PGW - PGG Wrightson

[Queenstfarmer]

There are already some switched on cookies bringing in stockfeed from Southeast Asia and they can't get it delivered fast enough. How did we get to foot and mouth????

[Minerbarejet]

Always a bit dubious about importing plant material of any kind to this country. Processed properly Ok but laden with bugs, bacteria, vermin, viruses and other baddies - definitely not. Thats the problem - getting it delivered by switched on cookies after the fast buck and slipshod checking.
Thats how it will get here if it does. We have always been under this threat and PGW along with the rest of NZ will suffer accordingly if it gets here IMHO. PSA virus will seem like a Sunday School Picnic.
Looking forward to payday with PGW. Have a nice day.

[Queenstfarmer]

And as if it wouldn't have to go thru the mill...please must we need to state the bleeding obvious. It has to come from somewhere if NZ run out of Winter feed. Nows the time to hunt around and get a safe clean source. If PGW were capable of importing something dodgy Id sell my shares yday. Lets use "NOODLES"

[Snoopy]

Speaking to any employee is always rewarding.You can quickly pick up whether they are proud to work for the company,what they think of where the company is going,are they getting the right products to sell,do they get the support from head office they need,and finding out what the opposition are doing.
You can pick up whether the company is in good shape or not.Really you just need to know what to ask.
Peter Lynch,Warren Buffett,in fact any successful investor checks out "the whole" business.
I trust you tried a KFC before buying their shares.?
And we must not forget "the tea lady" has always been the greatest source of inside information.

I agree Percy. As Macdunk said, the tea lady isn't paid enough to consider lying. My previous comment was directed towards talking to a mid level manager in Canterbury, and then extrapolating their experience to other regions of the country. Waikato is different. Seeds in Australia is different. The only people who know the overall picture are the senior management. You can question them at the AGM.

SNOOPY

[Balance]

There are already some switched on cookies bringing in stockfeed from Southeast Asia and they can't get it delivered fast enough. How did we get to foot and mouth????

Palm oil kernels - http://www.palmoilhq.com/PalmOilNews/demand-drops-for-palm-kernel-expeller-in-new-zealand/

Cranking up again - plenty around. NZ used to import 25% of total production of this waste product, helping planet earth.

[tosspot]

This damn stock is going to give me a heart attack soon. Especially because I sold xero a 7.59 and bought this at 44c a few weeks back now its down to 36c. whats up with this damn stock.

[Queenstfarmer]

Stop following it for 5 months...then take a look. I expect we've come close to the bottom on this cycle. The positive being the last bottom was 28c....so thumbs up for the weeks leading up to FY13.

[tosspot]

Yea I figured the drought but they just posted a great result and agrias share price is flying. I guess all i can do is impatiently wait.

[hilskin]

http://www.sharechat.co.nz/article/b9a0c157/pgg-wrightson-parent-agria-posts-wider-first-half-loss-on-land-use-impairments.html (http://investmentresearchgroup.createsend1.com/t/r-l-omlktl-jrldiuktdk-y/)

[Snow Leopard]

PGW dropped out of the NZX50 today.

Best wishes
Paper Tiger

[traderjoe]

So does one cut one's losses and sell now? Or decide to hold?

[tosspot]

I dont see how dropping out of the nzx 50would make the share price tank. Its just administrative. And traderjoe Im holding I cant deal with losing that much. I was going to free these up to buy PEB now I have to choose between selling SUM which i bought for 2.51 and DIL which I bought for 6.25 so havnt made anything off them but they both have good potential.

[traderjoe]

OK Tosspot - I'll join you in holding!

[Queenstfarmer]

Well with 11,000,000 shares traded and 90% of that traded in the last half hour...someone continues to collect this bargain.

[stevo1]

Buyer volume disappearing like water in a drought

[Snoopy]

http://www.sharechat.co.nz/article/b9a0c157/pgg-wrightson-parent-agria-posts-wider-first-half-loss-on-land-use-impairments.html (http://investmentresearchgroup.createsend1.com/t/r-l-omlktl-jrldiuktdk-y/)

That result from Agria can only be described as dreadful. They are coming off one of the best calendar years in farming and still the losses continue to increase. Closer inspection of the result though indicates it is not quite as bad as the headline figure. The half year loss of $US60.2m included a one off loss of $US57.3m. So the real ongoing loss is only $US2.9m.

It is particularly disappointing that this loss on farmland leases has only been declared now, when the underlying cause of the loss, as a result of the 2010 sale of Taiyuan Primalights III Agricultural development, or P3A, which was formerly the company's main operating entity, should have been declared at the time IMO. It makes you wonder what else on the Agria balance sheet is sitting there grossly overvalued? The company has exited a 49 percent stake in Wuwei Ganxin Seeds also at a modest loss. Not encouraging, and the implications for PGW of having a cash hungry leach on the share register will be negative for PGW going into the future too.

SNOOPY

[Snoopy]

This damn stock is going to give me a heart attack soon. Especially because I sold xero a 7.59 and bought this at 44c a few weeks back now its down to 36c. whats up with this damn stock.


Tosspot there is a whole different psychology with a share like PGW compared to XRO. Looked at from a 'Xero psychology' viewpoint PGW is darn cheap. The difference is that demand for PGW goods does not follow a straight line upwards and margins are much lower. You have to look at PGW in a more ;conventional' way. IMO it is still a little overvalued at 36c. Something closer to net asset backing is a more opportunistic buy in price I believe.

SNOOPY

[Snoopy]

Snoopy can i asume that you would be full of awe if Agria has made money during the last half year ?


Yes I would have been. Unfortunately they didn't, just as I foretold. Losses for Agria have increased verses the prior comparable period.



Now Agria and all the other shareholder of PGW has received a small dividend out of an additional income that PGW has received (craffar loans).


This is a myth about PGW that has to be squashed. Look at the half year cashflow statement. PGW received $22.1m cash from a decrease in finance receivables. But in the same statement $28.5m in external borrowings were repaid. This indicates to me that all of the cashflow from the Crafar farms went straight into repaying debt. None was retained inside PGW.

Now look at the PGW segmental information. PGW rural capital (discontinued) lost $1.140m while finance (also discontinued) made $1.169m. Now sum the two. Within rounding error PGW neither made nor lost money as their finance book was wound down.

I conclude that overall the final repayment of the Crafar loans had no net effect, either good or bad, on PGW.

That in turn means that the declared recent dividend will be paid by just borrowing more money from the banks to do it.

SNOOPY

[Agrarinvestor]

Hi Snoopy,

i sold 60% of my holding, with a nice win. Honestly i hoped for a surprise in net margin. So i was wrong you was right. You have 4 Stars, and i am still learning.
But do you have an explanation about the high volume and rising shareprice during the last days ? Agrias share price is stable now. I have no explanation.

[Food4Thought]

Is the decrease in the NZ dollar likely to play in favour for PGW in regards to overseas buyers?

[Agrarinvestor]

Yes I would have been. Unfortunately they didn't, just as I foretold. Losses for Agria have increased verses the prior comparable period.



This is a myth about PGW that has to be squashed. Look at the half year cashflow statement. PGW received $22.1m cash from a decrease in finance receivables. But in the same statement $28.5m in external borrowings were repaid. This indicates to me that all of the cashflow from the Crafar farms went straight into repaying debt. None was retained inside PGW.

Now look at the PGW segmental information. PGW rural capital (discontinued) lost $1.140m while finance (also discontinued) made $1.169m. Now sum the two. Within rounding error PGW neither made nor lost money as their finance book was wound down.

I conclude that overall the final repayment of the Crafar loans had no net effect, either good or bad, on PGW.

That in turn means that the declared recent dividend will be paid by just borrowing more money from the banks to do it.

SNOOPY

>>That in turn means that the declared recent dividend will be paid by just borrowing more money from the banks to do it.<<




Total Liabilities
406.0
405.5
502.0
847.1
901.8





Total Equity
581.3
575.0
564.0
602.0
631.0




Libilities enhanced by 0.5 Million
Equity enhanced by 6 Million

Where is the problem Snoopy. I don't understand ?


http://www.reuters.com/finance/stocks/incomeStatement/detail?stmtType=BAL&perType=INT&symbol=PGW.NZ

[Minerbarejet]

In addition to on The News
AVANE X® unique endophyte technology has won the 2010/2011 Australasian DuPont Innovation Award for Performance Materials, which recognises the commercialisation of outstanding science and technology in Australasia.
The endophyte is a naturally occurring fungus that reduces insect numbers on the grass and as a result makes the area less attractive to insect-feeding birds. It also reduces grass feeding birds flocking to grassy areas by causing post-digestion feedback.
This exciting innovation uses endophyte-infected turf-type grasses, including:


Jackal, a tall fescue
Colosseum, a perennial ryegrass.

The attributes of the novel endophytes serve to dramatically reduce bird and insect populations. At airports, this could potentially reduce bird strikes on aircraft. It can also be used in non-airport situations such as sports fields and golf courses where fouling by ducks and geese can occur.
This internationally recognised technology is exclusive to PGG Wrightson Turf and is being used on sports fields, amenity areas, waterways, reservoirs and on and around airports.
Sounds good to me - get plenty of post digestion feedback myself - not many birds around here.:)

[duncan macgregor]

In addition to on The News
AVANE X® unique endophyte technology has won the 2010/2011 Australasian DuPont Innovation Award for Performance Materials, which recognises the commercialisation of outstanding science and technology in Australasia.
The endophyte is a naturally occurring fungus that reduces insect numbers on the grass and as a result makes the area less attractive to insect-feeding birds. It also reduces grass feeding birds flocking to grassy areas by causing post-digestion feedback.
This exciting innovation uses endophyte-infected turf-type grasses, including:


Jackal, a tall fescue
Colosseum, a perennial ryegrass.

The attributes of the novel endophytes serve to dramatically reduce bird and insect populations. At airports, this could potentially reduce bird strikes on aircraft. It can also be used in non-airport situations such as sports fields and golf courses where fouling by ducks and geese can occur.
This internationally recognised technology is exclusive to PGG Wrightson Turf and is being used on sports fields, amenity areas, waterways, reservoirs and on and around airports.
Sounds good to me - get plenty of post digestion feedback myself - not many birds around here.:)All very nice But not very practical I cant imagine the quatity required will lift the company to new heights. The customers have had a big financial hit due to the drought so I would expect a downturn in trade. The brightside might be extra grass seed will be required. I would think It will be a couple of flat trading years unless the weather comes to the rescue. This is a company that you look up the weather forecaste to predict its financial fortunes the other is irrevelent. Macdunk

[Food4Thought]

Perhaps if PGW threw in a mix of this http://www.youtube.com/watch?v=48H7zOQrX3U and cross it with some AIRNZ advertising, that lil animal Rico http://www.youtube.com/watch?v=BZLBY3lYtsQ. Their product would get some good international exposure... I know, Farmers are all about watching YouTube clips... Anyway, enjoy some Monday morning funny's

[Master98]

could be a billion-dollar business for pgw
http://www.stuff.co.nz/business/farming/8468340/Bird-repelling-grass-on-offer

[Minerbarejet]

could be a billion-dollar business for pgw
http://www.stuff.co.nz/business/farming/8468340/Bird-repelling-grass-on-offer
fescue to the rescue. lol

[Master98]

Wait till the greenies get wind of this!

billion dollar business? Are there that many airports? ;)
include all those military ones:)

[Dej]

include all those military ones:)

PGW should try get the rights so only they can mow it too ;)

[Minerbarejet]

MOA probably has them already

[Food4Thought]

Good application in the wine growing industry? Plant it between your fruit trees... less attraction for birds? There are many applications for a grass that would keep bird numbers down... naturally. This grass should be endorsed by the SPCA...etc

[Master98]

PGW seeds business should performing well follow this drought:

http://www.stuff.co.nz/business/farming/8474098/Farmers-need-to-start-thinking-about-pasture

[winner69]

See nut arm say Australia is munted at the moment and they not making any money over there

Cany even sell sun flower seeds cause of the weather

But then again nufaem activities bear no resemblence to pgw so no worries eh

[winner69]

NUFARM have recently acquired an American seeds business which no doubt they wil leverage ctivity in this part of the world. Pretty big business circa 100 mill annually but I don't know what sort of seeds they specialise in. Potential PGW competitor?

I only posted the comments about NUF woes because they made a lot of the lack of sunflower seed sales as one reason along with the general climatic conditions in AU which seemed pertinent to this three. Yes NUF mainly in chemicals but Agria related businesses is their game

If PGW boom with their seeds so will NUF - making sure only the seeds turn into what they meant to be and taken over by weeds and grubs

[Minerbarejet]

We ran into this back in the sixties when we had some horrendous droughts. Those areas that have had some but minimal rain to this point now have the added peril of clodding. As I understand it, this is where minimal rain turns the grass roots upwards seeking the moisture, growth ensues, the animal eats the grass AND pulls it out of the ground. It would seem to be crucial for the farmers that a good dose of rain is needed now in order to prevent this. Added to this is the scourge of facial eczema.

On a positive note though PGW will have a lot of seedsowing on its hands one way or another.
More so if the above happens.

Could be a good year for wild mushrooms too but have a feeling there wont be many whitebait around in August.

This post has the intent of passing on personally experienced information as part of the thread.
It contains two speculative statements related to the environment but not connected to the thread.
It is not intended to offend any sharetrader forum member.

[GRIFFIN]

Take it from me there is a huge amount of seed going into the ground at the moment, we are under sowing drought expired pastures right now which in a normal year would not be the case. We have also had to re sow brasica crops which have not fired at all, this weekend i drove from the wairarapa through to Napier and would have seen 20 direct drills working along the way and countless paddocks that have been covered .

[Master98]

Agria lunch shares buyback plan.
http://finance.yahoo.com/news/agria-announces-share-buyback-program-123000675.html

[Snoopy]

I agree its mighty convenient to boost Agria's share price.

So is Agria's price irrationally low? Fraid I can't answer that, as I really don't follow the company.


I think you are being a little modest here Sparky, even if you don't know it. Please allow me to join the dots for you.

The Agria half year results are out. Unfortunately the Agria detail is nowhere near as comprehensive as the PGW result for the corresponding period. However Agria do disclose that their principal divisions in China, Field Corn Seeds and Edible corn seeds had turnover of $US2.8m and $US2.2m respectively, for a total of $US5m over the half year.

We are told total consolidated revenues were $US489.1m for the six month period. But this figure includes the turnover of the 49.99% minority shareholders, as well as that of the Chinese operations. So we can work out the percentage of revenues from the Chinese based operations as follows:

$US5m / [$US489.1m-$US5m] x [1-0.4999] = 2.06%

So the total Agria turnover outside of PGW amounts to just over 2% of the total, which is within the margin of error when looking at results on this scale.

What this means is that to get a complete picture, within 2%, you can entirely ignore what Agria is doing under its own brand in China. If you understand PGW, and I think you do Sparky, then you also understand Agria.

SNOOPY

[Snoopy]

We are told total consolidated revenues were $US489.1m for the six month period. But this figure includes the turnover of the 49.99% minority shareholders, as well as that of the Chinese operations. So we can work out the percentage of revenues from the Chinese based operations as follows:

$US5m / [$US489.1m-$US5m] x [1-0.4999] = 2.06%

So the total Agria turnover outside of PGW amounts to just over 2% of the total, which is within the margin of error when looking at results on this scale.


Some more detail on half year earnings. Agria made 'Operating Income' (EBIT) of $US6.1m, which equates to $NZ7.4m using the exchange rate on 31st December 2012 (half year result date).

From the PGW HY2013 report, EBIT was $NZ18.0m - $NZ4.0m = $NZ14.0m.

Half of that (the Agria share) is $NZ7m, which compares unfavourably with the $NZ7.4m EBIT declared by Agria. So has Agria finally added some value at EBIT level? Possibly, although the lack of break down in the Agria result makes it difficult to be sure.

The problem of course is that Agria has large debts, over and above any debt consolidated via PGW. So the NPAT result is liable to be much worse than the 'operating profit' declared. I would guess that on a NPAT normalized basis, Agria is still loss making. Of course we will have to wait until to full year 20F filing in the third quarter to confirm this.

SNOOPY

[Snoopy]

>>That in turn means that the declared recent dividend will be paid by just borrowing more money from the banks to do it.<<




Total Liabilities
406.0
405.5
502.0
847.1
901.8





Total Equity
581.3
575.0
564.0
602.0
631.0




Libilities enhanced by 0.5 Million
Equity enhanced by 6 Million

Where is the problem Snoopy. I don't understand ?


The figures you have quoted I think are from the PGW balance sheet with the most recent full year figures on the left. There is no doubt Agrainvestor that the reduction in liabilities and the increase in equity are moves in the right direction. The problem I see is what happens from here. Allegedly the PGW restructuring is now over. But what we are left with is a company with over $400m in debts and what looks to be normalized peak of business cycle profits of around $NZ25m. By my way of thinking that debt level is still far too high, and there appears no prospect of it reducing further.

Borrowing money to pay Agria (and small shareholders) a dividend, will have an adverse effect on liabilities going forward. That in turn puts PGW at risk should the rural downturn take hold.

The share price is being held up at 38c, probably in anticipation of a further 2cps dividend in the coming twelve months. This represents a gross yield of some 7.5%. But I think there are other far safer dividend yields of 7.5% available on the market, and personally I have real doubts as to whether a forward annualized dividend rate of 2cps is sustainable for PGW over the next two years. To me with all of those rural drought effects still to flow through, I don't believe that topping up at 38c is a good bet.

SNOOPY

[Queenstfarmer]

Received dividend statement today. Very clear that this 2.2c payout was an interim dividend. So in the event of shareholders receiving a final of perhaps a similar amount...the yield would therefore be approximately 4 times more than the banks give us at around 16%. That's going on a gross dividend of a little over 3 cents per share (just received) and then again for a final. Snoopy?

[Master98]

Received dividend statement today. Very clear that this 2.2c payout was an interim dividend. So in the event of shareholders receiving a final of perhaps a similar amount...the yield would therefore be approximately 4 times more than the banks give us at around 16%. That's going on a gross dividend of a little over 3 cents per share (just received) and then again for a final. Snoopy?

I received dividend payment check yesterday, and saved to my bank account today:)

[Queenstfarmer]

I used to wait for the post to arrive...now computershare transfer it direct. was in.my account last Thursday evening. Gotta love progress.

