PGW - PGG Wrightson [Archive] - Page 12

Newman

05-06-2013, 10:42 AM

Some useful insights by Chalkie there and the chances of a full takeover appear to be extremly remote so I agree with your prognosis. I was thinking about dipping my toe in the water but won't bother after reading Chalkie's article. (I've never had any joy with Chineese controlled companies and doubt the result will be any different this time).

Would PGW be in a better position now if Agria did not get control 2.5 years ago? I am deeply doubtful about it. It is easier to be a commentator. PGW's problem has its roots: those on top positions are too slow in adjusting the business as the external environment changes.

Further, I do not understand why PGW has hundreds of staff with a cost of >$100,000 pa. Does selling seeds and cows require extraordinary skills?

Do not blame Agria for any problems at PGW. Like everyone else, Agria needs a return on their investment on PGW.

Beagle

05-06-2013, 11:09 AM

Would PGW be in a better position now if Agria did not get control 2.5 years ago? I am deeply doubtful about it. It is easier to be a commentator. PGW's problem has its roots: those on top positions are too slow in adjusting the business as the external environment changes.

Further, I do not understand why PGW has hundreds of staff with a cost of >$100,000 pa. Does selling seeds and cows require extraordinary skills?Do not blame Agria for any problems at PGW. Like everyone else, Agria needs a return on their investment on PGW.

Perhaps you have a point. The root of the problem lies right there. An extremly ruthless approach to cost cutting appears warranted seeing as we've been through the country's worst drought in seventy years.

I guess another key question, (perhaps some of the regulars with farming experience would like to share their insights), is with the rise of co-op's around the country is the PGG-Wrightson business model facing permanent headwinds or are we just talking about factors caused by the 1 in 100 year drought ? Another thought is are we now looking at the effects of climate change and will 1 in 100 year droughts happen every few years ????
Thoughts folks ?

Snoopy

06-06-2013, 04:01 PM

Would PGW be in a better position now if Agria did not get control 2.5 years ago? I am deeply doubtful about it. It is easier to be a commentator. PGW's problem has its roots: those on top positions are too slow in adjusting the business as the external environment changes.

Further, I do not understand why PGW has hundreds of staff with a cost of >$100,000 pa. Does selling seeds and cows require extraordinary skills?

Do not blame Agria for any problems at PGW. Like everyone else, Agria needs a return on their investment on PGW.

I think in the last year PGW had a reasonable year both in real estate and livestock. People in those sectors often work on commissions. On a good year (FY2012) you might expect such people to do well, and that may be inflating the annual report figures for who you perceive is the 'management team' (those earning $100k+). It will be interesting to see the number of staff still on $100k+ income when the FY2013 report comes out.

I do also agree with you Newman that PGW will have to manage their own way out of their problems. Agria may have the willingness to try and boost PGWs earnings, but do they have the skills?

SNOOPY

Snoopy

06-06-2013, 04:21 PM

Yeah, Chalkie sums up owners pretty well. I suspect that long time senior PGW management will steadily trickle out the door. Add this to the fact that they're competing against co-ops and PGW growth prospects are nil or worse. Time to book those losses folks and move on.

I agree with the Chalkie article, although there is nothing in there that I haven't known for a long time. Sparky is already out of the door, and Belg sees no future. Moosie no more positive from the traders perspective. Roger looking for those one in 100 year droughts to occur every few years. Co-ops now holding the whip hand in the competition stakes. And Winner reminiscing on those halcyon days of PGW and the yearling sales, never to be repeated.

Looks pretty much like total capitulation to me. And that is why I am in today, looking to double my holding!

Some will say I have secret insight into PGW that I am not willing to share on this forum. I am sorry to say that I do not. I am only seeing assets (almost said good assets!) trading at below NTA with the market price down to 28c. The Ben Graham in me has awakened! I have no idea when PGW will recover. I do know PGW have some great seed technology that has the potential to double the profitability of the company, if they can sort Australia seeds out. And I do know that at 28cps I am paying very little for it. If only my average holding price was 28c :-(. However, on the positive side my average entry price is now well under that paid by major shareholder Agria!

SNOOPY

percy

06-06-2013, 07:02 PM

I agree with the Chalkie article, although there is nothing in there that I haven't known for a long time. Sparky is already out of the door, and Belg sees no future. Moosie no more positive from the traders perspective. Roger looking for those one in 100 year droughts to occur every few years. Co-ops now holding the whip hand in the competition stakes. And Winner reminiscing on those halcyon days of PGW and the yearling sales, never to be repeated.

Looks pretty much like total capitulation to me. And that is why I am in today, looking to double my holding!

Some will say I have secret insight into PGW that I am not willing to share on this forum. I am sorry to say that I do not. I am only seeing assets (almost said good assets!) trading at below NTA with the market price down to 28c. The Ben Graham in me has awakened! I have no idea when PGW will recover. I do know PGW have some great seed technology that has the potential to double the profitability of the company, if they can sort Australia seeds out. And I do know that at 28cps I am paying very little for it. If only my average holding price was 28c :-(. However, on the positive side my average entry price is now well under that paid by major shareholder Agria!

SNOOPY

I think you are right to be buying.
With Sir John's chairmanship and the work George Gould would have done, means the company is now well balanced.Gould would have made sure PGW has the right people, with the right back up systems.So with reducing debt the company is in pretty good shape.Gould was never going to grow old there.
When PGW's clients have a good year so will PGW.Being agriculture servicing company you never know when that year will be.!

percy

07-06-2013, 01:34 PM

And just like that, Mark Dewdney of Livestock Improvement Corporation is brought in as new CEO for PGG Wrightson.

https://nzx.com/companies/PGW/announcements/237147

Given the financial interests between LIC and Agria, should we be surprised, and what does it all mean?

On further thought I think there is more to the change of CEO than I gave credit too.
I think it means "may we live in interesting times." !!!!

Master98

07-06-2013, 02:25 PM

Agrarinvestor

08-06-2013, 06:53 AM

And just like that, Mark Dewdney of Livestock Improvement Corporation is brought in as new CEO for PGG Wrightson.

https://nzx.com/companies/PGW/announcements/237147

Given the financial interests between LIC and Agria, should we be surprised, and what does it all mean?

It means that LIC Management has a deep look inside Agrias secrets. What you take a job in a company that muddle through its issues ?

>>Agria will muddle through its issues<<

I know, most of you disagree, but i am convinced it is better to be invested in the company that is the majority controlling shareholder.

Master98

08-06-2013, 01:40 PM

I know, most of you disagree, but i am convinced it is better to be invested in the company that is the majority controlling shareholder.

You could be right.

Snoopy

08-06-2013, 03:10 PM

I know, most of you disagree, but i am convinced it is better to be invested in the company that is the majority controlling shareholder.

I would say most rules of thumb like this decay around the edges. The 'majority controlling shareholder' Agria seems to exist as a personal fiefdom for Mr Lai and is actually controlled by the bankers who foolishly put up the money to takeover PGW when there was not enough underlying cashflow to finance the purchase. And we still don't know what strings New Hope has to control the Alan Lai puppet.

I can't see any evidence that Agria is in control of its own destiny any more, and so could not recommend investing in it.

SNOOPY

Snoopy

08-06-2013, 03:21 PM

Well, you are a braver man than me. In my view, the facts have materially changed from when I made an investment at 32c (mostly) in October or so.

1/ The drought (unknown in October) has wrecked the hopes for positive earnings. Though weather is always an unknown for seasonal earnings based companies, but clearly Agriservices which has done well last year has taken a hit.

2/ The CEO has moved on. And it is clear there has been a suppressed board stoush which engendered Gould's departure. I don't like that one bit.

3/ Australia Agritech has more work to be done to integrate properly and see it perform within the group.

Here's what I can't assess - Agria's behaviour and impact on PGW's performance. Gould's position, alongside that of Sir John was a strong signal to the market that Chinese ownership would be tempered by Kiwi "back to basics" leadership. I don't have that comfort level now, though I acknowledge the next CEO could be a great addition to the team. Yet a new CEO will wish to implement a new vision, which will take time, and this could hold back financial performance. The way in which Gould departed (as yet undiscussed with the market, but clues are emerging which I'm hearing slowly about) suggests Agria will want a catspaw rather than a leader. I hope I'm wrong, because PGW deserve better.

Sparky, all of your observations are rational and valid. The only thing I would expand on is that while the drought was unknown last October, the potential favourable weather that everyone was assuming as a base case was also unknown. The weather is unpredictable and basing a farm business case on the weather being OK (whatever that means) is showing a certain naivete, IMO.

As for the boardroom stoush, I am assuming that eventually sense will prevail and the board will realize that what is good for PGW will be good for Agria. Perhaps the appointment of the LIC man as CEO will expedite the splitting of Agritech and Agriservices into two separate companies?

In the short term I am expecting a significant final dividend, as that is what Agria wants, or more likely their US banks have told them to get. Once those US loans are renegotiated sense may prevail and PGW may continue to reduce debt as I believe they should do!

SNOOPY

winner69

08-06-2013, 04:35 PM

Soil Moisture Deficit was looking pretty bad back in late October and early November

At the least the maps on the niwa website showed sponges of orange (dark) back then

History tells us that economic impacts of drought hurt more a year after than the year it occiurs - hard to imagine considering the amount of rain in last month

winner69

09-06-2013, 02:52 PM

Winner, soil moisture deficit during November-Feb a great thing for seeds businesses. But having the rains come in Feb-May is then whats needed to kick start the seeds resowing.

But they blame 'climatic conditions' for lower earnings this year - a drought

Appears as if seeds don't make much difference to how they perform ..at least for now ...maybe some day

Xerof

09-06-2013, 05:12 PM

winner69

09-06-2013, 06:06 PM

I note they're advertising for a GM Real Estate. Incumbents leaving the ship or just natural attrition?

of course new brooms and new blood could be a good result.

BTW, I thought Sir JA had stated no CEO replacement was imminent only a week ago, then they get the fella from LIC, who are 'in bed' (to an extent) with the major shareholder.

Sounds like there might be 'new hope' for the future at some stage

One thing - one never knows what is coming next with PGW

One would think that hope is the only strategy for punters to make anything here ...or minimise their losses ....hope kid a takeover

futurist

09-06-2013, 07:23 PM

I think a cent or 0.8c a share will be declared. Any more would probably raise eyebrows, given they declared a 2.2c dividend in May.

I take the point regarding weather assumptions in October, but on the laws of probability, a normal or slightly favourable weather pattern in NZ was more likely than the biggest drought in 50-70 years!

Ah - now that's an intriguing point regarding splitting Agritech and Agriservices, which roughly invalidates the merger of PGG and Wrightson and all the work over the last few years.... though may actually be the smartest thing. Lai gets his seeds company, and Agriservices can focus on what it does best.

I think the point on naiveness includes the inability to understand statistics and its limitation. Take worst case scenario as an example, do you think when the event happened it was the worst case scenario of that time? Of course not. Did people talk about global warming 50 years ago? It wasn't even an available condition to discuss.

So if you have a weather assumption, great. But statistics does not make your assumption better, it actually makes it weaker because of the increasing variability of weather due to global warming. See, I also use statistics to back the idea of not using statistics.

whatsup

10-06-2013, 11:04 AM

IMHO the 3 C'c rule here as it does with all agricultural stocks.

C= climate.
C=commodities.
C=currencies.

All of which NO ONE has any control of and when all 3 go haywire there always is no way to predict the profit of a agricultural company with any certaincy.

winner69

10-06-2013, 11:38 AM

Snoopy

10-06-2013, 03:07 PM

What would raise my eyebrows would be if Agria doesn't force a big dividend pay out to make their books (cash) look better and send PGW's share price tumbling so that Agria can then wing in and mop up with a full TO offer.

A couple of holes in your Agria takeover plan Belg.

1/Agria has no money and they already maxed out on their credit, so it would be impossible for them to fund a full takeover of PGW (I have to keep repeating this because a takeover from Agria seems a persistent myth on this thread). If you remember Agria couldn't even raise $10m to pay back the LIC loan last year. And wringing a $10m dividend from PGW isn't going to cut it to raise the takeover money either. Agria would need 10 times that amount, even at all time low PGW market prices.

2/ PGW shares are sitting on Agria's books at 60c. If Agria made a takeover offer at less than that (say 40c) it would require them to write down their existing holding. At current prices, I believe Agria would be in a negative equity position if they did that. So in effect a takeover over by Agria would tip the predator (Agria) in this transaction into administration.

SNOOPY

Snoopy

10-06-2013, 03:27 PM

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 ?

Good question Agrainvestor. Agritech goodwill is listed as an astonishing $216.636m (AR2012 p65). There is no breakdown between the Australian and New Zealand goodwill. The budget for FY2013 is set up for a 40% rise in Agritech EBITDA (AR2012 p66).

On the bottom of that page there is a note that if EBITDA drops 1.9% below forecast then goodwill will have to be written down. However, I can't figure out by how much such a writedown will be. Nevertheless it does appear a goodwill writedown will be required if Agritech EBITDA growth is less than 0.981x 40%= 39.2%.

Depending on how large the Agritech EBITDA growth shortfall is depends on how large the goodwill writedown will be. It doesn't take too much imagination to get to the stage where such a writedown will extinguish all headline profits, maybe for several years.

The saving grace is all of this coming write down in goodwill is 'non cash', and the write down will be in 'intangible assets', so Net Tangible Asset Backing would be unaffected.

But presumably the headline 'EBITDA' figure will take a hit if 39.2% growth in seeds is not achieved in FY2013?

Having never worked as a corporate banker I am unsure as to the implications of all of this. Perhaps someone who has would like to comment?

