NZL - NZ Rural Land Co IPO

[Jantar]

I have just received an email inviting me to invest in an IPO for NEW ZEALAND Rural Land Co. Looking at how it is structured I don't think I will try for any shares ahead of the IPO, But if shares were available for The Manager I would in straight away.

The Manager is entitled to fees from NZRLC, being (all GST exclusive).
• a management fee of 0.50% per annum of NZRLC’s Net Asset Value.
• a performance fee of 10% of any increase in NZRLC’s Net Asset Value per Share from one financial year to the next.
• a transaction fee of 1.25% of the acquisition or divestment value of any rural land that NZRLC acquires or disposes of.
• a lease fee of $30,000 for each lease entered into by NZRLC.

https://www.directbroking.co.nz/DirectTrade/dynamic/getfile.aspx?id=630&token=716b13ed996d2a473e40c9f2dd951f254c3a75593442 08760512bf3c6b00f86e

[Snoopy]

I have just received an email inviting me to invest in an IPO for NEW ZEALAND Rural Land Co. Looking at how it is structured I don't think I will try for any shares ahead of the IPO, But if shares were available for The Manager I would in straight away.

The Manager is entitled to fees from NZRLC, being (all GST exclusive).
• a management fee of 0.50% per annum of NZRLC’s Net Asset Value.
• a performance fee of 10% of any increase in NZRLC’s Net Asset Value per Share from one financial year to the next.
• a transaction fee of 1.25% of the acquisition or divestment value of any rural land that NZRLC acquires or disposes of.
• a lease fee of $30,000 for each lease entered into by NZRLC.

https://www.directbroking.co.nz/DirectTrade/dynamic/getfile.aspx?id=630&token=716b13ed996d2a473e40c9f2dd951f254c3a75593442 08760512bf3c6b00f86e


Buy 'Allied Farmers' then. Don't they have the management contract?

SNOOPY

[Beagle]

There should be a performance fee hurdle. 10% performance fee should only apply if the NTA increases more than the dairy farm index, in my opinion.
Getting a performance fee without reference to an appropriate measurement base (that attempts to measure the degree to which the fund has truly outperformed), seems most unreasonable to me.

[mfd]

Allied farmers (ALF) are planning to acquire 50% of the management company with an option to buy the rest at a later date. The shareholders are voting on this today.

Not a pure play on the management company but it could become a significant part of their business.

I hold ALF, not sure about NZRLC yet.

[ratkin]

Just received an email too. Is this going to be listed on the main board?

[nztx]

Allied farmers (ALF) are planning to acquire 50% of the management company with an option to buy the rest at a later date. The shareholders are voting on this today.

Not a pure play on the management company but it could become a significant part of their business.

I hold ALF, not sure about NZRLC yet.


It wouldnt be difficult looking at reduced Veal result & drought effects

That alone suggests it may put the Jan 2021 Div very much in question
and moreso, given even more shares on issue

I'm out of ALF on the recent up trend & staying away from NZRL, watching both as a spectator going ahead

Far more enticing prospects elsewhere ;)

[nztx]

It wouldnt be difficult looking at reduced Veal result & drought effects

That alone suggests it may put the Jan 2021 Div very much in question
and moreso, given even more shares on issue

I'm out of ALF on the recent up trend & staying away from NZRL, watching both as a spectator going ahead

Far more enticing prospects elsewhere ;)


I now see ALF Dividend has been chopped down to 1.2c from 2.0 cps (fully imputed) last year -

http://www.sharechat.co.nz/article/95dfdaaa/allied-farmers-limited-nzx-alf-2020-annual-meeting-chair-speech-and-dividend-announcement.html

From Richard Perry's Annual Meeting speech:

"I'm delighted to announce a dividend to holders of our existing shares of 1.2 cents per share (fully imputed). This dividend will not be available to any participants in the placements (including the vendors of the Management Company) or participants in our rights issue. To achieve this in the current financial year is a pleasing accomplishment, but you will note that it is lower this year to reflect the lower profit. As has been the case for the last few years, the dividend will be paid in January 2021."

[Ferg]

Sorry for the long post but I am doing the work the Directors should have done in presenting a financial forecast. TLDR : don't invest.

You may ask why the rush with this listing? IMO NZRLC is using the Government guaranteed COVID loan, likely through BNZ. I believe the Govt guarantees up to 80% of loans issued prior to 31 December 2020 on the proviso it is for new business or new capex etc. Hence the rush. I have seen this scheme being offered to another client by the BNZ.

How disappointing to see yet another prospectus with no forecast financial information. RUA also comes to mind. Surely they have done their own forecasts, so why can't they share that? In the absence of a formal forecast, here is mine.

What we know about the issue (everything in 000s unless millions stated):

Shares in existence now = 160k, issued for $200k
IP transfer 100k shares, $125k value
ALF loan assumed to convert to equity 300k shares, $375k value
Offer of 60m shares for $75m
Offer expenses $3m
Directors issued shares in lieu of payment for services 60k shares, $75k value
Debt raised $30.86m

So the financial position after the capital raise (assuming the debt facility is fully drawn down, which it must be under the Govt scheme) will be:

Cash $103,435k
Intangible Assets $125k
Term Loans -$30,860k
Nett Equity = $72,700

Which is made up of:
Issued Capital $75,775k
Reserves -$3,000k (issue expenses)
Retained Losses -$75k

Shares on Issue = 60.62m
NAV per share $1.20

Note that the NAV has already fallen from the issue price of $1.25 which raises the question of when ALF will convert their loan to equity. I can't answer that but if I were ALF I would wait until it were more advantageous to convert the loan to equity.

NZRLC have stated they are interested in dairy farms and can see 19 opportunities with 9,239 hectares. I don't know the average cost of a dairy farm but eye-balling the graph they provided suggests $30,000 per hectare is within the ballpark. So they are looking at opportunities with a value of circa $277m. That is some distance North of their minimum prospectus cash of $103m above. Some might say that is a touch optimistic.

Anyhoo, they are aiming for a 4.5% gross rental. Assuming they put circa $100m to work in acquisitions and retain $3m (for management and directors fees & capex), then they can afford to buy about 7 farms given the average price will be somewhere around $14.5m (based on their numbers). A 4.5% gross rental on $100m is $4.5m turnover per annum (7.4c per share). Given they have already identified 19 opportunities, I suspect this won't be the only capital raise.

Buying the 7 farms for around $100m will cost NZRLC an extra $1.4m in Management fees. The 1.25% transaction fee might be able to be capitalised. It will take time to get acquisitions and leases sorted, and provided they are in place by 1 April, then I'm forecasting a very small loss for FY21 of around $230k. That is after the Management Co have taken their 0.5% NAV fee of around $210k for 7 months. NAV per share end of FY21 will be around $1.20.

Year 2 is more interesting. Long story short, 7 farms leased $4.5m revenue, NPAT of around $1m after NAV fees and NAV increase fees combined of ~$870k assuming a 3% asset revaluation. After tax EPS of 1.5c per share excluding revaluations. It's no wonder they think this should be valued on a NAV basis which will be $1.26 per share (and an eye watering P/E ratio of 82). Other assumptions include 1% capex, 1% depreciation, 3% revaluation, 3% interest, directors fees & expenses $186k, other expenses $150k.

Cash generated will be $1.6m before repayments on the debt, and the NAV 0.5% fee is paid in cash. The NAV increase fee is paid in shares which means offer shareholders will be slowly diluted by the Management Co. At some point the BNZ will likely want some money back so the dividends will be capped by covenants, imputation credits and free cash flow arising after debt repayments.

I can't be bothered working our their weird measure of "AFFO". We can look at cash & profit instead plus their policy is to be Listed PIE so they require full imputation credits and RWT on dividends. Taking 80% of the pre-tax profit of $1.3m implies a maximum potential dividend of ($1.3m x 80% / 61m shares) 1.7c per share. Based on a NAV of $1.26, this gives a maximum yield of 1.35%. It's no wonder they want this to be valued on a NAV basis.

Take from this what you will but it appears the Management Co does very well out of this at the expense of shareholders. As other have said, better to invest in the Management Co with such easy fees, but I believe it is unlikely ALF will be able to acquire the other 50% of rights without paying through the nose. Now that I have gone through the process, the cynical side of me thinks the Directors know these numbers and didn't want to disclose such a miserly return to shareholders. But it is worth asking for whom do the Directors of NZRLC work?

Like RUA, I wouldn't touch this given there are better opportunities elsewhere.

I think I will stop there.

[kiora]

Thanks Ferg for all that good work
There has been a lot of these type of investments over the years and the most pertinent Q is as you say is
Who benefits?
and who is going to lease these properties ?
The $30m debt is also a major concern if not all paid back.
When/if interest rates go up the interest cover will be all eaten up by the term loan
My view is that investing in rural land is best used as a storage of wealth not a maker of wealth but that this vehicle is not suitable for this purpose given its debt and sensitivity to interest rates.

[nztx]

Thanks - Ferg, a good summary there..

Lets add in a new variant - farms revalued annually & resulting contrived revaluation surplus or loss taken into P&L directly.

The Retirement Homes sector already does this - so why not NZRL as well .. nothing like a bit of window dressing
& polishing the EOY results to bury the obvious ;)

Who pays the rates & other farm owner outgoings ? Capital expenditure ? Farm Development costs ?
R&M ? Water & other humungous fees (as can be attributed usually to the current Red/Green
clowns in session)

Are the eager bunch of Farm leasees going to be hit over the head with a long batton for these as well ? ;)

Perhaps some of us on here should assemble our own bundle of 'profitable dreamed up yet to fly schemes'
and fire them at ALF in return for a large slab of the equity / action & seats around the ALF Boardroom Table ;)

That seems fairly roughly to be what's happened, doesn't it ?

[Snoopy]

Thanks Ferg for all that good work
There has been a lot of these type of investments over the years and the most pertinent Q is as you say is
Who benefits?


A short précis on a talk given by Cameron Bagrie is here

https://coastandcountrynews.co.nz/news/5416-dairy-industry-well-positioned-future.html

-------

The high proportion of interest-only loans in the dairy industry, compared to other sectors, is an area where farmers can expect to continue to see change.

“Low interest rates have been distorting the price of risk, and as a result risk has been mispriced. Lending standards have been tightened, and this will continue.”

--------

The way I read they article, the banks have been far too "gung ho" about lending to the dairy industry and want to wind back their exposure.

Enter NZ Rural Land Co. to take some of that rural land off their books. I don't like that 'risk continues to be mispriced' comment though. I think Cameron is saying dairy farm prices are too high.

Mind you others have said the same about real estate in general, and yet this in particular has fed into incredible value opportunities becoming apparent in the retirement village sector (apparently). So I guess if house prices are destined for a steep rise forever, exactly the same applies to farm land?

SNOOPY

[kiora]

Its more about returns have been very modest rather than farm prices been overvalued. Sort of smoke & mirrors
All complicated by who is going to lease their farms LONG term and pay 4.5% ROR?
When typical return on farmer owned operations of only 3-4%?
Leasee can't secure over land, just stock plant & equipment
No leasee no return
What are interest rates going to do long term? Up or down?
What effect will this have on this vehicle?
Farm sale prices have been flat lining for 12 years and yes rural land prices are due/overdue for a rise

[Ferg]

Some good questions and comments. As kiora mentioned, it won't take much of a change in interest rates to harm the financials and covenants. I suspect the vendors of the farms will be the initial tenants.

Any "window dressing" of revaluations will add to the NAV which will add to the management fees, both in cash and shares. I suspect the revaluation will go into an asset revaluation reserve - whilst it might be there for "comprehensive income" it won't be part of retained earnings.

From my brief skim read of the prospectus, all rates and other operational outgoings (including water & maintenance) are to be borne by the tenant. I also think any capex is pre-agreed with the leasee. I reckon the farms are being purchased off the intended tenants, hence due diligence is important to avoid any deferred capex/maintenance traps. NZRLC will want to protect themselves from that so the purchase and lease agreements will be full of all sort of clauses for the benefit of NZRLC, which is a risky proposition for the tenant.

That leads me to my next questions which Snoopy touched on. If the banks are nervous about historic interest only loans in the farming sector, does that mean NZRLC only has a small window of interest only? If so, debt repayments will consume a large proportion of future FCF which will hamstring any dividend returns. If not, then that doesn't solve the issue for the bank of the capital not being repaid. Some interesting quotes from the prospectus have been pasted below* which convinces me this is a play for a major bank (BNZ?) to offload some distressed dairy debt onto shareholders.