[Snoopy]

Received dividend statement today. Very clear that this 2.2c payout was an interim dividend. So in the event of shareholders receiving a final of perhaps a similar amount...the yield would therefore be approximately 4 times more than the banks give us at around 16%. That's going on a gross dividend of a little over 3 cents per share (just received) and then again for a final. Snoopy?

QSTF, total PGW earnings in the first half were 1cps. The dividend of 2.2cps was therefore mostly composed of earnings retained from the previous year. That 2.2cps interim dividend is not indicative of what you will get as a final dividend for FY2013 (if anything), nor would I expect it to be repeated next year.

The whole purpose of the bumper interim dividend IMO was to provide liquidity for major shareholder Agria, who are in the process of renegotiating their own US bank loans. This is a case of past dividends not being indicative of what we can expect in the future!

SNOOPY

[Queenstfarmer]

I feel there's a good chance agria will look for another bumper later in the year. PGW also stated they were resuming with a dividend policy. Agree it may not be 2.2c but perhaps a little drip feed to keep shareholders happyish?

[Snoopy]

Is the weather in Australia picking up for seed planting?


The PGW Australian seed business is in deep trouble Sparky. This from 'sharechat' yesterday.

-----

Senior Aussie PGG Wrightson exec to head Landcorp
Thursday 4th April 2013


PGG Wrightson's Steve Carden, who heads up its Australian seeds unit, will leave the country's biggest rural supplies firm to take up the reins at New Zealand government-owned Landcorp Farming in July.

The Wrightson general manager will take up the chief executive role being left vacant by long-standing Landcorp boss Chris Kelly, the company said in a statement.

Carden has been with Wrightson since 2008, and responsible for the Australian seeds business since 2010, overseeing the acquisition and integration of a number of businesses while confronting some challenging climatic and market conditions.

AgriTech group GM John McKenzie will act as manager of the Australian business until a replacement is found.

------

The only positive I can take from this is that by 30th June, when shareholders finally realise how bad all those seed acquisition businesses were, the fall guy will already have gone and they won't have to offer him a big bonus for the year to go with his golden parachute.

The other thing you need to bear in mind is that when assessing goodwill on the books as at 30th June 2012 (see note 26, AR2012). EBITDA growth assumption for Agritech is 40% this year. No that is not a misprint. Unless EDITDA at Agrtech improves by 40% in the year to June 30th, PGW will be looking at some significant goodwill writedowns. This was tagged in the accounts by the auditors last year for those with short memories.

Currently the goodwill on the books at Agritech is $216.6m. OK I know that when the write down comes it will all be 'non cash'. But it was cash once, not too many years ago. And such a write down will still make the balance sheet look sick. What chance that the CEO at PGW is an ANZ banker within twelve months?

SNOOPY

[Snoopy]

I feel there's a good chance agria will look for another bumper later in the year. PGW also stated they were resuming with a dividend policy. Agree it may not be 2.2c but perhaps a little drip feed to keep shareholders happyish?


The problem is QStF, PGW will have to satisfy their bankers first. Note 8 in the HY2013 interim report shows an 'amortising facility ' of $NZ20m maturing on 31st July 2013.

Translation: Unless PGW pay their banks back $20m by 31st July, the new CEO for PGW come August will be an ANZ banker. PGW have effectively emptied their accounts with the interim dividend. So all of that $20m due will have to be accumulated from 1st January 2013. A $20m after tax profit may still be achievable in the second half, although personally I don't believe they will do it. But even as an optimist $20m earned and paid to the banks, leaves nothing for distribution as a final dividend for shareholders. So I am picking a final PGW dividend of 0c.

If the second half profit is less than $20m, PGW could raise the cash balance by selling their small holding in Heartland. This was the holding acquired at 90c IIRC, so once again PGW shareholders will be looking at more losses. Ironically because this HNZ shareholding has already been written down in value, PGW will probably attempt to pass off such a share sale as 'profitable'. Can you believe that? My understanding of the term 'long suffering shareholder' is deepening by the day!

SNOOPY

[Queenstfarmer]

Snoopy! Why not just cut your losses and get out??

[Master98]

Snoopy! Why not just cut your losses and get out??
Lol, this question has been asked many times, for me, if I don’t like this stock or look down it or no confident in it just sell it and walk away, has no point keep spending time on it.

[Xerof]

Translation: Unless PGW pay their banks back $20m by 31st July, the new CEO for PGW come August will be an ANZ banker

bit late on that one Snoopdog....Sir John A was installed ages ago.

[percy]

bit late on that one Snoopdog....Sir John A was installed ages ago.

Cracker post.!!! Made my day. lol.

[Snoopy]

What nonsense from our resident Eeyore. My own investigation, involving actually speaking to senior managers at Agritech (not the tealady), suggest the integration of the Australian business units was poor initially but is coming together nicely across late 2012 and 2013.

The move from GM of a division to CEO of NZ's largest farming company is a huge promotion for an individual.


Sparky, I refer you back to my Thread post 1958, dated 12th April 2012. There you can see what has happened since Mr Carden came on board at Agritech. The summary is, turnover has steadily increased while profit after tax has slid away to virtually nothing. Of course this view of Agritech includes all of the New Zealand operations as well, which reputedly have been doing quite well. So to basically destroy the profitability of Agritech in total by going on the acquisition trail of stray dogs in Australia must have taken some skill.

May I suggest next time you interview your PGW high level manager you do speak to the tea lady as well. She doesn't get paid enough to lie.

I have to admire your conviction, but am not convinced that 'pin the wail on the donkey' is a successful investment strategy.

SNOOPY

[Snoopy]

Snoopy! Why not just cut your losses and get out??

QStF, I still see PGW as an effective way to plug into the rural sector. In my experience the rural sector is often out of line with the rest of the market. Thus when almost everything else is sitting at multi year highs, I tend to gravitate sectors that are merely overpriced to averagely priced.

Successful investing in the rural sector is IME very much a case of not paying too much. So my strategy is to sit patiently and wait until the next market spook shows up. Alan Lai bumbling around in a white sheet before last years AGM was one opportunity. I expect there to be others. Thus I continue to watch PGW, and wait with my cheque book at the ready.

SNOOPY

[Snoopy]

Of course this view of Agritech includes all of the New Zealand operations as well, which reputedly have been doing quite well. So to basically destroy the profitability of Agritech in total by going on the acquisition trail of stray dogs in Australia must have taken some skill.


I note the half year report does not include a break down of geographical segment information as the full year report did. I don't think PGW gets any revenue from Australia that is not Agritech. So if Australian revenue was $78.798m in FY2012 (AR2012 p48) and South American Agritech revenue was $96.227m (AR2012 p46) then that leaves the revenue for NZ Agritech as:

$486.464m - $78.798m - $96.227m = $311.439m

Looking at that you would think that a good year in NZ might be able to pull up by the bootstraps any wayward performance in Australia and South America. Yet this appears to not have been the case for any year since 2008. Would those defenders of Carden like to offer an alternative explanation that does not involve gross mismanagement in Australia?

SNOOPY

[Queenstfarmer]

Hang in there Snoopy....you may very well see your 60c sp and beyond before the fy13.

[winner69]

Then again Snoopy might say " wish those agriseed managers would stop wasting time talking to clowns and just get on with making money"

[GRIFFIN]

You will find most of us farmers have the seed in the ground now regardless of rain or temperature its a case of having too and now hope for good growing conditions.
Ravensdown, Ballance etc will be very busy at the moment as well.

[Snoopy]

Lai has a habit of talking up Agria's potential and capabilities, so forgive my cynicism.


Never have wiser words been written on this thread Sparky. Your cynicism regarding Lai is fully justified.

There is nothing wrong with a leader have a vision, drive and ambition. But every so often a leader needs to look over their shoulder, take stock, and reevaluate their plans in line with the reality of the market. I have done a couple of simple maths exercises on Lai's vision for PGW Agritech.

Last years sales were $NZ435m and that equates to around $US370m using $NZ1 = US85c. If in ten years the turnover is to be $US10 billion we can calculate the implied growth rate as follows:

$370m(1+g)^10=$10000m => g=39%

So Lai is predicting a growth rate for Agritech of 39% every year for the next ten years!

Next in forage he is saying that sales to China will be $US25m by 2017 (sales are nil at the moment). Then he is saying that six years later sales could be $US200m. So we can calculate the implied growth rate here:

$25m(1+g)^6=$200m => g=41%

From a nil base, Lai is predicting a 41% growth rate in forage sales going forward.

Now, I know that China is one of the fastest growing economies in the world. But even allowing for this I would say Lai's vision for the future of Agritech is not realistic.

SNOOPY

[Snoopy]

An interesting article by Fran O'Sullivan this morning about the Seeds business potentially joining up formally with Agria.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10875679



I am not sure whether to shoot the message, the messenger or the editor. But by some measure this is the worst piece of journalism I have read this year. The article contains contradictions and as a result does not make sense.

"Lai shared his vision for the seeds business at an interview in Auckland. "In three years we could be in the top 10 seeds companies in the world ".

Then later on in the article Lai says.

"With the combination between PGGW and China Seeds, we are number two in the world and we are looking in the next three years to be number one."

So what Lai is saying is that in the next ten years a combined PGGW Agritech and China seeds will slip backwards from number two to number three?

Then on talking about a Chinaseeds Agritech merger, Lai says:

"Post the merger PGG Wrightson would have less than one-third of the new company."

Then in the next paragraph Lai is quoted:

"Lai said Agria was prepared to adjust the 51 per cent (in the PGG Wrightson Seeds business) to bring more benefit back to the New Zealand firm. "

That looks to me like a direct contradiction to his previous comment about decreasing the relative holding of PGG Agritech in a future merged entity. Can anyone offer a coherent interpretation as to what Lai might mean by his comments?

SNOOPY

[Snoopy]

Alan Lai's comments are not aligned with that of PGW's management. I suspect PGW are as bemused as we are. Comments from useful and informed sources are describing Lai as a comical ego. However, he is not running PGW.


I hate to point this out Sparky, but Lai's Agria has a controlling shareholding in PGW. And this is the quote from the Herald article you referenced:

"Lai says the Chinese side has not intervened at management level since the asset was bought. But he indicated a desire to have a much bigger say in future strategy."

PGW's NZ based management may not have much of a choice as to where they go in the future, to the detriment of minority shareholders like us!

SNOOPY

[Xerof]

I hate to point this out Sparky, but Lai's Agria has a controlling shareholding in PGW. And this is the quote from the Herald article you referenced:

"Lai says the Chinese side has not intervened at management level since the asset was bought. But he indicated a desire to have a much bigger say in future strategy."

PGW's NZ based management may not have much of a choice as to where they go in the future, to the detriment of minority shareholders like us!

SNOOPY

I would love to see the minutes of the meeting at which the 'interim' dividend was voted on.

no intervention? Bollocks.

[Xerof]

I'm a very fair person Sparky - that was precisely the 'intervention' I was meaning

[Snoopy]

Some more detail on half year earnings. Agria made 'Operating Income' (EBIT) of $US6.1m, which equates to $NZ7.4m using the exchange rate on 31st December 2012 of $1NZ = $US 0.8196 (half year result date).

From the PGW HY2013 report, EBIT was $NZ18.0m - $NZ4.0m = $NZ14.0m.

Half of that (the Agria share) is $NZ7m, which compares unfavourably with the $NZ7.4m EBIT declared by Agria. So has Agria finally added some value at EBIT level? Possibly, although the lack of break down in the Agria result makes it difficult to be sure.


I am going to give Agria the benefit of the doubt. I shall assume the difference in the HY2013 profit ($NZ0.4m, $US0.33m) was all due to 'China seeds'. Based on 6 months seed turnover of $US5m, this represents an EBIT margin of 6.5%. How does that compare to 'Agritech', the arm of PGW that 'China Seeds' is ostensibly trying to merge with?

Well, Agritech had HY2013 turnover of $NZ 181.7m and EBIT of $4.999m. That gives an EBIT margin of 2.8%.

Therefore Chinaseeds is 232% better than Agritech and 'equivalent turnover' for China Seeds is not $US5m, but $US11.6m or $NZ14.2m. Thus if the two businesses were to be combined the fair split of the combined business would be for it to be held 7.2% by Agria shareholders and 92.8% by PGW shareholders.

Sigh! It is no use. Using all the BS figuring* in the world, I cannot get anywhere near Alan Lai's NZ Herald Interview claim of grabbing 67% of a combined PGW Agritech / Agria China Seeds for Agria shareholders! It also includes all of the troubles that Agritech were facing in Australia over the comparison period.

SNOOPY

*BS figuring includes the expected low first half of the year for Agritech (southern hemisphere) with the expected high first half of the year (northern hemisphere) for Agria's 'Chinaseeds'.

[Snoopy]

I am going to give Agria the benefit of the doubt. I shall assume the difference in the HY2013 profit ($NZ0.4m, $US0.33m) was all due to 'China seeds'. Based on 6 months seed turnover of $US5m, this represents an EBIT margin of 6.5%. How does that compare to 'Agritech', the arm of PGW that 'China Seeds' is ostensibly trying to merge with?

Well, Agritech had HY2013 turnover of $NZ 181.7m and EBIT of $4.999m. That gives an EBIT margin of 2.8%.

Therefore Chinaseeds is 232% better than Agritech and 'equivalent turnover' for China Seeds is not $US5m, but $US11.6m or $NZ14.2m. Thus if the two businesses were to be combined the fair split of the combined business would be for it to be held 7.2% by Agria shareholders and 92.8% by PGW shareholders.

Sigh! It is no use. Using all the BS figuring* in the world, I cannot get anywhere near Alan Lai's NZ Herald Interview claim of grabbing 67% of a combined PGW Agritech / Agria China Seeds for Agria shareholders! It also includes all of the troubles that Agritech were facing in Australia over the comparison period.

SNOOPY

*BS figuring includes the expected low first half of the year for Agritech (southern hemisphere) with the expected high first half of the year (northern hemisphere) for Agria's 'Chinaseeds'.

From the NZ Herald report.

"Agria has 51 per cent of the Wrightson seeds' business but 100 per cent of China Seeds. Post the merger (and some prospective M&A activity in the US) PGG Wrightson would have less than one-third of the new company."

This kind of thinking has 'grand theft seed pod' stamped all over it. How on earth could Lai consider that his China seed business would make up two thirds of a combined Agritech/ China Seeds? PGW minority shareholders will have to be very careful here. It does read like Lai is lining up to 'steal' decades of seed technology built up in New Zealand for himself (Agria)! There is serious risk here for PGW minority shareholders IMO.

SNOOPY

[Snoopy]

An interesting article by Fran O'Sullivan this morning about the Seeds business potentially joining up formally with Agria.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10875679



Another quote from the above article:

"With the combination between PGGW and China Seeds, we are number two in the world and we are looking in the next three years to be number one."

"I believe there is a natural synergy between PGG Wrightson Seeds and Agria Seeds to make a company to compete with the giants like Monsanto. The integration will give PGG Wrightson much more extensive access to the Chinese market as well."

This claim does not stack up to me. How will combining PGW Agritech and 'China Seeds' improve contacts in China? Before merger we are reliant on Alan Lai and his connections to develop the China business. After merger we woudl still be reliant on Alan Lai as the beachhead into China for PGW investors. How can combining Agritech and Chinaseeds make one jot of difference in improving access to the Chinese market?

SNOOPY

[Snoopy]

An interesting article by Fran O'Sullivan this morning about the Seeds business potentially joining up formally with Agria.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10875679



Another quote from the above article

"Lai is not proposing an IPO on the Hong Kong exchange (this was earlier floated by XT)."

Well of course he isn't! All you need do to see why is look at the HK listing rules for new issues:

http://www.hkex.com.hk/eng/listing/listreq_pro/listreq/equities.htm

where you can find the following quote:

A GEM new applicant must have a trading record of at least 2 full financial years with: substantially the same management throughout the 2 full financial years; and a continuity of ownership and control throughout the full financial year immediately preceding the issue of the listing document

Since the CEO and CFO both left six months ago, Agria would not comply with the management continuity rules and so he would not be allowed to list the company in Hong Kong. Naturally Lai didn't tell Fran O'Sullivan that!

SNOOPY

[Snoopy]

An interesting article by Fran O'Sullivan this morning about the Seeds business potentially joining up formally with Agria.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10875679



I am not finished with this article yet!

"And with China rapidly building huge mega-dairy farms (Lai knows of at least 40 with more than 10,000 cows on each farm), he believes there is a big opportunity to grow forage in China to cut-and-carry to the animals."

"Lai estimates this business could generate at least US$25 million in annual revenue by 2017 - rising to US$200 million turnover within 10 years."

This claim is harder to judge because in general NZ does not supplementary feed like Lai is proposing.

However, Uruguay certainly does and as a former NZS shareholder I have some relevant information. NZS had an average of 65,000 cattle on their farms during FY2012 and spent $4.943m on forage. Scale that up to 400,000 cows and you would be looking at a turnover of $US30.4m. That is substantially below the $US200m ten year target that Lai is talking about. Granted, conditions in China are not directly comparable with Uruguay. But the feed used by NZS in Uruguay during FY2012 was substantially over budget due to the poor grass conditions. So it does look like Lais claimed forage market in China is an order of magnitude above reality.

SNOOPY

[Snoopy]

It is entirely possible he was talking drivel on purpose and Fran O'Sullivan didn't know enough about PGW to challenge it.


Fran O'Sullivan is a well respected journalist, and I would have expected much better of her. The article wasn't even consistent within itself, which should have raised some alarm bells even if your specialty training wasn't in farming. IMO this Herald article is an utterly disgraceful piece of journalism: inaccurate, inconsistent and just plain wrong over its entire content.

SNOOPY

[Morpheus]

This kind of thinking has 'grand theft seed pod' stamped all over it. How on earth could Lai consider that his China seed business would make up two thirds of a combined Agritech/ China Seeds? PGW minority shareholders will have to be very careful here. It does read like Lai is lining up to 'steal' decades of seed technology built up in New Zealand for himself (Agria)! There is serious risk here for PGW minority shareholders IMO.

SNOOPY

This was something Shoeshine in the NBR picked up on recently, noting that Alan Lai’s wife seemed to feature a lot as a major shareholder in lots of obscure seed companies half owned by Agria. Shoeshine mentioned Shenzhen Guanli Agricultural Technology, 51% owned by Agria Brother (Agria’s biotech arm) and 49% owned by Li Juan, wife of Agria chairman and founding shareholder Guanglin (Alan) Lai. Then there is Shenzhen Agria Agricultural Co and Shenzhen Zhongyuan Agriculture Ltd, of which Mrs Lai is the 95% owner ... plus lots of other side deals with the Chinese government and shady lease agreements between these seed merchants and farmers in mainland China. Worth reading.
The article was in the print edition and is now on the website http://www.nbr.co.nz/article/agria-keeping-pgw-dark-135030
Sorry NBR wont allow me to cut and paste it here.