SNOOPY

whatsup

10-06-2013, 10:37 PM

You once work for BNZ Wealth?

NOOOOO< just a private investor who has learnt the HARD investment lessons re commodity shares.!

Agrarinvestor

11-06-2013, 05:38 AM

A couple of holes in your Agria takeover plan Belg.

1/Agria has no money and they already maxed out on their credit, so it would be impossible for them to fund a full takeover of PGW (I have to keep repeating this because a takeover from Agria seems a persistent myth on this thread). If you remember Agria couldn't even raise $10m to pay back the LIC loan last year. And wringing a $10m dividend from PGW isn't going to cut it to raise the takeover money either. Agria would need 10 times that amount, even at all time low PGW market prices.

2/ PGW shares are sitting on Agria's books at 60c. If Agria made a takeover offer at less than that (say 40c) it would require them to write down their existing holding. At current prices, I believe Agria would be in a negative equity position if they did that. So in effect a takeover over by Agria would tip the predator (Agria) in this transaction into administration.

SNOOPY

1.) It's your myth that Agria has no money. You can not know what kind of resources are behind Adam Lai.

2.) Agria has the Assets in their book, not the shareprice. If they buy the rest of PGW for 30 cent, they can improve their balance sheet. But i think at first they will force PGW to make some wright downs because of the australian business.

wealthboost

11-06-2013, 12:50 PM

How does Australia's bumper Lucern Seed crop impact on PGG? Just been reading this (came out June 6) and how PGG bought the assets of the marketer of the seeds being Keith Seeds in 2011. For this years March/April harvest, growers have reported yields of 1400kg per hectare off the header whereas in an average year they'd expect to harvest 500-600kg per hectare.
http://www.abc.net.au/news/2013-06-06/bumper-crop-sows-seeds-of-recovery-for-lucerne-exporters/4729366?section=sa (http://www.abc.net.au/news/2013-06-06/bumper-crop-sows-seeds-of-recovery-for-lucerne-exporters/4729366?section=sa)

Snoopy

11-06-2013, 02:12 PM

Snoopy, what I should have perhaps said is Agria and its backers ... Or perhaps more likely just ... Agria's Backers. ... I.e. PGW shareholders get stung. Agria shareholders get stung a bit less. And a Backer wings in and picks up the left overs for way below a realistic price while taking a proportionally smaller hit than both PGW shareholders and the other Agria shareholders. Been done before.

The problem remains Belg that if the Agria shareholding of PGW is diluted below 50.01%, (such as in a capital raising where Agria's backers put in more money than Agria) then Agria will have to 'mark to market' 377m PGW shares in their accounts currently on the books at 60c to 30c (if that is the current market price). That means Agria will take a

($NZ0.6-$NZ0.3)x377m= $NZ113m

hit in their accounts.

Agria will not let their 'backers' out of their cage to allow this to happen.

When one uses the words' backers', the Chinese government backed 'New Hope' comes to mind. But how much help are they really willing to lend to Agria? As Chalkie pointed out, the New Hope shareholding has a guaranteed income agreement attached to it. And it also has a redemption clause that can be initiated at the behest of New Hope whatever the consequence to Agria. Despite being called a shareholding, this New Hope shareholding in Agria Asia has all the hallmarks of a loan. I would say that New Hope is a fair weather friend to Agria at best. If trouble strikes I expect New Hope to run for the exits.

SNOOPY

Snoopy

11-06-2013, 02:35 PM

I'd be more concerned about any writedown in inventory associated with seeds that they are unable to sell. If you look at note 21 on page 60, they have provisioned $6m in inventory writedown. There may be some impairments here if they have to offload aged seeds at impaired rates in secondary markets.

Sparky that $6.037m is an existing provision for inventory write down. Agritech sales were $435m in FY2012. So the size of that FY2012 provision indicates to me that writing off dud seeds is an unusual event and shouldn't be too much of a concern to shareholders.

If seeds were not sold due to floods and/or drought, then those seeds can be held over for another season, at least from a biological perspective. They are not necessarily write offs, even if the viability of seeds does deteriorate the longer they are kept. If PGW sells one year old seeds and they still germinate, then that is fine for the farmer customers. I observe that all seeds I have bought from my own garden store have a best before date well outside a year from packaging.

In the unlikely event of last years seeds failing, the worst case scenario, PGW could still offer up some newer replacement stock.

SNOOPY

Agrarinvestor

11-06-2013, 09:04 PM

By Adam Lai, I presume you mean Alan Lai. My own gut feeling is that Alan Lai is a big noter and braggart. I haven't seen much that suggests he is any kind of well connected financier to help PGW become a global seeds force. I'm sure we would have seen evidence of this already, but rather we have seen Agria seek accommodation with Livestock Improvement Corp over a relatively small $10m loan, which is an odd thing for Agria to do if they have powerful forces behind them.

My own view (and Snoopy will disagree as he has in the past) is that Agria will probably muddle along, providing little benefit to PGW for the medium term. Potentially their China connections may give Agritech some great markets in 3-4 years.

I tend to agree with the Chalkie column the other week that suggests Agria hasn't worked out a very positive partner for PGW. Their exit from PGW in favour of a wealthier backer would probably be the best thing for PGW.

http://www.stuff.co.nz/business/opinion-analysis/8755681/Key-PGW-investor-short-on-rural-know-how

>>I haven't seen much that suggests he is any kind of well connected financier to help PGW become a global seeds force<<

1. Do you have seen, since march, how robust the share price of Agria is ? There must be someone with big money behind Agria.

>>providing little benefit to PGW for the medium term. Potentially their China connections may give Agritech some great markets in 3-4 years.<<

2. It is the job of PGW to provide benefit for Agria, and as a side effect PGW can have advantages as well. It could be that this provoking sentence sounds a little bit
arrogant, but that is the reaon why Agria paid the money for being a majority shareholder of PGW.

False Profit

12-06-2013, 08:10 AM

Wish i'd sold at 35.4c....i'm still waiting for that stairway to heaven where the share price decides to go on a holiday...upwards.

Snoopy

12-06-2013, 11:02 AM

Agritech goodwill is listed as an astonishing $216.636m (AR2012 p65). There is no breakdown between the Australian and New Zealand goodwill. The budget for FY2013 is set up for a 40% rise in Agritech EBITDA (AR2012 p66).

On the bottom of that page there is a note that if EBITDA drops 1.9% below forecast then goodwill will have to be written down. However, I can't figure out by how much such a write-down will be. Nevertheless it does appear a goodwill write down will be required if Agritech EBITDA growth is less than 0.981x 40%= 39.2%.

Depending on how large the Agritech EBITDA growth shortfall is depends on how large the goodwill write-down will be. It doesn't take too much imagination to get to the stage where such a write down will extinguish all headline profits, maybe for several years.

Some more homework on this topic. Going through my library of past Annual Reports, I find Agritech Goodwill listed as worth $223.331m in AR2011 and $211.503m in AR2010. However in the AR2009, Agritech goodwill is a mere $32.616m by way of comparison. So what happened during FY2010 to cause the huge increase?

It turns out that at the end of FY2009 total goodwill was composed of $32.616m (Agritech ) and $290.748m (Other Agriservices). According the the footnotes 'Other Agriservices' included corporate assets and head office exposure.

At the end of FY2010, we have $80m in 'Livestock' goodwill, $18.4m in 'Other Agrservices' goodwill, and $221.503m in 'Agritech' goodwill.

For both FY2010 and FY2009 the total goodwill listed is comparable but there has been a redistribution in the books, with a lot more being shunted into Agritech. This is possibly tied up with a change in accounting standard over the year, but it is nevertheless a startling change to make just as Agritech earnings went into decline. I couldn't find any comment in AR2010 to justify such a change.

SNOOPY

Snoopy

12-06-2013, 11:13 AM

Wish i'd sold at 35.4c....i'm still waiting for that stairway to heaven where the share price decides to go on a holiday...upwards.

I can't claim success either. Despite buying a lump of shares at 28c, I still need to climb that ladder to 45c just to break even on PGW!

SNOOPY

Snoopy

13-06-2013, 02:36 PM

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

That might be a rave Winner, but plenty of wisdom contained within methinks.

Some may wonder why I keep persisting with PGW. Volatile profit, low margin and poor ROE are all Warren Buffett red flags. But there is a good reason to stay interested, apart from the fact that this is a farming economy and PGW is a way to gain exposure to all those farming sectors.

I can't help notice that where the index goes, PGW very often goes in the opposite direction. The index is quietly reversing today while PGW is up 6.7%. So PGW is a kind of real world hedge that you can actually buy. It might even satisfy the constant clamour from those who want to 'short' NZX shares, but can't find any real world way to do it.

Helping news was the fact that new CEO Mark Dewdney declared an interest in PGW amounting to six figures worth of shares. When I saw that declaration I immediately thought, this guy is positioning himself to take over the company! It was only then I remembered PGW has billions of shares on issue, and 170,000 would only fill half a pig bucket.

The other bit of good news is a new head for Agritech Australia. All very positive.

SNOOPY

percy

13-06-2013, 02:48 PM

Well I think the recent appointments are very positive.George Gould has the servicing business sorted.Mark Dewdney should run it well from here on in .
The Australian seeds business should now be under good management with the appointment of John Stewart.
May not be a flash business, but as I have said before,when PGW's clients do well,so should PGW.

percy

16-06-2013, 02:22 PM

He also noted when American Express was looking to be in serious trouble,restaraunt customers were still using "the card" to pay for their meals.
I think you will see farmers using their cards [PGW] once they start dinnng out again ,so to speak.
So again, when PGW's clients do well so will PGW.

percy

16-06-2013, 02:51 PM

Oh, I don't think the business is stuffed. I think the share price is simply going nowhere soon. Hence why I have found greener pastures (pardon the pun).

Pretty much think you are right.
Lot of lovely girls to kiss at present, in the green pastures!

janner

16-06-2013, 08:40 PM

Pretty much think you are right.
Lot of lovely girls to kiss at present, in the green pastures!

Hope that you are speaking metaphorically percy !!.

Hoop

16-06-2013, 10:54 PM

Pretty much think you are right.
Lot of lovely girls to kiss at present, in the green pastures!

http://www.clipartguide.com/_named_clipart_images/0511-1101-2921-5318_Cartoon_of_a_Bull_in_Love_clipart_image.jpg

percy

17-06-2013, 06:58 AM

http://www.clipartguide.com/_named_clipart_images/0511-1101-2921-5318_Cartoon_of_a_Bull_in_Love_clipart_image.jpg

Thanks Hoop.
Janner;A picture is worth a thousand words.Your answer . in " heart land" ? !!!!

False Profit

17-06-2013, 07:54 PM

I have plenty of PGW and OGC shares so I'm with you 100% on that. As with many things it's all cyclical. Ahem...I have GPG also which I'm not so chuffed about...

Minerbarejet

19-06-2013, 02:34 PM

Ouch, bit of a scathing review by Chalkie today on the loans from Agria to PGW being counted as equity...
Could you send us a link please Moosie or are we talking Jun 5th here. I cant find anything other than that however things take time to reach Taranaki.:)

Minerbarejet

19-06-2013, 02:59 PM

Thanks, Ill keep an eye out for it. He did refer to the equity in his June 5 post - guess this is an expansion on that
disc: holding PGW since before the cows came home and went back out again. :)

winner69

19-06-2013, 03:03 PM

Not online yet, is in the Dom Post today though.

only historical stuff so no worries .... george and john have already fixed the probelm

only one of the few dodgy things that keep popping up on the pgw balance sheet .... and no doubt some skeleton in the closet as they say

Snoopy might find them if we are lucky

Minerbarejet

19-06-2013, 03:20 PM

moosies into skeletons - he may be able to shed some light as well
:)
moa fence

winner69

19-06-2013, 03:42 PM

NBR's Shoeshine column ripped into PGW for corporate mismanagement, poor culture, and the shenanigans around Gould's departure last week.
Shoeshine doesn't think much of PGW and its corporate governance and shenanigans does he.

Don't blame him either and no doubt more to come out ....and monkey stuff that can be bad for shareholders (at least the minorities)

In spite of what Percy says things still not good at hq .....at least that's what I hear

Wonder if the accounting treatment of the silver ferns supply is working out to plan?

And the superfund shortfall seems to be getting bigger by the year ....must have a lot of older people looking to their defined benefits payout over the next few years - in addition to those already retired being supported by shareholdes

winner69

19-06-2013, 03:59 PM

The rep that snapiti said was going to get the boot probably worked their for years and would have got a decent payout from the superfund .....or taken a pension so shareholders in a round about sort of way are still paying him

percy

19-06-2013, 04:11 PM

That is sad to hear. I desperately want to see the NZ agriculture sector do well. It's hard enough dealing with weather extremes, currency swings and random events like PSA virus etc, but to have mismanagement and poor morale, well, we don't need that at NZ Inc.

NZ agriculture is doing well.Good management means PGW will do well when their clients do well.NZ agriculture is still developing from the family farm to company owned farms.We are seeing millions of dollars invested.With Asian middle class demanding more protein,NZ is "well positioned" to provide it.
Times change,so PGW and other suppliers must adapt.Gould brought leadership,resources , systems and support to PGW.This has relaid the foundations for a company to achieve it's place in NZ agriculture.
There are huge amounts of land in NZ that can be put to better agricultural uses.A lot more dairy conversions going ahead.Crop farming we are seeing the benefits of investment in irrigation.
The future is filled with opportunities for those who want to take them.NZ agriculture has a bright future.Turning water/grass into food must be the right way to go.Renewable too.