I see NZRLC will not draw down the full debt facility (p44) - they want to leave some covenant headroom (debt <= 30% of total assets). So this may leave around $2m headroom on the facility - this doesn't significantly change my previous analysis.

So who are the potential vendors of the 19 farms? Are they farms with distressed debt brought to NZRLC by the banker? The prospectus mentioned 19 opportunities, but these are scattered around the country including Southland and Canterbury which, I'm lead to believe, are not naturally good for dairy. Some more disclosure is needed around how these opportunities were identified and any links between the various Management Co Directors and the banker they have in mind (my bet is BNZ given there is more than one connection). If these opportunities were found by the advisors, that is a very scatter gun approach rather than focussing on good dairy country like Taranaki and Waikato.

Qui bono? The farmer gets out of his financial pickle, the bankers reduce their risk, the management agreement is a bed of clover - all paid for by the shareholders.

NB : from here: https://www.nzx.com/announcements/361572 I see the ALF loan will convert to equity so my previous analysis does not change.

*Banking quotes from the prospectus:
p19 "lending appetites have changed within the banking sector and lending is now significantly constrained, particularly to the dairy sector."
p19 "Debt per kgMS has grown from NZ$9.48 in 2003 to NZ$21.99 in 2019."
p20 "Banks are increasingly requiring principal repayments on dairy sector debt"
p20 "More Dairy Farm Balance Sheets are Currently Stressed"
p20 "24% to 30% of New Zealand Dairy farms are classed as highly indebted resulting in a “distressed debt” market size of between NZ$9.94 billion to NZ$12.42 billion"
p20 "High Debt-to-Income farms are struggling to service debt despite strong milk prices"
p24 banks have been "tightening credit to dairy farmers"
p45 "From the rental income NZRLC receives it intends to meet its operating costs, service bank debt and pay dividends." So there is no interest only loan for NZRLC.

In conclusion, this feels like a play for a banker to offload their debt and risk to shareholders. What will be interesting to know is which bank benefitted from the sale and lease-back of each property. I ask again, who are the Directors working for?

[kiora]

In my view an equity partnership is a better vehicle to invest in the rural sector as all the stake holders are better aligned but even with EP there is a lot of snake oil
The major downside of EP is the lack of liquidity for exiting partners
http://www.stuff.co.nz/business/industries/8947591/Second-crack-at-raising-money
There has been more interest in horticulture EP in the last few years as the returns have been a lot higher (25% for cherries?) than pastural farming or dairying

I wonder how this is living up to its promises
https://www.myfarm.co.nz/central-cherry-orchard

And then there is Rocket apples, hops and kiwifruit

[RTM]

Thanks for this Ferg and others. I to have received several invitations to invest, had not intended to and the comments above confirm my decision.

[Nigel]

I hold ALF and am more comfortable being on that end of the equation. 5 million shares at $0.50, and if NZRLC goes ahead, a good stream of fees in perpetuity. ALF still has a market cap of only $12m, is profitable and pays a dividend.

[nztx]

Has anyone compared a lucky fortunate shelling out 4.5% on a farm lease to NZRL (likely more on top)
and not enjoying ownership / gains on it for the duration

WITH

The same Lucky Fortunate instead Buying the Sticks & perhaps paying (I dont know what rural lending rates look like)
but lets guess - 3% say - with ingoing Deposit / initial ingoing seeing help from wider family resources up to fair deposit ?


Presumably extras / outgoings in turn see the lucky fortunate in future leasing NZRL Dirt being hit over the head with
a Long Batton to cough up, in the same way as if he owned the block (with a large mortgage) ;)

Based on this -

Who in their right mind would be wanting to LEASE some Dairy dirt for 10 YEARS from NZRL ? ;)

Am I missing something here ? ;)

Let's face it - NZRL buying farms with no-one wanting to Lease them = Scheme No work

NZRL not buying Farms because No Farmer interest in future leases of them = Scheme No work either

NZRL offering extra long term incentives to Farmers to make Leasing more attractive = Scheme No Work well either

(How thin are NZRL's margins after those huge management & other fees again ? )


Obviously ALF really like the scheme - and may also get to potentially clip the ticket in multiple ways via other
livestock & other activities they operate..

Many could be forgiven for having reservations on whether NZRL will actually fly or founder or even taxi on the runway;
or indeed wind up costing occupants in a number of different sets of seats a good sting in the tail & disappointment .. ;)

When erecting structure made from stack of cards, always prudent to ensure bottom cards do what is intended

Does the NZRL Scheme actually pass the test ? ;)

Does anyone know ? or are the eager punters all throwing bucks in the air on no NZRL Projected figures in hope ? ;)

In any event - why is ALF's "arrangement" suggesting it allows for withdrawal / refunds - you name it, if the grand
scheme of things doesn't happen ? .. surely they should have more faith in things than that, before expecting & directing
further stakeholder funds raised along with ALF resources to be thrown at NZRL ? ;)

[Snoopy]

Has anyone compared a lucky fortunate shelling out 4.5% on a farm lease to NZRL (likely more on top)
and not enjoying ownership / gains on it for the duration

WITH

The same Lucky Fortunate instead Buying the Sticks & perhaps paying (I don't know what rural lending rates look like)
but lets guess - 3% say - with ingoing Deposit / initial ingoing seeing help from wider family resources up to fair deposit ?


Based on this -

Who in their right mind would be wanting to LEASE some Dairy dirt for 10 YEARS from NZRL ? ;)

Am I missing something here ?



What you are missing is that, pre-Covid at least, the market for farms in some regions was so bad that there were no sales at any price. Banks were under pressure from their Australian parent banks to wind back rural lending, and most importantly get those farmers to pay back some principal as well as interest. So no new finance was available at all - cash buyers only - which obviously severely restricted the pool of buyers and froze the market. That means purchasing a farm for almost all was not an option.

A leaseholder does not have any obligation to repay principal. So there is likely a cashflow advantage for the lessee. A ten year lease is probably a good thing as it likely will ensure you have at least a few very good years across the commodity cycle and you can't be thrown off 'your' land by some Johnny come lately wanting to jump in on your lease as the commodity cycle turns.

SNOOPY

[WAIKEN]

i agree with you Snoopy.
I know a number of diary farmers well. They have all made tens of millions in profits and capital gains over the past 30 years and expect to continue that wealth accumulation. They all have a problem of getting market value for their enterprises when wanting to retire.
The 20 million dollar plus farms are increasingly going to corporates. NZRL is a unique corporate structure removing the operating risk.
Over time they will purchase other types of land use as forestry and horticulture.
In the long run many of their properties near growing population centres are likely to be able to be subdivided.
NZ has a growing population. Land is a scarce commodity.
I believe this is a very clever structure which will give a good dividend return and excellent capital gains in the long run for those wanting a smaller slice of the rural money pot. Clever ideas often appear simplistic eg Trademe or Facebook.
The Aussie banks don't give a toss about their own farmers let alone Kiwi farmers. They will provide a steady stream of well priced land for NZRL

[kiora]

If they are buying dairy farms why are they not putting on 50% sharemilkers.
A far better return I would have thought?

[Snoopy]

I know a number of dairy farmers well. They have all made tens of millions in profits and capital gains over the past 30 years and expect to continue that wealth accumulation. They all have a problem of getting market value for their enterprises when wanting to retire.

<snip>

NZ has a growing population. Land is a scarce commodity.
I believe this is a very clever structure which will give a good dividend return and excellent capital gains in the long run for those wanting a smaller slice of the rural money pot.


I wonder if there is an expectation issue here?

Could the reason that farmers are not getting the prices that they think their land is worth be because their land is not worth what they think it is?

I know that farmers have done well with capital gains over the last 30 or so years. In fact those capital gains are really the reward for many farmers whose cumulative incomes over that period have been less than stellar.

The banks are not prepared to lend on farm land acquisitions, because they cannot see the continuity of income that will support the current market price for farm land. So why should new equity investors in farm land today have a realistically different measuring stick on farm values?

And why should farm values go up long term from here if the farm cannot generate the income to support those farm values?

SNOOPY

[GTM 3442]

Out of idle curiosity, would you sell Rural Equities (REL) on Unlisted to buy this?

[kiora]

I was waiting for this
No way
Interesting RE was set up to bail out Sheep and Beef farms not dairy initially
Way more successful I would have thought and no one clipping the ticket so much

[SeanL]

According to a REINZ press release in November 2020 “The median price per hectare for all farms sold in the three months to October 2020 was $28,399”* with the average dairy farm size being 133 hectares. If we ignore any costs NZRLC might incur to upgrade or get the property tenantable, our purchase price for the average Kiwi Dairy Farm is

$ 3,777,067.00 NZD

Income at stated lease yields of 4.5% $ 169,968.02 (gross p.a.)

Less:
Transaction Fee of 1.25%: $ 47,213.34
Management Fee 0.5% (NAV) Annually: $ 18,885.34
Lease Fee: $30,000.00

Total Fees paid $96,098.67 (representing a total charge of 2.543%)

NIBT $73,869.34

This is clearly rough data but does provide you with an outline of what to expect from the company in the future, then consider they will also reap 10% of any capital gains in asset value, which over a 10-year lease period could be significant income for the management company annually.

[JoeM]

According to a REINZ press release in November 2020 “The median price per hectare for all farms sold in the three months to October 2020 was $28,399”* with the average dairy farm size being 133 hectares. If we ignore any costs NZRLC might incur to upgrade or get the property tenantable, our purchase price for the average Kiwi Dairy Farm is

$ 3,777,067.00 NZD

Income at stated lease yields of 4.5% $ 169,968.02 (gross p.a.)

Less:
Transaction Fee of 1.25%: $ 47,213.34
Management Fee 0.5% (NAV) Annually: $ 18,885.34
Lease Fee: $30,000.00

Total Fees paid $96,098.67 (representing a total charge of 2.543%)

NIBT $73,869.34

This is clearly rough data but does provide you with an outline of what to expect from the company in the future, then consider they will also reap 10% of any capital gains in asset value, which over a 10-year lease period could be significant income for the management company annually.

That would only be for the first year though? then all 9 years ( assuming its leased for the full 10 years ) would only incur the 0.5% fee plus any performance increases

[SeanL]

That would only be for the first year though? then all 9 years ( assuming its leased for the full 10 years ) would only incur the 0.5% fee plus any performance increases

Thats correct - i did do the math's using rural land prices over a 10 year historical growth and what that looks like if rural land increase along the same trend over a 10 year period (based on lease periods) as well but I just thought the first year snatch and grab was interesting

[kiwidollabill]

^ All interesting and have come to similar conclusions.

Depending on where the purchases of land happen I would say your per Ha cost is too low, quality dairy land in the SI at scale is closer to the mid $30k s per Ha.

Lease rental is then a lower %

All parties require speculation on increased land value, unless they are dedicating capital investment/conversions (which they are not) given the market dynamics in the near-medium term, what is the likelihood of that happening? OIO, nor the banks have interest in loosening up.

[Ferg]

See post 8 for the average size of farm they are considering. It is closer to 486 hectares per farm based on 19 farms identified as acquisition targets, occupying a total of 9,239 hectares. It could be that the farms NZRLC is considering are significantly larger than the latest quarterly average you have seen, especially given that appetite for bank funding for dairy farms has diminished. That puts the larger farms out of reach.

To your point of the first year being a cash grab - we all agree on that but the sting in tail for investors will be dilution by the Management Co after a number of farms are acquired at a value significantly under "market value", whatever that may be. Admittedly 90% of the gain is shared amongst the shareholders, not forgetting that would also include the Management Co.

[nztx]

If they are buying dairy farms why are they not putting on 50% sharemilkers.
A far better return I would have thought?


ALF's newly incarnated money generating satellite to make up for less bacon elsewhere may have invent another raft
of ticket clipping if they did .. ;)

[SeanL]

^ All interesting and have come to similar conclusions.

Depending on where the purchases of land happen I would say your per Ha cost is too low, quality dairy land in the SI at scale is closer to the mid $30k s per Ha.

Lease rental is then a lower %

All parties require speculation on increased land value, unless they are dedicating capital investment/conversions (which they are not) given the market dynamics in the near-medium term, what is the likelihood of that happening? OIO, nor the banks have interest in loosening up.

speculation would be putting it lightly with this one considering the financial data the company is providing - next to none. would much rather see a private company like dairy holdings limited take itself to market.