[Queenstfarmer]

I am not finished with this article yet!

"And with China rapidly building huge mega-dairy farms (Lai knows of at least 40 with more than 10,000 cows on each farm), he believes there is a big opportunity to grow forage in China to cut-and-carry to the animals."

"Lai estimates this business could generate at least US$25 million in annual revenue by 2017 - rising to US$200 million turnover within 10 years."

This claim is harder to judge because in general NZ does not supplementary feed like Lai is proposing.

However, Uruguay certainly does and as a former NZS shareholder I have some relevant information. NZS had an average of 65,000 cattle on their farms during FY2012 and spent $4.943m on forage. Scale that up to 400,000 cows and you would be looking at a turnover of $US30.4m. That is substantially below the $US200m ten year target that Lai is talking about. Granted, conditions in China are not directly comparable with Uruguay. But the feed used by NZS in Uruguay during FY2012 was substantially over budget due to the poor grass conditions. So it does look like Lais claimed forage market in China is an order of magnitude above reality.

SNOOPY

I would imagine that within ten years he wld be talking about a substantial amount of cows...a great deal more?? than 400,000?

[Master98]

Believe or not, as long as Mr Lai want, he can easily get funding from china to buy another half pgw, just when this will happen. China agriculture is a major part of new nation five years plan.

[Queenstfarmer]

Believe or not, as long as Mr Lai want, he can easily get funding from china to buy another half pgw, just when this will happen. China agriculture is a major part of new nation five years plan. Just waiting for balance to jump in on this. Have to agree with him...only a matter of time before PGW follow in FPA's footsteps.

[Food4Thought]

As a general overview of PGW... if you need quality and quantity supply to feed people... this is a low price stock, with exceptional technology in this "field" of providing higher yields/returns, the network in place to supply good quantities of seed etc from geographically diverse assets... PGW ticks all these boxes. I look at this stock and go wow, long term... long term this is enormous. Kind of like Aged Health Care in the developed world... The stock is cheap... cheap for economies with monumental needs due to a highly strained local food supply economy... the potential for PGW... that's how I see it. Don't sell it cheap.

[Master98]

As a general overview of PGW... if you need quality and quantity supply to feed people... this is a low price stock, with exceptional technology in this "field" of providing higher yields/returns, the network in place to supply good quantities of seed etc from geographically diverse assets... PGW ticks all these boxes. I look at this stock and go wow, long term... long term this is enormous. Kind of like Aged Health Care in the developed world... The stock is cheap... cheap for economies with monumental needs due to a highly strained local food supply economy... the potential for PGW... that's how I see it. Don't sell it cheap.

NZ investors didn’t see it until someday this iconic company gone for overseas hand, sad isn’t it.

[Queenstfarmer]

One has to question the first sale this morning. 100 shares sold at 39c. Take away the fee of $30 and you're left with $9?

[Hoop]

One has to question the first sale this morning. 100 shares sold at 39c. Take away the fee of $30 and you're left with $9?

As seen on the depth there is no sell orders at 39c..... therefore .....This will be a completion of both... an earlier buy and a sell order....could be a tidy up (dropping the sell price 1c to get rid of the residual) to complete a much larger sell order.

There's just one fee for completed orders

[Queenstfarmer]

I get what you're saying...however if that were the case...the 100 shares and the drop wldve registered at 10am. Still only 100 shares sold. Yes there is no sell at 39c...however you or I cld jump on now and sell 100 shares at 39 and they will instantly sell due to the buy side at this price.

[Queenstfarmer]

Also...I can't see that there wouldve been any residual from the day before as all the sales were at 40c and there are still 4 sellers at 40c. So how does it drop to 39 on a volume of 100? Enlighten me!

[stoploss]

Also...I can't see that there wouldve been any residual from the day before as all the sales were at 40c and there are still 4 sellers at 40c. So how does it drop to 39 on a volume of 100? Enlighten me!

the sell order( if it was partially filled) could have been from a week ago @ 41,42,43 wherer ever . Then at what ever time it has transacted today they have moved the order down to .39 to transact.

[Snoopy]

I would imagine that within ten years he wld be talking about a substantial amount of cows...a great deal more?? than 400,000?


Yes QStF what you are saying is quite possible. We really don't know how fast China will be able to develop dairy farms, and they could surprise on the upside. I don't think you can say that just because there is a lot of land available in China, that means you can turn it into dairy farms though. For example Alan Lai has just taken a multi-million dollar hit, via his vehicle Agria, because the leased land he has signed up to in China will not be able to produce the forecast yields when he signed up for the leases. Reading between the lines the soil quality and potential for crop growth just isn't up to it.

Some might say that this just proves the market exists for supplementary feed. But I don't think it is as simple as this. I think combined with the supplementary feed cows need water. And if that isn't available, then all the dry hay you can get won't sustain your cows.

I don't claim to be a better estimator for dairy farm development in China than Alan Lai. The problem I have with Lai is that his claims are consistently higher, by a factor of ten in this case, than comparable real examples. So even if I have underestimated the number of dairy cows in China by a factor of three, Lai still claims he can sell three times as much silage per cow as the comparable Uruguayan example. And in addition Lai's claim is consistent with having 100% market share for silage, even though he has never sold a single hay bail in China. A 20 or 50 percent divergence with forecasting I would be tolerant of. But with Lai in this case, the error on base case figures is 1000%.

SNOOPY

[Snoopy]

Believe or not, as long as Mr Lai want, he can easily get funding from china to buy another half pgw, just when this will happen. China agriculture is a major part of new nation five years plan.


Master I guess if you repeat this 'China will come to the rescue' phrase often enough to yourself you may end up believing it. But I have to ask you if cash is so readily available to Lai as you claim, why did he have to renegotiate the Agria loan with LIC, that he technically defaulted on, on such onerous terms?

Have you ever looked at the balance sheet of Agria? Do you understand that Agria is making huge losses and is cashflow negative, even off one of PGWs best years? Do you appreciate that Alan Lai now lives in Singapore, and that Agria is his private fiefdom, a kingdom in which the Chinese government has no say?

Do you appreciate that Lai has given dividend guarantees to the Chinese government vehicle New Hope? IOW the Chinese government is planning on taking cash out of Agria Asia, not putting more money into it. Do you appreciate that New Hope can force Agria to repurchase their share of Agria Asia in the next couple of years at an undisclosed price I would guess is cost? That could mean more huge losses for Agria.

Why do you think that the Chinese government will bail out Alan Lai, an independent Singaporean citizen?

SNOOPY

[Hoop]

the sell order( if it was partially filled) could have been from a week ago @ 41,42,43 wherer ever . Then at what ever time it has transacted today they have moved the order down to .39 to transact.

There are perhaps other reasons but your suggestion, Stoploss, is what I was thinking has happened...


Also...I can't see that there wouldve been any residual from the day before as all the sales were at 40c and there are still 4 sellers at 40c. So how does it drop to 39 on a volume of 100? Enlighten me!

The plausable scenario could be that this investor had nearly sold out as (or before) the price started dropping and got most of their order away e.g at 41c**...when the share dropped the residual amount left (100) became hung....Brokerage firms (I think its NZX policy) have a policy that selling shares orders last a duration of one month.
Why not sell at 40C?....There are 4 other sellers at 40c so that 100 residual would be placed 5th in the queue and may not sell on the day of expiry.......

**...Using Sherlock Holmes logic the seller must have had a sell order at 41c because the 1 month chart shows the share price at or below 40c since the sell order was placed...If it was at 40c the seller would mostly likely be at the top of the queue..

Extra unforeseen expiry forced sell cost ...$2 !!!

If the investor was Scrooge McDuck and wouldn't part with the extra $2 loss..The sell contract expires and the investor is left with an unmarketable parcel of 100 shares

Minimum Holdings at any time shall, unless otherwise determined by NZX, are as follows:

(a) In relation to equity securities (shares), a holding with a market price at the relevant time of:



Number of Units

Price (both figures inclusive)


2,000
Where the price does not exceed 25 cents


1,000
Where the price exceeds 25 cents but does not exceed 50 cents


500
Where the price exceeds 50 cents but does not exceed $1.00


200
Where the price exceeds $1.00 but does not exceed $2.00


100
Where the price exceeds $2.00 but does not exceed $5.00


50
Where the price exceeds $5.00 but does not exceed $10.00


25

Where the price exceeds $10.00




ref : .. DirectBroking

http://i458.photobucket.com/albums/qq306/Hoop_1/PGW1monthchart09042013.gif

[Snoopy]

I am pleased to find myself in constant agreement with you Snoopy these last couple of days. It is important to remember that Alan the Liar and Agria are distractions though to our ownership of PGG Wrightson shares. It is fine to ridicule Agria's position, or point out the flaws, but its not actually the company we are really interested in.


Sparky, despite what you may think I take no pleasure in watching the problems of Alan Lai unfold. As a PGW minority shareholder, it is in my best interests to see Agria/ Alan Lai (they are effectively one and the same) do well. PGW is a well respected seed producer and I would like nothing better than to see them break into the Chinese market. If Alan Lai can help them do this then I am all for him.

The problem as I see it is that Alan Lai chose PGW, but PGW did not choose Alan Lai. When I look at the business record of Alan Lai in agriculture all I see is a record of overpaying and underdelivering. I must be careful here, as I understand China is not the easiest place to do business, and we have to give Lai his chance to work his magic. My problem is I have yet to see even any green shoots, not even a single blade of grass from Agria. Has Alan Lai ever made any money in China? Is he really the partner that PGW should have in that market?



Agria's problems, should they get worse, would ultimately see ANZ and other banks take the PGW shares back and put them up for placement.


Actually the ANZ is supporting 80.81% unlisted subsidiary Agria Asia (otherwise minority owned by New Hope and Ngai Tahu) . If Agria, the US listed entity, went into chapter 11 then it is the US banks that would be calling the shareholding shots, not the ANZ. It would be fascinating to be a fly on the wall at these US banking facility negotiations, going on in the Agria boardroom right now.



It would be a short term hiccup, rather than something affecting the supply of goodies to the agricultural sector. The underlying PGW company is in my opinion a fine company, focused on basics, poised to improve considerably on last years earnings, is paying back debt, and now paying a dividend again.


Certainly the expiry of the $20m 'amortizing facility' in July 2013 will be positive for future PGW earnings going forward, thanks to the associated lower interest bill resulting. I believe that PGW will be stretched to pay a final dividend on top of paying back the amortizing facility though.

My concern is the future of Agritech, which is the real intellectual property jewel that Master, amongst others, does not want we minority PGW shareholders to sell off too cheaply. The poor performance of this unit is IMO largely the responsibility of PGWs own management. Yes there have been adverse weather events. But anyone who knows anything about agriculture should plan for such contingencies. I am afraid the only people who you can blame for Agrtech's underperformance are PGWs own staff, principally the departing Mr Carden.

Agritech is now vulnerable to a low ball Agria merger offer priced at the bottom of the Agritech business cycle. This I believe would be a terrible loss of value for minority PGW shareholders, should such a merger come to pass. Any closer Agria PGW tie up at this stage should IMO be strongly resisted. But with Agria as controlling shareholder at PGW, can we minority shareholders do anything about it?

SNOOPY

[Snoopy]

I can see a smaller dividend being declared for 2H2013. No more than a cent a share. Maybe 0.8c to take PGW to a total of 3c for the year, a nice round number. I'd be fine with that.


I wanted to spend a bit of time on this question since IMO it will be a major driver on where PGW goes forward from here share price wise.

What is not in question is that come July 2013 a $20m amortizing facility from the ANZ and Westpac is set to expire. I had assumed this meant PGW would need to ring fence $20m in cash to deal with this. However, if I look at the HY2013 report, note 8, I see that as at 31st December 2012 this facility was undrawn (yay, means it doesn't have to be repaid so the cash will be available for dividends). However it also says the facility is 'entirely committed to a contingent liability'. What does that mean?

This 'contingent liability' turns out to be the financial guarantee offered to Heartland when when PGW Finance was disposed of. Now IIRC, and I am interested here if Heartland shareholders can comment, Heartland are already maxed out on their own bad debt provisions. This I presume means that, on balance, Heartland management assumes they will be cashing in their PGW guarantee. In that sense the $20m is gone and is a real liability for PGW. However a provision is not actually a loss until the loan does go bad. If some of these provisions are recovered the guarantee of PGW could conceivably be part written back.

So my question is come 20th June can PGW simply wipe their amortising facility (because it is undrawn), or will they be caught out by that $20m Heartland guarantee liability?

SNOOPY

[Snoopy]

Are you sure about that? Surely ANZ would be operative in the USA for the purposes of any Chapter 11 declaration, should that happen?


Sparky it is not entirely clear in the Agria end of year 20F filing report because all of the PGW loans are consolidated within Agria's own loans.

Among the loans listed on p16 of the 20F filing where 'Liquidity and Capital Resources' are detailed are:

"Acquisition debt denominated in New Zealand dollars totaling NZ$63.0 million (RMB337.2 million, $52.2 million) that matures on October 31, 2012 with a mandatory repayment of NZ$27 million (RMB144.5 million, $22.4 million) on April 30, 2012 provided by a bank and Livestock Improvement Company."

This I believe is the consolidation of the Agria Asia debt, and includes the ANZ debt. The page then goes on to list all the PGW debt as well until finally we get

"· Loan facilities denominated in RMB of RMB62.0 million ($9.6 million) that matures on April 7, 2012 provided by one bank." (by implication a Chinese bank)
· Loan facilities denominated in US Dollars of US$57.2 million (RMB369.9 million) that mature between January 23, 2013 and April 19, 2013 (by implication a US bank)"

If Agria USA goes into Chapter 11, I believe it would be the banks that manage Agria's own debt that would drive the receivership. That does not include ANZ. However if Agria Asia went down as well, then obviously ANZ would be involved. Whether ANZ is involved or not would depend on which way the cards fell down IMO.

SNOOPY

[Snoopy]

The simple fact is farm gate commodity prices are just fine where they are now but any shift upwards in the kiwi $ comes straight out of the farmers pocket.

kiwi $ at 85-87 to the US $ is a game changer for farmers.


You wrote this on 2nd November 2012 Snapiti. Now five months later the exchange rate has moved into your 'game changer' range, and you have probably had a drought as well. Care to give us an update from down on the farm?

SNOOPY

[Master98]

I hold PGG and bought some more today. I believe it has good long term value at these levels, only negative is not knowing what Mr Lai's intentions are. He is the majority shareholder and the last dividend payment show's he is having an influence on company policy.
I hope PGG is not going to be his cash cow.

More debt needs to be paid before helping Mr Lai and his Agria problems out.

Mr Lai is a majority shareholder, he do has more hope PGW going well than you, so I don't think you need to worry about this. the way of asian running a company is much different from nz.

[Snoopy]

yep farming sux at the moment.
a 17.5 kg lamb is worth $75 if you can finish it, most farmers dont have the quality of grass to do this so the reality is most farmers are sitting on unfinished lambs hovering around 13kg dead wieght which is worth $50.
those finished lambs 12 months ago were worth $140 and unfinished $100.
Your local beef weaner sale are well under way with the average price being $480 which is almost $200 less per head than last year.
Your price per kg for beef animals to the works is down 30% on this time last year, but wait there is more, most regions are still in a drought this is half way through Autumn which means that most farms have not received half of there winter feed.
I know many farmers have bought in feed for winter that have never needed to do it before.
That is thousands of dollars worth and in some case's 10's of thousands.
Did you see on the news tonight a -5 degree frost on top of drought ground(truely a nightmare for any farmer)

Then there is the value of the dollar to consider, that will give the meat companies all the excuse they need to keep farm gate prices low.

All in all a dreadful year with an exceptionally long winter to come.

Snapiti, I appreciate the candidness of your reply. It wasn't the message we PGW shareholders wanted to hear, but it was the message we had to hear.

Spoke to a federated farmers rep a month ago. They said that while attending the Palmy livestock auction, some of the lambs were going through at the equivalent of $1 per kilo! That is what happens when there is no feed available. At that point there was feed in the South Island. But the freight cost in getting it north combined with the low lamb prices made interisland food trade uneconomic. Sounds like the farmers in your area are some of the 'lucky' ones!

SNOOPY

[Snoopy]

Don't get too depressed Snoopy. Livestock is not a major part of the revenue at PGW. It is an important part, but not a major part.


From a PGW perspective you are right Sparky. From a sheep / beef farmer perspective, livestock is the end product , your income at the end of the season. Less cash in the farmers pocket means less cash to trickle down to all divisions of PGW!

SNOOPY

[winner69]

SNOOPY - don't get too despondent over these 'attacks' on and 'jibes' at you

You have in the past withstood far tougher opposition than those current with an anti view to you - the current lot are only boys compared to what you have faced in the past

And what they don't appreciate that eventually (and invariably) you turn out to be right

Keep at it - cheers from your old mate winner

[percy]

SNOOPY - don't get too despondent over these 'attacks' on and 'jibes' at you

You have in the past withstood far tougher opposition than those current with an anti view to you - the current lot are only boys compared to what you have faced in the past

And what they don't appreciate that eventually (and invariably) you turn out to be right

Keep at it - cheers from your old mate winner

Mates together.!!!!!!
You deserve each other.!!!!
Read Farmer Hamilton's post on Synlait Farms Limited [SNLF] thread on Unlisted Market;
"A bit depressing when a company that sells greasy fried chicken,crap coffee,and nat pizza with their packaging littering the streests of NZ."
I believe you both hold shares in that company,whose growth is going to be [suspect] burgers.Don't you two have any morals?

[winner69]

probably crap coffee because the milk come from a synlait farm

at least that pizza and greasy chicken place makes it customers happy .... not like that loan shark you own that charges exorbitant rates on its lending so it can keep you happy

[winner69]

Sorry percy ... that post of mine uncalled for and completely out of order .... and the silly computer wont let me delete it .... forgiveness is sought

[percy]

Sorry percy ... that post of mine uncalled for and completely out of order .... and the silly computer wont let me delete it .... forgiveness is sought

Forgiveness given.
Sorry I can't stop laughing.!!!
It is usually you who winds me up,so I am over the moon to have wound you up.!!! lol.

[winner69]

Just because snoopy pisses you off sparky is no excuse to berate him so cruelly

I did say Snoopy is generally eventually right ..... not the short time frame you are using to lamblast the poor guy.