Minerbarejet

19-06-2013, 04:26 PM

A lot of positive comment about Fielddays as well this year - seems our farmer friends are investing in machinery and farm supplies. I will know that things are picking up when I hear (if able to) topdressing aircraft at work in the area - usually a pretty good indicator. Unlikely to get two droughts in a row though I suppose anything is possible.

winner69

20-06-2013, 02:00 PM

Shoeshine started his NBR column on PGW with this - A road built on hope looks better to the traveller than a road built on despair, even though they both lead to the same destination.

A bit philosophical for me but whatever it is meant to say it doesn't sound good

Maybe describes Percy's 'road' rather than many others 'road'

Xerof

20-06-2013, 02:26 PM

Perhaps he is talking the same riddle as I was on 9 June

Sounds like there might be 'new hope' for the future at some stage

percy

20-06-2013, 02:54 PM

I have not read shoeshine.
NBR june 14.Margin Call;"PGW should be a leader in the government's goal of doubling merchandise exports to $64 billion by 2035 with $48billion of it coming from pastoral production."
"The succession of Mark Drewdney ,has been widely approved."

Snoopy

22-06-2013, 11:16 AM

Snoopy wrote:
"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."

...and yes my farms are in the Hawkes Bay

There seems to be a lot of "rear view mirror analysis" on PGW done in the press of late. Much of it has been referenced on this forum. Looking forwards, I am more positive about PGWs medium term future, as an investment, than at any time since Craig Norgate left the boardroom.

I keep half an ear open for whatever happens in Hawkes Bay because anecdotally I think it is one of the toughest areas to farm right. Hawkes Bay gets more than their fair share of drought and tends to be more sheep/beef than dairy. So whenever things look up for Hawkes Bay I am heartened. Admittedly my farmer sample of one (Snapiti) is not statistically significant and given that he has money to invest in the sharemarket I suspect Snapiti is a better than average farmer. Nevertheless the fact that our ear on the ground in Hawkes Bay is moderately buoyant is something I take notice of.

Snapiti also warned us about the danger of the NZ dollar staying for a prolonged period of time in the upper 80 cent range. Well it is now in the upper 70 cent range. OK that is still not low enough for farmers to declare 'times are good' (only happens about once in a decade anyway). But I believe we are on track for a modestly good year in farming.

In the past I have considered a 'good year for the irrigation unit' is a bad sign, as it means a shortage of rainfall. However, I was surprised to read the other day that 70% of the irrigation being installed nationwide at the moment is in Canterbury. Combined with the fast tracking of the Canterbury Plains irrigation scheme and the fact that PGW's "Pumping and Irrigation" is largely Canterbury based I now believe we can have a good irrigation year and a good farming year.

I can't see any significant contribution coming from China, although I would be grateful if partner Agria proves me wrong. But to my way of thinking China was never a pivotal growth market anyway. Perhaps we will end up quitting Australia at a loss, but Agritech historically has made almost all their money in NZ. And South America does seem to be 'coming right'.

In summary, I see a somewhat dreary steady as she goes future for the NZ operations. But if PGW can jettison their overseas baggage that should produce some 'growth' (reduced losses). And if you can buy those PGW shares cheaply enough (somewhere under 30c qualifies in my book) that should produce a positive experience for new PGW investors going forwards.

SNOOPY

Minerbarejet

03-07-2013, 12:20 PM

whose chart is that and does it have adjustable MA like 50 and 200? Its very clear not like some.
Cheers:)

Minerbarejet

03-07-2013, 05:22 PM

whose chart is that and does it have adjustable MA like 50 and 200? Its very clear not like some.
Cheers:)
request withdrawn thanks anyway. it is a Direct Broking chart with limited MA

Snoopy

04-07-2013, 02:05 PM

Wow - no other stock with that potential? :-)

Your 32c buy in was the same as my buy in back in October (which snuck up when I accumulated more later).

I think what many of you guys miss is that 'potential' doesn't just mean how much blue sky you can see, but also the prospect of your prime land turning into bog and leaving you stuck up to the top of your gumboots.

The way I see it the better the year is for farmers, the worse it will be for Fonterra unitholders and upcoming Synlait Processing shareholders. That is because milk price is reflected as an input cost for the aforementioned duo, and there is no certainty that that higher input cost can be recovered upstream. If all input cost inflation is recovered then the best case scenario for Fonterra Unitholders and Synlait Processing shareholders is that their positions will stand still. Synlait Processing isn't listed yet, but Fonterra Units trade on a PE much nearer to 20 than 10. PGW trades on a PE of around 10. So straight away these other two agricultural investments are likely to have a far larger growth expectation built into the shareprice than PGW. Are FSF and Synlait better companies than PGW? Probably yes. Are they twice as good? Almost certainly not. That more or less closes the investment case in favour of PGW right there.

Supporting the PGW share price going forward, is the ongoing pressure from "Uncle Alan" for steady dividends. This is probably not in the best interests of PGW longer term, as I believe PGW management would be better to pay down debt. High dividends will support the PGW share price in the short term though, and that takes away most of the 'boggy boot' risk for shareholders. When will PGW get better? I don't know. But in the short to medium term I don't see a more favorable entry price than today's. And you can sit there harvesting your dividends while you wait.

SNOOPY

discl: hold PGW

lowrolling

04-07-2013, 02:25 PM

The way I see it the better the year is for farmers, the worse it will be for Fonterra unitholders and upcoming Synlait Processing shareholders. That is because milk price is reflected as an input cost for the aforementioned duo, and there is no certainty that that higher input cost can be recovered upstream. If all input cost inflation is recovered then the best case scenario for Fonterra Unitholders and Synlait Processing shareholders is that their positions will stand still. Synlait Processing isn't listed yet, but Fonterra Units trade on a PE much nearer to 20 than 10. PGW trades on a PE of around 10. So straight away these other two agricultural investments are likely to have a far larger growth expectation built into the shareprice than PGW. Are FSF and Synlait better companies than PGW? Probably yes. Are they twice as good? Almost certainly not. That more or less closes the investment case in favour of PGW right there.

If you look at the EV/EBITDA multiples the companies are a lot closer than your 10 - 20 range in PEs. Fonterra has a EV/EBITDA multiple of around 9x and PGW of around 7x.

Snoopy

05-07-2013, 03:09 PM

If you look at the EV/EBITDA multiples the companies are a lot closer than your 10 - 20 range in PEs. Fonterra has a EV/EBITDA multiple of around 9x and PGW of around 7x.

I appreciate there is more to comparing shares than looking at a single statistic lowrolling.

I tend to use PE because:

1/ It is widely published (in the newspapers).
2/ the PE shows me the number of years I will need to wait before my investment money is earned back, hopefully in dividends (assuming a 100% payout ratio) on any lump sum investment that I make.

I wondered what your corresponding thinking was behind using EV/EBITDA?

SNOOPY

lowrolling

05-07-2013, 03:24 PM

I appreciate there is more to comparing shares than looking at a single statistic lowrolling.

I tend to use PE because:

1/ It is widely published (in the newspapers).
2/ the PE shows me the number of years I will need to wait before my investment money is earned back, hopefully in dividends (assuming a 100% payout ratio) on any lump sum investment that I make.

I wondered what your corresponding thinking was behind using EV/EBITDA?

SNOOPY

I agree that you should not be looking at just one statistic, that is why I added a comparison of EV/EBITDA.

EV/EBITDA takes into account debt which is especially important for a valuation of PGW (or the NZ rural sector in general)

Snoopy

06-07-2013, 02:27 PM

I suspect he will say that P/E is subject to earnings manipulation, but there might be other good reasons.

Yes you are quite right that the price earnings ration can be manipulated Sparky.

But the alternative mentioned is: Enterprise value / EBITDA. Isn't the 'E' (earnings) in the denominator equally likely to be manipulated?

SNOOPY

Snoopy

06-07-2013, 02:34 PM

I agree that you should not be looking at just one statistic, that is why I added a comparison of EV/EBITDA.

EV/EBITDA takes into account debt which is especially important for a valuation of PGW (or the NZ rural sector in general)

OK, so EBITDA used in the denominator removes the 'I' (interest bill paid) from the equation - I see that compared to the alternative PE measure. However would not the EV in the numerator contain an interest rate effect? After all if a company is laden with debt, and at risk of a possible cash issue to act as a bailout, would this not depress the share price?

I am also interested as to why IYO taking into account debt is especially important for the rural sector companies. Is it because you see them as low margin companies, or that they are volatile in earnings, or a combination of both?

SNOOPY

percy

07-07-2013, 04:30 PM

PGW still a dog

Some 690 mill invested in it (equity and debt) and still despite John and George's effort will make a return of 25 mill to 28 mill on that invested capital - not even anywhere near covering their cost of capital. Not much of a return eh. Wealth / value destruction of the first order.

With a market cap of 234 mil the market is saying that future wealth destruction is 344 mill - yes 344 mill shortfall to covering cost of capital

Somebody needs to put them out of their misery

Same old story.Nothing new to add?
Would have been nice to have had a good old Sunday "Rave" from you, foretelling the bright future you can see PGW enjoying once we are past the affects of the drought.The results of John's and George's great work going to reward, customers,staff and shareholders.But no, you have let yourself [and us] down again.
You have earned yourelf another ten hours of community service.!

winner69

07-07-2013, 06:01 PM

Only 10 hours .... ok ..... got 350 trees (natives) to plant in a valley a group of us are restoring back to how it was generations ago

Does that count

percy

07-07-2013, 06:34 PM

Only 10 hours .... ok ..... got 350 trees (natives) to plant in a valley a group of us are restoring back to how it was generations ago

Does that count

That should go a long way to focussing your attention.
May make you think, just how important it has been for Sir John and George to plant for the future.
And remember that today someone is standing in the shade,because years ago someone planted a tree.

winner69

19-07-2013, 01:51 PM

And the grass is growing

Boom times down on the farm next season
http://www.stuff.co.nz/business/farming/dairy/8939791/Pasture-growth-exceeds-expectations

PGW 45 cents by xmas

percy

19-07-2013, 02:53 PM

And the grass is growing

Boom times down on the farm next season
http://www.stuff.co.nz/business/farming/dairy/8939791/Pasture-growth-exceeds-expectations

PGW 45 cents by xmas

That native tree planting did you a world of good.!!

Balance

22-07-2013, 10:25 AM

Share price on the move.

Something in the air?

Snoopy-me-ole-mate, we need one of your negative postings - please!*

Snoopy

22-07-2013, 11:36 AM

Share price on the move.

Something in the air?

Snoopy-me-ole-mate, we need one of your negative postings - please!*

The 30th June year is signed off, but I think the day of reckoning with the auditors is near. The accounts were tagged last year and PGW managements response was that seed EBITDA would rise by 40% in FY2012. I am betting this hasn't happened so be prepared for a massive PGW headline loss for FY2012. Something over $100m is not inconceivable. Of course all of this is 'non-cash' and so won't affect PGW going forwards. But for those who only read the headlines it won't be pretty. It is all very disappointing, because George Gould was meant to have cleared all the skeletons out of the closet when he took over. It looks like he left the wardrobe filthy, in keeping with all previous PGW CEOs that I can remember.

SNOOPY

PS Is that negative enough for you Balance? Not sure it will work because I stocked up heavily with PGW shares at 28c. If only all of my PGW share shad been bought at that price!

Agrarinvestor

24-07-2013, 03:33 AM

The 30th June year is signed off, but I think the day of reckoning with the auditors is near. The accounts were tagged last year and PGW managements response was that seed EBITDA would rise by 40% in FY2012. I am betting this hasn't happened so be prepared for a massive PGW headline loss for FY2012. Something over $100m is not inconceivable. Of course all of this is 'non-cash' and so won't affect PGW going forwards. But for those who only read the headlines it won't be pretty. It is all very disappointing, because George Gould was meant to have cleared all the skeletons out of the closet when he took over. It looks like he left the wardrobe filthy, in keeping with all previous PGW CEOs that I can remember.

SNOOPY

PS Is that negative enough for you Balance? Not sure it will work because I stocked up heavily with PGW shares at 28c. If only all of my PGW share shad been bought at that price!

@Snoopy

(forgive me, i can not resist) if you had listen to my advice and bought Agria with 75 cent, you could laugh about your PGW shares which you had bought at 60 cent.
I hope this mocking remark is ok for you . You gave my investment so much flogging and i am happy that i followed my own judgement.
Despite our dispute about Mr. Lai's dancing shoes, i wish for you that PGW share will triple (Agria will quintuple) within the next 12 month. :)

Snoopy

24-07-2013, 03:01 PM

I wish I took your advice agrarinvester, I did look into agria share's.

Don't feel too left out Snapiti. IIRC Agrainvestor didn't take his own advice either. He was selling down out of Agria after the half year 'profit' (loss) announcement.

SNOOPY

Snoopy

24-07-2013, 03:10 PM

@Snoopy

(forgive me, i can not resist) if you had listen to my advice and bought Agria with 75 cent, you could laugh about your PGW shares which you had bought at 60 cent.
I hope this mocking remark is ok for you . You gave my investment so much flogging and i am happy that i followed my own judgement.
Despite our dispute about Mr. Lai's dancing shoes, i wish for you that PGW share will triple (Agria will quintuple) within the next 12 month. :)

Fair enough call Agrainvestor. Lai has certainly exceeded my expectations on his survival and even managed to sidestep a share reorganization. Alan Lai, dancer par excellence! Even the Agria website has a nice fresh new look.

However we are yet to see what onerous clauses Lai has signed to retain his dancing shoes. The dates for renegotiating his US based debts have come and gone. But I want to see his 20F full year filing so I can see what are the new terms on which his company is financed. The share price closed at $US1.18 for no good reason that I can see. There have been no announcements to justify it and the PGW result for FY2013 I expect will be a shocker.