[golden city]

Ipo closed on last Friday. Let’s see how much they have raised

[nztx]

https://www.nzx.com/announcements/365132

ALF Rights Announcement today contains reference to the NZRL IPO:

"FINAL CHANCE TO INVEST IN ALLIED RIGHTS ISSUE FOLLOWING SUCCESSFUL RURAL LAND COMPANY IPO

• Shareholders are reminded that Allied Farmers’s Rights Offer @ 50cps closes this Friday 18 December 2020.

• The NZ Rural Land Company Limited (NZRLC) IPO has successfully satisfied its minimum raise condition of $75 million in its Initial Public Offering, meaning that Allied Farmers will acquire a 50% interest in NZ Rural Land Management Partnership (the Manager). To assist in the success of the IPO capital raise, Allied agreed to invest $750,000 in the NZRLC IPO.

Final Chance to Invest in Allied Farmers’ Rights Issue Capital Raise"

[nztx]

https://www.nzx.com/announcements/365157

Updated L&Q Notice - New Zealand Rural Land Company Limited


'Company: New Zealand Rural Land Company Limited

Issuer Code: NZL

Ticker Code: NZL

ISIN: NZNZLE0001S2

Short Name: NZRLC


'Product Disclosure Statement Dated: Monday, 16 November 2020

Offer Opens 5:00pm, Monday 23 November 2020

Offer Closes 5:00pm, Friday 11 December 2020

Allotment Date: Friday, 18 December 2020

Earliest Mailing of Holder Notices: Friday, 18 December 2020

Expected Commencement of Trading on the NZX Main Board: Monday, 21 December 2020'

[golden city]

Good outcome

[Ferg]

So NZL listed today (great ticker BTW!). Per my post #8 I estimated shares on issue of 60.62m after the IPO. The various NZX announcements show the shares on issue are 60.46m. My previous calculation assumed ALF would exercise their right to convert their loan into 300k shares which it seems they have not yet done.

The 60.46m is made up of the initial 260k shares, plus 60k shares issued to Directors for services in lieu of fees and I'm guessing the balance of 60.14m shares were issued under the IPO.

Per the NZX announcements, the D&O's Messrs Dillon, Milson & Swasbrook now collectively hold 3.13m shares. This has increased by 2.87m shares versus the 260k shares on issue prior to the IPO. Without these individuals increasing their stakes, the IPO would not have met the minimum subscriptions. I estimate public subscriptions were about 57.27m shares out of a minimum of 60m.

The IPO offer price was $1.25. Pre-opening trades have settled today at $1.30 with sellers currently at $1.28 and buyers at $1.26. Some hopeful punters are offering 229k of their newly acquired shares at prices ranging from $1.50 to $2.25. They may be waiting a while considering total shares on offer outnumber total shares being bid for at 3.6 : 1.

[nztx]

Well that went well - a series of of bumps & skids up to 131 pennies for a slice of prime future dairy
estate then a slide down the slope to start, any eager buyers in sight look like they're running out of puff .. ;)

but who knows ..

[Beagle]

Good outcome

I am pleased the absolute barrage of emails soliciting support has stopped so yes, from my perspective its a great outcome.

[WAIKEN]

Some interesting substantial holders if you google them.

[golden city]

Clyde and Rena Hollard Also bought 20% of the management company very interesting

[golden city]

Could all back up to Alf with the call option. Eventually Alf will hold 100% of the management company and Clyde and Rena Hollard and elevation will control Alf the entity will become their vehicle to drive future plans

[Southern Lad]

Rural Equities Limited (on Unlisted) looks a better buy than NZL to me:

* In house management team with no apparent ‘out perform’ remuneration
* Already established portfolio of 17 properties.
* Total assets at June 2020 were $182m which included cash on hand of $38m.
* Last traded price of $5.00 is a discount to NTA of $5.60
* Directors have a track record of driving shareholder value (especially if you resist the frequent share buy back offers)

REL undertakes a mixture of farming operations themselves and also farm leasing. There is a mixture of dairy, sheep and beef, and arable. They also have taken the odd equity position in agricultural sector firms. Controlled by the Cushing family out of the Hawke’s Bay. Share are tightly held so you will need to be patient to acquire a sizeable shareholding.

[SailorRob]

No wonder they need the big flash advertisements.

If it was remotely interesting they wouldn't need to advertise at all.

[nztx]

Two months later after IPO = No News whatsoever

Must mean most of the dough raised is still sitting in the bank .. ;)

Surely even having finished the first step of arranging the deckchairs would be newsworthy for an announcement ? ;)

[nztx]

Confirmation of a session of sleepies & dreaming up to 31 Dec 2020 through today .. ;)

https://www.nzx.com/announcements/368331

[Analyst]

No investment in this. But thought it was interesting to see the a director effectively benefit twice in the IPO...director fees+brokerage

12344

[Ferg]

TLDR: For context current SP is $1.13, float price was $1.25. Again sorry if it's a bit long but this makes me nervous due to IMO a lack of progress, lack of focus, sloppy reporting and snouts in the trough.

An update on my post #8 on 5 December 2020 - partly quoted below:


So the financial position after the capital raise [snip] will be:

NAV per share $1.20

[snip]

NZRLC have stated they are interested in dairy farms and can see 19 opportunities with 9,239 hectares.

NAV
Reported NAV = $1.208 per the interim report, so I wasn't too far out with my projection of $1.20 (~$0.5m).

Acquisitions
The prospectus stated NZL was interested in 19 farms at the time. So far nothing has eventuated but p2 of the Interim Report (IR) states: "We anticipate being in a position to announce the terms of an acquisition in several weeks". Notice this says acquisition singular, not plural. The interim report mentions that irrigation reports and soil testing takes time for large acquisitions. Personally I would have expected they were a little more advanced with their 19 opportunities in terms of some of this stuff when they went to IPO. How were these opportunities identified and/or included in the PDS if they didn't have any of this basic information? Surely the potential vendors would have had something to assist with the process? Or maybe they were pie in the sky opportunities? I suppose the big wheels do turn slowly but this feels glacial given we are now at the end of February.

Receivables
How does a company with no revenue have receivables of $116,251 per note 7? I know it's not a big number but I am genuinely curious. Has an insider borrowed money from NZL? Or has someone not paid for some shares? Note 5 states equity raised is $75,000,000 but the cash flow statement has $74,883,749 so the mystery is partly solved. Who hasn't paid for their shares? If this is an insider, should that be disclosed in related party transactions? And if it's not an insider, how do we get shares on tick? That sort of rubbish needs to be sorted before you reach the end of a reporting period so that simple people like me don't get to raise simple questions like that.

Missing Directory?
Also, where is the Directory per the index in the Interim Report? Still waiting to see if the bankers are BNZ....

Elevation Capital Management Brokerage Fees
The PDS stated "Elevation Capital Management Limited (Elevation) has entered an arrangement with the Lead Manager where the Lead Manager will, from the fees it receives for acting as Lead Manager, pay brokerage to Elevation. The amount of brokerage payable will be up to 1.5% of the aggregate value of all Applications that Elevation arranges from its investor network and are allotted."

The IR states Elevation received $747,255 in brokerage fees. Dividing this by 1.5% implies Elevation brought almost $50m of the proceeds to the table, out of $75m total. So if I am interpreting this correctly, Elevation brought around 2/3rds of the money to the table through it's investor network, and the brokers etc the other $25m. Assuming the $747k is included the total listing expenses of $2,330k that leaves a lot of money to make the PDS and raise the other $25m.

The way that note is worded in the PDS, it sounded like Swasbrook was bringing along a few mates with him and wanted to be compensated for that. But 2/3rds....really? IMO that should have been disclosed in the PDS.

Dairy / Not Dairy
The PDS was full of statements about dairy dairy dairy, milk prices, dairy land prices yada yada yada. In 54 pages viticulture was mentioned in passing 3 times:
p2: "In the long term NZRLC may acquire land in the dairy, sheep and beef, horticulture, viticulture and forestry sectors."
p8: "Our initial focus is on acquiring New Zealand dairy properties. However we intend to expand our focus to other New Zealand primary sectors, particularly as investment opportunities arise in horticulture, viticulture, forestry, as well as sheep and beef."
p45: "As it grows NZRLC intends to expand to other primary sectors in New Zealand such as horticulture, viticulture and sheep and beef."

Page 2 of the IR now states: "While our core, initial focus remains on acquiring dairy farms, we are having preliminary discussions with potential tenants and vendors in other sectors such as viticulture. This work will continue so that we are prepared to diversify into other sectors once we have established an asset base in the dairy sector."

Focus people, focus. It is too early to get into other sectors when your prospectus had a mountain of analysis on dairy. I recommend NZL stop "chasing deals" and deliver on what they said they would in dairy.

Conclusion
This makes me nervous due to IMO a lack of progress, lack of focus, sloppy reporting and snouts in the trough.

@NZL PM me if you want a professional.

[beetills]

FPI and LAND on the NYSE are successfull examples of how they should operate imo although to be fair i only say that because both companies share price have been going up.

[kiora]

"It is possible for small-scale investors to buy shares in real-estate investment trusts (REITs) that own and manage agricultural land. However, as with all such investments, how a REIT is managed can be a substantive source of risk unrelated to the underlying value of the land assets, not all of which may be farm land"
.https://finance.yahoo.com/m/0f5815fc-7633-357c-8ab1-e9ddb6e4da1c/bill-gates-and-warren-buffet.html

[nztx]

Oh - Look ... Someone at NZL has woken up after long holiday .. ;)


https://www.nzx.com/announcements/369156



15/3/2021, 5:06 pm TRANSACT
NZX Announcement

15 March 2021

New Zealand Rural Land Company Limited (NZL.NZX) is pleased to announce that is has a conditional agreement for the first in a series of expected acquisitions.

NZL’s first purchase is a 456 hectare dairy farm in Mokoreta, Southland with a settlement date of 1 June 2021. The purchase price is NZ$10.373 million. The agreement remains conditional on a successful ‘Drop Test’ to test the integrity of the effluent pond on the farm and this condition is due to be confirmed on 26 March 2021.

NZL has agreed the terms of a lease for the farm with Fortuna Group which will commence from settlement. The lease is for 10 years with a rental of $515,667 per annum, representing a 4.97% per annum lease yield (after transaction costs). This acquisition is consistent with NZL’s stated plans and tenant requirements at the time of the IPO in December 2020.

NZL continues to work on several larger scale acquisitions of dairy farms in the South Island and expects to complete those negotiations in the ensuing weeks with earlier settlement dates than traditional dairy farm settlements (being 1 June). Successfully concluding these negotiations would see NZL generate lease income prior to its 30 June 2021 balance date that would be earlier than indicated in the IPO documentation. NZL is in discussions with debt funders to establish funding lines for these further acquisitions.

Attached to this NZX release is an Acquisition Announcement document which provides a property and tenant summary.

ENDS

Contact:
Christopher Swasbrook

[Lola]

Oh - Look ... Someone at NZL has woken up after long holiday .. ;


https://www.nzx.com/announcements/369156

Ridiculous, cynical, useless comment.
It’s the first carefully considered step in fulfilling their long term strategy. Are you jealous of something?

[CJ]

Ridiculous, cynical, useless comment.
It’s the first carefully considered step in fulfilling their long term strategy. Are you jealous of something?
Agree - No Dairy sale is going to settle until Gypsy day anyway so they are still working to timetable.

The question that this raises for me is why would Fortuna sign up to a lease at 4.97% when they could be borrowing in the low 2% range. Fortuna probably should have just done a cap raise themselves to give them the equity to do this themselves.

[Lola]

Agree - No Dairy sale is going to settle until Gypsy day anyway so they are still working to timetable.

The question that this raises for me is why would Fortuna sign up to a lease at 4.97% when they could be borrowing in the low 2% range. Fortuna probably should have just done a cap raise themselves to give them the equity to do this themselves.

Good question. I have no idea but Fortuna will have their reasons.....I guess its a waste of time asking NZTX...?

[nztx]

Here's an exit facility for punters - courtesy of the new Board Import's desk:

https://www.nzx.com/announcements/369173


;)

[nztx]

Good question. I have no idea but Fortuna will have their reasons.....I guess its a waste of time asking NZTX...?

CJ has a good point there IMO .. no answers or further suggestions - Lola ? ;)

[nztx]

Ridiculous, cynical, useless comment.
It’s the first carefully considered step in fulfilling their long term strategy. Are you jealous of something?

no no no .. out of this duo for good & smiling -- far better faster moving fish elsewhere .. already well off the starting blocks & flying ;)

[nztx]

* Double posting removed *


can't have folks wondering if their glasses are malfunctionng seeing double - can we .. ;)

[Ferg]

Here's an exit facility for punters - courtesy of the new Board Import's desk:

https://www.nzx.com/announcements/369173
Thanks for sharing. The Directors previously stated they want this business to be valued on an NTA basis, so I guess this is where they get to make that happen by acting like a market maker. Is this the best use of funds? Also, qui bono?