Think about a 10 year time frame .... and wonder how many appreciate the significant gains they have made (or could have made) with such dogs (as generally assessed by sharetraders) like RBD and SCT to name a few

[Snoopy]

Really?

We heard from Snoopy less than a year ago that the share price was artificially high at 33c and a dividend wouldn't be paid for the next eight years (post 1966 on 12 May) (http://www.sharetrader.co.nz/showthread.php?2923-PGG-Wrightson-(-PGW-)&p=373861&viewfull=1#post373861)


Sparky my contention was that a dividend wouldn't be paid for eight years because shareholders would gain more value if that dividend money was put into paying down debt. The fact that a dividend was paid does not invalidate that argument.



Also, earnings for PGW are "as good as it gets" at 2.5c in EPS (post 1973 on 13 May 2012) (http://www.sharetrader.co.nz/showthread.php?2923-PGG-Wrightson-(-PGW-)&p=373902&viewfull=1#post373902)


You have seem the droughts and floods causing havoc in the seed business in Australia. You have seen the terrible drought in the North Island. You have seen farmers posting on this forum explaining how tough the year is going to be. Yet Sparky, you resolutely predict rising profits in FY2013? There is no evidence eps will be higher than 2.5cps in FY2013! I have not been proved wrong.



Snoopy has also predicted Agria's failure in post 1991 on 14 June 2012 (http://www.sharetrader.co.nz/showthread.php?2923-PGG-Wrightson-(-PGW-)&p=375732&viewfull=1#post375732). Now while I agree that Agria is hardly a champion company, I note they haven't failed, and give every indication that they'll be ok and meander along. (Note use of word ok, not good, or great or outperforming).

Two days later on 16 June, Snoopy tells us that Agria are probably gone. (http://www.sharetrader.co.nz/showthread.php?2923-PGG-Wrightson-(-PGW-)&p=375972&viewfull=1#post375972)


Sparky, Agria did default on their LIC loan. Agria are currently in difficult negotiations with their Chinese and US banks. I think it is all too soon to call, to see if Agria will make it in their current form. Nevertheless one thing is certain. Continuing losses and negative cashflow is not a 'just meandering along' position.



On the 23rd of August 2012 in post 2017 (http://www.sharetrader.co.nz/showthread.php?2923-PGG-Wrightson-(-PGW-)&p=379600&viewfull=1#post379600), Snoopy tells us Agria would be delisted from the NYSE before the year's end.


Agria only remain listed because of an imminent share consolidation as you well know.



Snoopy told us all two days after predicting Agria's delisting by years end, that PGW was 20% overvalued at 36c. (http://www.sharetrader.co.nz/showthread.php?2923-PGG-Wrightson-(-PGW-)/page143)

Then, a couple of weeks later in post 2141 on 6 September (http://www.sharetrader.co.nz/showthread.php?2923-PGG-Wrightson-(-PGW-)&p=380717&viewfull=1#post380717), PGW was fully valued at 34c.


There are periods based on historical valuation norms when shares in the market become overvalued. I contend that at 38c, PGW is overvalued right now. I don't withdraw those earlier comments.

SNOOPY

[winner69]

Sparks says I think pseudologica fantastica is at work here. .......it's actually psuedologia ...without a c

You do seem rather obsessed with putting Snoopy down ....must be some fancy name given to this condition.

A guy called Michel Foucault has some thoughts on this type of behaviour

[percy]

Sparks says I think pseudologica fantastica is at work here. .......it's actually psuedologia ...without a c

You do seem rather obsessed with putting Snoopy down ....must be some fancy name given to this condition.

A guy called Michel Foucault has some thoughts on this type of behaviour

To get a clear picture of who has been putting who down, you only need to read PGW and HNZ threads on sharetrader to see that SNOOPY has been obsessed at putting both Sparky and me down.As I have pointed out on HNZ thread he has a history of being wrong.Sparky has cleared the air by pointing out Snoopy's incorrect posts.
We all try to help each other learn and better understand companies,so it is only fair to point out who has a history of getting things wrong.I think most of us admit to our mistakes.Snoopy has failed to apologise once.

[winner69]

Oh Percy .....disappointed in you

snoops has stoutly stuck to his views about TUA. RBD. SCT amongst others in spite of being subjected to heaps from posters with different views .......and he and others done well

Only time will tell whether is right or wrong ( long term) about PGW and HNZ .....to date he has not been proved wrong .....and even if he is wrong his record not too bad .....can't be right all the time can we .....and remember I only said 'generally' right

Good on you anyway for stoutly defending the stocks you love .....maybe you will one day be proved right

[percy]

Oh Percy .....disappointed in you

snoops has stoutly stuck to his views about TUA. RBD. SCT amongst others in spite of being subjected to heaps from posters with different views .......and he and others done well

Only time will tell whether is right or wrong ( long term) about PGW and HNZ .....to date he has not been proved wrong .....and even if he is wrong his record not too bad .....can't be right all the time can we .....and remember I only said 'generally' right

Good on you anyway for stoutly defending the stocks you love .....maybe you will one day be proved right

I was put into the position of defending HNZ because there was so many misleading,untrue posts,rather than falling in love with it!.Snoopy's posts on equity ratios,and the banking licence were just plainly wrong.100% wrong.As Sparky proved,talking to the company and seeing that they were achieving what they said they would do, proved to be the correct approach. There was no need to wait 10 years to see whether he was right or not.Had he checked equity ratios of listed banks he would have seen he was wrong.The 3 years for banking licence he was proved wrong within 6 months!!!.
At the same time your posts on HNZ let yourself down too.The Coop bank may be your bank,but has little to do with HNZ's future.I wish the CoOp well,but think you may be best to start a new thread,rather than using HNZ thread.
TUA.Snoopy and I are pretty much in agreement here.
SCT.Snoopy has done excellent research.I don't follow closely,however if I did want to invest I would reread his posts.
RBD.I don't really follow.If I did invest would most probably do as Snoopy did and buy Yum Brands,as I feel they are the people with most to gain from RBD.
PGW.Have a small parcel in the wife's name.Had PGG through PGC and was most impressed with George Gould's merging PGG with Reid Farmers.So having Sir John Anderson as chairman and Gould as CEO I could see they were the right people to get PGW on the road.
LPC.I have followed Snoopy's comments and realise I have a better understanding of NZ ports than he does.

[Snow Leopard]

I am very impressed by the level of recent debate here.

But why anyone would want to be invested in the stock at present completely mystifies me.

Best Wishes
Paper Tiger

[winner69]

I am very impressed by the level of recent debate here.

But why anyone would want to be invested in the stock at present completely mystifies me.

Best Wishes
Paper Tiger

Thanks for the compliment PT

Maybe we have a clash of egos going on ....from my journal and cant remember who said it ......"Humans will always have a burning urge to be right and in an ideal world everyone would be right about everything even if it contradicted reality but this would be a paradox, there is such thing as true and false despite what people want to believe."

Maybe that's where this discussion should end .....and let's get back to PGW related stuff only

[Agrarinvestor]

@Snoopy

>>Sparky, Agria did default on their LIC loan. Agria are currently in difficult negotiations with their Chinese and US banks. I think it is all too soon to call, to see if Agria will make it in their current form. Nevertheless one thing is certain. Continuing losses and negative cashflow is not a 'just meandering along' position.<<

Agria had made an extension arrangement with LIC, for that you can not say "they defaulted". If you are serious in investigating the matters of a company you should follow Sparkys example and call the people who know the truth. For the Lic Loans you can call Mr. King from LIC. You have made a lot of strong accusions to Agria and all of them were wrong, except that they will make a loss in 2013.
Agria is an agressiv growing company, it could be possible that in a few years Agrias name is a household name for seeds. PGW will benefit from their teamwork. And in my opinion Agria as the majority shareholder will benefit more.
In their earning release you find one sentence that i thpought would be an error.

>>We expect further consolidation trends in the global agriculture industry, and in particular, in markets which would create merger and acquisition opportunities for us, including North America and Greater China<<
Do you really mean North ?
North America forage variety especially alfalfas is key source of forage imports for China. Together with our PGW forage expertise, we see opportunity to identify suitable strategy in North America so that we will have full array of forage seeds offering to the vast market in China.

That must mean they have found a new investor. Together with the recent recovering of the shareprice and the statements from Mr. Lai i am currently thinking of
repurchasing my shares i had sold.

>>"In three years we could be in the top 10 seeds companies in the world . That is our vision. In 10 years we want to be US$10 billion turnover."<<

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10875679

[Snoopy]

>>Sparky, Agria did default on their LIC loan. Agria are currently in difficult negotiations with their Chinese and US banks. I think it is all too soon to call, to see if Agria will make it in their current form. Nevertheless one thing is certain. Continuing losses and negative cashflow is not a 'just meandering along' position.<<

Agria had made an extension arrangement with LIC, for that you can not say "they defaulted". If you are serious in investigating the matters of a company you should follow Sparkys example and call the people who know the truth. For the Lic Loans you can call Mr. King from LIC. You have made a lot of strong accusions to Agria and all of them were wrong, except that they will make a loss in 2013.



The loan to LIC was due to be fully repaid last year. It was partly renegotiated at higher punitive interest rates, because Agria could not fully repay it. Granted this means that Agria did not default in terms of not paying anything back. But it was a 'technical default' in terms of being unable to fulfill the original loan agreement.



In their earning release you find one sentence that i thought would be an error.

>>We expect further consolidation trends in the global agriculture industry, and in particular, in markets which would create merger and acquisition opportunities for us, including North America and Greater China<<
Do you really mean North ?
North America forage variety especially alfalfas is key source of forage imports for China. Together with our PGW forage expertise, we see opportunity to identify suitable strategy in North America so that we will have full array of forage seeds offering to the vast market in China. [COLOR=black]

That must mean they have found a new investor.


Yes, well sleuthed Agrainvestor. Agria does need more equity and finding a new investor would be one solution. It may sound a bit crazy but consider this.

The USA imports so much from China, there must be a lot of empty containers going back from the USA to China to keep bringing in that wall of manufactured goods. What if some of those containers were filled with forage, destined for Chinese farms? Ordinarily it would be uneconomic to do such a thing. But if the container space was available at a much reduced rental, maybe such a scheme could be made to work?



http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10875679


And now a quote from the Herald article, talking about a new combined seed company.

"Post the merger (and some prospective M&A activity in the US) PGG Wrightson would have less than one-third of the new company."

What was Lai referring to when he mentioned "prospective M&A activity in the US?". Could that be an oblique reference to bringing on board a new equity partner? If so that could explain why Lai sees PGW only owning one third of a combined seeds company in the future, when given the existing size of Agritech and Agria that one third shareholding would clearly be an unfair balance of power.

SNOOPY

[Snoopy]

Snoopy wrote:
"At the point we sit in the business cycle with the heavy debt burden the company carries it is unlikely that PGW will pay a dividend for at least eight years."
1. Your post about no dividends was pretty black and white. You are trying to twist your own words now.


I have made my point about this Sparky, and I see no need to say more. The only point I will add is that your definition of black and white is not the same as mine.



Agria will not necessarily be taken down by their bankers due to relationships. A technical default would not necessarily trigger receivership if steps were in place address the debt, as Agria appears to have done.


For someone so keen on checking stuff out with management Sparky, your statement on what Agria management is up to is pretty woolly. Of course it has to be that way because Agria has not announced exactly how they have restructured their debt. And Agria don't have to until they are required to file their 20F report for FY2013, in September or thereabouts. I see little point in debating the financial health of Agriaany more until more information comes into the public domain. In the meantime you are fully entitled to keep those blinkers on and consider that Agria are 'just muddling along' and doing OK.



3. If you bothered to ask questions of management, you would have realised the very hot and dry weather from January-March has been perfect weather for generating seed buying in April-June. As George Gould himself has noted, their agriservices business has been going great for pumps and irrigation equipment. You also ignore posts by farmers about how they are busy undersowing in preparation for rain. A bad year for farmers does not mean they give up on the preparation and planning for future years. if anything, it is a trigger for them to invest more.


Farmers are a very diverse bunch Sparky. Some may have the cash to do a pre-winter sow and hope. Others will not have the resources to do this. Pumping and Irrigation may be going well, but it is not big enough to make up for a downturn in the rest of the Agriservices business.



In addition, debt has been paid back meaning PGW pay less interest, meaning money straight to the bottom line. But again, you seek to twist your own words by accusing me of being too optimistic. It is you who said 2.5c in earnings per share FOR THE NEXT EIGHT YEARS! (http://www.sharetrader.co.nz/showthread.php?2923-PGG-Wrightson-(-PGW-)&p=373902&viewfull=1#post373902). In fact, PGW delivered 3.1c last year (over 20% more than your flat lining figure for year one of the next eight years).


Yes looking back my 2.5eps estimate was before the result was announced. PGW did have a good year last year, better than I expected. But you misunderstand my 2.5eps for future years. That is a business cycle average. It doesn't mean I am predicting 2.5cps for the next eight years every year.

SNOOPY

[futurist]

To get a clear picture of who has been putting who down, you only need to read PGW and HNZ threads on sharetrader to see that SNOOPY has been obsessed at putting both Sparky and me down.As I have pointed out on HNZ thread he has a history of being wrong.Sparky has cleared the air by pointing out Snoopy's incorrect posts.
We all try to help each other learn and better understand companies,so it is only fair to point out who has a history of getting things wrong.I think most of us admit to our mistakes.Snoopy has failed to apologise once.

Why insists someone else have to apologize to you or the clown or the point of view you both share with many others? I may disagree with Snoopy and tend to agree with you guys, but actually I prefer the existence of Snoopy simply because I have already bought into one side of the debate so I am much more interested to know more about the other side. The best situation for all of us is to balance between the two views with as much knowledge spilled over from and to everyone as possible.

It is difficult to define right and wrong because as long as the world is still moving, things are changing and so it only depends on at which time you decide to evaluate and then measure. Please, stop the personal attack and focus on the issue. I really enjoy reading the analysis from Snoopy even I don't take that view. But I may change my mind one day, who knows, you could too.

[percy]

Why insists someone else have to apologize to you or the clown or the point of view you both share with many others? I may disagree with Snoopy and tend to agree with you guys, but actually I prefer the existence of Snoopy simply because I have already bought into one side of the debate so I am much more interested to know more about the other side. The best situation for all of us is to balance between the two views with as much knowledge spilled over from and to everyone as possible.

It is difficult to define right and wrong because as long as the world is still moving, things are changing and so it only depends on at which time you decide to evaluate and then measure. Please, stop the personal attack and focus on the issue. I really enjoy reading the analysis from Snoopy even I don't take that view. But I may change my mind one day, who knows, you could too.

I think it is just a case of manners .
I always apologise when I have been wrong.
The personal attack was very much against me on HNZ thread.
Read it.Nothing remotely constructive.And surely that is the real issue?
HNZ directors and management told us they were engaging with The Reserve Bank for a banking licence,and it was not too far away,while Snoopy would not listen,but chose to post that according to Reserve Bank Banking Licence application form it would be 3 years.One phone call was all it would have taken him to check that out.Analyst ? Come on!
Much the same with HNZ's equity ratio.Analyst? No.
Both of these grave errors of judgement could have influenced any one reading his posts.

[futurist]

I think it is just a case of manners .
I always apologise when I have been wrong.
The personal attack was very much against me on HNZ thread.
Read it.Nothing remotely constructive.And surely that is the real issue?
HNZ directors and management told us they were engaging with The Reserve Bank for a banking licence,and it was not too far away,while Snoopy would not listen,but chose to post that according to Reserve Bank Banking Licence application form it would be 3 years.One phone call was all it would have taken him to check that out.Analyst ? Come on!
Much the same with HNZ's equity ratio.Analyst? No.
Both of these grave errors of judgement could have influenced any one reading his posts.

If it is really about manners, then why are you hunting Snoopy regarding HNZ in the PGW thread? Show some manners to the rest of us here.

Moreover, you have already reinforced that point about phone call; while yes it is a good idea to call and talk to people if you know who to talk to, honestly can you say this is the strategy that can be applied across all investors? Not to mention that as much information you could source from a phone call, equally there could be misinformation too. You simply cannot conclude that calling the management is always 100% the best move, can you? Same thing applies to Snoopy's method. He relies on published reports which could contain both signal and noise. However, he makes his assumptions very explicit upfront and so we know where he actually feels uncertain. He also scopes things well so I can always tell what is inside and what is outside of his analysis.

At the end of the day, we all make our own decisions and being responsible for ourselves. I don't think the purpose of a forum is for people to blindly believe in someone and follow without thinking. As I said, I may not agree with Snoopy but I value his contribution and would like to continue to hear his voice in this forum without him being attacked. I am not only interested in the result of his analysis, but the way he thinks and frames the issues. Therefore, he does not have to be right about everything and certainly does not have to apologize for them.

Do us a favor, stop the hunting now. If you have some recent conversations with PGW's management or whatever, share with us. I want to know for instance if anyone thinks the collapse of gold would indicate the rise of US$ soon enough to push the share market to hell soon? Is the thing with Agria just noise? Please, continue the discussion. Thank you!

[futurist]

Exactly! That's why some people call, some don't; some believe what they hear, some don't. What is the big deal here? Why call yourself a clown when you don't know how to cheer up?

That link ... those are your opinions but not methodologies. You cannot develop a method without an ontological position which differentiates that method and the meta-method from existing ones. Whatever, call what you want, could we go back to discuss real matters?

[futurist]

I could call myself a religious professor and work out why God has granted me a new acquaintance like you without any prayerful request on my part.

Or I could ignore you on the grounds that my methods work for me, and investing isn't a zero sum game where in order to make money, I need to see you lose money. We can all be prosperous together.

Or I could ask you, in a firm yet polite way to state your own thoughts on PGW instead of trying to play judge. It's possible I might learn something. Even better, I might be highly amused.

So go on, tell us what you think of PGW, and why....

I am not playing judge, because I am not concluding anything here. I simply express my opinion which I believe I am not alone on this - stop the personal attack. If I could take some heat away from Snoopy, I don't mind that though :)

Investment is not zero-sum game, but speculation is. Discussion is not zero-sum, but personal attack is. Do you see the difference?

I don't have opinion on PGW, that's why I am here! Your ongoing hunting of the cartoon character is destroying the reason I spend my time in this forum and many others as well. Of course I also wonder why the market has not been kind to PGW, but that does not mean I have a belief behind that just because I am curious. Snoopy offers some of his thought, so do you. That was great, until somehow you think it is important to increase your voice to cover his. Of course you can ignore me, or anyone here for that matter, but what is your final goal then? Haven't you preached enough on the subject related to Snoopy?