Put simply I can't see how Agria can keep making these losses year after year and yet survive. But as unfathomable as it is, Lai is still here so I await that 20F filing with interest.

SNOOPY

Balance

28-07-2013, 11:01 AM

I think most would agree that if farmers do well PGW will do well.
A very high proportion of farming in NZ revolve's around grass.
The more grass the more productivity.

As seen by the latest drought no grass = small, less or no profit for farmers which = bad news for PGW.

It is interesting to note we are about to record the 2nd warmest June and July since records began in 1953.

This all means good news for grass growth and grass platforms for early spring which is a vital time for most farmers. Good news for farmers = good news for PGW.

PGW Real Estate brokered sale of $200m of farms the other week - a nice kicker to profits.

winner69

28-07-2013, 11:55 AM

Balance - how much they get of that

Even if it only 2% that's 4 mill .....god stuff

I feel a record year coming on .... Grass growing with warmest July after wettest June ....plenty of farm sales by the look of it ....oz turned around ..farmer confidence at high levels

George should have stayed around

percy

28-07-2013, 01:42 PM

Snoopy

29-07-2013, 04:52 PM

PGW Real Estate brokered sale of $200m of farms the other week - a nice kicker to profits.

Not sure where that figure came from. However, I was in the main street of Rangiora last week and looked in the PGW property window. I found they had listed several what I would call 'town residences' as well as rural and semi-rural properties. I guess it makes sense. If you are in a rural town, and I would still class Rangiora as that, why not make a bit of extra commission selling urban dwellings as well?

SNOOPY

percy

29-07-2013, 05:01 PM

Not sure where that figure came from. However, I was in the main street of Rangiora last week and looked in the PGW property window. I found they had listed several what I would call 'town residences' as well as rural and semi-rural properties. I guess it makes sense. If you are in a rural town, and I would still class Rangiora as that, why not make a bit of extra commission selling urban dwellings as well?

SNOOPY

Have done for years.

Xerof

29-07-2013, 05:01 PM

Not sure where that figure came from

the last of G Hart's Carter Holt dairy conversions?

not convinced he'd pay 2% fee for this but you never know.....

Food4Thought

09-08-2013, 04:51 PM

Minerbarejet

09-08-2013, 08:30 PM

:confused:
What an amazing winter for Farmers... could we ask for better conditions for grass growth, gentle livestock rearing conditions and solid weight gain. Rather positive, despite that Botulism news. How exciting
Its an amazing winter for everyone although we may well pay for it in the months to come.
Just a point though regarding livestock rearing. HOW does feeding milk powder which has been milked, transported, processed, transported, stored, transported, onsold, transported, merchandised and retailed back to the farmer, who then drives home, with everyone taking their tuppenceworth - how is that cheaper than feeding the calf naturally or with whole or skim milk available at source. :confused:

Time has moved on since I was farming but Wrightsons is still there and selling milk powder no doubt.
Cant figure out all the panic about botulism - its everywhere in improperly cooked or processed meats and vegs, the soil.
And on that note if everything breastfed we'd all be better off and we wouldnt have to worry about infant formula but they'd have to stay off the drugs and alcohol. Cant see the cows doing that though - they love molasses.:)

freddagg

09-08-2013, 08:47 PM

[QUOTE=majorbarejet;420951]:confused:
Just a point though regarding livestock rearing. HOW does feeding milk powder which has been milked, transported, processed, transported, stored, transported, onsold, transported, merchandised and retailed back to the farmer, who then drives home, with everyone taking their tuppenceworth - how is that cheaper than feeding the calf naturally or with whole or skim milk available at source. :confused:
The powder used for rearing calves is not milk powder.
The best powders are casein based and the cheaper ones vegetable fats

Minerbarejet

09-08-2013, 10:19 PM

Well I'll be hornswoggled, all these years and I thought casein came from milk:)

freddagg

10-08-2013, 11:03 AM

The fat used is a byproduct of animal processing. I think it is still called casein but I could be wrong.

RTM

10-08-2013, 11:39 AM

http://en.wikipedia.org/wiki/Casein
Casein (/ˈkeɪs.ɪn/ or /ˈkeɪˌsiːn/, from Latin caseus, "cheese") is the name for a family of related phosphoproteins (αS1, αS2, β, κ). These proteins are commonly found in mammalian milk, making up 80% of the proteins in cow milk and between 20% and 45% of the proteins in human milk.[1] Casein has a wide variety of uses, from being a major component of cheese, to use as a food additive, to a binder for safety matches.[2] As a food source, casein supplies amino acids; carbohydrates; and two inorganic elements, calcium and phosphorus.[3]

Snoopy

10-08-2013, 12:37 PM

What an amazing winter for Farmers... could we ask for better conditions for grass growth, gentle livestock rearing conditions and solid weight gain. Rather positive, despite that Botulism news. How exciting

Ah, but is a good winter a good thing for PGW? Some would say the natural feed has held up well, so no need to go to PGW to buy supplementary feed (bad). Others would say more money in farmers pockets looking likely, so they are more likely to spend at PGW (good). Which is it?

SNOOPY

Food4Thought

10-08-2013, 03:56 PM

I would gather that Supplemntary feed was purchased well in advance after a difficult summer and the potential for a harsh winter with the heavy snowfall. The subsequent mild weather will be a blessing as animal numbers are likely to be strong as the birthing season has been gentle on the animals. I think it has been a win win situation. Snapiti, you are totally right, heavy stock, and PGW clipping the ticket with this will result in a slightly better then expected result. Even if farmers have had a very difficult year, the outlook is much more positive now, then had we had a terrible harsh winter. The young sheep and cows have all had a good dose of sun and grass and are growing strong. Fingers crossed reporting won't be as harsh as expected. Fingers crossed.

Snoopy

11-08-2013, 01:03 PM

That is a good point, the milder the winter and early spring is the more live lamb and calves there will be which then means more tickets for PGW to clip.
Unfortunately this will have no reflection on the latest results and as the price for dairy and meat has only recently been higher than last year this has also come to late to show in the latest results.
Not expecting any positive surprise's next week, but at 32cps I don't think Mr market has priced in any good news either.

OK, so the general consensus is that while a mild winter is good, another drought in the spring could still see those lambs and calves bundled off to the works at historically low weights. That in turn means while a promising start to the year is as good a start to the year as can be hoped for, an adverse spring can still undo things. However, maybe if there is sufficient unused forage from winter perhaps farmers can take a drier than normal spring and still come out OK?

SNOOPY

Snoopy

11-08-2013, 01:19 PM

Very wary of major shareholders intention with PGW.
I believe it is in his best interest to use PGW as a cash cow.
What is best for minority shareholders is to pay off debt.
Unfortunately it is also in the majority shareholders interest to have share price decline ready for a full take over and I believe Mr Markets will not like divi payments instead of debt payment.

Will be watching this one carefully.

Only a couple of days to wait for the result now. Just to put things in context the declared results of PGW since it has been in its current form (FY2007) read like this:

$40.0m, $73.2m, -$66.4m, $23.3m, -$30.7m, $24.5m, FY2013?

It sums to a net $63.9 earned over the last six years. If the 2013 result is as bad as I am expecting, the FY2013 goodwill write-off will probably extinguish all profits that PGW has made since the start of FY2007. Of course a goodwill write off is historical and will not affect cashflows from here on in. Nevertheless if I am right, to not earn a single dollar since the modern PGW was formed is a damning indictment on the broken dreams of past management.

My main fear on Tuesday is that PGW will be once again in breach of their banking covenants. The banks could then force them to sell assets, possibly the seeds business, which has decades of intellectual capital tied up, for a bargain price. Perhaps they will get away with unloading only the Australian arm which is where the trouble of recent years has been brewing? But how much money will they get for a loss making business?

One thing I do know is whatever happens to the PGW share price, Agria will not be making a full takeover offer as they are fully occupied keeping the receivers away from their own door. They have already consolidated PGW into their accounts and have nothing to gain from holding more PGW shares, even if they could afford it.

SNOOPY

discl: holding PGW, but looking to the future, not the past!

Snoopy

11-08-2013, 02:43 PM

My concern is that they payed a divi last time when it should have been used to pay down debt.

This divi was clearly declared for the benefit of the major share holder and not for the company as a whole.
You are right if this was to continue PGW will be forced by the banks to fire sale some assets.

This in turn will not be good for PGW share price but may make it more attractive for a full takeover. In my opinion this would take at least 2 years to happen and when the share price has fallen to 18 - 20 cps the majority shareholder will step in at 35 cps and the market place will react like he is a night in shining amour when the truth is he is one of the reason the company is going backwards because he has used PGW as a cash cow.

The problem is Snapiti, without the backing of New Hope or Ngai Tahu or both, Alan Lai simply cannot launch a takeover because I believe the Agria credit card is already maxed out (the Agria FY2013 accounts when published will prove or disprove my assertion). However, if New Hope (for example) does bring in more capital, that will reduce Agria's share of the PGW business below 50.01%. That in turn means that the PGW shares they do hold will have to be 'marked to market' down from 60c to 32c. IMO that would destroy what remains of the capital base of Agria and trigger a receivership of Agria. Alan Lai will do anything to prevent that happening. Hence my belief that neither New Hope nor Ngai Tahu will be called on for more capital, and a PGW full takeover is off the agenda.

SNOOPY

Snoopy

11-08-2013, 02:47 PM

snoopy you need to move on from the supplement food issue, like I said most supplement feed is fed out over winter weather it is mild or not and just means your stock are in better condition.
So there will not be extra left over for another drought.

OK I accept your expert opinion Snapiti. The thing that made me ask the question was that I have seen a couple of fodder stashes in barns that looked untouched in my travels around rural Canterbury in the last couple of weeks.

SNOOPY

winner69

12-08-2013, 04:40 PM

Good luck to holders tomorrow, hope expectations are met and there's good news ahead.

Disc: not holding, undecided on buying in for now, but a 28c buy price would probably kick star me into action.

PGW history of meeting expectations is pretty dismal

But this time WILL be different eh. ... I have faith in John and George ....good blokes

Jim

12-08-2013, 05:39 PM

PGW history of meeting expectations is pretty dismal

But this time WILL be different eh. ... I have faith in John and George ....good blokes

Hopefully a big surprise and not a big disappointment

Queenstfarmer

12-08-2013, 06:04 PM

Look on the bright side. ..we're all expecting bad news??

winner69

12-08-2013, 07:25 PM

George isn't there any more. It's John and Mark. From the Beatles to the Bible.

Forbarr reckon that EBITDA should come in at $43m, which is slightly under the mid expectations of the $40-$48m EBITDA band given previously.

George was in charge during the time this great result covers

Supposedly doesn't actually leave until 31/8 though I presume he using up his annual leave or something ... or maybe teaching Mark a few tricks

$40m ebitda doesn't end up with much profit after tax

winner69

12-08-2013, 08:02 PM

Same brand of calculator Balance and I use there Sparky? I reckin something $19.5-$20.0m

Hoop

12-08-2013, 08:06 PM

Look on the bright side. ..we're all expecting bad news??

I'm depending on that sentiment:) .... smaller bad will be very good I hope...Unfortunately I ODed on the happy pills went insane and dabbled small time into some NZX stocks on friday..reason?.. to excite my boring life on the sidelines.... I have no idea why I picked PGW as one stock (32c) , it has tight bollinger bands on a flatline chart so the price is going to go either up or down...

My plan is,,,,,,,,,,,, sell if it goes up ...... sell if it goes down ........if the unexpected happens and it stays flatlined I'll have to take a day or two to think what to do next... (slow thinker:p)

Wolf

12-08-2013, 08:27 PM

Im new to investing. For some reason i bought PGW at 0.450.
Not much thank god just $2000 worth and am trying to decide whether i should just cut my loses and get out.

Minerbarejet

12-08-2013, 09:01 PM

I'm depending on that sentiment:) .... smaller bad will be very good I hope...Unfortunately I ODed on the happy pills went insane and dabbled small time into some NZX stocks on friday..reason?.. to excite my boring life on the sidelines.... I have no idea why I picked PGW as one stock (32c) , it has tight bollinger bands on a flatline chart so the price is going to go either up or down...

My plan is,,,,,,,,,,,, sell if it goes up ...... sell if it goes down ........if the unexpected happens and it stays flatlined I'll have to take a day or two to think what to do next... (slow thinker:p)
Have you considered perhaps going to the movies - also could I have the name of those pills:)

Minerbarejet

12-08-2013, 09:11 PM

Im new to investing. For some reason i bought PGW at 0.450.
Not much thank god just $2000 worth and am trying to decide whether i should just cut my loses and get out.
Welcome to sharetrader, Wolf, you have come to the right spot. We have a Moose here as well. A lot of good information available here. Sounds as if you are not heavily involved as yet. Do you not know the reason for buying PGW?:)

Wolf

12-08-2013, 09:22 PM

Thanks :). I really just got sucked into the "restructured company image" and made the mistake of looking at their history. I thought releasing dividends would raise the share price which it did initially, but i bought in after that had already been accounted in the share price i think.

Minerbarejet

13-08-2013, 08:02 AM

False Profit

13-08-2013, 08:22 AM

I bought in at 35c. Was looking at increasing my holding too but currently nuts up in dil...

winner69

13-08-2013, 08:37 AM

Fantastic result ... George did a good job before he left and John has steered the ship well

And all those divies ... wow wow

ANd Snoopy was right about all those writedowns ... but what the heck they are not cash. Shareholders just own a smaller company

Heck next year we should see $70m ebitda at least

And shareprice 40 cents by end of week methinks

winner69

13-08-2013, 08:51 AM

winner69

13-08-2013, 08:57 AM

Geez Winner - did we read the same announcement? LOL

EPS of 1.9cps ($14.6m divided by 755m shares) looks unimpressive to me.