[CJ]

So they listed a cashbox and will use that cash to buy their own shares? Seems a bit premature.

Here's an exit facility for punters - courtesy of the new Board Import's desk:

https://www.nzx.com/announcements/369173


;)

[CJ]

So they listed a cashbox and will use that cash to buy their own shares? Seems a bit premature.

Here's an exit facility for punters - courtesy of the new Board Import's desk:

https://www.nzx.com/announcements/369173


;)

[Ferg]

I have been looking into the impact of NZL buying back shares on the market. It appears we currently have a floor price in the market of around $1.13 and a (relatively) large volume went through on March 30th at somewhere around that price (any traders may know the actual prices?). For the purposes of this analysis I'm assuming NZL have set the market maker at $1.13 and they are paying maybe 0.8% brokerage (a guess) which puts the cost per share at $1.139 each.

They can buy back up to 10% of issued shares (60.46m), which is a maximum of 6,046,000 shares. If they manage to buy all 6m shares at $1.13 this impacts the P&L and NTA given they have stated the shares will be cancelled and not held as treasury stock. I'm not an expert on this so this is my best guess - if the accounting treatment is not correct please let me know.

Assuming all 6m are purchased at a cost of $1.139 then cash expended will be $6,886k, capital cancelled will be $7,324k* giving a nett gain of $438k which I imagine will form part of comprehensive income. This lifts NTA from $1.208 per share per the interim report to $1.216 assuming there are no other transactions. Make of that what you will but there are performance incentives based around NTA. Buying and cancelling shares increases NTA where shares are purchased on market for less than $1.21.

*Capital cancelled includes cancelling not just the shares and their par value, but also the issue costs associated with those shares. The capital per share is $1.211 per the interim report (total $73,241,792 / 60,460,000).

And in other news I see NZL have announced their Southland farm acquisition is now unconditional. Hopefully that is the first of many successful acquisitions. https://www.nzx.com/announcements/369598

Disclosure: curious and interested observer, not a holder (at the current price).




FYI Workings follow:




Opening
Buy back
Closing


Summary:





Shares on issue
60,460,000
-6,046,000
54,414,000








Capital $
$73,241,792

$65,917,613


NTA
$73,033,149

$66,146,755








Capital/share
$1.211

$1.211


NTA/share
$1.208

$1.216














Balance Sheet:





Cash
$72,842,848
-$6,886,394
$65,956,454


+Others
$371,195

$371,195


=Total Assets
$73,214,043
-$6,886,394
$66,327,649








- Liabilities
$180,894

$180,894








Capital
$73,241,792
-$7,324,179
$65,917,613


+Retained Earnings
-$208,643
$437,785
$229,142


=Equity
$73,033,149
-$6,886,394
$66,146,755














Price / share

$1.130



+Brokerage 0.8%

$0.009



= Cost / share

$1.139

[nztx]

$6 Mills - is that one or two less Farms ? ;)

along with less in follow on enrichment / do a deal / Management fees for ALF on multiple levels too .. ;)

[nztx]

https://www.nzx.com/announcements/379712

Rights Issue Shortfall Placement

23 September 2021


Rights Issue Shortfall Placement Completion

On 28 June 2021, New Zealand Rural Land Company Limited (NZX: NZL) completed a rights issue which raised $20.3 mln in aggregate. The rights issue resulted in a shortfall of approximately $24.0 mln.

NZL is pleased to advise that it has today allotted 16,805,868 ordinary shares at $1.10 per share to place the shortfall from the rights issue and raise a total of $18.486 mln in new capital. This, together with debt capacity that NZL has with Rabobank, represents sufficient capital for NZL to fund the acquisitions that it currently has under due diligence. Given the shortfall placement was at a sizeable discount to NZL’s audited net asset value as at 30 June 2021, NZL was conscious to not raise any capital in excess of what it actually requires to fund the acquisitions that it has under investigation.

NZL today also allotted 1,163,162 ordinary shares at $1.3968 per share to satisfy the performance fee payable to NZL’s manager, New Zealand Rural Land Management Limited Partnership, for the period ending 30 June 2021.

A capital change notice accompanies this announcement.


So the Rights Issue didn't go exactly to plan ? ;)

but some punters on the outside stood up to the plate to buy the shortfall shares instead to save the day ? ;)

Suppose the Merchant Banker on the Board had his work cut out trying to find a new home for the all unwanted
shares in the Rights Issue ? ;)

Just short of 46% of existing holders (by value on what on was sought) taking up their rights doesn't exactly
look like an overly happy or positive vote by existing holders on the June 2021 Cap Raise - does it ? ;)


But wait there's more:


Given the shortfall placement was at a sizeable discount to NZL’s audited net asset value as at 30 June 2021

So there was a sizeable discount to Net Asset value to quit the unwanted large bundle of slightly more than 54% of the Rights Issue shares by value ? ;)

That should make existing holders very happy .. Was the Farm portfolio too aggressively revalued upwards at 30 June 2021 for this to happen ? ;)

Is that also why only slightly less than 46% of Rights Issue shares (by value) were actually taken up by stakeholders ? ;)


Just as well NZL was fortunate enough to be able to rescue the Rights Issue, or it could have been an embarrassing
LARGE FAIL which probably could have had equally large repercussions on transactions the issue was to fund and
downstream the Muddy Boots Management Co through to ALF & it's stakeholders as well ;)


Looking back this was a 2 for 3 Rights issue at $1.10 a shot

NTA at 31 Dec 2020 was $1.208

NZL is undertaking a 2:3 rights issue @ $1.10 to raise $44.33M

from this release:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/373634/347973.pdf


So just 22 days before balance date NZL Shareholders were fed the December Net Asset Value of $1.208
with no indication that Net Asset value at 30 June would be 19 cps more ? ;)


That's nice - wonder how many more would have taken up their rights if disclosure that further revaluation gain
upwards was likely for period / year ended 30 June 2021 ; rather than giving away that gain to others along with
NZL stumping up the fee for finding a new home for their unwanted Rights Shares ? ;)




and a bit on the post Rights Issue haggling to clear the deck is here:

https://www.nzx.com/announcements/374643


Allotment of Rights Issue

New Zealand Rural Land Company Limited (NZL.NZX) is pleased to announce that it has today allotted approximately 18.47mln ordinary shares under its rights issue, raising $20.3mln in aggregate. NZL thanks shareholders for this support.

Under its capital management policy, NZL’s primary mechanism for raising capital is through pro rata rights issues. This ensures that existing shareholders receive a first and proportionate right to participate in a capital raise. Accordingly, NZL expects that its rights issues will not be fully subscribed but will give NZL shortfall to place, on no more favourable terms, with institutions and wholesale investors to enable it to then broaden its investor base.

Clyde and Rena Holland, a substantial shareholder of NZL, have agreed to maintain a 9.90% stake in NZL and intend to participate in shortfall placements accordingly. Excluding this allocation, a shortfall of approximately $21.6mln remains which NZL will look to place within the next three months. NZL has received expressions of interest for approximately $2.5mln of that shortfall and welcomes further interest from institutional and wholesale investors.

NZL has agreed to pay third party financial intermediaries a placement fee of up to 1.75% on shortfall allocations.


so aside from the sizeable discount, NZL also stumped up a fee to clear the deck of unwanted Rights Issue shares as well ? ;)


Now despite all this - just FOUR WEEKS ago on 30 August 2021 - NZL issued this commentary
Accounts etc for year ended 30 June 2021:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/378211/353578.pdf

Buried on the first page is this -

Financial Performance/Summary for Period Ending 30 June 2021

Net Asset Value (NAV) Per Share $ 1.3968


and Shortfall shares were still issued at a "sizeable discount" to 30 June 2021 Net Asset Value ? ;)


Is there a problem with what the farms are actually worth ? or was there an unwanted rights shares fire sale ?
or was the whole scheme in grave danger of turning badly to kr@p on poor 2:3 Rights Take up ? ;)


Did NZL treat it's Shareholders fairly in communicating only the 31 Dec 2020 Net Asset Value ($1.208) ;
omitting any mention that Net Asset Value just 22 days past the release on 8 June 2021
to End of the Year could be materially higher or different - as it was (at $1.3968 per share) ?

Was there a material omission in NZL's disclosures and releases to it's Shareholders ? ;)

The difference between the two values is almost a 15.63% increase on 31 December 2020 Net Asset Value ..


What sort of message does this send out to Shareholders at large of the Muddy Boots Empire ? ;)

Should ALF's Shareholders also be concerned by this ? ;)

Obviously they are expecting something to be tipped out of ALF's overflowing pot next January in the once a year
divvy up of the excess spoils ;)


Am I missing something here ? ;)

[nztx]

Annual Report Sheet issued today, disclosing extent of Farm Property mark ups added

Note: Unrealised Revaluations should not be confused with REAL SURPLUSES / PROFIT or even CASH SURPLUSES
until the farming dirt is on-Sold onto a new buyer, if and when that happens ;)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/380167/356041.pdf

[percy]

Top 20 shareholders as at 31st August 2021
New Zealand Permanent Trustees Limited 15,995,000
Premier Nominees Limited 5,884,902
Forsyth Barr Custodians Limited 4,900,000
Citibank Nominees (Nz) Ltd 4,152,391
FNZ Custodians Limited 4,079,431
Janice Cather Walker, Sinya Jane Walker and Duncan Varnhan Fea
as trustees of the Bill & Jan Walker Family Trust 4,000,000
MFL Mutual Fund Limited 3,667,173
New Zealand Depository Nominee 2,868,474
Accident Compensation Corporation 2,568,796
Investment Custodial Services Limited 2,357,372
HSBC Nominees (New Zealand) Limited 1,413,701
Premier Nominees Ltd Armstrong Jones Property Securities Fund 1,246,681
Tea Custodians Limited 1,116,708
JPMORGAN Chase Bank 1,022,651
Custodial Services Limited 972,607
Allied Farmers Limited 900,000
Kim Christopher Wilkinson & Marie Eleanor Wilkinson 800,000
Public Trust Rif Nominees Limited 773,442
Kiwigold.Co.Nz Limited 666,666
FNZ Custodians Limited 583,536

[Grimy]

Thanks for that Percy. I'm in MFL and never seen/noticed NZL show as a holding in their newsletters. Maybe a minor holding for them in their overall portfolio.
Will have to have a better look sometime.

[Ferg]

I don't think you are missing anything nztx. I do wonder about rural land in the South Island going up by 13.7% in what is effectively less than 1 year. But that's what happens when you buy using method A (i.e. a distressed seller) and value using method B (discounted cashflow forecast). This was always the play and the Management Co clips 10% along the way. It works until it doesn't.

By the way, the issuance of new shares to the Management Co will dilute down the NAV which I don't believe is reflected in the quoted value (please correct me if I am wrong). Also the loan of $5m at 10% compounding with put and call options sounds like a high risk play for someone.

Lastly, with a SP of $1.11 and sellers outweighing buyers by 6:1, I think there is a degree of scepticism around the true value. Not paying a dividend doesn't help either, but this business model won't release a lot of cash for dividends per my earlier analyses.

[percy]

https://www.nzx.com/announcements/381498

[nztx]

https://www.nzx.com/announcements/381498



The transaction will be financed using a combination of cash on hand and an extended debt facility with Rabobank. In May 2021, NZL’s shareholders approved NZL establishing a $65M revolving credit facility with Rabobank and Rabobank has agreed to extend this facility to $88.5M.

Settlement of this transaction will see NZL temporarily exceed its ‘steady state’ internal debt policy of 30% of total assets. However, NZL will comply with its loan to value ratio (LVR) covenant with Rabobank of 40%. The Directors are comfortable with this position in the near-term given the immediacy of cash flows from this acquisition, NZL’s resulting diversification of tenants and the quality, large scale assets that this transaction provides to NZL.