Maybe I am more a macro guy so I don't really have that kind of sensors you guys have to look into a single company with all that details. That's why I appreciate the debate to reveal more for all of us, but not the meaningless attack. Have I made myself clear enough for you to understand?

[futurist]

Look, if you don't like what I say, use the ignore button. I'm not going to defer my interest in defending my homework based approach to investment because you don't like it. If Snoopy wants to relentlessly criticise a company without bothering to find out important facts (eg, lazy assumptions on his part) , then frankly he can expect to be taken to task over it.

For what its worth, I really liked it when Snoopy was critical when I first invested around late last year (despite his rather demanding attitude), because it made me rethink and recheck a number of assumptions. But his continuing to maintain doom and gloom in the face of mounting evidence that things have indeed improved has made him look silly. And he refuses to acknowledge his mistakes either.

No dividend for the next eight years. Earnings "at an average of 2.5c" for the next eight years. A company with a greater likelihood of going under according to Altman Z. Our doggy friend is really a bear for PGW! But he's also a holder, and one at a much much higher price than I bought in at in late last year. Maybe twice as high. I can understand the gloom in that context.

Edit: Oh, and I saw your last comical statement about "Have I made myself clear enough for you to understand?". Maybe not. What are you going to do about it? Run off and complain to your mummy?

What homework approach? This is a forum and Snoopy is not living in your household, so the ongoing attack is nothing but homework approach. Why keep calling yourself an investor here? You just buy shares, you have no contribution or value adding to the company at all; we are all speculators and just try to free ride on companies. Yes, when companies have right issues you may feel you are "investing" in them; but again because we can get out whenever we want that is hardly an investment. When you do your "homework" you may feel you have invested your time and effort to the company, but guess what? The company does not care and it changes nothing.

So the forum is for people to contribute their thinking in this speculation game, and there is no right or wrong. The result is not as important as the process, because the game is always on until the world ends. Snoopy bought PGW when the price was high, and now he thinks the company is not doing very well. We could suspect the two has some correlation and thus factor that in when we read his posts; but hasn't he also tried to stay as objective as possible knowing that we all would think like that about him? What more do you want?

It is pretty clear you and your fellow clown mates want an apology or some sort; but either you have a smarter way of fishing that out please stop using the forum for that purpose. Why not ask yourself this: could I let this go and move on, like right now? Don't you think you will earn a lot more respect if you do that? As I told you earlier, I bought into your premise on this and I also have more faith in PGW to speculate them doing better soon. However, when the market is not kind to the company, would it hurt to listen to some oppositions even we disagree their viewpoints?

I don't know what's your point on the mummy comment but clearly that is a reflection of your personal issues ... is it why you call yourself a clown because you don't know where she is, and so you could never run off and complain to her? If that is true... I apologize for my insensitivity.

[stoploss]

Westpac economists spread a bit of cheer that "the
net cost to the economy of the drought could be close to zero thanks to the sharp gains in world dairy prices
"

That's just one bank, and of course, opinions are usually varied on these matters. But it is nevertheless interesting that a headwind for many farmers may in fact be dramatically reduced.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10877964

Rains have fallen over most of NZ (certainly North Island) these last two or three days, more rains coming over the next 3 days or so. Warmer humid northerly winds which are best for seed germination. Better news for farmers.

Wish it came in March but Mother Nature is a lady and sometimes likes to be late.

Homework update: big issue for farmers over the year will be replacing their stock they sent off to the abattoirs early, sources tell me that supply will be constrained. But prices will be good.

I think where Westpac are getting this wrong is that they are basing their estimates on Global Dairy Trade (GDT) prices and assuming these increased prices will carry over for all dairy exports. The reality is that GDT is less than 10% of product sold by Fonterra, and while it is an indicator of market sentiment at any one time it does not reflect the sales of milk products across a season. The other area where I think Westpac have underestimated this is that the volumes being produced have nearly stopped with the drought and will not commence to any significant degree until September at the earliest. The cost of the drought in feed and dollar terms is another factor that will need to be considered when we talk about the effects on GDP. This is more than a one year effect.
Sure the price increases will negate some of this but I still think we are looking at a hole in earnings for a couple of years.

[winner69]

Who was it?

If it was snoopy I think he would have used snoopy and not " K"

So there we have it ....the man says eps will be down


Hi do you expect the likes of services companies e.g. PG Wrightsons earnings to be adversely effected over the next couple of years or not by the drought?by K 1:05 PM

Yes service providers' earnings will be negatively impacted.by Con Williams 1:05 PM

[stoploss]

Hi stoploss, interesting comments. Have you read Westpacs full report? A couple of your comments suggest you havent although maybe I am interpretting them incorrectly

From what I can gather from the report the key estimates and assumptions they have made in order to conclude roughly a zero net effect are:
Revenue gain generated from gain on milk price in turn derived from an increased estimate of Fonterra's total payout from $6.00/kg (pre drought) to $6.6/kg (post drought).
Assume a 5 percentage point drop in production due to the drought
Estimated increased farm costs $200 to $400m

How do those numbers stack up for you?

Westpacs estimate of a 5% drop in production seems to be one of the main issues re your comments. - too low?
Im a bit confused about how GDT ties in with Fonterra's payout and whether the way Westpac has conducted their analysis in that repect is is a good reflection of increased revenues due to increased dairy prices. There is nothing in the report that clears that up for me, but also nothing directly to indicate they have used GDT only as you have suggested. I wonder though if Fonterra's payout is a fair reflection of overall revenue change from the drought??
Also re your comments important to note Westpac did in fact look at costs.

Hi Tumeric, to answer your questions I think the production will drop more than 5 %.Also dairy is about $ 13 Bio, Sheep and Beef $ 7 Bio industry. The sheep and beef farmers have not had an uplift in price and will take considerably longer to restock than the dairy farmers.So will take a bigger hit than the dairy sector. Also milk powder is a commodity ,( we have seen the past few days how much commodities can swing when they turn ) the only commodity that I know of that keeps going up is electricity in NZ......
Anyway just my opinion ,but driving through the countryside I feel the rural sector is going to take a hit over the next 18 months to two years.

[iced]

Hi do you expect the likes of services companies e.g. PG Wrightsons earnings to be adversely effected over the next couple of years or not by the drought?by K 1:05 PM

Yes service providers' earnings will be negatively impacted.by Con Williams 1:05 PM

"The negative impact will be more on capital expenditure on things like quad bikes and new tractors. But suppliers like PGG Wrightsons will benefit from farmers regrassing paddocks."

[winner69]

Ah so -- so not really live chat when Con can add things a bit later on. I had tuned out before he added the last bit ..... suppose sparks rang Con and reminded him that he got his answer wrong the first time around .... well done sparks ... you saved the day ... and Con's reputation

[Lawt]

So the forum is for people to contribute their thinking in this speculation game, and there is no right or wrong. The result is not as important as the process, because the game is always on until the world ends. Snoopy bought PGW when the price was high, and now he thinks the company is not doing very well. We could suspect the two has some correlation and thus factor that in when we read his posts; but hasn't he also tried to stay as objective as possible knowing that we all would think like that about him? What more do you want?

It is pretty clear you and your fellow clown mates want an apology or some sort; but either you have a smarter way of fishing that out please stop using the forum for that purpose. Why not ask yourself this: could I let this go and move on, like right now? Don't you think you will earn a lot more respect if you do that? As I told you earlier, I bought into your premise on this and I also have more faith in PGW to speculate them doing better soon. However, when the market is not kind to the company, would it hurt to listen to some oppositions even we disagree their viewpoints?



Whilst generally not in favour of attempted character assassinations they are at times warranted and are in fact the only viable option.

Everyone seems to think it is their right to have an opinion and their right to express their opinion and that others should respect that right.
As with any right there is a responsibility. A responsibility of due care and consideration and provided that opinion is expressed as such (an opinion) and not fact.
If I offer an opinion in my line of work I am accountable for that opinion - even if it is couched as an opinion. If I express an ill-considered opinion it will cost me financially. Why should the principal of due care be any different on the Internet?

Furthermore there may be significant ramifications beyond the obvious and that may even result in life or death situations for others due to careless advice.

There are members of some forums who consistently and persistently post rubbish dressed up as fact. Some of these people see this as their right and are persistent and belligerent about it. The only practical way to deal with these types is a concerted character assassination. Sure it's rarely successful as they invariably don't take clue too well either, but in the interests of public safety I see it as only practical course of action.

If one were to be truely upset at being targeted they need only moderate their behaviour or log off.

[futurist]

Whilst generally not in favour of attempted character assassinations they are at times warranted and are in fact the only viable option.

Everyone seems to think it is their right to have an opinion and their right to express their opinion and that others should respect that right.
As with any right there is a responsibility. A responsibility of due care and consideration and provided that opinion is expressed as such (an opinion) and not fact.
If I offer an opinion in my line of work I am accountable for that opinion - even if it is couched as an opinion. If I express an ill-considered opinion it will cost me financially. Why should the principal of due care be any different on the Internet?

Furthermore there may be significant ramifications beyond the obvious and that may even result in life or death situations for others due to careless advice.

There are members of some forums who consistently and persistently post rubbish dressed up as fact. Some of these people see this as their right and are persistent and belligerent about it. The only practical way to deal with these types is a concerted character assassination. Sure it's rarely successful as they invariably don't take clue too well either, but in the interests of public safety I see it as only practical course of action.

If one were to be truely upset at being targeted they need only moderate their behaviour or log off.

Wow, some very interesting views you have there. Yes they are completely opposite to mine but I often enjoy more from reading the other side.

I am sure in many lines of work, opinion matters and it could even as you said result in life or death situations; but this is a virtual discussion forum built on what we call an architecture of participation. People self-subscribe themselves instead of being assigned, and therefore both the motivation and governance are very different from being in an organization, including the military or organized crime to take into account the possible contexts in your mind.

The biggest contribution of the internet to mankind is to provide a level field for freedom of expression. I am not saying it doesn't come with issues, but it depends on what we value more as human being. Certainly there are countries in this world where the internet is tightly censored by the government (i.e. China) or does not exist (i.e. N. Korea), and the justification for that would align very nicely with your point of view about people need to take responsibility of their opinion and the seriousness that could result from expression. So I am just saying there are people who think just like you, and they take this matter very seriously too.

Sorry if my previous posts have stopped the attack on Snoopy which upset you; I can ensure you that was not my intention to upset you, but I will do it again even I know it in advanced. Actually I am very pleased to see both the clown and percy are back to their normal business which I appreciate a lot of their works here. So if you still have unresolved issues, bring it on but probably start a new thread on your own, calling it life and death perhaps.

[Lawt]

Wow, some very interesting views you have there. Yes they are completely opposite to mine but I often enjoy more from reading the other side.

I am sure in many lines of work, opinion matters and it could even as you said result in life or death situations; but this is a virtual discussion forum built on what we call an architecture of participation. People self-subscribe themselves instead of being assigned, and therefore both the motivation and governance are very different from being in an organization, including the military or organized crime to take into account the possible contexts in your mind.

The biggest contribution of the internet to mankind is to provide a level field for freedom of expression. I am not saying it doesn't come with issues, but it depends on what we value more as human being. Certainly there are countries in this world where the internet is tightly censored by the government (i.e. China) or does not exist (i.e. N. Korea), and the justification for that would align very nicely with your point of view about people need to take responsibility of their opinion and the seriousness that could result from expression. So I am just saying there are people who think just like you, and they take this matter very seriously too.

Sorry if my previous posts have stopped the attack on Snoopy which upset you; I can ensure you that was not my intention to upset you, but I will do it again even I know it in advanced. Actually I am very pleased to see both the clown and percy are back to their normal business which I appreciate a lot of their works here. So if you still have unresolved issues, bring it on but probably start a new thread on your own, calling it life and death perhaps.

I'm upset not a whit sir, I haven't been here long enough to establish if snoopy is good, bad, accurate, mischevious etc.
Simply pointing out "life" as I see it. An opinion if you like.

Perhaps a small (but very real) example how things can easily go awry if I may.
A young chap enquires about his squeaking brakes on a forum.
Someone suggests putting CRC on the brakes to stop them squeaking (I mean who would really do such a thing right, they must truely be silly).
Young chap is - well young and he's not a mechanic, he applies CRC - then crashes and is injured.
His father seeks out the advice giver and injures him.
It could have ended worse.

Now, it's all well and good to laugh or put it down to darwin etc - but would you honestly want that on your concience? I know I wouldn't.

Financial decisions have led to suicides in the past.

I'm not suggesting for a minute that people should not have opinions or that they should not post their opinions for fear of adverse consequences or that opinions should all be the same. We are all different and that's the way it should be.
I am suggesting that where they are posting opinion they say so and that they should post considered and reasoned opinion - or that others should tear apart the posts and if a poster persists with unreasoned or ill considered opinion then those in posession of such knowledge are actually perfoming a valuable service by ripping them apart.

[futurist]

Futurist, count on me to point out Snoopy mistakes, or indeed anyone else who makes unjustifiably dim, ignorant or unbalanced assertions like Snoopy's comments on PGW being closer to receivership than 6 months prior, an inability to deliver dividends etc etc etc. Frankly, I've seen so much nonsense from him he deserved the criticism. Lawt is correct that there are some who consistently and persistently post rubbish dressed up as fact. That's how I saw a number of Snoopy's posts.

However, I'll accept you'd like all of us to stop bickering. I'll take that in a generous spirit you surely intend.

And allow me to point out that you have yet to make a decent contribution yourself to the PGW thread in recent weeks. Perhaps you would like to start? And please don't think I am being less than generous in that statement - I genuinely would like to hear what your thoughts are about the drought, PGW's seeding business, debt levels etc.

Well, I told you I didn't have much thoughts with PGW. I bought it years ago when it was 60c and at that time the decision was purely down to the desire to have some exposure to agriculture. You know how that went. But recently I top up a little bit because I speculate the company is turning around; and the more it falls back to mid-high 30s the more I want to buy. However, I also question if it is a good idea to have dividends. I honestly don't know much of the details, I only care about their R&D and cash flow.

That's why I am hanging around here to learn from you guys.

[Minerbarejet]

so how is the drought in your area Sparky? Taranaki has had a decent burst of rain and the grass is growing like mad on the front lawn. If it stays reasonably warm there should be a fair bit of fresh growth before winter. I was amazed to see how green the farmland became in one day. Could have saved the bacon by the looks of things as the timing couldnt have been better for the seeds.:)

[percy]

Last week I drove around Hope and Appleby areas of Neson.All crops planted and doing well.
On monday I drove to Methven via Rakaia and Barhill.Then from Methven to Chertsey via Lauriston,then down to Dorie on the coast.All crops planted and doing well.
On the bike today as my van was being serviced.Heavy rain.
Disclosure;Although not a farmer I know a sprout from a shoot,and a root from a fruit.

[winner69]

For what it's worth the Community Garden in the Aro Valley in Welington is doing ok at the mo even though we weren't allowed to use water outside this summer ....couple of plots of young cabbages really enjoying the rain that was falling and somebody had planted broad beans and they seemed to be doing ok ..... But heck the weeds in the untended plots were rampant now the rains have come

[futurist]

I'm upset not a whit sir, I haven't been here long enough to establish if snoopy is good, bad, accurate, mischevious etc.
Simply pointing out "life" as I see it. An opinion if you like.

Perhaps a small (but very real) example how things can easily go awry if I may.
A young chap enquires about his squeaking brakes on a forum.
Someone suggests putting CRC on the brakes to stop them squeaking (I mean who would really do such a thing right, they must truely be silly).
Young chap is - well young and he's not a mechanic, he applies CRC - then crashes and is injured.
His father seeks out the advice giver and injures him.
It could have ended worse.

Now, it's all well and good to laugh or put it down to darwin etc - but would you honestly want that on your concience? I know I wouldn't.

Financial decisions have led to suicides in the past.

I'm not suggesting for a minute that people should not have opinions or that they should not post their opinions for fear of adverse consequences or that opinions should all be the same. We are all different and that's the way it should be.
I am suggesting that where they are posting opinion they say so and that they should post considered and reasoned opinion - or that others should tear apart the posts and if a poster persists with unreasoned or ill considered opinion then those in posession of such knowledge are actually perfoming a valuable service by ripping them apart.

As I said, the internet is not without issues. However the two examples, i.e. the father and the suicide, how are they relevant? I mean, are you suggesting those would not happen if internet never exists? About a decade ago, many people in Hong Kong committed suicide because of financial hardship and I am sure poor advice played a role; but majority of those were given in-person. Similarly, the sub-prime associated products also burned many people in Hong Kong but all the misinformation were given again face to face in banks.

Maybe you never suggest people should not have opinions; but what you try to imply from those examples is way scarier than the first post, because you manage to see association between independent events that no one could prove at all ever. That means you have already built up the faith, and then you use what you believe in to argue against reasons. Don't you see how similar between this and those tragic examples from your own quotes? It all stems from how one thinks and makes decisions. Whether it is life or death, it is solely in the eye of the beholder.

[Lawt]

As I said, the internet is not without issues. However the two examples, i.e. the father and the suicide, how are they relevant? I mean, are you suggesting those would not happen if internet never exists?.

More than happy to continue our discussion but i'm not so sure that I should be taking things so far off of the topic of this thread. Most people don't mind a small detour, but I don't want to overstay my welcome in here.

[GTM 3442]

. . .
You have raised an interesting point regarding "exposure to agriculture" in New Zealand.

Why isn't there a ETF that offers exposure to a number of NZ listed agricultural companies?

Smartshares, run by NZX, have a number of ETFs that are weakly taken up on, mainly because they don't mimic sectors like some of the highly successful US ETFs. Instead, its all about the top 10, or the midsized companies. But investors don't tend to think "I need exposure to the ten biggest companies in NZ", they are more likely to say "I like NZ technology but can't choose between Xero, WDL, DIL and PEB"


Probably because there are so few primary industry companies (of any subsector - fisheries, forestry,meat, wine, rural supplies, dairy, etc) that it's just as easy to build your own index. Just a reminder of how tightly held NZ is.


The same thing holds for technology (SCT, PEB, TTK, eStar FPA(RIP), DIL etc).

Also for electricity - the NZ electricity system was designed as an integrated whole. Shame I have to buy all the pieces of the jigsaw (and pay 5 boards of directors instead of 1) to reconstruct the original design, just in order to do a decent job of sectoral de-risking.