As Snoopy said before, it looks like the Aussie company buys were a failure.

At least the new guy gets to clear decks.

Just read the positive spin in the main announcement .... and maybe using the sharetraders rose tinted glasses

Minerbarejet

13-08-2013, 09:53 AM

only one nervous nellie sofar at 31 with good support at 32 - not a bad result considering what they have been through.

Hoop

13-08-2013, 10:07 AM

I'm depending on that sentiment:) .... smaller bad will be very good I hope...Unfortunately I ODed on the happy pills went insane and dabbled small time into some NZX stocks on friday..reason?.. to excite my boring life on the sidelines.... I have no idea why I picked PGW as one stock (32c) , it has tight bollinger bands on a flatline chart so the price is going to go either up or down...

My plan is,,,,,,,,,,,, sell if it goes up ...... sell if it goes down ........if the unexpected happens and it stays flatlined I'll have to take a day or two to think what to do next... (slow thinker:p)

Hmmm looks like I have to think about it....damm I hate trying to think.

Hoop

13-08-2013, 10:16 AM

sell hoop sell help drop the price to 29 cents
:)
Whataya wreckin Snapiti..... A sell order for 1 share at 28 .... to create a shake out :D:D

Minerbarejet

13-08-2013, 10:21 AM

Hmmm looks like I have to think about it....damm I hate trying to think.
Me too - my brain,such as it is, hurts from trying to follow this stock. Maybe you could get some more happy pills with the dividend.:)

percy

13-08-2013, 11:12 AM

All in all not too bad considering the drought.
Mr Lai gets to bleed the company for a divi (should be used to pay down more dedt).
Given the strong outlook for farmers over the next 6 months me thinks I will hold my shares through till the next announcement(6 months).
Well put my order in for some more shares if Mr Markets lets the share price go below 30cps on the back of this result.

Sir John Anderson and George Gould have the company in good shape.We find ourselves "well positioned."

biker

13-08-2013, 11:53 AM

Not as bad as I was expecting. I'm in at 32c

winner69

13-08-2013, 12:36 PM

Quick skim thru the accounts ...

- 47m debt due this year (30m last year)
- 40m net cash flow from operating activities (60m last year)
- raised 18m in new debt, paid back some 50m
- interest & finance cost down by 8m
- earnings per share obfuscated - but down

IMNSHO overvalued (even at 28c!)

W69, care to comment on those margins again?

Need I belg ....nobody listens

Lizard

13-08-2013, 01:48 PM

I actually feel more positive about the potential for share price growth from here. However, it is still hard to see more than 20-50% in it, so not alot to get excited about.

Snoopy

13-08-2013, 01:59 PM

Edit: Is anyone worried about the note at item 15 - that PGW breached their overdraft (temporarily, it is noted)? That worries me, to be honest. Good companies don't do that.

I think that in general PGW have had a decent go at paying down debt in general this year Sparky.

Overdraft facility was $12.34m. Actual overdraft was $12.463m. So we are talking a difference of $123,000, that the directors lead us to believe will be easily rectified. I am prepared to cut Sir John a bit of slack here as we know how notoriously difficult cashflow from farming is to predict accurately. If they had other imminent debt problems that might be cause for concern.

Think of PGW as an OK company rather than a good company and I am sure you will come around to my point of view.

What did catch my eye was the bad debts written off under note 7: $2.111m verses $225k from last year. NPAT normalized was only $14.6m. That bad debts would have boosted earning by circa 10% if they had been held at the level of last year.

SNOOPY

Snoopy

13-08-2013, 02:10 PM

I'm new to investing. For some reason i bought PGW at 0.450.
Not much thank god just $2000 worth and am trying to decide whether i should just cut my loses and get out.

Wolf I have been investing a bit longer than you and my PGW shares owe me 45c as well. I see no reason to sell from here, as Agria on the register should see a steady steam of dividends headed our way. The very highly paid gardener, George Gould, I believe will be off the payroll this year. That should add a million or so to profits for FY2014 right there.

I am sure your investment in agriculture and specifically horticulture is exactly the place to be though. Here in Christchurch city the head gardener, a bloke named Marriott, is on $500k plus. Over at another Christchurch based company called Solid Energy the head gardener, a bloke called Elder is I think on close to $1m. So horticulture is I think, the money making industry of the future ;-P.

SNOOPY

Snoopy

13-08-2013, 02:27 PM

Do I detect an unnormal positive smooth/soft tone to your post Snoopy.
Can your lack of scathing about this latest report be a buy signal or did you just get lucky last night.

The main message that I have tried to give people over the last year Snapiti is don't pay too much for your PGW shares. I know that from bitter experience as I paid too much for most of mine. Unfortunately various shareholders on this forum seemed to suffer from 'irrational positivism' and determinedly did not learn from my experience.

PGW are the most recent shares that I have bought at 28c. If I was negative on PGW I wouldn't have bought those shares. NTA is currently 32c so I would rate PGW an accumulate on weakness at those price levels.

SNOOPY

winner69

13-08-2013, 02:47 PM

Wolf I have been investing a bit longer than you and my PGW shares owe me 45c as well. I see no reason to sell from here, as Agria on the register should see a steady steam of dividends headed our way. The very highly paid gardener, George Gould, I believe will be off the payroll this year. That should add a million or so to profits for FY2014 right there.

I am sure your investment in agriculture and specifically horticulture is exactly the place to be though. Here in Christchurch city the head gardener, a bloke named Marriott, is on $500k plus. Over at another Christchurch based company called Solid Energy the head gardener, a bloke called Elder is I think on close to $1m. So horticulture is I think, the money making industry of the future ;-P.

SNOOPY

Good one Snoopy

percy

13-08-2013, 03:51 PM

I actually feel more positive about the potential for share price growth from here. However, it is still hard to see more than 20-50% in it, so not alot to get excited about.

20%-50% gets me very excited.!! lol.

Food4Thought

13-08-2013, 04:32 PM

If you go talk to either PGW or Farmlands/RD1 staff about products... you will soon realize that the situation is comparable to asking a person at a Red Shed about their best recommendation on a fishing spot versus asking someone at your local hunting and fishing store... You pay for what you get, and PGW has a solid product range and a skilled staff base. I hope that Australian venture starts bearing some juicy fruit in the next couple of years... I wonder what stats are available on warm NZ winters and wet Australian summers...?

Wolf

13-08-2013, 05:25 PM

glennj

13-08-2013, 05:28 PM

I'm sure that the co-operatives have taken market share from PGW over the years. PGW would be a smaller operation now than their constituents Wrightsons, Fruit Fed Supplies, Pynes etc. once were. Farmlands have gone from strength to strength as have CRT and these operations have now combined. PGW are lucky that the CRT Farmlands co-op doesn't compete in livestock and some other areas!

My experiences differ from your friends snapiti and I've found and had farmers tell me that that the co-ops are better than PGW in the merchandise area for service, price and range of products. For specialist advice I'd deal direct with the company manufacturing the products e.g. herbicide, culvert pipes etc. rather than the sales people at the ag shops whose specialist knowledge is often limited and often tends toward what they have in stock. I currently have an account with CRT & find them very good on the service!

I'm holding a moderate number of PGW shares and have found their restructuring progress dissapointing. I'll hang in a bit longer but like belgy am now resigned to thinking earlier optimism may have been over done and that progress will be slow.

macduffy

13-08-2013, 05:55 PM

kiora

14-08-2013, 08:14 AM

I agree 100 % with this reason !!! Belg

kiora

14-08-2013, 12:35 PM

You'll have to work hard to convince me of even 20 per cent, Liz. Them co-ops will keep PGW exactly where they are for years to come and nothing the company management has planned or announced leads me to believe otherwise. (I really should have spent more time understanding PGW's competitive environment before buying.)

This one :)

winner69

14-08-2013, 01:36 PM

I don't hold any shares in PGW these days but as a former shareholder in Wrightsons - and Wright Stephensons then Fletcher Challenge (remember them?) before them - I take a casual interest in the company, waiting for an opportune time to invest, which never seems to eventuate!

Many years ago, I attended an EGM when Wrightsons sought shareholder approval to sell Wrightson Farmers' Finance to Rabobank. The company had endured one of those periodic hard years and selling the finance company seemed a sensible way out of their difficulties. Chairman, the late Sir Ron Trotter, presented a good case for the sale but he was opposed by several farmer shareholders who warned that losing the finance arm, with its seasonal financing of many farmers, would sever its links with its clientele who would then have no particular reason to stay with Wrightsons and would gravitate to the co-ops who could offer member rebates. They spoke with some passion but lost the vote and Rabobank bought the finance co.

It don't think that the company has ever recovered from this. The merger with PGG followed, as has the establishment of a new finance offshoot, but I sense that PGW's day in the sun has passed and that the old "stock and station" companies have been well and truly supplanted by the co-ops.

Duncan Mac once told us there is no money to be made from farming ..until you sell the farm.

I believe him ...except that the bankers and finance guys seem to do ok on the way through. But PGW not even involved in that side of agriculture now....bugger

They just one big shop and have lots of people who help farmers sell things. Just like any retailer or commission agent ...except their customer base is mainly farm based. Simple as but not a hugely profitable model really.

My grandad always bought his tractors and cars from a Wrightsons something. I don't think PGW even sell these things now. So as Mcduffy says what's the thing that ties farmers and PGW together ...ongoing loyalty stuff?

Steady as she goes svthe best PGW can ever do .....even if things return to 'normal'

And that what I don't like about the PGW ...they are in a fickle market .....but PGW don't have a resilient business model'

percy

14-08-2013, 04:35 PM

Duncan Mac once told us there is no money to be made from farming ..until you sell the farm.

I believe him ...except that the bankers and finance guys seem to do ok on the way through. But PGW not even involved in that side of agriculture now....bugger

They just one big shop and have lots of people who help farmers sell things. Just like any retailer or commission agent ...except their customer base is mainly farm based. Simple as but not a hugely profitable model really.

My grandad always bought his tractors and cars from a Wrightsons something. I don't think PGW even sell these things now. So as Mcduffy says what's the thing that ties farmers and PGW together ...ongoing loyalty stuff?

Steady as she goes svthe best PGW can ever do .....even if things return to 'normal'

And that what I don't like about the PGW ...they are in a fickle market .....but PGW don't have a resilient business model'

Life is very simple;if you give people what they want,you will get what you want.
In PGW's case they service the rural community.If they give that community what they want when they want it they will do well.
When rural community does well so will PGW.
Simple.!

Agrarinvestor

14-08-2013, 09:17 PM

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 ?

I only replied on my own posting, for showing that these write downs were expectable, even from a non farming expert, and far away from New Zealand. If shareprice of Agria is falling i will add shares to my 11k.

Here are th expected write downs. Was the release after market ?

For the fiscal year ended June 30, 2013, PGW reported operating earnings before interest, tax and depreciation (Operating EBITDA) of NZ$45.8 million and a net loss of NZ$306.5 million. The net loss reported by PGW includes a goodwill impairment charge of NZ$321.1 million. This goodwill was primarily due to an accounting entry from the 2005 merger of PGG and Wrightson. A number of factors, including PGW's share price, slower than expected recovery and a range of external variables, led the board of directors of PGW to conclude that a write-down of historic goodwill was appropriate. Excluding the impact of this non-cash charge, PGW would have reported net income of NZ$14.6 million. The goodwill write-down has no impact on PGW's operations or cash flow. PGW's fiscal year operating cash flow was NZ$39.3 million.

http://finance.yahoo.com/news/agrias-zealand-listed-subsidiary-pgg-123000728.html

winner69

17-08-2013, 04:49 PM

Raining and bored as

With PGW finally realising that there company wasn't really worth $577 million and writing things off so shareholder equity is now only $256m some financial ratios now reflect reality and worth while looking at again. (Note shareholders have put in $604 million over the years so over the years the company has lost/wasted or whatever you want to call it $350 odd million - love the way they describe Retained Earnings being 'accumulated undistributed profit' ... whoops forgot to use the word losses)

So shareholders have $256m invested in the company ..... and isn't it amazing the market values that at $250m. Some might say the market is pretty clever doing that - a price book ratio of 1

Market Value Added proponents say this means that PGW is at least going to cover its cost of capital in the future. (Theory: Market Value Added is Market Cap - Equity and equals the NPV of future excess returns over the cost of capital)

PGW return on invested capital last year was 5.7% - so currently not really covering the cost of capital (equity and debt). I didn't bother including in debt the $20m they owe the underfunded defined benefit scheme.

So in simple terms the market (by pricing PGW at book value) is telling them to pull their socks up and make more money. We have priced in improved performance.

How much more improvement .... if WACC is say 10% then the shortfall last year was $23m of ebit - 83% more than $27m achieved

Maybe PGW aren't very risky from an equity perspective and the equity premium should not be so high and ACC at 8% is fairer - then another $13m odd last year would have done it

Heck some big growth numbers needed here to justify the current shareprice on a economic value added basis. Almost beyond record profit levels that Norgate made. Lets hope that conditions are better than normal over the next year or so

Or maybe there is hefty takeover premium built into the price!!!

winner69

17-08-2013, 04:59 PM

Really really bored so forgive me if I recalculate the Z-Altman score on the reality based balance sheet

Score is 1.96

The people on the internet say Your Z score of 1.96 is in the medium range. Though your company is out of crisis zone, it is mandatory to take precautionary steps and keep tab of the figures to avoid bankruptcy.