What will be left over after paying interest (likely increasing rates too) & management fees ? ;)

Nothing like leveraging a deck of stacked cards a bit for future invisible funny money revaluation gains
(Sorry - NON CASH PROFIT/GAINS) on the distant future horizon - is there ? ;)

Here is the Cake as it would have looked, However the kitty is empty now because what was in the pot got spent :)

After all, another large CAP RAISE fast on the heels of the last Very Successful Cap Raise
may or may not have gone down as well as the last one ;)

[percy]

Yes another capital raise will allow them to buy more farm land,which will enable ALF to clip the ticket again.
Bring it on...lol

[nztx]

Yes another capital raise will allow them to buy more farm land,which will enable ALF to clip the ticket again.
Bring it on...lol

Best close your eyes .. the last one went down a real screamer from accounts :)

Not sure whether the Courier & Paper Deliverer had to be roped in to take up some of the large leftover 'unwanted'
by the loyal entitled enrollees, or whether it just wasn't close enough to Christmas time ;)

[golden city]

Looks like before dividends a little break out forged

[nztx]

Looks like before dividends a little break out forged


how soon do you reckon this one starts spitting out little dividends - golden ? :)

[percy]

NZL expects to pay an inaugural interim dividend
of 2.0 cps in February 2022 and follow-up with
a final dividend in August 2022 of 2.7 cps, for a
total dividend of 4.7 cps in FY22. NZL highlights
that it has one of the longest WALTs (10.65 years)
and one of the highest forecast dividend yields in
the NZ listed property secto

[golden city]

Not far away

[golden city]

We are back to the listing price soon looks like

[nztx]

Not far away


No multi bagger here just yet ?

[percy]

Interesting to know in their latest research Craigs, rate NZL as "overweight" with a $1.35 target price.

[golden city]

I am happy with where the company goes I actually bought a few at 1.10 which looks ok with the dividends comming

[nztx]

Hold on to your hats folks - IT'S ANOTHER CAP RAISE

Timing couldn't be better as markets are buckling ahead of heavier interest rates
& Govt funny money created INFLATION with more to follow when the band-aids get torn off


https://www.nzx.com/announcements/393381


New Zealand Rural Land Company Limited (NZX.NZL) has today announced a Pro Rata Accelerated Renounceable Entitlement Offer to raise approximately $20.38 million (Offer). The net proceeds of the Offer will be used to fund the acquisition of two further dairy assets, Argyle Downs and Greenhill.


What happens when Farm Prices start deflating ? :)

Never mind .. the NZL Share Price is bound to plummet just out the Cap Raise first

How well will this Raise go down or will north of 50% of the New Shares run unwanted
and have to be placed to find a new home ?

An earlier Cap Raise didn't exactly inspire a robust support level, did it ? :)

[beetills]

WillNZL have to raise capital whenever they buy a new property?

[kiora]

WillNZL have to raise capital whenever they buy a new property?

Which benefits who?

[nztx]

WillNZL have to raise capital whenever they buy a new property?


Or mortgage up large against the freehold ?

Somehow I can't see that happening given Man Fee impost to ALF
and potentially increasing costs of borrowing going ahead, with what
can be passed onto lessees of the Ag blocks being capped

Revaluations don't represent cash generated after all, so shareholders' pockets (or possibly
pockets of the ones that get landed with placements of otherwise unwanted surplus shares)
would be cheapest easiest form of getting in added new capital, if they're even interested
in throwing extra large wads of readies in to NZL for more of the same ahead ..

[nztx]

And presto -- in comes a NZL Shortfall Bookbuild

The magic $1.05 current market & offer price too, but could that crumble when the dust clears ? ;)

In today's market, could south of 80c be seen in near future ?

[Sideshow Bob]

Substantial NAV Uplift Demonstrates Quality of Portfolio - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/397670)

FY22 Results: Substantial NAV uplift demonstrates quality of portfolio New Zealand Rural Land Company (NZX. NZL) is pleased to announce its audited FY22 earnings and outlook. NZL recorded a record Net Profit After Tax of $39.7M for the period and a net asset value per share (NAV) increase of +18.6% (+$0.26) alongside a total dividend for the year of 3.61 cents per share.

[nztx]

Substantial NAV Uplift Demonstrates Quality of Portfolio - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/397670)

FY22 Results: Substantial NAV uplift demonstrates quality of portfolio New Zealand Rural Land Company (NZX. NZL) is pleased to announce its audited FY22 earnings and outlook. NZL recorded a record Net Profit After Tax of $39.7M for the period and a net asset value per share (NAV) increase of +18.6% (+$0.26) alongside a total dividend for the year of 3.61 cents per share.

No tax credits .. revaluations being distributed (or part thereof)

What happens if the rural market turns the other way ? ;)

Was any part of NAV movement due to increase in Cap at a higher or lower value to NAV ?

[beetills]

How positive is this forestry purchase for NZLs future

[kiora]

It depends on CC pricing trajectory & when they might sell the CC & THE FINANCIAL SOUNDNESS OF NZFL
https://www.stuff.co.nz/business/farming/83230321/companies-revealed-for-buying-fraudulent-carbon-credits

[DTC]

Interesting to note NZL not down in share price as much as other property stocks, depending on measurement dates, from hi of $1.27 at launch in Dec 2020 to $1.05 now- approx 17%. Even tho' gummint beating up on farmers, inc. new greenhouse gas tax, along with supply chain issues, staff shortages, transport costs up, etc...

[nztx]

Interesting to note NZL not down in share price as much as other property stocks, depending on measurement dates, from hi of $1.27 at launch in Dec 2020 to $1.05 now- approx 17%. Even tho' gummint beating up on farmers, inc. new greenhouse gas tax, along with supply chain issues, staff shortages, transport costs up, etc...


The Govt beating up of the Local Ag sector with untold mindless Green policies might still be to happen .. wait until it goes round :)

Not much of div being paid to keep this sucker up & no imputation credits attached either :)

Down 3.0c or 2.78% yesterday

Div 3.06c/$1.05 closing SP = a lowly 2.91% .. 'money in da bank' probably pulls in a better return
with both NZL div & Interest from the bank copping a full caning by the taxman in the end.

When the risks on Ag exposures become more apparent, possibly some further SP slippage may be seen ;)

Contrast it with ALF which lost 5.33% of it's opening SP yesterday & it pays no Div

[nztx]

https://www.nzx.com/announcements/405618

Financial Year Ending 31 December 2022 Update


As previously announced, New Zealand Rural Land Company (NZX: NZL) has changed its balance date to 31 December (from 30 June). Accordingly, NZL has begun work with its auditors and valuers on this reporting period.

So what's that ? - an 18 months Full Year ?


At this time, NZL has received preliminary independent valuations of its investment properties. In aggregate, the properties have increased in value by +0.9% (+$2.46 million) which demonstrates both the resilience and quality of the rural land NZL holds in its portfolio. These valuations are subject to final audit confirmation.

NZL expects to report the result for the period ending 31 December 2022 on or before 27 February 2023.

So a revaluation gain of $2.46m pre any tax provision thereon = 2.13 cps across 115.6 m shares issued

Does it actually make any real Cash Profit after stumping up Management fees across to ALF Empire ?

Or more relevant will it be - looking ahead with rising cost of loan servicing, management fees etc ?

The increased $100 mil of borrowings already showing higher rates in FY 22 over the prior year FY 21
and including further $40m Tick then added will be starting to bite hard into any cash generated with loan expiries reported in 2022 accounts of 1 Jun 2024, 2025 & 2026 and some rates reported near doubled in Y/e to 30/6/22.

The hiked up interest / loan servicing has got to come from somewhere, and it won't be Cockies leasing the turf. I'm picking if things get hard the dividend small as it is, could get knifed or another hand gets outstretched to stakeholders to pull the loans outstanding back to some kinder levels ;)

Doesn't seem a h4ll of lot to write home about with sub interest rate dividend 3.37% yield showing on NZX site
and no imputation credits anywhere to be seen.

Probably running the same reporting deal as the rest homes sector booking unrealised revaluations into P&L ;)

No wonder this thing is sitting around $1.08 ( + 0.01 today on the announcement) on NZX recorded NTA of $1.63 reported at close :)

[blackcap]

Does it actually make any real Cash Profit after stumping up Management fees across to ALF Empire ?



That is gold, but so true. I have looked in depth at the structure and if you wanted an investment in the rural sector, ALF would be the way to go and avoid NZL like the plague.

[nztx]

Let's take a closer look at the borrowing / interest servicing monkey being carried by NZL
also capital movements / issues to ALF for Fees to Management company:

The movement between 2022 accounts & NZX Issued shares appears to be all the Performance
Fee due to ALF associate Management Company which has taken shares (@ $1.65 apiece) in early Sep 2022 so a large impairment now on those 2.5 million shares needs to be booked by ALF & Associates *, currently out the back door by $1.425 m (* depending on whether 50/50 or 100% owned at that time)

Ultimately no new shares issued for direct cash inflow since the Accounts in 2022 issued

Looking at Borrowings -

2021 Year $54.254 million Borrowings outstanding - Ave Interest cost 2.29% at year end - Annualised cost of Interest $ 1.24 m

2021 Accounts comparatives reported Lease revenue of $498 K for 2021 year or part thereof

2022 Year $100.768 million Borrowings outstanding - Ave Interest cost 3.998% at year end - Annualised cost of Interest $ 4.03 m

2022 Accounts comparatives reported Lease revenue of $8.215 m for 2022 year or part thereof and possibly
properties acquired mid late through the year



Looking forward - Interest rates 2021 Average 2.29% 2022 Average 3.998%

Next rollovers for borrowings are going to see considerably higher average rate than 4.0%

Some properties acquired have call options allowing for vendor to repurchase + a margin, but if things
get considerably tighter pushing firesale conditions with hefty interest rates that may be of no
assistance with the buy back options are not exercised

ALF will already be seeing an impairment to market on it's NZL shareholdings and there is risk
if things get tighter even a share swap for performance fees owed may not be most
prudent move if it results in further impairment on a SP continuing it's run downwards
with more red needed to be provided for.

Racking up increased holding & not seeing cash for Management Company Revenues
may also not be most prudent view either in terms of ALF .

Stacking the deck of cards at outset on projections is one thing, but the same structuring
needs to be fit for purpose no matter what the ensuing conditions bring, otherwise the
stack may be at risk of toppling over or showing signs of serious wilting :)

[nztx]

Holy Kopoli - it's another CAP Raise Boys & Girls :)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/407533/389758.pdf

Well on rising interest rate tides, borrowing more must have been out of the question

Why not just try to call on the good old Bank of the Shareholders instead
to carry the can @ a solitary buck a shot for some Forestry Turf & Timber
to add to the pile

Earlier Cap raises in easier times went down a prize treat and were a ripping
success - weren't they ? .. well sort of with need for shortfall books out to get things over the line ;)

Note: Rising interest rates on the rest of bundle of $108m Hock being carried
plus further enhancements may catch up later .. but who knows - that could be
a completely different story for another day in the not too distant future ? ;)


Thanks for the update - Mr Chair - Rob Campbell ... but unfortunately still better fish
in abundance to fry elsewhere :)

[nztx]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/407532/389753.pdf

Even a 2.03cps FULLY UN-IMPUTED dividend spit out - to help towards filling the outstretched Cap Raise hand
at a muddy Buck a shot plus whatever warrants attached - for more future hand outstretched exercises ;)

[Nemology]

Let's take a closer look at the borrowing / interest servicing monkey being carried by NZL
also capital movements / issues to ALF for Fees to Management company:

The movement between 2022 accounts & NZX Issued shares appears to be all the Performance
Fee due to ALF associate Management Company which has taken shares (@ $1.65 apiece) in early Sep 2022 so a large impairment now on those 2.5 million shares needs to be booked by ALF & Associates *, currently out the back door by $1.425 m (* depending on whether 50/50 or 100% owned at that time)

Ultimately no new shares issued for direct cash inflow since the Accounts in 2022 issued

Looking at Borrowings -

2021 Year $54.254 million Borrowings outstanding - Ave Interest cost 2.29% at year end - Annualised cost of Interest $ 1.24 m

2021 Accounts comparatives reported Lease revenue of $498 K for 2021 year or part thereof

2022 Year $100.768 million Borrowings outstanding - Ave Interest cost 3.998% at year end - Annualised cost of Interest $ 4.03 m

2022 Accounts comparatives reported Lease revenue of $8.215 m for 2022 year or part thereof and possibly
properties acquired mid late through the year



Looking forward - Interest rates 2021 Average 2.29% 2022 Average 3.998%

Next rollovers for borrowings are going to see considerably higher average rate than 4.0%

Some properties acquired have call options allowing for vendor to repurchase + a margin, but if things
get considerably tighter pushing firesale conditions with hefty interest rates that may be of no
assistance with the buy back options are not exercised

ALF will already be seeing an impairment to market on it's NZL shareholdings and there is risk
if things get tighter even a share swap for performance fees owed may not be most
prudent move if it results in further impairment on a SP continuing it's run downwards
with more red needed to be provided for.

