I suppose we are backing the team here so
I am happy to see what happens. Obviously there could be a lot of milk under the bridge depending upon the outcome of the VDL legal appeal.....

[percy]

Personally I'm going in . I appreciate things ran ahead of fair value recently . However they need this SPP money for the previous purchase . I suppose we are backing the team here so
I am happy to see what happens. Obviously there could be a lot of milk under the bridge depending upon the outcome of the VDL legal appeal.....

I decided in the end I did not want to be a dairy farm owner.!!
Going by the sp strength it looks as though people taking part in the SPP will do very well.
The disappointment to me was I ended up with two entitlements.
Don't know whether its Murphy's Law or Sod's Law??...lol.

[NZSilver]

http://www.stockandland.com.au/story/3537960/court-rejects-tasfoods-bid-for-vdl/?cs=4593

[NZSilver]

http://www.asx.com.au/asxpdf/20151208/pdf/433mzyxvsj0fc8.pdf

[NZSilver]

Well sp closed at 37c, I ended up fronting up the BPay an hour before spp closed - will be interesting to see if they got my money. I haven't pushed it that close before. See what the price does today... When are we likely to be issued our shares? I'd say it will drop a fair bit when that occurs. Anyway still plenty of hype re dairy on Aus markets so I think we'll be right.

[stoploss]

Think they get issued Friday from memory .

[ozzie]

Got all 24000 late today. Which as a proud and loyal holder means I now have 24001 :)

[NZSilver]

Got all 24000 late today. Which as a proud and loyal holder means I now have 24001 :)

Im even more loyal than you ozzie, 24000

[percy]

Gee Whiz,
I trust everyone was really quick hitting that sell button.Good money for the fast movers.
25.5cents close tonight is a bit sad .

[h2so4]

Still holding. You never know what's in the wind and they have the resources for the next thing. May not be dairy?

[h2so4]

.........but it will be Tasmanian.

[h2so4]

Share price zooming up.

[h2so4]

Gee Whiz,
I trust everyone was really quick hitting that sell button.Good money for the fast movers.
25.5cents close tonight is a bit sad .

I was a bit slow.....but I was quick this morning.
Nice short term profit.

[percy]

I was a bit slow.....but I was quick this morning.
Nice short term profit.

Very nice profit for you.
Well done.

[percy]

Years fly by.
TFL Tassfoods ltd.

Somehow I ended up with 500 TFL shares .[still only had the Oncard shareholder's No.].
Rights issue has just closed.My entitlement was for 160 shares,taking my holding to 660.As you were allowed to apply for extras I did.Another 39,340 at 12 cents.
Looks as though I am going receive all the extra ones I applied for.Will end up with 40,000 shares,and no additional brokerage .!

[percy]

TFL trading at 16.5 cents.Buyers want 360,259 at 16 cents and sellers of 61,222 are asking 17.5 cents.

Going in the right direction already.

[Well Endowed]

Crabbing along, drifting south, looks like it might've bottomed - well at least Jan Cameron seemed to think so, upping her position recently.

Few board changes pre-AGM, could be an interesting 6-12mths here.

I might look to get a few more I reckon...

[percy]

I sold out at 13.5 cps on 14th October last year,and have not followed them since then..