Seem a good description of the state of affairs to me .... keep a tab on things and hope for normal times this year ,,,, please no shocks like droughts or whatever ..... and you really have to sell those Heartland shares

No room for complacency here John and Mark ..... a couple of unforeseen shocks and back to shareholders for more dosh .... and they wont like that at all (esp the one who owns most of you)

winner69

17-08-2013, 07:18 PM

know how you feel. Have been crunching my value formulas all over the place as the rain hits the big glass window.

PGW comes up strongly as a value buy on the Graham 22.5 score.

(P/E X P/B must be <=22.5)

In PGW's case, thats 9.44 X 0.43 according to Google Finance. Nice and cheap.

The E is 1.9 cents (based on their $14.5m normalised NPAT) so PE is 17.2

Market Cap = Book Value now after the writedwons so P/B=1

So your Graham Score is 17.2 .... still <22.5 but as compelling as you thought

winner69

17-08-2013, 07:30 PM

I think Mr Graham would be buying PGW up to 38 cents based on his formula

Which really doesn't make much sense when he doesn't like a pe over 15 and at 38 PGW would have a PE of nearly 20. He obviously believes that a P?B ratio of 1 is the driver of this undervaluation, not the earnings

winner69

17-08-2013, 07:40 PM

Ah so the old normalised trick and forget about the bits that always seem to recur ..... you bet NO unusuals this year, of course not.Nno wonder punters are always disappointed they don't make as much money as the likes of Forbar say they should

OK bowing to superior knowledge than Ben would buy up to 50 cents on his formula

I would say good luck to him ... but what the heck would I know

winner69

17-08-2013, 07:44 PM

Would Ben apply a discount to his 22.5 Formula .... the 50 cents

janner

17-08-2013, 09:01 PM

[QUOTE=

Hmm. I dunno. I think I might grab some cider.[/QUOTE]

Make sure it is Cider.. Not Scrumpy. You will have already given yourself a headache with crunching those numbers.

winner69

17-08-2013, 09:03 PM

....... I think I might grab some cider.

Good old cider eh .... when I was young there wasn't much choice outside of Rochdale but a bottle of that was much cheaper than wine and slightly more expensive than beer but packed a lot more punch (in other words got you pissed faster and cheaper and less bloated). It was a value investment, best return for cheapest price ha ha

Mind you you cant beat the real stuff down Somerset way .... that's real bad for you

Occasionally have a Old Mout - the Scrumpy stuff, I am old fashioned but they seem to blend all sorts of fruits into the cider as well .... probably a 4% job for the sissys

What sort you got in the fridge tonight

winner69

17-08-2013, 09:07 PM

Just as I finished that dived under the table with another quake ... 5.9 they say

If it wasn't so late might have had a cider to settle the nerves

janner

17-08-2013, 09:10 PM

Good old cider eh .... when I was young there wasn't much choice outside of Rochdale but a bottle of that was much cheaper than wine and slightly more expensive than beer but packed a lot more punch (in other words got you pissed faster and cheaper and less bloated). It was a value investment, best return for cheapest price ha ha

Mind you you cant beat the real stuff down Somerset way .... that's real bad for you

Occasionally have a Old Mout - the Scrumpy stuff, I am old fashioned but they seem to blend all sorts of fruits into the cider as well .... probably a 4% job for the sissys

What sort you got in the fridge tonight

Being from Devon.. and having ridden the horse around and around in circles ( Hmm that might explain much ) driving the Cider press..
I can tell you Old Mout is like drinking Moet.. compared to real Scrumpy..

winner69

18-08-2013, 09:10 AM

I had some Bulmers, a Gisborne sourced drop. It was nice, but I agree Old Mout is superb.

Back to PGW - I'm not sure I've seen enough to leap back in again, but agree that at the right price it becomes very tempting.

I don't think you will get that right price sparks

PGW has enough supporters now which will keep the price up ...priced at level which reflects what should happen

But what should and what actually does happen is often different things with PGW

Snoopy

18-08-2013, 01:04 PM

know how you feel. Have been crunching my value formulas all over the place as the rain hits the big glass window.

PGW comes up strongly as a value buy on the Graham 22.5 score.

(P/E X P/B must be <=22.5)

I think it is probably best if you use this Graham score as a screen, as Graham intended. What this formula tells me is that Graham makes no distinction between different PE ratios and different price to book ratios across different industry groups. When using this formula you have to think about whether PGW justifies an 'average' PE ratio. I would argue that due to the cyclical nature of farming it does not. Also PGW has traded around the price to book ratio for a considerable period in its history. That is more than enough time for outsiders to buy into the company and make those lazy assets work hardrer. Craig Norgate couldn't do it, and neither so far has Alan Lai with his five year involvement. I would take this as evidence that working those lazy assets harder is more difficult than we observers think.

The problem I see with reverse engineering the formula, as Sparky has done, to derive a shareprice for a given PE and Price to book ratio, is that this approach embeds the assumption of a 'normal' PE and a 'normal' Price to Book ratio. I would argue that these normalised assumptions do not apply to PGW, so the Sparky formula will give potential investors a wrong (overoptimistic) answer on PGW share price value.

SNOOPY

Snoopy

18-08-2013, 01:14 PM

I actually feel more positive about the potential for share price growth from here. However, it is still hard to see more than 20-50% in it, so not a lot to get excited about.

As my alter ego Percy has already said, 20% to 50% is quite enough to get me excited in this climate of full valuation just about everywhere you look. But the thing that appeals to me about PGW having offended so many new investors to the company already is that it is hard to imagine a scenario where the PGW share price will go significantly lower as there is no lower sharemarket shelf than the one labelled 'utter contempt'. Investor protection on the downside is just as important as looking at the potential upside!

SNOOPY

Snoopy

18-08-2013, 01:24 PM

EBITDA at high end of expectations so not a disappointing result ..... but at the end of the day no matter what Percy has said about John and George for all things they are involved in and their market position it really is a pathetic result.

Not much left at the end of the day after selling 1.1 billion of stuff

Another thing I always worry about companies that feel they need to report ebitda as Operating Profit .... isn't things like interest a reality of life?

I have always found that when I have an interest bill I have to pay it as well Winner. My preferred method of analyzing companies is net profit after both interest and tax has been paid, on a divisional basis. Having updated my spreadsheet for the FY2013 results, here is the picture it gives me.

That column on the right represents divisional earnings in millions of dollars, but I haven't figured out how to get the 'm' behind the number yet. To me there are three clear messages in this divisional profit sketch.

1/ Agriservices in total had a great year, much better than I expected.
2/ The light blue Agritech continues in what seems to be an unending slump.
3/ The South American growth engine has stalled, which is very disappointing.

SNOOPY

Snoopy

18-08-2013, 01:35 PM

To me there are three clear messages in this divisional profit sketch.

1/ Agriservices in total had a great year, much better than I expected.
2/ The light blue Agritech continues in what seems to be an unending slump.
3/ The South American growth engine has stalled, which is very disappointing.

One thing I forgot to mention was that the biggest driver of 'growth' was actually the lower interest bill. Net interest payable dropped from $13.835m to $6.102m. Unfortunately with Alan Lai siphoning off as much cash as he can to keep cornerstone shareholder Agria afloat, this biggest driver of 'growth' has now stalled as well.

SNOOPY

winner69

18-08-2013, 01:43 PM

Which column has got seeds in it Snoopy

Must have boosted whatever one it is in

Snoopy

18-08-2013, 01:50 PM

Which column has got seeds in it Snoopy

Must have boosted whatever one it is in

Seeds is part of Agritech Winner. It has gone from star performer in FY2008 to perennial non-performer.

SNOOPY

Snoopy

18-08-2013, 01:53 PM

Seeds is part of Agritech Winner. It has gone from star performer in FY2008 to perennial non-performer.

I know that correlation does not necessarily imply causation, but I thought this more detailed examination of Agritech over several years does tell a story. The graph shows that while overall revenue is on a weak growth path, revenue from Agritech Australia is on a much stronger growth path. Unfortunately this strength seems to have come from buying a significant number of barely profitable or unprofitable bolt on acquisitions in Australia. The result has seen a sharp fall off in profits overall from the days when PGWs biggest income stream in Australia was NZ developed turf mix. Now the whole Agritech division is a mess and a far cry from the Monsanto of the southern hemisphere that Alan Lai envisaged when he seized control.

SNOOPY

P.S. On 1 August 2012 the Group entered into an incorporated joint venture in New Zealand, 4Seasons Feeds Limited. This joint venture company operates in the sale and distribution of
molasses liquid feed. The transaction involved the Group divesting certain assets including intangibles from Agri-feeds into the joint venture company 4Seasons Feeds Limited to create a supply chain to import, transport and distribute molasses through the former Agrifeeds channel.

Under the terms of the agreement Agri-feeds manages the operations of the joint venture company in return for a management fee. A loss on sale of assets of $2.9 million
was incurred with $2.8 million of this loss pertaining to a loss on the sale of goodwill. This JV entity is an associate and is accounted for using the equity method.

This has affected the revenues of Agritech, by transferring those earnings to earnings via an associate, 50% owned 4Seasons Feeds Limited. However I am not clear if the Agrifeeds division of Agritech no longer exists, or that declared on the books is just a remaining rump of the old whole business.

bulltrap

18-08-2013, 02:36 PM

Or maybe there is hefty takeover premium built into the price!!!

I've been mulling this one over, especially since I'm kicking myself for bailing too soon on FPA last year. (I was in for a full takeover, but once the share price recovered and levelled off I figured it wasn't happening - wrong!)

If I were strategizing a foreign takeover of a local company, my #1 rule would be this: Make sure the locals have skin in the game.

With the Ngai Tahu partnership and 50% non-controlling shares outstanding (an unfathomable percentage of which are assumed to be locally-owned), I'd say Agria have this spot-on already. Any more could trigger a firestorm of xenophobia in the local media and in their client base (Crafar farms anyone??).

So on that basis, I've recently thrown in the towel on what I hoped was another value/takeover play.

But in hindsight, what was different for FPA? Well, the #1 rule above would still apply, unless you could determine that the company wasn't the subject of nationalistic pride anyway. New Zealand is after all, in its own view, a '100% pure' agriculture producer, and someone else can take care of smokestacks and churning out widgets thanks.

winner69

18-08-2013, 03:51 PM

I didn't reverse engineer the graham 22.5 formula to get the 50 cents for PGW

Just used this formula ....easy peasy

http://en.wikipedia.org/wiki/Graham_number

I see sparks typed it in last night ...but punters can read all about fair value now

It's 50 cents ....BUY BUY BUY

Under Surveillance

18-08-2013, 04:03 PM

One thing I forgot to mention was that the biggest driver of 'growth' was actually the lower interest bill. Net interest payable dropped from $13.835m to $6.102m. Unfortunately with Alan Lai siphoning off as much cash as he can to keep cornerstone shareholder Agria afloat, this biggest driver of 'growth' has now stalled as well.

SNOOPY
I was amused to note the speed with which PGW is getting the final pay out into the hands of Lai (and other shareholders). PGW goes XD on 28 August and the pay out is made on 13 September.
By way of comparison, OIC announced their interim result on the same day PGW announced their final result. OIC goes XD on 13 September and pays out on 1 October. Clearly OIC's majority Asian owner is less desperate for cash than PGW's.

winner69

18-08-2013, 04:06 PM

Went up the gully earlier and planted 2 little trees - little rata

I blessed both ...called one Percy and the other Snoopy

I planted Percy on the north facing slope and told the tree he represents growth and had a high PE. I planted the other on the south facing slope and told him he represented solid analysis and had a low PE.

Thought I better not plant them close together ..ha ha

I'll keep on eye how each grows over the years ....will growth bias beat solid analysis?

Could be interesting because Percy (north facing slope) has the more favourable market conditions but I was nice to Snoopy and made sure he had a bit of shelter from the southerly gales that occasionally wipes out the odd tree so he could be protected from market shocks.

bulltrap

18-08-2013, 04:25 PM

You need money to buy a company. Agria don't seem to have that kind of coin for a full takeover.

Noted, and thanks for pointing that out along the way - I've been listening!

A carving off and takeover of AgriTech only wouldn't be a big surprise, but without adding a lot of value for existing shareholders (sell-off of finance arm sets a precedent for this). I wonder how much of the write-down (and hence loss) this year gets pinned on AgriTech? Looking the 2012 FY report, I'd guess around $210M!

Can anyone figure out what that makes AgriTech worth, from book and/or market perspectives?

(Back to my #1 rule, it comes down to perception. Locals should be happy if just the retail and services companies are part locally-owned, and could care less about who owns the technology - never mind that the 'local' part might just be a ticket-clipping operation.)

percy

18-08-2013, 05:05 PM

percy

18-08-2013, 05:48 PM

I hope snoopy and percy know traditionally when a farmer plants a tree and give's it a name they christen it by urinating over it.

Snoopy and I are very fortunate that Winner69 had a few good {Bulmers?} ciders last night,so a bit of cider pee will give us both a good start.!!! lol.

tim23

18-08-2013, 06:43 PM

If they can maintain 3c per share dividend its 9% net yield, i like that.

blakecb

19-08-2013, 02:53 PM

Is it just me or does this stock look like it's about to make a move based on the latest SSH?

Minerbarejet

19-08-2013, 04:05 PM

Heres a good sign with the CEO buying up.

winner69

19-08-2013, 04:06 PM

Is it just me or does this stock look like it's about to make a move based on the latest SSH?