Racking up increased holding & not seeing cash for Management Company Revenues
may also not be most prudent view either in terms of ALF .

Stacking the deck of cards at outset on projections is one thing, but the same structuring
needs to be fit for purpose no matter what the ensuing conditions bring, otherwise the
stack may be at risk of toppling over or showing signs of serious wilting :)

And how are those interest rates going...6.50% @$29.5m and 6.35% @$46m...other two @6.20%...no wonder muddy boots is looking to the bank of ye olde shareholder

stripped of 'revaluation gains' and tax net income comes in at $3m...+ all that dilution... ;)

[nztx]

And how are those interest rates going...6.50% @$29.5m and 6.35% @$46m...other two @6.20%...no wonder muddy boots is looking to the bank of ye olde shareholder

stripped of 'revaluation gains' and tax net income comes in at $3m...+ all that dilution... ;)


Muddy boots needed to go to Bank of Ye Olde Shareholder to buy some Forestry Trees & Dirt
they signed up for - think that was what the latest Money Raise was for - I may be wrong though.

Possibly a cool $100 million in Hock carries forward at higher ongoing interest ticket rates
that is before adding another $25m dallop of Rabo-Hock on for the new project :)

Might be why they need to find some new big monied mates to bring on to the Share Register
because the ones already there may have had lingering concerns based on how earlier Hand
Outstretched for Cap Raises efforts went and then the follow on Shortfall on Take up :)

Wonder if the Chair - Rob Campbell is staying on the board or likely to depart off into the
yonder very soon ? ;)

[nztx]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/407533/389758.pdf


Forestry Estate Acquisition and Capital Raise Announcement

On 21 October 2022, NZL announced it had entered into an agreement to acquire up to 100% of a forestry estate
located in Manawatū-Whanganui in the North Island. The estate is comprised of five individual properties with a
total area of approximately 2,383ha.

NZL’s cost to acquire 100% of the estate is approximately $63.7m (subject to final costs), with a settlement date of
15 April 2023. The entire estate will be leased to New Zealand Forest Leasing (NZFL) for a period of 20 years


Muddy Boots need a mere $64m real fast to buy Tree Blocks, in times of increasing Interest Rates




The most earnings and dividend accretive option in the time available is to purchase 100% of the forest funded via
a 1:3 pro-rata rights issue at a cost of $1.00 per share, to raise approximately $38.5M. The Offer will open today to
institutional investors and then the retail component of the Offer opens next Monday, 6 March 2023.

For every 3 new Shares allotted to investors under the Offer, NZL will also allot 1 warrant for no additional
consideration. Each Warrant gives its holder the right, but not the obligation, to subscribe for one additional
ordinary share in NZL on or before the expiry date (30 November 2025) for an exercise price of NZD$1.20.

Application has been made to quote the warrants on the NZX Main Board and this is expected to occur on
Thursday, 23 March 2023, under the ticker code “NZLWA”.

In addition, $25.2M further debt will be raised via Rabobank, with total facility limits expected to increase to
approximately $131.0m


Rabo coming up with $25m at the prevailing going Interest Rate


Muddy Boots certainly has a reasonable pile of DEBT on board adding $25m on top out of this :)

Shareholders get hit for $38.5 m and maybe institutions get a look in too ?

So they signed up in Oct 2022 on the new Forest Blocks with no dough in kitty to be thrown towards it
and interest rates have increased since (doubled or more) and the SP has sagged from $1.65 to a
mere muddy Buck in the same time ? ;)


ALF's share of the Performance Fee $4.3 m or so for last financial year, on NZL Share price sliding is now
worth just 61% of what it was 5-6 months earlier when NZL Shares were issued for
the Performance Fee - so basically 39% circa of that has gone down the toilet, leaving ALF with a large
impairment loss on whatever their share of the Muddy Boots Management Co was at the time:)


How's the dividend going forward looking out of all this Card Stacking and increased pile of
Hock to fund the growing estate at interest rates multiplying out of sight ?


What was the Chair - Rob Campbell doing while all this was going on ? ;)



Any sort of fish elsewhere would tend look better than the potential risks here IMO and probably warrant
a Dividend yield in the double digits and no less than exponental property revaluations on top ;)

Perhaps ALF & NZL should collectively look at investing in a Money Printing plant next ? :)

Better not try the Performance fee thing - who knows both ALF & NZL could slide to under Half
a Muddy Buck going forwards with more ImPearments lurking, if things further implode /deteriorate
and the paper for printing gets drenched in a heavy Taranaki rain storm :)

[Ferg]

Wonder if the Chair - Rob Campbell is staying on the board or likely to depart off into the
yonder very soon?
After his self-immolation with NZ Health, I wonder about his priorities. Some might ask is he fit to be an independent director? Do we know what other companies he Chairs or where is a director?

Edit: in 2021 he was chair of SKC, SUM, THL, NZL + others and a director of PCT.

[Sideshow Bob]

After his self-immolation with NZ Health, I wonder about his priorities. Some might ask is he fit to be an independent director? Do we know what other companies he Chairs or where is a director?

Edit: in 2021 he was chair of SKC, SUM, THL, NZL + others and a director of PCT.

Can you a director search on the companies register, but is alot of Robert Campbells......

[percy]

Rob Campbell has an enviable business record.
Shown skilled leadership at each company he has been chairman.
One of the few people who would have sorted out NZ Health/Hospitals.No politican has ever, or ever will.
Only wish he had kept his political gob shut.

[Sideshow Bob]

Rob Campbell has an enviable business record.
Shown skilled leadership at each company he has been chairman.
One of the few people who would have sorted out NZ Health/Hospitals.No politican has ever, or ever will.
Only wish he had kept his political gob shut.

I think the Te Whatu Ora job is too big/too hard........so hence the comments that got him sacked rather than just resign.

Sorry for the thread hijack.....

[percy]

I think the Te Whatu Ora job is too big/too hard........so hence the comments that got him sacked rather than just resign.

Sorry for the thread hijack.....

Most probably right.
So the health/hospital mess continues.

[nztx]

The NZL Interest Expense going forwards is looking like it's going to become a very visible high expense
gobbling up a sizable chunk of cash revenue - with recent Rate rises and added Debt stacked onboard for the Forestry Estate :)

[nztx]

Oh look - a dual Frankfurter listing :)


https://www.nzx.com/announcements/407627



New Zealand Rural Land Company (NZL.NZX) has implemented a dual listing on the Frankfurt Exchange - the stock exchange ticker is: 8UK.GR.

NZL implemented this dual listing after requests from potential European Investors.

NZL plans to engage with the market maker - mwb fairtrade Wertpapierhandelsbank AG to provide liquidity during European trading hours. NZL will further update the market on trading and settlement details for Frankfurt in the next few weeks.

The undertaking of this dual listing fits with NZL’s previous market commentary that it is seeking to broaden its international investor base, and a dual listing in Frankfurt is a cost-effective venue to facilitate this.

NZL’s Frankfurt dual listing can be found at: https://www.boerse-frankfurt.de/equity/new-zealand-rural
WKN number is: A3CUMC
ISIN number is: NZNZLE0001S2



Will that really help the NZX SP or the local NZL punters, being targeted with rounds of Cap Raises
to bail the ship's Capitains & Navigators out of a tight spot, and possibly further CR's on the horizon to be dealt out to the captive stakeholders as well ? ;)

Hope the Europeans know how to count the number of worms lurking under the lush green grass
and number of needles on the trees in the Forest acquisitions :)

[Sideshow Bob]

Oh look - a dual Frankfurter listing :)


https://www.nzx.com/announcements/407627






Will that really help the NZX SP or the local NZL punters, being targeted with rounds of Cap Raises
to bail the ship's Capitains & Navigators out of a tight spot, and possibly further CR's on the horizon to be dealt out to the captive stakeholders as well ? ;)

Hope the Europeans know how to count the number of worms lurking under the lush green grass
and number of needles on the trees in the Forest acquisitions :)

Well that is a pretty random for the day......although there was an article in the ODT a month ago about NZL interested in courting more Europeans..

[nztx]

Well that is a pretty random for the day......although there was an article in the ODT a month ago about NZL interested in courting more Europeans..


Wonder who is paying for all the Offshore travel & perks over to Europe to inspire these European bods
into throwing a bit the way of an obscure well borrowed up Muddy Boots Empire down-under after it's
lost a bit of traction in the thick muck here. done a few frantic wheelspins for readies to avoid losing some Forest
they signed up for without the readies on hand, & seen SP rapidly deflate around 38% in a short period ? ;)


Does the Chair need a special offshore Business Holiday, after being poked, needled and fired by some of the lesser Bees in the BeeHive, who were supposed to be loyal allies & best buddies and then Little Bee even failed to come to the rescue ? ;)

[Aaron]

Oh look - a dual Frankfurter listing :)
https://www.nzx.com/announcements/407627

I know nothing about NZL but have never let ignorance stop me. I understand NZL was like a SPAC that said give us your money and we will invest it wisely for you in agriculture.

A Frankfurt listing would put them closer to the European industrial companies that might want (relatively) cheap NZ land to plant forests for carbon credits so they can use the credits to offset their emissions.

Wild speculation on my part but concerning if it has an ounce of truth. More likely to be true, the higher the value of carbon credits get on the global market. How do we check that?

Here is a start
https://www.investopedia.com/terms/c/carbon_credit.asp

New York-based Xpansive CBL or Singapore’s AirCarbon Exchange.

https://www.mynativeforest.com/carbon-price-nz?gclid=EAIaIQobChMI6e7wxZW-_QIVEjErCh1JiAVzEAAYASAAEgLetfD_BwE

According to this graph prices have increased roughly 200% over the last 3 years.

Frankfurt might be a smart move for someone willing to sell their mother for a quick buck.

[nztx]

Cap Raise seems to be going well @ a buck a shot plus some warrants thrown in

SP already sagging under the buck @ 0.98 at close 7/3

Will it slide further & what sort of shortfall this time ? ;)

Guess the local Retail love for NZL in retreating markets hasn't improved on the past Cap Raise sentiments
and those $1.20 warrants may be deep under water ;)

Perhaps rights for stakeholders to each name their portion of the magnificent specimens among the new blocks of trees should have been considered as part of the bargain :)

Will the next attempted Tree Acquisition project (if there is one) include a trip out to hug some tree specimens and certify NZL's anti-slash measures - even if the investors have sustained some degrees
of their investments being promptly slashed into smaller pieces, courtesy of the fundraising process ? :)

Will ALF be refunding a portion of their Performance fees, if performance goes south ? ;)

How about returning some of those shares issued in Oct 22 @ 1.65 a pop back at the current
market rates to tidy things up ?

(They obviously can't be returned at above the current prevailing market prices now - can they ?)

[nztx]

https://www.nzx.com/announcements/408183

MARKET UPDATE



CAPITAL CHANGE NOTICE

New Zealand Rural Land Company Limited (NZL) has completed the allotment of shares and warrants under the institutional offer component (Institutional Offer) of its accelerated renounceable entitlement offer. A total of $10.486 million was raised.
A capital change notice detailing these allotments was released to the NZX on 9 March 2023.

RETAIL OFFER

The retail offer opened on Monday, 6 March 2023, and is scheduled to close on Wednesday, 15 March 2023 at 5:00pm (NZT). As at 9 March 2023, approximately 14% of the shareholders have taken up their full entitlements and 30% of these shareholders have also applied for additional shares.

DIVIDEND REMINDER

A dividend of 2.03 cents per share for the six-month period ending 31 December 2022 was announced on Wednesday, 1 March 2023 and will be paid today, Friday, 10 March 2023. Holders of the new shares allotted under the institutional offer are not entitled to receive this dividend.


Time for a Ring Round to chase up all the Retail loose change yet ? ;)

Just 86% of Retail hanging in the balance out there with just 3 working days to go ..

Perhaps they forgot or don't want to pass their wallets & purses across for a date with NZL ? :)


Wonder why ?


NZL $0.980
-$0.020 / -2.00%

[nztx]

https://www.nzx.com/announcements/408185

But wait .. Harbour Asset Management seem to like the smell of Trees and Needles ;)

Could they be harvested for some more loose coin to save NZL's Cap Raising day ? ;)

[nztx]

When is announcement day for NZL to tell everyone how many pegs past the mark they got ?:)

The Most recent Success Rate for those opening their wallets is just (give or take a bit for over-subs):


14% of Retail


Obviously NZL's efforts on the % of Retail that stayed away appears to have seen considerably worse
this time than in previous Cap Raise which must have caused a few problems finding homes for all the
unwanted newly minted shares robustly rejected by more than just a few shareholders ..