Ah well, c'est la vie.

[futurist]

Hey Clown, who are the competitors of PGW in NZ?

[Agrarinvestor]

The loan to LIC was due to be fully repaid last year. It was partly renegotiated at higher punitive interest rates, because Agria could not fully repay it. Granted this means that Agria did not default in terms of not paying anything back. But it was a 'technical default' in terms of being unable to fulfill the original loan agreement.



Yes, well sleuthed Agrainvestor. Agria does need more equity and finding a new investor would be one solution. It may sound a bit crazy but consider this.

The USA imports so much from China, there must be a lot of empty containers going back from the USA to China to keep bringing in that wall of manufactured goods. What if some of those containers were filled with forage, destined for Chinese farms? Ordinarily it would be uneconomic to do such a thing. But if the container space was available at a much reduced rental, maybe such a scheme could be made to work?



And now a quote from the Herald article, talking about a new combined seed company.

"Post the merger (and some prospective M&A activity in the US) PGG Wrightson would have less than one-third of the new company."

What was Lai referring to when he mentioned "prospective M&A activity in the US?". Could that be an oblique reference to bringing on board a new equity partner? If so that could explain why Lai sees PGW only owning one third of a combined seeds company in the future, when given the existing size of Agritech and Agria that one third shareholding would clearly be an unfair balance of power.

SNOOPY

>>Lai estimates this business could generate at least US$25 million in annual revenue by 2017 - rising to US$200 million turnover within 10 years and realising at least US$40-$50 million annual ebit.
<<
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10875679

China is now the most important buyer of dairy cows worldwide. In addition, investors from Hong Kong and countries such as Germany and New Zealand are working to rebuild and improve China’s dairy industry on a much larger scale, which improves opportunities for U.S. alfalfa exports to China.

>>2011 it was increased to 177,000 metric tons despite record prices in California and other states.<<

>>In the first three months of this year(2012) nearly 97,000 tons of alfalfa in the U.S. were purchased for China’s dairy industry, which is more than half the amount that was bought last year.<<

>>According to data from the customs office, China imported 457,005 tons alfalfa during 2012, up 58.42% year on year; the monthly average import price was 396.45 US dollars/ton<<

>>Alfalfa is one of the world’s most versatile crops. It is grown in
environments ranging from burning hot deserts to cool high mountain
valleys, from the frozen continental climate of Minnesota, to the Mediterranean
valleys of California. Alfalfa can grow on soils ranging from beach
sands to heavy clays. It is grown as an intensive cash crop under irrigation,
or as a lower-intensity rainfed pasture crop in forage mixes.<<

Cost of alfalfa hay per ton =396 that means 457000 tons * 396$ = 180 Million US$

Agria has 13.500 acres of unused land
5 tons to 18 tons of alfalfa seems to be possible. With 13.500 acres it makes 80.000 tons at the lowest yield rate. 80.000 time 396$ makes 31 million US$.

Tons per Acre:
http://www.haytalk.com/forums/topic/15243-how-many-tons-per-acre-on-alfalfa/

Some information in general about alfalfa
http://alfalfa.ucdavis.edu/-files/pdf/Alf_Wild_Env_BrochureFINAL.pdf

I bought 5935 shares yesterday. After the message with the write off i sold 2/3 of my holding. I think now it was an error of me. (or mine, ****ing grammar)
Any thoughts about Alfalfas ?

[janner]

Hey Futurist..

Thank you STC.. and Gutten Tag .. Agrarin...

The responses coming from your question Futurist have produced exactly the responses.. WE like to see..

Cool calm and collected from both sides..

This is and will be a long term question.. Whom is right.. Hahahaa..

Do your own research..

[futurist]

Hey Futurist..

Thank you STC.. and Gutten Tag .. Agrarin...

The responses coming from your question Futurist have produced exactly the responses.. WE like to see..

Cool calm and collected from both sides..

This is and will be a long term question.. Whom is right.. Hahahaa..

Do your own research..

Hi. Since I am not very knowledgeable I could only ask question here; luckily people are nice enough to contribute here, when they are not busy fighting :P

[futurist]

None who are listed.

in regards to rural supplies

RD1 owned by Fonterra
Farmlands-CRT
there are others but those are the two biggies.

In terms of seeds, in NZ there is Wesco and Cropmark off the top of my head.

But PGW have a strong position here backed by significant intellectual property, also marketing under two brands. One being the PGG Wrightson brand used in their own stores and the other being Agricom which is sold through competitors in the rural supply space.

It would not do for Farmlands or RD1 to sell a PGG Wrightson labelled product in their stores! But they are cool with Agricom branded seeds.

Thanks! Sometimes I wonder if it is good for a company to not having enough competition, or maybe the NZ market is too small for it.

[POSSUM THE CAT]

Futurist I agree with you valuing a near monopoly company is very hard

[winner69]

With all the various tirades over the last week did we decide what the real value, if there is such a thing, of PGW was

Yahoo has targets from 36 cents to 49 cents. I got a few mates to do their intrinsic value calcs and they ranged from 29 cents to 62 cents - discarded the outlier of zilch.

Can't remember what sparks intrinsic value is, my back of envelope iPad calculator app value is 37 ( please don't chastise me). Won't mention snoopy's view

So it seems nobody can agree - anything from around 30 to 60 and mr market says high 30's.

We all can't be right can we -wonder how it will all turn out?

[winner69]

Looks like I have to add belgies 60 to my note

[winner69]

That solid 200 day MA can't be wrong ... and the 100 day MA cross just adds wieght. :)


On the yahoo chart I look at the red line (100) is above and has been following the green line (200) fr some months but not crossing

The purple line (20) has stopped falling and maybe heading up but not crossed any long term line yet

Another source has 5ma at 35.6 and 20ma at 38.2 - current price at 37 signals weakness? Or just signs that it all honky dory from here

[kizame]

Well A quick look at the chart and I see a sick looking puppy,nothing looks very good,in fact 50 day MA and 150 day MA are about to cross on the way down,yuk. Wait for the price to settle somewhere.

[winner69]

One would have to say PGW is a pariah if the market - all based on past performance and investor disappointment. Once given that tag a company never really achieves full respect, no matter what it does to change and do things differently. Generally the shareprice will always be a laggard and not very often do they trade anywhere near 'intrinsic' value, whatever methodology is used to calculate that, no matter how good John and George are.

Research shows that it generally is only a few shareholders (major ones) that move a shareprice - one way or the other. Small investors don't move shareprices. PGW might have a few larger shareholders like ACC and a couple of other instos but I feel they are not really that keen on holding them but only do for portfolio reasons. With a shareholder with 50% plus what can the other larger shareholders have in 'moving' the PGW shareprice, little I would say.

So I combination of being a market pariah and having a majority shareholder is not a gd combination if one expects a shareprice of 60 cents plus

Unless Forbar can continue to produce positive reports to tout a bit of business or unless a white knight comes and puts them out of their misery.

Maybe. Just maybe, that might happen. The takeover bit nt the Forbar bit

But ten what the heck do I know

[tosspot]

The annoying thing is we wont get any updates on financials until early august. doesn't really seem worth the wait considering the potential gain compared with other stocks.

[percy]

One would have to say PGW is a pariah if the market - all based on past performance and investor disappointment. Once given that tag a company never really achieves full respect, no matter what it does to change and do things differently. Generally the shareprice will always be a laggard and not very often do they trade anywhere near 'intrinsic' value, whatever methodology is used to calculate that, no matter how good John and George are.

Research shows that it generally is only a few shareholders (major ones) that move a shareprice - one way or the other. Small investors don't move shareprices. PGW might have a few larger shareholders like ACC and a couple of other instos but I feel they are not really that keen on holding them but only do for portfolio reasons. With a shareholder with 50% plus what can the other larger shareholders have in 'moving' the PGW shareprice, little I would say.

So I combination of being a market pariah and having a majority shareholder is not a gd combination if one expects a shareprice of 60 cents plus

Unless Forbar can continue to produce positive reports to tout a bit of business or unless a white knight comes and puts them out of their misery.

Maybe. Just maybe, that might happen. The takeover bit nt the Forbar bit

But ten what the heck do I know

What really does drive a share price is earnings and expectations of future earnings.
To get earnings you need to put in the right people,and earnings will come.May not be straight away,but earnings will come.
PGW have the right people in Chairman Sir John Anderson and CEO George Gould.
The company is on tract to deliver.In fact one could say they are "well positioned."
ps.Drought.Sorry, but I wish it would stop rainning.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[winner69]

What really does drive a share price is earnings and expectations of future earnings.


Fundamentally you are correct Percy .....except those things drive what punters expect to be a fair share price - intrinsic value or whatever you want to call it

However the other important factor is sentiment. Some companies have negative sentiment and sometimes it never goes away. I used the term market pariah, I believe PGW to be one of those. At least snap it's agrees with me there.

The other point is you need punters to drive the share price up ....and research shows that only a big players actually 'move' the share price, ie buy heaps of them. Do the big players have the wherewithall to do this PGW with a majority shareholder and all that negative sentiment.

That was the point I was making .....PGW might do as you say ...but would that performance ever be reflected in a fully 'valued' shareprice? One may need to apply a discount to any value calculation to reflect this.

There has been a couple of good papers in the Journal of Portfolio Management on such a topic

But heck what do I know anyway

Yes plenty of rain the last few days .....bloody boring eh when you wanted to do outside things today

[percy]

Fundamentally you are correct Percy .....except those things drive what punters expect to be a fair share price - intrinsic value or whatever you want to call it

However the other important factor is sentiment. Some companies have negative sentiment and sometimes it never goes away. I used the term market pariah, I believe PGW to be one of those. At least snap it's agrees with me there.

The other point is you need punters to drive the share price up ....and research shows that only a big players actually 'move' the share price, ie buy heaps of them. Do the big players have the wherewithall to do this PGW with a majority shareholder and all that negative sentiment.

That was the point I was making .....PGW might do as you say ...but would that performance ever be reflected in a fully 'valued' shareprice? One may need to apply a discount to any value calculation to reflect this.

There has been a couple of good papers in the Journal of Portfolio Management on such a topic

But heck what do I know anyway

Yes plenty of rain the last few days .....bloody boring eh when you wanted to do outside things today

There are exceptions to every rule.In NZ the pariahs were Smiths City which went into receivership.Put the right people together,Paul Preston the Receiver,,Bill Revell the Chairman,and Craig Boyve the CEO,and they traded out of receivership,and in the end relisted on NZX.
The other pariah was offcourse RBD,which kept underperforming for years.New CEO every year or two until they gave the job to the South African guy.Since then it has performed well.
PGW is now a well run,well focused company,with a bright future.
"The Smart Money" are well aware of this.!!!!

[winner69]

Not all rain is the same.

Whats the diff you say

For a farmer this is great rain cause it is warm rain.

It sounds crazy but warm rain does not drop the temperature of the ground as quick as cold rain.

Ground temperature is the holy grail to farmers and rain coming from cold winds(southerly) is alot colder so when it hits the ground the ground temperature can plummit slowing and in some case's stopping grass/ crop growth.


ps when it come's to any share price of any company it is driven by sentiment, fear and greed and lastly fundimental......

Warm rain sometimes a problem with facial ezcema

The red line going up in these charts
http://www.asurequality.co.nz/resources/pdf/facialeczema/fe1314.pdf

[Hoop]

Not much to cheer about here...I sold out at 42c when the sell triggers went off and I'm still out.
The NZX is in a 4year old bull market...an old saying goes ..."a rising tide raises all boats" ...so I guess PGW is a submarine.

The only highlight is the bullish FAIL at 36c at the S&R/trend line juncture...theoretically this can be a jump in point to buy but sadly this pull back to 37c has evaporated that opportunity.

The good news is PGW long term seems to have bottomed out at 29 and is in an uptrend....the bad news is it is in a short term secondary downtrend, has lost recent momentum and testing its uptrend support at 37c threatening the primary uptrend....so PGW is at a critical area.... a drop below 37 might not be a complete worry but a drop below 36 would confirm that the 9 month primary uptrend could be over and a longer term downtrend established. (lower low lower high).

An easy share to apply stops with as it responds to its numerous supports and resistance areas...(not all the S&R lines are drawn on the chart below)

http://i458.photobucket.com/albums/qq306/Hoop_1/PGW19042013.png (http://s458.photobucket.com/user/Hoop_1/media/PGW19042013.png.html)

[percy]

Not much to cheer about here...I sold out at 42c when the sell triggers went off and I'm still out.
The NZX is in a 4year old bull market...an old saying goes ..."a rising tide raises all boats" ...so I guess PGW is a submarine.

The only highlight is the bullish FAIL at 36c at the S&R/trend line juncture...theoretically this can be a jump in point to buy but sadly this pull back to 37c has evaporated that opportunity.

The good news is PGW long term seems to have bottomed out at 29 and is in an uptrend....the bad news is it is in a short term secondary downtrend, has lost recent momentum and testing its uptrend support at 37c threatening the primary uptrend....so PGW is at a critical area.... a drop below 37 might not be a complete worry but a drop below 36 would confirm that the 9 month primary uptrend could be over and a longer term downtrend established. (lower low lower high).

An easy share to apply stops with as it responds to its numerous supports and resistance areas...(not all the S&R lines are drawn on the chart below)

http://i458.photobucket.com/albums/qq306/Hoop_1/PGW19042013.png (http://s458.photobucket.com/user/Hoop_1/media/PGW19042013.png.html)

Hoop as always thank you for your chart and commentary.
37cents looks very important.I note on Yahoo chart the 200 day moving average is moving higher which I take as a positive.I also note there is buying support at 37cents.In fact nearly 700,000 wanted by 25 buyers, while the lonely seller at 38cents has only 5,308 shares for sale.I deduct from this that the buying support is stronger.

[Hoop]

37cents looks very important.I note on Yahoo chart the 200 day moving average is moving higher which I take as a positive.I also note there is buying support at 37cents.In fact nearly 700,000 wanted by 25 buyers, while the lonely seller at 38cents has only 5,308 shares for sale.I deduct from this that the buying support is stronger.

Yep..you are correct.. the depth table below shows strong support (buyer) as of the close on Friday

I said in my post ..."An easy share to apply stops with as it responds to its numerous supports and resistance areas"...I love it when stocks behave according to textbook TA..it make investment life so much easier...
Notice how the depth S&R prices are similar to the charts S&R lines...Textbook TA at work .. theory and practice agree as they should but often don't :)

http://i458.photobucket.com/albums/qq306/Hoop_1/PGWdepth19042013.png (http://s458.photobucket.com/user/Hoop_1/media/PGWdepth19042013.png.html)

36c is the support line on the chart..the large numbers of buyers shown on the depth table above confirms that the 36 support line is very strong
37c is the primary trend line on the chart... shown on the depth table above has more strength than the support 36 line
40c is the Resistance line on the chart..the numbers of sellers (15) shown on the depth table above confirms this is a strong resistance point


.......Will spend the big wednesday money topping up this week as my infinite probability machine say PGW rather than the 15m. http://www.sharetrader.co.nz/images/smilies/001_smile.gif

If I see PGW gap up from 37c to 55c next Thursday I'll say it is due a "Belgarion Effect" ,,,then watch them run and google what it means..eh

Oh to save time...lets Google "Belgarion Effect" now...............Hmmm no hits on Google...Hey Belg you could make history Thursday :D

[The BOWMAN]

Is animal feed part of the PGW's business? If yes, then this would be good news to PGW then?
http://www.stuff.co.nz/business/farming/drought-recovery/8586201/Drought-status-remains-despite-rain

[Food4Thought]

Hi Bowman. Yes, they supply feed for sure. Apart from a huge number of CORSON corn seed fields scattered around NZ, they also do the cow favourite, Palm Kernel Extract (PKE). From the looks of things... feed's been in high demand and depending on the winter feed growth, the current lack of winter feed on farmer's property, there will be more demand for additional feed from suppliers. A bumper year in that regard in NZ. Fingers crossed

[Master98]

Agria sp is soaring with huge volume before tomorrow annual meeting in HK, investors must see value in it?

[The BOWMAN]

DuPont result reinforces the theory that the drought is bad for the farmers, but good for PGW.

"Sales in DuPont's agricultural business rose 14 percent in the first quarter as the worst dry spell in decades encouraged U.S. farmers to buy its drought-hardy seeds and crop-protection products to boost yields."

http://www.reuters.com/article/2013/04/23/us-dupont-results-idUSBRE93M0DX20130423?feedType=RSS&feedName=businessNews&rpc=408

[Master98]

Nice for them, but of course it could be "corporate" action rather than investors finding value.

if shares buy-back triggered should be announcement on market like nzx?

[Agrarinvestor]

I am still hoping that a few of you will join the success Story of Agria before it is to late. Shareholder Equity is still 364 Million US Dollar. Market Capitalisation far below at 66 Million. Buy now! Keep in mind that Agria is the controlling shareholder of PGW and it is very likely that Agria will get more advantage on any kind of kollabaration betwenn AGRIA and PGW.

[winner69]

Depth got turned on its head today eh and down it went to 36 - a price hoop says anything could happen

And today sparks said he was lightning a bit today with all shares ....and later said he wanted the money by days end so he could sleep soundly over the weekend .....and he just made it with that largish sale at 4.44pm

So hoop nothing to do charts or anything ...just sparks selling

[percy]

Only 66,040 sold at 36cents..So 1,838,139 were sold at 37 to 39 cents.On the bid at 36cents there are 469,853 wanted,while for sale at 37cents there are only 31,209 shares for sale.

[winner69]

Only 66,040 sold at 36cents..So 1,838,139 were sold at 37 to 39 cents.On the bid at 36cents there are 469,853 wanted,while for sale at 37cents there are only 31,209 shares for sale.

but then again 'don't be fooled' by what you see as depth .... probably only tells a bit of the story. Always quite a few orders (maybe buys as well as sells not on the depth

[percy]

but then again 'don't be fooled' by what you see as depth .... probably only tells a bit of the story. Always quite a few orders (maybe buys as well as sells not on the depth

Maybe a bit like the "huge" seller at EBO not showing his hand.
Or the "huge" buyer waiting in the wings.
A lot of people out in the wings.
Yeah Right.!!!!

[winner69]

Maybe a bit like the "huge" seller at EBO not showing his hand.
Or the "huge" buyer waiting in the wings.
A lot of people out in the wings.
Yeah Right.!!!!