As they say a good sign when the CEO fronts up with a few weeks pay to buy shares

Must be about to make a move

50 cents her we come

winner69

19-08-2013, 04:12 PM

He did have 173k before he came CEO as well ....what a good guy

blakecb

19-08-2013, 06:32 PM

go you good thing.
me thinks if it breaks through 35cps it will go real close to 40cps real fast.
what do the chartist say

Yeah that's roughly what I reckon, except I think it just needs to break above 34cps. I became an accidental owner today. I saw the SSH and while I know it was for a relatively small parcel of shares as far as CEOs go, I think it may be just what the farmer ordered to push the stock on. It's quite a difficult stock to chart with the normal the indicators. This is my rough drawing of where things sit just with basic trendlines:
4730

Snoopy

19-08-2013, 06:57 PM

Altman Z test for PGW for FY2012

Now, Z= 1.2A+1.4B+3.3C+0.6D+1.0E

Where:
A= (Working capital/Total Assets)
B= (Retained earnings/Total Assets)
C=( EBIT/ Total Assets)
D= (Market value of Equity/Total Liabilities)
E= (Sales/Total Assets)

This is the first time I have done one of these 'Z' calculations, so you might want to check if I have got it right:

I have assumed 'Working capital' to be the amount of cash tied up in the business as a result of normal operations at the end of the financial year.

So WC= (Inventory+Biological assets)+(Trade Payables-Trade Receivables)= ($239.4m+$20.7m)+($228.1m-$207.1m)= $281.1m

So A = $281.1m/$980.5m = 0.287

----

B= (Retained earnings/Total Assets)

Now PGW have retained all of their earnings and not paid a dividend. So Retained earnings is equivalent to NPAT

$24.243m/$980.472m= 0.025

--------

C= (EBIT/ Total Assets) = $42.438m/$980.472m = 0.043

--------

D= (Market value of Equity/Total Liabilities) = (0.37 x 754.85m)/$402.698m = 0.694

--------

E= (Sales/Total Assets) = $1,336.8m/$980.472m = 1.363

-------

So putting everything together:

Z= 1.2A+1.4B+3.3C+0.6D+1.0E
= 1.2(0.287)+1.4(0.025)+3.3(0.043)+ 0.6(0.694)+1.0(1.363)= 2.30

A Z-score of lower than 1.8, in particular, indicates that the company is heading for bankruptcy. Companies with scores above 3 are unlikely to enter bankruptcy. Scores in between 1.8 and 3 lie in a grey area.

That means by Z-score PGW is far from a safe investment, and will require further work by management.

Altman Z test for PGW for FY2013

Now, Z= 1.2A+1.4B+3.3C+0.6D+1.0E

Where:
A= (Working capital/Total Assets)
B= (Retained earnings/Total Assets)
C=( EBIT/ Total Assets)
D= (Market value of Equity/Total Liabilities)
E= (Sales/Total Assets)

I have assumed 'Working capital' to be the amount of cash tied up in the business as a result of normal operations at the end of the financial year.

So WC= (Inventory+Biological assets)+(Trade Payables-Trade Receivables)= ($243.7m+$4.2m)+($222.7m-$217.8m)= $252.8m

So A = $252.8m/$619.5m = 0.408

----

B= (Retained earnings/Total Assets)

PGW have paid out more in dividends than they earned. So 'Retained earnings' is a negative value. The excess of dividends paid out over NPAT

-$22.65m/$619.5m= -0.0366

--------

C= (EBIT/ Total Assets) = $39.64m/$619.5m = 0.064

--------

D= (Market value of Equity/Total Liabilities) = (0.34 x 754.85m)/$363.4m = 0.706

--------

E= (Sales/Total Assets) = $1,131.8m/$363.402m = 3.114

-------

So putting everything together:

Z= 1.2A+1.4B+3.3C+0.6D+1.0E
= 1.2(0.408)-1.4(0.0366)+3.3(0.064)+ 0.6(0.706)+1.0(3.11)= 4.18

A Z-score of lower than 1.8, in particular, indicates that the company is heading for bankruptcy. Companies with scores above 3 are unlikely to enter bankruptcy. Scores in between 1.8 and 3 lie in a grey area.

That means by Z-score PGW is now out of danger of going bankrupt. Rather different to the Winner result on post 3410. Did I make a mistake?

SNOOPY

Snoopy

19-08-2013, 07:34 PM

Senior Debt Coverage Ratio = (senior bank debt)/EBITDA

This had to be reduced to under 3 before any excess cashflow becomes available for distribution. Using the figures at the end of the FY2012 financial year, I can calculate this figure as it stood on 30th June 2012.

SDCR= ($29.709m+$111.500m)/ $50.761m = 2.78

If the SDCR is under 3.0 but over 2.0, this means the banking syndicate will allow 50% of PGW excess cashflow to be paid out. However, you will note that once all of the FY2012 profits have been booked the SDCR is only just under 3. That means it is unlikely that any distribution to shareholders would have been allowed up until 30th June 2012.

Last year I did this under post 2178 (above)

Senior Debt Coverage Ratio = (senior bank debt)/EBITDA

This had to be reduced to under 3 before any excess cashflow becomes available for distribution. Using the figures at the end of the FY2013 financial year, I can calculate this figure as it stood on 30th June 2013.

SDCR= ($47.702m+$62.000m)/ $45.797m = 2.40

If the SDCR is under 3.0 but over 2.0, this means the banking syndicate will allow 50% of PGW excess cashflow to be paid out. Thre is a significant improvement from FY2012, but the SDCR is still within the 2-3 range. That means it is unlikely that more than 50% of profits will be paid out to shareholders. However, Alan Lai must have twisted the banks arms as it looks like 100% of profits are being paid out.

SNOOPY

winner69

19-08-2013, 08:53 PM

Snoopy

20-08-2013, 09:23 AM

Snoopy - I think Mr Altman uses the Retained Earnings number on the balance sheet. This is the accumulated Retained Earnings over time, not just for the current year as you have used

Rationale of that ratio is twofold. One being to see if borrowings fund growth and the other an indication of the long term profitability of the company. In this case PGW gets penalised on the Z Altman Score because of its long tradition of losing money (or not making very much), in other words if push comes to shove how would PGW extract themselves from a sudden tight situation.

And just remember its just a screening tool and a load of bull**** .... but one that is used by real lenders of money (along with other ratios)

Just a screening tool as you say, so no point in getting too worked up about it. However Winner, it looks to me as though there is a conceptual inconsistency in the Altman Z formula as highlighted by this PGW result.

$300m in losses casts a very long shadow into the future. PGW will take ten years or more to eradicate that cumulative earnings deficit. So another way of interpreting Altman in the PGW case is to say.

"Don't invest in this company until that one off loss has been erased by positive earnings"

In the case of PGW that means 'avoid investing' for ten years, all because of this one off 'mistake' of recognizing all that goodwill with the merger of Pyne Gould Guinness and Wrightson in 2006. IOW for a decision taken in 2006, you should not invest until 2023! Eighteen years is a very long shadow to cast, when all the other metrics that make up the ALTMAN formula (sales, ebit, market value of equity and working capital) are measured on a single year basis.

I am inclined to think that by just using the current years retained earnings, and looking at the annual trend in this modified Altman statistic rather than going for the long shadow effect that Altman is suggesting, I will get a far more useful set of figures. Maybe a call to that Altamn guy is in order? What do you think?

SNOOPY

winner69

20-08-2013, 10:55 AM

Snoopy ....we just need to look at the trend ...is the z score getting better or not and we can't really do that until next year can we as this year was really the starting point after all the write downs eh to give a more real picture of what shareholder funds are. Just like old ROE numbers are useless. The point that Altman makes is that retained earnings does say something about how the company operates and is a sort of proxy for long term performance ...in this case years of underperformance which would worry a lender ( and remember this is a solvency test)

Good exercise but agree a bit meaningless at the moment.

question .....that $360m .....is what shareholders have lost over the years isn't it?

winner69

20-08-2013, 11:02 AM

Sparky ...yes Beinish is useful. Not to assess solvency but whether earnings are being manipulated

We did the Beinish thing on PGW a while ago and they were given the green light ....no signs of manipulation.

Then again when a company is in a steady state of poor performance (equilibrium almost) I don't think one would need Beinish to work out if the numbers were being fiddled.

I'd be more inclined to recheck the numbers using Beinish if PGW suddenly improved profits .....now there's a low blow

Snoopy

20-08-2013, 04:29 PM

Winner, thanks and I accept your correction for term 'B':

So WC= (Inventory+Biological assets)+(Trade Payables-Trade Receivables)= ($239.4m+$20.7m)+($228.1m-$207.1m)= $281.1m

So A = $281.1m/$980.5m = 0.287

----

B= (Retained earnings/Total Assets)

-$34.30m/$980.472m= -0.035

--------

C= (EBIT/ Total Assets) = $42.438m/$980.472m = 0.043

--------

D= (Market value of Equity/Total Liabilities) = (0.37 x 754.85m)/$402.698m = 0.694

--------

E= (Sales/Total Assets) = $1,336.8m/$980.472m = 1.363

-------

So putting everything together:

Z= 1.2A+1.4B+3.3C+0.6D+1.0E
= 1.2(0.287)+1.4(-0.035)+3.3(0.043)+ 0.6(0.694)+1.0(1.363)= 2.22

OK the above is quoted from post 2401, when Winner had to correct my same mistake last year. Looks like I am a bit of a slow learner with this Altman Z! Now I will incorporate Winner's correction of including all retained earnings on the books (not just this years normalised less abnormals and dividend paid) into the calculation.

Altman Z test for PGW for FY2013

Now, Z= 1.2A+1.4B+3.3C+0.6D+1.0E

Where:
A= (Working capital/Total Assets)
B= (Retained earnings/Total Assets)
C=( EBIT/ Total Assets)
D= (Market value of Equity/Total Liabilities)
E= (Sales/Total Assets)

I have assumed 'Working capital' to be the amount of cash tied up in the business as a result of normal operations at the end of the financial year.

So WC= (Inventory+Biological assets)+(Trade Payables-Trade Receivables)= ($243.7m+$4.2m)+($222.7m-$217.8m)= $252.8m

So A = $252.8m/$619.5m = 0.408

----

B= (Retained earnings/Total Assets)

'Retained earnings' is a negative value (in the case of PGW!) as displayed on the balance sheet under the 'Equity' header.

-$359.28m/$619.5m= -0.5800

--------

C= (EBIT/ Total Assets) = $39.64m/$619.5m = 0.064

--------

D= (Market value of Equity/Total Liabilities) = (0.34 x 754.85m)/$363.4m = 0.706

--------

E= (Sales/Total Assets) = $1,131.8m/$619.5m = 1.827

-------

So putting everything together:

Z= 1.2A+1.4B+3.3C+0.6D+1.0E
= 1.2(0.408)-1.4(0.5800)+3.3(0.064)+ 0.6(0.706)+1.0(1.827)= 2.139

A Z-score of lower than 1.8, in particular, indicates that the company is heading for bankruptcy. Companies with scores above 3 are unlikely to enter bankruptcy. Scores in between 1.8 and 3 lie in a grey area.

Altman Z is telling now me that things are worse than last year. Yet the only one of the five terms within the formula that has actually deteriorated is the one relating to retained earnings. The other four performance metrics have got better. The past is certainly casting an ugly shadow on PGW, at least as far as Mr Altman is concerned.

SNOOPY

winner69

20-08-2013, 05:08 PM

Nearly there snoopy except you have used total liabilities instead of total assets in E

Wil bring it back to about 2

Snoopy

21-08-2013, 10:00 AM

Nearly there snoopy except you have used total liabilities instead of total assets in E

Wil bring it back to about 2

Sigh! Why is it that the mistakes that are hardest to spot are those staring you right in the face? I will correct my attempt 2 rather than chew up webspace with another full iteration. Thanks Winner.

SNOOPY

winner69

21-08-2013, 11:30 AM

winner69

21-08-2013, 11:35 AM

Snoopy

21-08-2013, 05:23 PM

Just bear in mind the part with retained earnings in it is measure that reflects the company's age and earning power.

So why shouldn't this be a 'drag' on PGW when doing this exercise? Like saying once a dog always a dog ....or a leopard never changes it spots or whatever the phrase is

Why is PGW not a dog? I think if you look carefully enough all companies have doggy edges.

Captain Craig shaped the PGW ship to conquer the world, but unfortunately ran into the GFC iceberg. By that stage Captain Tim was all set to come on board but coastal cruising didn't suit his global ambitions. So he became PGWs first highly paid onshore gardener. Then it was Captain George who got the job of cleaning the ship up. Everything ship shape and SS PGW is all ready for a new start he reports to Admiral Sir John. Job done George joined the onshore gardening elite. But as soon as successor Captain Mark came on board, what does he find? A $300m skeleton in the closet! Maybe George should have listened to his cleaners/auditors after all?

All captains have come on board with only the best intentions, and now there are no skeletons left on the ship manifest - goodwilling. So PGW no longer a dog, because there are no more bones to gnaw on.

But whether the SS PGW is really ship shape or not, one thing is certain. Somewhere within a a gangways swagger of the PGW home port, there are a couple of very impressive gardens....

SNOOPY

Snoopy

23-08-2013, 04:02 PM

Snoopy ...we always knew PGW were pulling themselves with the value of the company in the books eh ..... Shareholders never really owned $600m company did they.

To show things are actually better and in case you want to do this exercise again next year why not pretend that the massive write down happened in 2012 and so had the large retained earnings back then.

Comparing apples to apples then and we can monitor a real trend.

Winner, I have this vision of the distant future where you are wheeled out from your retirement village to get your 100th birthday telegram from King William, whereupon a nurse thrusts a J-pad and holographic pencil in front of you and says.
"All right Mr Winner, time for you to do your annual Altman Z calculation on PGW."