[nztx]

NZL
$0.990 +$0.010 / + 1.02%



Someone must have miscounted .. or an extra 1.5% may have mysteriously arrived in over the weekend :)

[beetills]

Can we expect another update before closing time.

[nztx]

Can we expect another update before closing time.


https://www.nzx.com/announcements/408183



The retail offer opened on Monday, 6 March 2023, and is scheduled to close on Wednesday, 15 March 2023 at 5:00pm (NZT).



Closed on Wednesday - not even a squeak out of NZL since the 14% Retail Uptake "Market Update" made on 10 March

Wonder if there was much improvement on the 14% or no further traction ? ;)

Can't have much worth writing home about for another update :)

[Ferg]

@nztx: I have had a morbid fascination with NZL since you and I put up our original analyses and I have watched your subsequent posts with interest. Have you taken a position in NZL? Or are you also a curious bystander? Do you have a price under which you would be tempted?

[nztx]

NZL $0.950

Interesting close


https://www.nzx.com/announcements/408495


Completion of Retail Offer

The Retail Offer closed on Wednesday, 15 March 2023 and raised gross proceeds of approximately NZD$7.9 million including those retail shareholders who applied for additional shares.

NZL has raised as follows from the Offer to date:

$10.5m from the Institutional Offer
$7.9m from the Retail Offer
$5.6m from Shortfall Subscriptions
$24.0m Total Raised

NZL now intends to place the balance of the shortfall ($14.5m).


Retail Offer looks like it was a Ripper of a Success Story :)

What % did they finally come in with for Retail Offering ?

Was it just 28% of Retail + Shortfall jobs ? ;)


When just 48.2% all up of the Retail Slice gets taken - what does that say ?

When it is a repeat of an earlier Cap Raising effort - what does that say ?


Best of luck trying to lighten the wallets & purses of the foreign Frankfurter contingent
for some NZ Light (on Cash) bits, if that's where the remaining shortfall are to be tossed ;)

Hopefully they wont also be short on Frankfurter coin, like the local contingent seem to be when NZL
came knocking trying for a rescue out of a slight Forests purchase tight spot ;)



What will the 95.0c close look like after the full ravages of interest rates hikes near on doubled
for full reporting periods impact into the next period or two going forward ?


Will it be 75.0c or 60.0c or less ?


Will the Dividend be wiped if Higher Interest charges on increased Debt carried takes
a larger chomp out of NZL Lease Revenues ? ;)


How Far north of 6.0% or 6.5% of Property values are the Leases positioned for Revenue ?


How far away are the Interest rates on Borrowings, once these are rolled to current rates ?


There might not be much left over by the time ALF grabs it's Fees out of the Job
and after issue of shares @ 1.65 for 2022 fees, which bit the Muddy Boots Management Company
badly on the backside in NZL Share price slide - they may not want shares in lieu of cash :)

[nztx]

NZL
$0.900


No encouragement needed :)

A full year of hiked up Interest rates coming in to bite hard

more debt loaded up at hiked up interest rates

another large outgoing performance fee thrown onto the slate



what could possibly go wrong ? :)

[winner69]

Interesting view in NBR on NZL relative under performance since IPO

ANALYSIS: Why has NZL performed relatively poorly versus the New Zealand sharemarket index?

https://www.nbr.co.nz/on-the-money/nz-rural-land-a-few-issues-part-1/
Might be free

Seems fees to be a significant transfer of value via the fees structure from NZL to ALF. Perhaps that's the problem for the declining value of NZL.

[Ferg]

.It's not free. There has been a lot of chatter here about the fees. But do you also recall winner they wanted this valued on an NTA basis? They were explicit in stating this. And the reason for that.....? Because IMO the EPS and return on assets would be 'poor to ok' in a low interest rate environment such that the float price would appear high, and EPS would be considerably worse in a high interest rate environment. The cheap money did not last forever. nztx has also made a number of posts on this; they were also onto the pitfalls from day 1. The lack of support for subsequent share issues is very telling. This listing feels very 1980s.

[percy]

One of the reasons for NZL being created was to keep NZ Rural land in NZ ownership.
Perhaps they are best compared with listed property companies.
...........................Share price a year ago...................... Current Share Price...................Difference.
ARG.........................$1.32................. .....................................$1.12........ .................-15.2%
KPG..........................$1.08................ .......................................92 cents.....................-14.9%
PFI............................$2.68.............. .......................................$2.30...... ......................-14.2%
SPG...........................$1.99............... ......................................$1.29....... .....................-35.2%
VHP...........................$3.01............... .......................................$2.31...... ......................-23.3%.

NZL.........................$1.15 .................................................. ......89 cents.......................-22.61%

Now if we look at retirement village property owners.
ARV...........................$1.62............... ........................................$1.04..... .......................-35.81%
OCA...........................$112................ ..........................................69cents. ......................-38.4%
RYM............................$8.65.............. .........................................$5.30.... .......................-38.73%
SUM............................$11.55............. ..........................................$8.14... .......................-29.53%

[nztx]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/409328/391876.pdf

Page 31:

31 December 2022 published Annual Report:



Dec 2022

Bank Facility A -- $46m fully Drawn -- Effective Interest Rate 6.35% (Expiry 1.6.25)
Bank Facility B -- $29.5m fully Drawn -- Effective Interest Rate 6.20% (Expiry 1.6.24)
Bank Facility B -- $2m - $ 1.968m Drawn -- Effective Interest Rate 6.20% (Expiry 31.2.23)
Bank Facility C -- $29.5m fully Drawn -- Effective Interest Rate 6.20% (Expiry 1.6.26)



Jun 2022

Bank Facility A -- $46m -- $41.768m Drawn -- Effective Interest Rate 4.01% (Expiry 1.6.25)
Bank Facility B -- $29.5m fully Drawn -- Effective Interest Rate 3.84% (Expiry 1.6.24)
Bank Facility C -- $29.5m fully Drawn -- Effective Interest Rate 4.14% (Expiry 1.6.26)

Pretty encouraging depth of DEBT huh ;)

The Monkeys need feeding more beans in just the last six months to stay interested..

Another additional load of Monkeys got added after balance date to help out with some forestry that
got signed up for before the necessary beans were in the pot for it .. ;)

How many beans to stay interested do the newer monkeys demand in % usance costs for the forestry privilege ? ;)


The interest rate hikes in themselves might have been sufficient to cause blindness in just one Board sitting .. on the finely balanced stack of cards ;)


The floating interest rates appear to be floating away just fine -- Effectively only up by 50%+ in 6 months :)


Any more $1.65 Performance shares going to be dished out to ALF or is that game up after the hot summer sun caused rapid evaporation on the issue price .. in just 6 or so months ? ;)

Hope a very stiff economic gale doesn't come ripping through, with all that higher priced short expiry debt
sitting at the whims of the breeze ;)


Any guesses on windspeed blowing through that might extinguish possibility of dividend ?

[Baa_Baa]

If you spoke in plain English, maybe more people would understand you.

Just saying.


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/409328/391876.pdf

Page 31:

31 December 2022 published Annual Report:




Pretty encouraging depth of DEBT huh ;)

The Monkeys need feeding more beans in just the last six months to stay interested..

Another additional load of Monkeys got added after balance date to help out with some forestry that
got signed up for before the necessary beans were in the pot for it .. ;)

How many beans to stay interested do the newer monkeys demand in % usance costs for the forestry privilege ? ;)


The interest rate hikes in themselves might have been sufficient to cause blindness in just one Board sitting .. on the finely balanced stack of cards ;)


The floating interest rates appear to be floating away just fine -- Effectively only up by 50%+ in 6 months :)


Any more $1.65 Performance shares going to be dished out to ALF or is that game up after the hot summer sun caused rapid evaporation on the issue price .. in just 6 or so months ? ;)

Hope a very stiff economic gale doesn't come ripping through, with all that higher priced short expiry debt
sitting at the whims of the breeze ;)


Any guesses on windspeed blowing through that might extinguish possibility of dividend ?

[kiwikeith]

D&O Notice - Rob Campbell - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/411472)

The Chairman Rob Campbell has just bought 140,000 shares at 84 cents in an on the market transaction. Sounds promising but of course, yet another capital raise that diminishes the net asset value per share could already be in the oven. It would be nice to see them focus on what they have and deliver on previously projected dividend forecasts.

[nztx]

https://www.nzx.com/announcements/412123

Guidance Upgrade, Dividend Suspension and Buyback Programme

Buyback shares may not cast so much attention to growing high Interest expense
ramped up borrowings etc ;)

Bound to be a few that would have liked a regular dividend spit out, so may be disappointed ;)

Cant say that suspension of dividend was at all unexpected ;)


Now how will the SP rapidly get blasted back up to $1.50+ levels in a hurry ? ;)

Why not borrow some more at large Interest rates to make it one heck of Share buyback ? :)


Market appears to like prospect of getting shares bought back by this outfit - up 4.0c or 4.7% so far :)

[kiwikeith]

The problem is they keep doing capital raises to expand their assets. But the capital raises never get fully subscribed so they have to use more debt. And now they do away with the dividend to get their gearing back under control. It does appear that rising interest rates have blown their initial projections off course.

[Sideshow Bob]

https://www.nzx.com/announcements/417032

New Zealand Rural Land Company (NZL:NZX) HY23

New Zealand Rural Land Co (NZX: NZL) is pleased to announce its financial results for the six months ended 30 June 2023. NZL recorded a net profit after tax of $2.5m for the period and adjusted funds from operations (AFFO) of $2.7m.

NZL owns 14,487 hectares (35,798 acres) of high quality productive rural land in New Zealand which is 100% tenanted on long-term leases with regular CPI adjustment provisions. NZL generates shareholder value through a combination of asset value appreciation and cash flows from its long-term leases.

Results Summary for the six months ending 30 June 2023 [see table in the attached PDF].

A detailed results presentation is available at: https://www.nzrlc.co.nz/reports-presentations

Acquisitions
In April 2023, NZL announced the settlement of approximately 3,137 hectares of forestry estate. The total acquisition cost was approximately $70m. Both forestry estates are leased to New Zealand Forest Leasing (NZFL), one for a 20 year period, the second (737 total hectares) being a 16 year period - both have annual CPI lease adjustments.

The purchase was funded in part with NZL’s inaugural Green Loan via Rabobank of $25.2m, the proceeds of NZL’s pro-rata rights issue and a $12m convertible note issued to an entity associated with NZFL.

Corporate Actions and Share Buyback

On 26 May 2023, NZL announced an upgrade to FY24 earnings guidance, suspension of the FY23 interim dividend and an on-market share buyback.
Due to the accretive nature of NZL’s forestry acquisitions, NZL upgraded its FY24 AFFO guidance. FY24 is the first full financial year in which the forests will be owned by NZL. FY24 AFFO is now forecast to be in the range of $8.0m - $8.5m equating to 5.25 -5.75 cents per share (a +4.8% increase on the 5.0 - 5.5 cps previously forecast).

The NZL Board considers that the current market price of NZL shares materially undervalues both the assets and the free cashflow profile of the business making shares purchased at this level attractive and accretive on an asset and free cashflow basis for shareholders.

Following the interim dividend suspension, NZL will use available cash flow to:
• acquire NZL shares through an on-market share buyback programme (306,327 purchased to date); and
• reduce the convertible note balance recently issued to acquire the forestry assets ($300,000 reduced to date).

Outlook
NZL’s strategy is to own quality rural land in New Zealand, and to grow and diversify its portfolio while delivering attractive risk-adjusted returns.
NZL’s leases incorporate regular, uncapped, CPI reviews. This means higher inflation results in higher than anticipated rental growth. NZL is insulated from inflation-impacted and all other operational on-farm costs by owning only the land.

NZL has interest rate hedging arrangements in place for 53% of its total borrowings at an average cost of 5.33%. NZL’s remaining debt is borrowed on a floating rate (BKBM plus bank margins) and the average cost of NZL’s floating debt as at 24 August 2023 is 7.63%. Accordingly, NZL’s weighted average interest cost (fixed and floating) is 6.42%.

From 1 July 2024, NZL will start to see the positive impact of rental growth with approximately 55% of the portfolio (by lease income) due for CPI review. CPI accumulated since the leases began (1 June 2021) totals +12.6% to 31 December 2022 and is forecast to be more than +22.3% for the three years to 30 June 2024.