The big trades yesterday never showed up on the depth. ......yeah right. Or yeah wrong

[percy]

The big trades yesterday never showed up on the depth. ......yeah right. Or yeah wrong

Yeah right,right.
Another day the big wingers came in from the wings.!

[winner69]

Yeah right,right.
Another day the big wingers came in from the wings.!

You not grumpy with me again are you percy

Its a long weekend to enjoy ourselves ... I didn't intend to upset you

[percy]

You not grumpy with me again are you percy

Its a long weekend to enjoy ourselves ... I didn't intend to upset you

Have not been grumpy with you since I stareted the Coop thread for you.
Witch reminds me you had homework to do over the weekend.
Being a Co-op who bails them out should they get into trouble?
I beleive there are people awaiting your reply.!!!

[winner69]

I thought my 'ramble' in reply was sufficient homework - obviously a fail mark

Or do I resort to the Aussie cricketers excuse of 'the Pup ate my homework'

[Snoopy]

There was a significant drop in the Agria share price overnight. Down 6.5% to 72c. Add in the post AGM share consolidation multiplication factor of 1.5 and we get share price of $1.08. Getting back down to that delisting risk zone of $1.


A couple of months on and Agria has stabalized above $1. The Agria AGM has come and gone and the 3:2 share price consolidation has been approved. Yet it is now on hold at the directors discretion. Fascinating stuff. Alan Lai now has some powder in his shotgun should any of those rebel shareholding rabbits make a bolt for their burrows...

SNOOPY

[Master98]

An article from STUFF:Ideal conditions result in high yieldshttp://www.stuff.co.nz/business/farming/cropping/8599413/Ideal-conditions-result-in-high-yields

any meaning to PGW?

[Snoopy]

An article from STUFF:Ideal conditions result in high yieldshttp://www.stuff.co.nz/business/farming/cropping/8599413/Ideal-conditions-result-in-high-yields

any meaning to PGW?

A long dry Canterbury summer may have been good for arable farmers growing crops and silage. It was not so good for those with animals.

SNOOPY

[Snoopy]

What I do know from a farming perspective is that PGW have sold a lot, way more than normal, of seeds to re sow pasture and crops in the last 2 months.


As a PGW shareholder this is good to hear. The question is are PGW selling 40% more seeds than last year, over the whole year? Because if you look at the base case PGW were projecting for FY2013 (note 26 of FY2012 annual report) , a 40% increase in Agritech EBITDA is already in the budget as the 'base case'. If the actual EBITDA increase is less than this, then the PGW share price could be marked down when the results are announced.

The other question is how localised is the upturn you are seeing Snapiti? It would make my day if you said you lived in Hawkes Bay.

No matter how well the NZ seed division has done in FY2013, in recent years the results of Agritech have been spoiled by their Australian arm. There is still the potential for this to happen again.



There has also been a large correction in stock price's recently.


At 37c and earnings of 4cps ($30m) the PE is 9. At 37c and earnings of 3.3cps ($25m) the PE is 11. I would argue the large correction has just brought PGW back to reality. In historical PE terms 37c is not cheap. And the drought has already hampered the FY2014 results, with the share price always looking ahead to future years. With a good result a modest re-rating is possible though.



PGW have also been involved in supplying (middleman) massive amounts of supplement feed to farmers.


More potential good news. The question is, what margin are PGW making as middle men for supplements?



I believe as a shareholder that the company is performing very well in most if not all of the key area's.


Certainly Agriservices in NZ had a good first half. If there is a surprise on the upside (AR 2012, Note 26 budget figure for 2013 is an EBITDA decrease of 48%) , I am picking it will be in Agriservices.

SNOOPY

[Snoopy]

The state of livestock numbers in NZ will of course be a challenge as many farmers sent their livestock off early given the big dry. It doesn't really impact on 2H2013 for PGW, but will be a risk for 1H2014 if farmers are unable to boost their numbers. It will be interesting to see if PGW can step in and boost supply of livestock from their sources.

I wonder if live export of livestock might be re-routed back into domestic animal purchase? Just a thought.

A vision popped into my head of Alan Lai with a shepherds crook running up and down the hills of peasant farmed China doing a pied piper. Chinese sheep shipments to NZ could be just around the corner !

SNOOPY

[Snoopy]

I still anticipate PGW selling their Heartland shares in the next few months, perhaps by years end, to reduce debt further by at least $10m.


Not another PGW investment sold at a loss pleeeaase! Just as well PGW aren't a Chinese business, as to make losses like that in China would lead to a serious loss of face...... Oh wait a minute, where did majority owner Alan Lai come from again?

SNOOPY

PS The word is that Heartland after being given the PGG Wrightson Finance loan book, has not boomeranged any of those doubtful PGW Finance loans back onto PGG Wrightson. So PGW may not need the level of debt finance that might have been budgeted for after 30th June after all. Perhaps that means PGW can hang onto those Heartland shares a bit longer?

[Snoopy]

Snoopy, I would humbly point out in a good nature way that Heartland is currently at 78c, which is more than the 75c they bought the shares for, and is higher than the 70-75c band that some posters felt that Heartland would be trapped within for some time....


You are quite right Sparky, PGW did buy those HNZ shares at 75c. However, given they have $10m odd worth of shares in what is a $300m company it remains to be seen if they could quit those shares at market prices. The stake isn't big enough to be strategic. So I would say those shares would have to be placed at a discount.



They have also been extracting some dividends out as well. I suspect they will get out for what they paid for it or slightly more, if they sell in the next few months.


True PGW has received a dividend stream from their HNZ shares. However, because PGW have corporate debt, this debt servicing cost should be offset against the cost of holding those HNZ shares.



As for Mr Lai, well, there may or may not be loss of face involved. Mr Lai is happy to see some dividends coming through and will be pleased with Gould and Anderson's direction setting.


Better to lose some face than go bankrupt, I would agree.

SNOOPY

[Agrarinvestor]

I have read in the past that some of you are interested and already have a lot of compentence in Value Investing. I remeber you talked about Altman Z Score and Piotroski.
Here you can find a listing of stocks with NCAV values, ALtmann Z score. You can sort that list for market cap and look for the larger companies that are undervalued regardind NCAV.
I think Snoopy must love the tool:
http://www.grahaminvestor.com/screens/graham-number-ncav-screen/
Unfortunately i have not found PGW, and off course Agria does not reach the NCAV criteria

[winner69]

I have read in the past that some of you are interested and already have a lot of compentence in Value Investing. I remeber you talked about Altman Z Score and Piotroski.
Here you can find a listing of stocks with NCAV values, ALtmann Z score. You can sort that list for market cap and look for the larger companies that are undervalued regardind NCAV.
I think Snoopy must love the tool:
http://www.grahaminvestor.com/screens/graham-number-ncav-screen/
Unfortunately i have not found PGW, and off course Agria does not reach the NCAV criteria

Well well ....unless I done my sums wrong pgw wouldn't even come up on mr grahams radar

PGW NCAV is 16 cents share ...graham wound only look at pgw at 10 cents

If I read it right mr graham would say TRU VALUE PGW IS 16 CENTS.if so must be a optimism built in if shareprice is high 30's




Or have I got it wrong

[winner69]

Snoopy wil love the site you linked eh ...he might even refer to it when talking about PGW

Maybe graham not a good person to follow

[winner69]

Even under the scenario of more debt reduction or even the sale of their hnz shares no way is PGW a DEEP VALUE play under mr Graham's criteria

Interesting that bens intrinsic value concept gives a much different view of value than this NCAV concept. Can't recall what Ben said in his book about both ....dud he buy things at a deep discount to intrinsic value or NCAV ....or has the story got a bit confused over the years

[winner69]

Mr Graham's intrinsic value calc says the collective wisdom of the market thinks PGW earnings are going to grow at about 2% pa .....Jeez aren't the majority completely dumb.

On this basis PGW a deep value term in mr Graham's view, ESP when intrinsic value calc needs to have a guess factor in it (growth)

PGW is currently 230% of NCAV ....mr graham only liked it to be 66% or less but if he got excited it seems he would pay up to 120% of NCAV. So on this basis no deep value play

Looks like one needs to take a guess (ok considered estimate based on facts) to work out what something is worth to see if it a deep value play

Sounds like punting to me ....ok we call it taking a calculated risk with the ids in your favour ....might ask Tom Waterhouse what he has heard on the grapevine

[Agrarinvestor]

Well well ....unless I done my sums wrong pgw wouldn't even come up on mr grahams radar

PGW NCAV is 16 cents share ...graham wound only look at pgw at 10 cents

If I read it right mr graham would say TRU VALUE PGW IS 16 CENTS.if so must be a optimism built in if shareprice is high 30's




Or have I got it wrong

I know that PGW doesn't fit into Grahams NCAV strategy. My favorite NCAV play is CGA, bought at 2,88 last week, and i sell it next week for 3,5. Every Quarter the same. It is so sad. A P/E of 2.x, no debt ... , but it is a NYSE list chinese Stock.

Back to PGW. If you compare Monsantos NCAV values with PGW you can see that MON has a NCAV value of 5$, and it is trading at 108$.
I think it is just a tool to help if you are looking for new investment ideas. That was the reason why i posted the link.

[winner69]

Clever use of words in the range of $48- $40 million" - putting the big number first is clever as paints a more optimistic picture than $40-$48 that most would have said. Well done George and your wordsmiths

But we know you really mean $40m or thereabouts don't we

How much of those other things like depreciation, interest and tax come off that $40m to give a real bottom line?

[winner69]

".....the Australian seed business, whilst important to the group strategically, is not forecast to
contribute significantly to group earnings this year."

Is this a clever way way of saying they make no profit at all?

[Minerbarejet]

Clever use of words in the range of $48- $40 million" - putting the big number first is clever as paints a more optimistic picture than $40-$48 that most would have said. Well done George and your wordsmiths

But we know you really mean $40m or thereabouts don't we

How much of those other things like depreciation, interest and tax come off that $40m to give a real bottom line?
might be inclined to check that out - could be a typo and should read 48 50mil which puts a different light. there is no doubting pgw would have a bad year - think this could be why the price is low atm. dont forget if it can make 40 mil in a bad year what could it do in a good one or two or three in a row. time will tell

[winner69]

Methinks this means NPAT of $17m to $22m (the tax bit is a guess because they seemed to have some favourable things last year that reduced tax expense quite signnificantly and I have guessed 20% tax rate this year)

Thats 2.2 cents to 3.0 cents earnings per share

PE of 10 share price 22cents for the realists and 30 cents for the believers ...... bottom drawer stuff for many again I fear waiting for the good times to come again .... this time IT will be different

[hilskin]

Can someone help me with a question I have.
If I place the lowest sell price before opening does that mean I will be matched with the highest offer to buy?

[winner69]

might be inclined to check that out - could be a typo and should read 48 50mil which puts a different light. there is no doubting pgw would have a bad year - think this could be why the price is low atm. dont forget if it can make 40 mil in a bad year what could it do in a good one or two or three in a row. time will tell

Could be but no correction yet ... funny enough the pdf file has FINAL in its name .... must have been a few drafts along the way eh

[hilskin]

There's a formula for matching which I don't know off the top of my head, BUT I can tell you with PGW this morning, at this stage based on current depth, you would not be mapped with the top bid. Look for the formula on the DB website.

Thanks, hopefully get out at breakeven or they will be going in the bottom drawer for a very long time.

[Balance]

Just laying the groundwork for New Hope to strike?

[winner69]

Just laying the groundwork for New Hope to strike?

getting cheaper by the day .... punters might be happy with a takeover at 35-40

As you would say Bal stupid NZ investors not thinking long term

[winner69]

One would have to say PGW is a pariah if the market - all based on past performance and investor disappointment. Once given that tag a company never really achieves full respect, no matter what it does to change and do things differently. Generally the shareprice will always be a laggard and not very often do they trade anywhere near 'intrinsic' value, whatever methodology is used to calculate that, no matter how good John and George are.


Suppose today just enhances their reputation .... bugger just as John and George were sorting things out

[winner69]

H2 last year EBITDA was $33m

So forecast EBITDA this H2 is $22m to $30m

The $22m a reason to panic .... down heaps

The $30m pretty good ... only down a tad on last year in spite of all the things against them

So takes your pick ... pretty good or really bad

All I know droughts seem to have more impact a year on than during them - thats my experience on such things anyway

[winner69]

Not too bad ... 35 is not much of a wipeout ... things will calm down

Wonder what George will tell the press / radio later on

Just all this years gains gone ... as Mr P always reminded us ... the market giveth but the market taketh away just as quick

[Balance]

getting cheaper by the day .... punters might be happy with a takeover at 35-40

As you would say Bal stupid NZ investors not thinking long term

Seen the howls of protests when FPA was taken over.

Likewise, Fletcher Energy.

Likewise, Countrywide Bank and Trust Bank.

[GRIFFIN]

And when talking market share the fast growing Farmlands/ CRT will not be helping the bottom line and don't forget that farmers own this so the profits come back to them.

[Queenstfarmer]

I guess I'll have to rug up for the winter and pop my head out come spring time and see how things are....ie, spring time 2014.

[Master98]

This year earnings downgrade is not uncommon for agriculture sector, Skellerup( SKL ) just cut their FY13 earnings ( second times this year) this month if my memory is right.

[tim23]

Nice post Snapiti - think a good opp to top up.

[Snoopy]

OK, prediction time. I am picking a steady as she goes first half of $8m in NPAT earnings. I predict the second half, while much better than the first (as is traditional) will be much tougher than expected. In number terms I am looking for $13m NPAT. So total for the year will be $21m. With 754.8m shares on issue that equates to 2.78cps. Based on a PE of 11 (same as last year), this gives a fair value share price of 31c. So quite a bit of pain could be in store for shareholders buying in at the 45c level then!

Looking further out things should get a bit better. South America is a bit of a dark horse and I think earnings there could surprise on the upside as they (hopefully) come out of the drought of last season. Australia though remains a real worry. PGW has been busy adding to their seed portfolio by At 32c I effectively paid almost nothing for that Australian Agritech arm. I feel there is a very real chance my 'valuation' will prove accurate.


Well here is what I wrote in my post 2696 back in February. And it more or less ties in with Winner's eps assessment post today's PGW announcement. All I can say is for all those that bid the price up into the 40c bracket I tried to warn you.

But no, those who came in late were confident those pointy heads are Forsyth Barr among others were right and PGW was on a growth path. If I had been wrong in my prediction my opponemts would be screaming for a formal apology by now. Of course, I won't be expecting any apology from them because I know that their views were honestly held, despite being misguided.

But fellow PGW investors, please learn from this experience. PGW will be a good investment going forward, but for goodness sake don't pay too much for your PGW shares!

SNOOPY

[Balance]

Nice big volume through yesterday and sp steady today on lesser volume.

I smell something and sure as hell ain't my socks from last week!

[Master98]

Nice big volume through yesterday and sp steady today on lesser volume.

I smell something and sure as hell ain't my socks from last week!

I assume you mean from Agria or New Hope?

[Agrarinvestor]

I have reduced my stake in Agria from 50.000 to 15.000 and yesterday to 5000 shares. The Agria/PGW partnership will add value to the company, i still beleave that, but during the next weeks i prefer to have cash and search for other oppurtunities. Therefore i have a general question. We all know that US shareholder are very careful or honestly they are accusing all chinese companies as fraud. What is the general opinion of New Zealands shareholders, do you share the concerns and think chinese managers are more often criminals than american managers ?

[Master98]

I have reduced my stake in Agria from 50.000 to 15.000 and yesterday to 5000 shares. The Agria/PGW partnership will add value to the company, i still beleave that, but during the next weeks i prefer to have cash and search for other oppurtunities. Therefore i have a general question. We all know that US shareholder are very careful or honestly they are accusing all chinese companies as fraud. What is the general opinion of New Zealands shareholders, do you share the concerns and think chinese managers are more often criminals than american managers ?

Agrarinvestor, Don't bring this question in this form, New Zealand is a peaceful country.

[winner69]

My nose is getting a wiff too ... Given Agria have annouced a buy back (i.e. have some cash) such an annoucement from PGW would be ideal for them to increase their stake at a lower price. The annoucement gives a fairly wide range. The next set of books will need a thorough grilling to see whether the Agria hand is at play. That said ... PGW going nowhere in the next year or so and any significant corp activity is unlikely to benefit smaller holders much. If its not a growth stock (growing earnings and growing dividends) - why hold?

You forgot about the John and George factor Belg

They sort everything out pronto

[winner69]

We talk about homework it's and balancesheetists and all that sort of stuff

But sometimes pragmatic macro stuff is sufficient.

PGW is a low margin business .(last year it took 1.2 billion of sales to make that 55 mill ebitda)

Low margin businesses are affected more (financially) when things don't go their way. It doesn't take much to make inroads to a ebitda margin of 4% does it

No matter what people say PGW is in an industry that is never smooth going ....history says farm based stuff seems to have more shocks than most ...and becoming more regular

A "shock prone" industry and low margins don't go together ....punters will invariably be disappointed if invested (comment does not apply to those who only worry about price and not fundamentals)

That's today's rave

[percy]

We talk about homework it's and balancesheetists and all that sort of stuff

But sometimes pragmatic macro stuff is sufficient.

PGW is a low margin business .(last year it took 1.2 billion of sales to make that 55 mill ebitda)

Low margin businesses are affected more (financially) when things don't go their way. It doesn't take much to make inroads to a ebitda margin of 4% does it

No matter what people say PGW is in an industry that is never smooth going ....history says farm based stuff seems to have more shocks than most ...and becoming more regular

A "shock prone" industry and low margins don't go together ....punters will invariably be disappointed if invested (comment does not apply to those who only worry about price and not fundamentals)

That's today's rave

As rave's go it was right on the money>.

[Food4Thought]

New budget has some money in it for irrigation. Hopefully this helps PGW in the near future. It is also one of PGW's growing area's for profit.

[Agrarinvestor]

I would not invest directly in a Chinese company myself, as I am not satisfied on matters of transparency. If I felt I needed exposure to the Chinese market, I would most probably choose an American or European company with significant exposure in China, or (less likely) an ETF.

I know a lot of German Companies which has invested in China and making good business there. Most of them are afraid that their products will be copied by the chinese, and they are very careful in the meantime. The problem is, that you are always the 49% minority shareholder. You have to deliver construction details that are confidential to your chinese 51% counterpart. For that reason i think it is better to be direct invested in the majority shareholder.
I calculate a 30% Risk of fraud. And i compare the valuation of US overvalued stocks like Monsanto, DuPont, with their chinese competition. US stocks are in general 10 times more expensive. In my opinion we are seeing a witch hunt on chinese stocks.