[DTC]

Currently, the NZL share price is 83 cents and sinking, yet the net tangible assets per share is $1.60 (as shown on NZX site).
Seems like a bargain(?)
Even if NZL goes bankrupt, won’t shareholders get back approx. $1.60 per share when the assets are sold up to repay creditors?
What is wrong with this logic?
(Disc. Not currently holding.)

[Bill Smith]

A quick look at their AR shows the forward looking statements are heavily reliant on lease renewals being CPI adjustable. Not sure about the forestry assets, but the dairy tenants are going to struggle paying current rates, let alone increased rates. They will be squeezed just like most NZ dairy farmers with a plummeting income and steeply rising cost structure. Along with the intemperate borrowings for the forestry, rising interest rates, falling dairy prices, it's going to be very challenging for NZL.

[Rawz]

Currently, the NZL share price is 83 cents and sinking, yet the net tangible assets per share is $1.60 (as shown on NZX site).
Seems like a bargain(?)
Even if NZL goes bankrupt, won’t shareholders get back approx. $1.60 per share when the assets are sold up to repay creditors?
What is wrong with this logic?
(Disc. Not currently holding.)

I tend to agree. Lots of people buy gold as an inflation hedge. I’d rather own this farmland

[Rawz]

I suppose when the dividend stopped people kicked it out of their portfolios. On the NZX NTA on property doesn’t mean much it’s what the dividend yield is

[X-men]

Nzl will be added to MSCI small cap end of this month together with THL

[nztx]

A quick look at their AR shows the forward looking statements are heavily reliant on lease renewals being CPI adjustable. Not sure about the forestry assets, but the dairy tenants are going to struggle paying current rates, let alone increased rates. They will be squeezed just like most NZ dairy farmers with a plummeting income and steeply rising cost structure. Along with the intemperate borrowings for the forestry, rising interest rates, falling dairy prices, it's going to be very challenging for NZL.


Sooner or later on those negative economic factors, property revaluations must come under pressure and follow as underlying primary returns falter and fall .. A well leveraged camp like NZL wearing growing financing costs may not exactly be the box of fluffy ducks for investors, that some might be dreaming ;)

The carnage wont be the odd operator but across whole sectors when the chips start to slide. Will buyers of assets in more stressed times still be interested in some firesale estates put on the chopping block for fast sell up to get the well indebted out of a tight spot or will it be at Receiver's breakup prices ?

[kiwikeith]

Ok they have just announced there will be no dividend for the year ending 31 December 2023. I wonder why they decided to announce this now? Is it driven by something they had to agree with their lenders? They say they would prefer to buy back shares at depressed prices but the dividend would not have been due until March 2024 and who knows what the share price will be then.

[Sampan]

I think this stock looks a bit fragile for the foreseeable future. You dont want exposure to rural assets in NZ as it stands. Yes, the Government will provide a more stable platform with less red tape/more certainty/less ESG requirements however this will be a slow burn and the rural fallout has already begun. Id look to buy some at some stage but that will be in the 50's....

[Rawz]

AFFO for FY24 is forecast to be 5.7cps to 6cps so say 5.8cps. If they payout 90% of that its 5.22 dps

Would put the dividend yield at today's SP 5.22/83= 6.3%

So NZL management think the SP is cheap as chips due to the discount from NAV but investors maybe think nah I want 8% or 9% div yield as this stock is unproven compared to the established reits... SP could still drift lower!

[kiwikeith]

I think this stock looks a bit fragile for the foreseeable future. You dont want exposure to rural assets in NZ as it stands. Yes, the Government will provide a more stable platform with less red tape/more certainty/less ESG requirements however this will be a slow burn and the rural fallout has already begun. Id look to buy some at some stage but that will be in the 50's....

NZL indicate that they have long lease terms and escalators built into their lease contracts. So what is this worth? Well that depends on the quality of their tenants. If you lease to someone as strong as countdown/woolworths and they decide they no longer want to use your building, they pay the lease to the end of the contract while the building sits empty. It will be interesting if NZL ever come back to the market and say, for whatever reason, they have decided to not enforce contract rental escalators.

[Rawz]

the recent forestry acquisition was completed with a rental yield of 7.9%
suppose fair to expect a dividend yield of 7.9%

[Muse]

the recent forestry acquisition was completed with a rental yield of 7.9%
suppose fair to expect a dividend yield of 7.9%

I can profess to have never opened a NZ Rural Land Co financial statement so I'm a complete newb and take everything I say with that attendant grain of salt. Rawz, taking at face value your statement that the forestry acquisition was made at a (presumably) pre tax rental yield of 7.9%, does beg a few questions. Rental yield does not equate to net cash, AFFO yield, or divy yield...there is the issue of operating expenses, tax, working capital, and capex (IE forestry infrastructure that needs to be put in place). I don't think the 7.9% rental yield is an appropriate benchmark from which to determine the right declared dividend yield for NZL...but therein lies the problem. Often times the FMV of forestry, to true and blue institutional forestry investors, is a long way from what a retail investor in miscellaneous rural property trust like NZL might demand. The FMV of forestry is often at implied yields way below what retail investors would accept. So, the underlying fair market value of the forest might be x, but the retail investors might not care at all because they demand a yield of y%, and price it accordingly. and that's the fundamental problem with NZL and its forestry acquisition from my 10 minute look.

For what its worth, I opened a research report that showed NZL's AFFO in FY24 of $8m/5.7cps (rising to $8.6m/6.2cps in FY25 before falling to $8.1m/5.8cps & growing thereafter), with a DPS of 5.25cps starting only in FY25, and growing thereafter. Sure, on a sum of the parts basis the forest if it was divested at fair market value to proper forestry owners, it could achieve a higher price than that ascribed by the market, and hence why the directors are doing the buyback. But that is unlikely in the short to medium term given they recently bought it and the confluence of ALF & its ownership of the rural asset management business (often times, its better to own the asset manager rather than the asset itself!)

On the positive, given NZL's asset ownership tend to be rural/working assets as opposed to commercial prosperities, there is less of a hit stemming from the removal of depreciation on commercial properties relative to the LPT peers.

[Rawz]

I can profess to have never opened a NZ Rural Land Co financial statement so I'm a complete newb and take everything I say with that attendant grain of salt. Rawz, taking at face value your statement that the forestry acquisition was made at a (presumably) pre tax rental yield of 7.9%, does beg a few questions. Rental yield does not equate to net cash, AFFO yield, or divy yield...there is the issue of operating expenses, tax, working capital, and capex (IE forestry infrastructure that needs to be put in place). I don't think the 7.9% rental yield is an appropriate benchmark from which to determine the right declared dividend yield for NZL...but therein lies the problem. Often times the FMV of forestry, to true and blue institutional forestry investors, is a long way from what a retail investor in miscellaneous rural property trust like NZL might demand. The FMV of forestry is often at implied yields way below what retail investors would accept. So, the underlying fair market value of the forest might be x, but the retail investors might not care at all because they demand a yield of y%, and price it accordingly. and that's the fundamental problem with NZL and its forestry acquisition from my 10 minute look.

For what its worth, I opened a research report that showed NZL's AFFO in FY24 of $8m/5.7cps (rising to $8.6m/6.2cps in FY25 before falling to $8.1m/5.8cps & growing thereafter), with a DPS of 5.25cps starting only in FY25, and growing thereafter. Sure, on a sum of the parts basis the forest if it was divested at fair market value to proper forestry owners, it could achieve a higher price than that ascribed by the market, and hence why the directors are doing the buyback. But that is unlikely in the short to medium term given they recently bought it and the confluence of ALF & its ownership of the rural asset management business (often times, its better to own the asset manager rather than the asset itself!)

On the positive, given NZL's asset ownership tend to be rural/working assets as opposed to commercial prosperities, there is less of a hit stemming from the removal of depreciation on commercial properties relative to the LPT peers.
Yes good points Muse.

I still want a dividend yield over their rental yield lol. But NZL say no, the SP is undervalued and thus they must buy back shares and in their minds push the SP higher. And div yield lower (assuming it returns next year).

Some other thoughts I had was the AFFO cagr they like to highlight since listing has had the benefit of loading up the balance sheet with debt. It’s now near 40% leveraged so could be considered close to comfort levels. Therefore their acquisitions will slow and affo growth will slow to cpi rate.

Last thought, why are they doing a European tour for potential investors?? This has a $100m market cap in NZ$ it’s a tiny microcap on the international stage…. Would have thought it would be a waste of time pitching outside of our neck of the woods. Unless… unless they are setting the stage for numerous cap raises for acquisitions. Good for the manager I guess but current investors may need to be ready to front up with more cash to maintain their holdings

[kiwikeith]

Yes good points Muse.

I still want a dividend yield over their rental yield lol. But NZL say no, the SP is undervalued and thus they must buy back shares and in their minds push the SP higher. And div yield lower (assuming it returns next year).

Some other thoughts I had was the AFFO cagr they like to highlight since listing has had the benefit of loading up the balance sheet with debt. It’s now near 40% leveraged so could be considered close to comfort levels. Therefore their acquisitions will slow and affo growth will slow to cpi rate.

Last thought, why are they doing a European tour for potential investors?? This has a $100m market cap in NZ$ it’s a tiny microcap on the international stage…. Would have thought it would be a waste of time pitching outside of our neck of the woods. Unless… unless they are setting the stage for numerous cap raises for acquisitions. Good for the manager I guess but current investors may need to be ready to front up with more cash to maintain their holdings

The history of NZL capital raises has been that if existing shareholders did not participate, not only did they get diluted, but their nav (net asset value) of their shareholding actually went down. A consequence of issuing new shares for less than nav.

[percy]

I enjoyed Richard Milsom's presentation this morning.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZL/418572/403383.pdf

[Aaron]

Yes good points Muse.

I still want a dividend yield over their rental yield lol. But NZL say no, the SP is undervalued and thus they must buy back shares and in their minds push the SP higher. And div yield lower (assuming it returns next year).

Some other thoughts I had was the AFFO cagr they like to highlight since listing has had the benefit of loading up the balance sheet with debt. It’s now near 40% leveraged so could be considered close to comfort levels. Therefore their acquisitions will slow and affo growth will slow to cpi rate.

Last thought, why are they doing a European tour for potential investors?? This has a $100m market cap in NZ$ it’s a tiny microcap on the international stage…. Would have thought it would be a waste of time pitching outside of our neck of the woods. Unless… unless they are setting the stage for numerous cap raises for acquisitions. Good for the manager I guess but current investors may need to be ready to front up with more cash to maintain their holdings

They buy back shares to boost the share price then do a capital raise. I am no financial genius but doesn't this sound a bit fishy?

[nztx]

https://www.nzx.com/announcements/421717

Change of Auditor


With effect from today, New Zealand Rural Land Company Limited (NZX.NZL) has accepted the resignation of PwC as the Company’s statutory auditor and has appointed William Buck in its place.

The decision to change auditor was driven solely by a desire to reduce the cost of audit fees.


Aha, so toss Auditor overboard because NZL still want Royce Royce job done but at Cheaper Buck Lada Rates with smaller gorilla at wheel ;)

sure there wasn't something else that make the Board buck a bit over ? ;)

Perhaps PWC Beancounter started warning of focussing in on revaluation fancy footwerks and scratching around interest cover marks etched in the thick Taranaki muck ;)

[beetills]

I am presuming that with the news from NZL of the sale of 25%,the proceeds should allow the company to grow with more purchases.
If they do i hope they stay away from dairy farms and get into dry stock or even cropping properties.

[Bill Smith]

Their difficulty is finding properties that can pay 5% land leases through phases of agriculture boom and bust. This sale is a result of such difficulty.

[percy]

Craigs have increased their target price from $1.12 to $1.21. Rating "Overweight".
Found this interesting in their latest research;
We view this transaction positively since NZL is
effectively raising funds to finance further acquisitions at +40% premium to
the current share price.

[kiwikeith]

Craigs have increased their target price from $1.12 to $1.21. Rating "Overweight".
Found this interesting in their latest research;
We view this transaction positively since NZL is
effectively raising funds to finance further acquisitions at +40% premium to
the current share price.


At $1.21 we will be 1 cent ahead of the initial issue price back in 2021.

[nztx]

At $1.21 we will be 1 cent ahead of the initial issue price back in 2021.


Still a way to go to reach the Oct 22 $1.65 level that ALF's performance fees got converted into NZL shares at however ;)