[Balance]

I know a lot of German Companies which has invested in China and making good business there. Most of them are afraid that their products will be copied by the chinese, and they are very careful in the meantime. The problem is, that you are always the 49% minority shareholder. You have to deliver construction details that are confidential to your chinese 51% counterpart. For that reason i think it is better to be direct invested in the majority shareholder.
I calculate a 30% Risk of fraud. And i compare the valuation of US overvalued stocks like Monsanto, DuPont, with their chinese competition. US stocks are in general 10 times more expensive. In my opinion we are seeing a witch hunt on chinese stocks.

Best exposure definitely via companies with exposure to China, rather than via China companies.

When the resources boom was on, via miners in Oz and Canada.

Post resources boom, luxury goods and food companies as well as services industries demanded by ever wealthy China consumers - e.g.tourism, travel, luxury goods, education etc.

Meanwhile, I think the Western media continue to preach doom and gloom on China economy and China companies.

I would be more concerned myself with how lax NZ is with regulations and transparencies - i.e.. finance companies, Rakon, Feltex etc etc.

What is unforgivable in NZ is how 25 years after the Crash of 1987, the finance companies debacle was allowed to happen.

[winner69]

Taking a real beating today

Is it a "I smell something day" a la Balance or just a "hell the worlds falling apart and dog stocks is not the placr to be when that happens"

Whatever next week is another week and it might be back to 39 again

[Balance]

Taking a real beating today

Is it a "I smell something day" a la Balance or just a "hell the worlds falling apart and dog stocks is not the placr to be when that happens"

Whatever next week is another week and it might be back to 39 again

Careful, you calling XRO a dog stock? :)

[see weed]

Winner, I doubt it will go back up to 39c until the earnings are known. The market is clearly pricing a bad result in, though it may not be as bad as the lower end of guidance given. You'd have to be brave to bet on the top end though. When there is a band like $48-$40m (inelegantly expressed by PGW!) then you have to rely on $40m.

It is immaterial for me, as I exited from PGW entirely between 35 and 36c since the announcement. It looked the weakest stock with the least potential after the earnings guidance, so I made the decision to exit. I still rate the long term fortunes of this company, but I'd rather the money was in a more productive space (or hold cash, which is important to me as well). Would be more than happy to buy in again if I thought I could buy with sufficient margin of safety. to adjusted intrinsic value after the recent earnings guidance.

Still will watch closely to see if they keep reducing debt, exit from those HNZ shares, and improvements in Australian seeds.
Positive news out with milk payout price . What do you think Sparky , time to jump back in ? Or wait a few months or year .

[Blue Horseshoe]

wow - unexpected departure of CEO is always seen as a negative in my books. On the heels of the bad announcement, there is nothing that yet says this stock is a buy See Weed.

(and while the gloss is put on Gould retiring from the role which was "fixed", it is not really expected, I would have thought).

Sadly, this stock is going to get a lot cheaper before it becomes attractive again. I am pleased I exited the other week.


But you will miss the full takeover soon.

[RTM]

Isn't CN looking for a job ?

[percy]

wow - unexpected departure of CEO is always seen as a negative in my books. On the heels of the bad announcement, there is nothing that yet says this stock is a buy See Weed.

(and while the gloss is put on Gould retiring from the role which was "fixed", it is not really expected, I would have thought).

Sadly, this stock is going to get a lot cheaper before it becomes attractive again. I am pleased I exited the other week.

/EDIT - Pleased is not the right word. On reflection, I think I mean "relieved".

I am not surprised.Gould was brought into the company to do a job.I would think he has done his organising and coordinating,so sees it as job well done and time to move on.
The results of his leadership with be seen for a good time to come.

[Food4Thought]

Would it be possible for PGW to become a co-op? Giving their customers in NZ added benefits, I.e., discounts for loyalty? Farmers face a lot of factors that are out of their control, but they are loyal supporters of those who support them. PGW has a great history in NZ. Why not help farmers to succeed and this will to help PGW succeed.

[Snoopy]

Would it be possible for PGW to become a co-op? Giving their customers in NZ added benefits, I.e., discounts for loyalty? Farmers face a lot of factors that are out of their control, but they are loyal supporters of those who support them. PGW has a great history in NZ. Why not help farmers to succeed and this will to help PGW succeed.


I would like to suggest that all farmers (not just Snapiti) buy shares in PGW and thereafter only buy their farm supplies from PGW. That gives the same effect of having PGW as a co-op while the likes of myself can still access the profit streams. Co-ops like Silver Fern Farms, have a good record with farmers (gulp!)

SNOOPY

[Snoopy]

Isn't CN looking for a job ?

PGW was too small for CN when he was at the helm before, which is why Craig went on the expansion trail. CN is so big now, his head wouldn't even fit through the door of soon to be ex George's head office. I suggest bringing back Tim Miles. He still has time to go on his original CE0 contact and PGW might even get some of that redundancy payment back?

SNOOPY

[GRIFFIN]

If farmers want to belong to a Co Op they become share holders in Farmlands/ CRT which is a nation wide outlet now and growing at a very fast rate with new farmers.

[Under Surveillance]

PGW was too small for CN when he was at the helm before, which is why Craig went on the expansion trail. CN is so big now, his head wouldn't even fit through the door of soon to be ex George's head office. I suggest bringing back Tim Miles. He still has time to go on his original CE0 contact and PGW might even get some of that redundancy payment back?

SNOOPY
After wondering/hoping you were being politically incorrect about Norgate's bulk, Snoopy, I decided you must be with the vibe from the Four Preps lyrics:

I was a big man yesterday but boy you oughta see me now
Well I talked big yesterday, but boy you oughta see me now...

I'll be politically correct in hoping that there can be a change of gender and/or ethnicity in the newcomer, after a parade of middle aged white males. Maybe Olam could shoulder tap someone from Asia?

[whatsup]

WOW!!!!! Thanks Mr market I cant believe I bought PGW shares at 29 cents today.
I really loaded up as well.
Not sure the share price has anything to make it rise in the near term but I really believe the share price has been way over hammered.
Dont mind holding this stock till everyone is back in buying or the inevitable happens that a full take over comes from china.
Dont really care if the share price trends down a bit just happy to be given the opportunity to buy at these levels.

And some one bought up large at .27 NOW THAT A ++WOW !!

[glasszon]

Closed at 25c, saw the mayhem happening @ close but don't really have the guts to go for it. Bloodbath anyone?

[whatsup]

And some one bought up large at .27 NOW THAT A ++WOW !!


Spoke TOOOOO SOOOOOON down to .25 +++ WOW !!

[Newman]

At close one vendor sold 7.81 million shares at 25 cents. Anyone got PGW annual report to check who this would be?

[whatsup]

At close one vendor sold 7.81 million shares at 25 cents. Anyone got PGW annual report to check who this would be?


Could be anyone of 11 shers. have a look on the companys web page, beejeesus all shareholders must be bleeding now.
What and where does the future lie??

[tosspot]

that is carnage. im fairly positive it will rebound on tuesday. has good support at 25c but man who knows.

[whatsup]

that is carnage. im fairly positive it will rebound on tuesday. has good support at 25c but man who knows.

WHY somfingsup here !

[Beagle]

OMG...a few days ago I was starting to think about having a nibble at 30 cents, bloody glad I didn't.

[tosspot]

WHY somfingsup here !
no doubt. massive dips on no news are always followed by a bounce even to 30c would be a nice profit.

[Master98]

lol, maybe GG selling his holding.

[Balance]

PGW taken out of MSCI index - hence the massive sell down.

Meanwhile, have a look at XRO and DIL going into MSCI.

Good buying for the traders today.

[EAGLE]

it's my NO1 holding now!!!

[Agrarinvestor]

it's my NO1 holding!!!

I think 2013 is for Agria and PGW a lost year regardind share price. Agria had some large write offs done, but share price is stable.

What is with PGWs Good Will and their australia business. Is it really a good idea to be invested in Australia, always these weather problems ?

Can it be possible that PGW will have some large write offs in 2013 ?

[winner69]

Is the lowest PGW has gone?

Maybe George knew something

What was market cap when George took over compared to now?

[winner69]

Might be utterly wrong but quick sums suggest george saw some 200 million bucks worth of shareholder value destroyed in his reign as md

Some effort eh for one so highly thought off ....ESP as John said he was put in to bring some stability to PGW

[Master98]

I think Agria not happy pgw performance, and GG was force to step down.

[percy]

When George Gould was put in charge of the merged Reid Farmers and Pyne Gould Guinness,he put the structure and systems into shape and focused it on its core business.When that job was done he moved on.
He has done the same job at PGW,and again moved on.He was never going to stay there after his job was done.

[Snoopy]

Is the lowest PGW has gone?

Maybe George knew something


IIRC Greg Keay (sp?) took the price down into the low 20c range very early this century (or late last). I think it was a career ending move, as I haven't heard anything from Greg since he left PGW. Perhaps he was forced to go back to being a lawyer?

So George G still stacking up well, in relative terms.

SNOOPY

[Snoopy]

WHY somfingsup here !


When I get the time, I must recalculate those PGW banking covenants again :-P

SNOOPY

[winner69]

Maybe need to dump those hnz shares on the market ....even at a discount?

[winner69]

When I get the time, I must recalculate those PGW banking covenants again :-P

SNOOPY

Good boy snoopy - keen to do your "home work"

[percy]

Maybe need to dump those hnz shares on the market ....even at a discount?

I agree with you. The "overhang" is holding back HNZ share price.
Wonder if George Gould will buy them?
He knows a bargain.!! lol.

[Master98]

Maybe need to dump those hnz shares on the market ....even at a discount?

lol, I will place a HNZ buy order at 60c.

[Snoopy]

I
The reality is PGW are a great long term brand (like FPA) that are making a profit and have improved the ship somewhat in the last 2 years.


PGW a great long term brand? I would go so far as to say they engender real loyalty. Until the farmer goes down the road to CRT and negotiates a deal a little cheaper. 'Ethereal loyalty' is I believe the more accurate term.

As for improving the ship. Well they are paying out cash to their shareholders. But the partnership arrangement with Agria creating these bumper dividends is akin to paying off your wife's debts out of the joint bank account. It doesn't really make the partnership account look any better.



Their shareprice has been hit by factors out of the companies control, ie drought.
THIER SHARE PRICE IS TRADING LIKE THEY WONT BE AROUND MUCH LONGER


Actually I would say the share price is trading where it should be. The price is below NTA because many of their assets are unprofitable and if disposed of would have to be quit at a discount.

Somewhere in there is some great proprietary seed intellectual property. But in an amazing disappearing act all profits from that division appear to have vanished.

SNOOPY

[golden city]

big drop always indicated more bad news comming..just we don't know a big WHAT yet?

[winner69]

Memories of a misspent youth - spent many days at the Wrightsons Yearling Sales at Trentham. The days when Bart and Nelson would zillions on the beautiful young athletic horses. wrightsons were glamourous and prob made zillions themselves as well. In those days I didn't care about such things but Wrightsons meant something - oh no not a brand.

Well they stuffed that up and no longer run the premier sales in nz. Dabble in the harness horse bit though.

My grandad always raved on about how the man from Wrightsons helped him out with finance - all part of a good brand. But no more

Pyne and Gould and Wrightsons are just names - things have changed so often over the years there ain't anything left that sort of binds them together if you going to say they have a strong brand. Their brand if one does exist is weak. I would not even call them iconic now - just has beens.

Won't go broke ....still sell stock and supply the rural folk ....but no brand. As snoopy says some exciting seed ip .....hidden away somewhere making no money ....maybe they have stuffed this up as well

[winner69]

When you read this its quite sad

http://pggwrightson.co.nz/Userfiles/files/Historyof%20PGG%20Wrightson%5B1%5D.pdf


All those names - heritage and all that .....and some say there is a strong brand there ....yeah right

[percy]

Memories of a misspent youth - spent many days at the Wrightsons Yearling Sales at Trentham. The days when Bart and Nelson would zillions on the beautiful young athletic horses. wrightsons were glamourous and prob made zillions themselves as well. In those days I didn't care about such things but Wrightsons meant something - oh no not a brand.

Well they stuffed that up and no longer run the premier sales in nz. Dabble in the harness horse bit though.

My grandad always raved on about how the man from Wrightsons helped him out with finance - all part of a good brand. But no more

Pyne and Gould and Wrightsons are just names - things have changed so often over the years there ain't anything left that sort of binds them together if you going to say they have a strong brand. Their brand if one does exist is weak. I would not even call them iconic now - just has beens.

Won't go broke ....still sell stock and supply the rural folk ....but no brand. As snoopy says some exciting seed ip .....hidden away somewhere making no money ....maybe they have stuffed this up as well

Monday morning rave is not as good as your usual Sunday morning one.
You can do better.
A lot better.
Elders in Australia have just posted a huge loss.
I expect PGW's earnings to be well down because of climate issues.Not as a result of anything management has done.
PGW reps still work closely with clients.So I would think they would pay little attention to your rave.!

[percy]

When you read this its quite sad

http://pggwrightson.co.nz/Userfiles/files/Historyof%20PGG%20Wrightson%5B1%5D.pdf


All those names - heritage and all that .....and some say there is a strong brand there ....yeah right

No different from a number of industries.Think of all the corner stores that have closed.Think of all the TV and radio stores that have closed.Think of all the bookshops that have closed.Think of all the furniture shops that have closed.Think of all the shoe manufacturers that have closed.Be lucky to find a blacksmith today.!! Times change.Businesses that stay close to their customers survive.PGW will survive for this reason.

[winner69]

PGW reps still work closely with clients..!

Thanks for the compliments Percy

No doubt PGW reps are working closely with their clients .....hopefully getting well rewarded for their efforts. They making more for their efforts than shareholders are eh

Living in hope for a boom year (profit wise) for PGW I fear is a forlorn hope

[percy]

Living in hope for a boom year (profit wise) for PGW I fear is a forlorn hope

Agreed.
However, when PGW's clients enjoy a good year,so should PGW.

[percy]

I have to say my PGW livestock agent is a complaceint prick, lazy as and stuck in tradition.
Totally needs to smarten up, too late for me as he has got the chop but he does not know it yet

How nice.?!
Thanks for sharing that gem with us.!! lol.

[GRIFFIN]

30 years ago Wrightsons were a strong brand in the NZ rural sector and had a financial interest in a lot of farmers operations.They played a big roll in getting the NZ deer industry into gear and also made good returns from it but today they have withered away to a sad company and most of us farmers only see the odd flier in the mail about clothing. I have been in the deer farming industry for over 25 years and haven't seen a pgw rep for 10 years. In the old days Wrightsons made good returns from the big sheep,beef and deer operators but a lot of that land is now covered in cows and this is where they are loosing to the likes of RD1 and Farmlands/CRT, it is a very different playing field to 30 odd years ago when they had it so good.

[winner69]

Good post Griffen

Seems they haven't met the challenges of changing times ... evolved in something vibrant and strong to move forward.

Usually this only means one thing

[Master98]

seems have different story from Agria announcement :

BEIJING--(Marketwired - May 30, 2013) - Agria Corporation (NYSE: GRO) (the "Company" or "Agria") today announced that the Managing Director of its majority-owned subsidiary PGG Wrightson ("PGW") will complete his term of service on August 31, 2013. George Gould moved from a non-executive directorship at PGW into the Managing Director role in February 2011, for the express purpose of stabilizing the business and refocusing on important core market opportunities. PGW expected Mr. Gould's tenure to be limited, and is pleased that Mr. Gould can return to private life, leaving PGW as a leading global agri-business.
PGW Chairman Sir John Anderson acknowledged Mr. Gould's key contributions as Managing Director, noting "George's experience in and love of rural servicing were key qualifications that he applied to restore PGW to a position of strength. We recognized his track record of success as Managing Director of Pyne Gould Guiness Limited, and were grateful that he was willing to direct his talents toward PGW. George provided admirable leadership for PGW, and the board will be sorry to see him leave."
Mr. Gould added, "It was a pleasure to serve a great company and, post 31 August, I will enjoy watching from the side lines as PGG Wrightson goes from strength to strength."
PGW is now undertaking a selection process to determine Mr. Gould's successor.
Mr. Alan Lai, Agria's Executive Chairman of the Board, commented, "We appreciate the commitment made by George Gould to PGW, and wish him the best in all his future endeavors. Agria is confident that its business operations can expand globally through PGW's support and we look forward to further bolstering the senior leadership at PGW."

[Balance]

Bounce back - entirely predictable.

[Hoop]

seems have different story from Agria announcement :

BEIJING--(Marketwired - May 30, 2013) - Agria Corporation (NYSE: GRO) (the "Company" or "Agria") today announced that the Managing Director of its majority-owned subsidiary PGG Wrightson ("PGW") will complete his term of service on August 31, 2013. George Gould moved from a non-executive directorship at PGW into the Managing Director role in February 2011, for the express purpose of stabilizing the business and refocusing on important core market opportunities. PGW expected Mr. Gould's tenure to be limited, and is pleased that Mr. Gould can return to private life, leaving PGW as a leading global agri-business.
PGW Chairman Sir John Anderson acknowledged Mr. Gould's key contributions as Managing Director, noting "George's experience in and love of rural servicing were key qualifications that he applied to restore PGW to a position of strength. We recognized his track record of success as Managing Director of Pyne Gould Guiness Limited, and were grateful that he was willing to direct his talents toward PGW. George provided admirable leadership for PGW, and the board will be sorry to see him leave."
Mr. Gould added, "It was a pleasure to serve a great company and, post 31 August, I will enjoy watching from the side lines as PGG Wrightson goes from strength to strength."
PGW is now undertaking a selection process to determine Mr. Gould's successor.
Mr. Alan Lai, Agria's Executive Chairman of the Board, commented, "We appreciate the commitment made by George Gould to PGW, and wish him the best in all his future endeavors. Agria is confident that its business operations can expand globally through PGW's support and we look forward to further bolstering the senior leadership at PGW."

Master98 I hope you not influenced by the back slapping, well done, top management retirement eulogy media announcement..... are you ??

[The BOWMAN]

So this is it?? Out of the blue, 20% drop with gigantic volume in minutes, and the next trading day going back to where it was, yet not one proper reason?!

[The BOWMAN]

The CEO announced he is resigning. That's material.

I really doubt that was the reason. I have a feeling it is something to do with the specific seller(s). Something only known by the seller(s) or their own situation. If it was because of the CEO resigning, the selling would be more spread more evenly across the training session on Friday.