What I was considering, is that given Mr Lai's intention to milk PGW for all the dividends he can (IOW no retained earnings for PGW into the future, so we are stuck with that $359m accumulated loss forever) what kind of a scenario could I imagine where Mr Altman is satisfied that PGW is OK? Or are we destined to carry out this Altman Z dodgeeness rating calculation forever?

Taking a leaf out of Sparky's book I have reverse engineered some of those Altman factors to find out.

The sum we need to lift the Altman rating to 3, the safety zone is 0.8604. If we are to get this factor based on a single factor changing, here are the options.

a/ Sales Increase: ( Sales/ $619,508m ) = (1.827 + 0.8604) => Sales = $1,665m

b/ Share Price: (0.6)( SPx 754.8m )/ $363.402m )= (0.7062 + 0.8604) => SP = $1.27

c/ EBIT: (3.3)( EBIT/ $619.508 ) = ( 0.064 + 0.8604 ) => EBIT= $174m

On the face of things this doesn't look very likely. However, maybe a lesser improvement by all three Altman factors, might yield a possible scenario in which you could live your dotage in peace?

SNOOPY

Snoopy

23-08-2013, 04:29 PM

What I was considering, is that given Mr Lai's intention to milk PGW for all the dividends he can (IOW no retained earnings for PGW into the future, so we are stuck with that $359m accumulated loss forever) what kind of a scenario could I imagine where Mr Altman is satisfied that PGW is OK? Or are we destined to carry out this Altman Z dodgeeness rating calculation forever?

The sum we need to lift the Altman rating to 3, the safety zone is 0.8604. If we are to get this factor based on a single factor changing, here are the options.

a/ Sales Increase: ( Sales/ $619,508m ) = (1.827 + 0.8604) => Sales = $1,665m

b/ Share Price: (0.6)( SPx 754.8m )/ $363.402m )= (0.7062 + 0.8604) => SP = $1.27

c/ EBIT: (3.3)( EBIT/ $619.508 ) = ( 0.064 + 0.8604 ) => EBIT= $174m

On the face of things this doesn't look very likely. However, maybe a lesser improvement by all three Altman factors, might yield a possible scenario?

OK time to spread the increase needed in the Altman factor around. 0.4302 on sales, 0.3302 on EBIT and 0.1 on the share price. The shared calculation based on those adjustments works out as follows:

a/ Sales Increase: ( Sales/ $619,508m ) = (1.827 + 0.4302) => Sales = $1,398m

b/ Share Price: (0.6)( SPx 754.8m )/ $363.402m )= (0.7062 + 0.1) => SP = 69c

c/ EBIT: (3.3)( EBIT/ $619.508m ) = ( 0.064 + 0.3302 ) => EBIT = $74m

The question is, are the above company metrics in the plausible space of possible? I conclude, yes they are, but the company will have to work hard to achieve these figures. If we take the actual results from Agriservices from 2012 and 2013 and combine them with the actual results from Agritech from 2007 to 2009, then these are the kind of total EBIT and sales figures we might expect. Given that profitability would roughly double, then we might expect the share price to double and 69c is about twice the price of where PGW trades now. So this is good news, as relief form Altman is attainable. The problem as I see it is that what I have presented here is a 'perfect paddock' scenario. Quite a lot of executive sweat will have to be expended to achieve it. Nevertheless, there is hope.

SNOOPY

Snoopy

24-08-2013, 02:59 PM

Here's a good sign with the CEO buying up.

While generally I would agree with majorbarejet that CEOs buying shares in their own company is a good sign, in this instance I beg to differ. Don't get me wrong. I am very glad that Mark has seen fit to increase his holding, and I believe it does send the right signals to the market. My caution is because Mark has only just got his legs under the CEOs desk. I don't believe he has spent enough time at PGW to really get a handle on prospects going forwards. If some of his other senior officers bought I would take notice. If Mark himself bought more shares in six months time I would take notice. But Mark investing in 100k additional shares now, is I feel too soon to be taken as a signal for other investors.

SNOOPY

percy

24-08-2013, 03:35 PM

While generally I would agree with majorbarejet that CEOs buying shares in their own company is a good sign, in this instance I beg to differ. Don't get me wrong. I am very glad that Mark has seen fit to increase his holding, and I believe it does send the right signals to the market. My caution is because Mark has only just got his legs under the CEOs desk. I don't believe he has spent enough time at PGW to really get a handle on prospects going forwards. If some of his other senior officers bought I would take notice. If Mark himself bought more shares in six months time I would take notice. But Mark investing in 100k additional shares now, is I feel too soon to be taken as a signal for other investors.

SNOOPY

What we learn from Mark's buying, is that he has found out very quickly what good shape George has left the company in.!!! lol.

Minerbarejet

25-08-2013, 09:13 AM

I would take notice too -lets see if he does it again any time soon.

winner69

25-08-2013, 09:29 AM

yes, it's hardly a significant amount. I would be more impressed with $100k of shares, than $33k.

Dare I say its the kind of purchase he can make that's relatively risk free and satisfies the shareholders that he cares about the company?

Give him his due he has got a lot more than the Chairman seems to have

Snoopy

25-08-2013, 04:53 PM

3/ The South American growth engine has stalled, which is very disappointing.

Interesting looking at the milk production figures over the first six months of 2013.

http://www.clal.it/en/index.php?section=world_map_consegne_latte

Uruguay was down only 1.3% verses NZ down 12.74%. So the drought 'there' was not as bad as it was here. The problem was PGW sold more stuff in Uruguay in FY2013 vs FY2012, but hardly made any money on it. I am at a loss to explain why.

SNOOPY

blakecb

28-08-2013, 09:33 AM

For the last few days there have been many buyers lining up on the buy side, and this morning.... they are gone. Piece of news I have missed?

Minerbarejet

28-08-2013, 09:44 AM

Fund exiting their position on the bid side to free up money elsewhere as they realise those bids will not be reached? NZX cleaning up old orders from the board?
Might be using it to buy PEB

blakecb

28-08-2013, 09:54 AM

To answer my own question, it seems overnight the US markets have been spooked by the military action the US will undoubtedly take in Syria. Could be a painful day on the NZX

Hoop

28-08-2013, 10:00 AM

To answer my own question, it seems overnight the US markets have been spooked by the military action the US will undoubtedly take in Syria. Could be a painful day on the NZX

Yes Global markets were spooked by many factors last night.
USA positioned and able to fire a missile at Syria within seconds after the order to strike
Pre GE tapering effect having a bad effect on emerging countries
Pre GE tapering is effecting the outlook of Wall St's bull market
NZ$ dropped
Money heading towards safe havens.

PGW has gone exDiv

Going to be a bad day today on the NZX folks I think PGW depth buffer will make it a less votalile stock so probably whether today better than other more sensitive stocks

The BOWMAN

28-08-2013, 02:57 PM

Yes Global markets were spooked by many factors last night.
PGW has gone exDiv

PGW exDiv on coming Monday.

Under Surveillance

28-08-2013, 03:14 PM

PGW exDiv on coming Monday.

You must have something in your quiver the NZX doesn't know about, as they currently quote it as XD

Hoop

28-08-2013, 06:41 PM

You must have something in your quiver the NZX doesn't know about, as they currently quote it as XD
It takes 3 trading days to complete and register so if the ex date is the Monday, then 27th is the last trading day to get on the register for the divy

bulltrap

28-08-2013, 07:27 PM

For the last few days there have been many buyers lining up on the buy side, and this morning.... they are gone. Piece of news I have missed?

Orders are automatically cancelled when going ex-dividend, and naturally there's some inertia in re-entering them. Looks OK now.

Food4Thought

28-08-2013, 07:32 PM

...also with the relative uncertainty I do not think that the buy orders are soon to outstrip the sells... PGW was supposed to be my shooting star... ended up being a BIG BLACK HOLE... which sucks everything that comes into it's path...current price too high for uncertainty vs risk and reward

Minerbarejet

28-08-2013, 07:49 PM

Food4Thought

28-08-2013, 07:56 PM

buy some with your div - its the only way out.

Had to exit prior to Div... can't face the price going any lower, which it will, sorry to be the bearer of no good news

Hoop

29-08-2013, 02:12 PM

Had to exit prior to Div... can't face the price going any lower, which it will, sorry to be the bearer of no good news

...also with the relative uncertainty I do not think that the buy orders are soon to outstrip the sells... PGW was supposed to be my shooting star... ended up being a BIG BLACK HOLE... which sucks everything that comes into it's path...current price too high for uncertainty vs risk and reward

Are we talking about the same stock???

My take on this....There are many buyers and many sellers and they are steadfast in their actions , wanting their price and not willing to budge. Its been like this for weeks now.....This shows up on the chart (see below) as a share price stuck within S&R multi layered strata area ..... The DMI is showing a rare neutral probably due to the stickiness in the intraday movement range shown by very short candlesticks.
During this phase this stock shows low risk day by day trading ...
PGW is managing an upward bias within this stickiness...however the 35 cents Resistance line is slowly cutting across the upward channel rise ..this could be a slow motion worry but happily one has plenty of time to watch and see what happens before making a decision.
Good news is that it has gone 1c ex div and the depth is still full of buyers and sellers...so same ol same ol

I'm depending on that sentiment:) .... smaller bad will be very good I hope...Unfortunately I ODed on the happy pills went insane and dabbled small time into some NZX stocks on friday..reason?.. to excite my boring life on the sidelines.... I have no idea why I picked PGW as one stock (32c) , it has tight bollinger bands on a flatline chart so the price is going to go either up or down...

My plan is,,,,,,,,,,,, sell if it goes up ...... sell if it goes down ........if the unexpected happens and it stays flatlined I'll have to take a day or two to think what to do next... (slow thinker:p)

Still thinking :mellow:

Of interest is TA has picked up an unusual trading behaviour on the 13 of May 2013 a day before bad news was announced...note how the MA50 broke back with a lonely buy signal before it crashed...this is showing a fake out investing behaviour signature (either innocently done or deliberate)

http://i458.photobucket.com/albums/qq306/Hoop_1/PGW29082013.gif (http://s458.photobucket.com/user/Hoop_1/media/PGW29082013.gif.html)

iceman

06-09-2013, 11:34 AM

I hear PGW is the importer that has angered farmers by spilling black grass weed in Canterbury and are facing an investigation and possible penalties from MPI ! Hopefully it will all be contained very quickly.

http://www.stuff.co.nz/business/farming/agribusiness/9128804/Feared-black-grass-weed-seeds-spilled

Master98

06-09-2013, 01:22 PM

stevo1

06-09-2013, 01:30 PM

where do you hear from?

http://www.stuff.co.nz/business/farming/agribusiness/9134527/Invasive-weed-seed-importer-owns-up

Storm in an eggcup

Could easily get as much coming in on a backpackers socks

iceman

06-09-2013, 03:30 PM

http://www.stuff.co.nz/business/farming/agribusiness/9134527/Invasive-weed-seed-importer-owns-up

Storm in an eggcup

Probably correct stevo1. I certainly hope so and that they have it all under control. I am disappointed that this happens though, even though it seems to be coming down to just carelessness from an employee according to reports. But it shouldn't happen.

Blue Horseshoe

06-09-2013, 03:50 PM

Surely it's up to the truck driver to secure the load, shouldn't the onus be on the transport company.? As far as I know PGG Wrightson don't own any trucks, or do they.?

winner69

06-09-2013, 04:20 PM

Surely it's up to the truck driver to secure the load, shouldn't the onus be on the transport company.? As far as I know PGG Wrightson don't own any trucks, or do they.?

Ok let's blame everybody else but the company

A responsible company also takes responsibilities for contractors as well.

The last paragraph is a bit of puzzle -

The spill had occurred in July, a month after the consignment arrived at Lyttelton, and the delay in alerting the public was to allow time for any possible black grass seeds to germinate. This would be between November and April. "Its easiest to identify them when you can see the black seedhead," he said.

So we weren't going to tell everybody and hope it would all go away

Blue Horseshoe

06-09-2013, 07:02 PM

Maybe that's what fonterra should have done.

Snoopy

07-09-2013, 04:02 PM

The problem remains Belg that if the Agria shareholding of PGW is diluted below 50.01%, (such as in a capital raising where Agria's backers put in more money than Agria) then Agria will have to 'mark to market' 377m PGW shares in their accounts currently on the books at 60c to 30c (if that is the current market price). That means Agria will take a

($NZ0.6-$NZ0.3)x377m= $NZ113m

hit in their accounts.

Agria will not let their 'backers' out of their cage to allow this to happen.

When one uses the words' backers', the Chinese government backed 'New Hope' comes to mind. But how much help are they really willing to lend to Agria? As Chalkie pointed out, the New Hope shareholding has a guaranteed income agreement attached to it. And it also has a redemption clause that can be initiated at the behest of New Hope whatever the consequence to Agria. Despite being called a shareholding, this New Hope shareholding in Agria Asia has all the hallmarks of a loan. I would say that New Hope is a fair weather friend to Agria at best. If trouble strikes I expect New Hope to run for the exits.

Unless I am completely wrong about US accounting standards, and I may be, the muddy waters for PGWs controlling shareholder Agria will clear on September 11th our time. For on September 10th NYSE time Agria release their full year results. The huge right down that PGW has taken on their goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid. Let's see what trade offs 'twinkle toes' Lai has made to get out of this!

SNOOPY

Agrarinvestor

09-09-2013, 08:04 PM

Unless I am completely wrong about US accounting standards, and I may be, the muddy waters for PGWs controlling shareholder Agria will clear on September 11th our time. For on September 10th NYSE time Agria release their full year results. The huge right down that PGW has taken on their goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid. Let's see what trade offs 'twinkle toes' Lai has made to get out of this!

SNOOPY

>>goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid.<<

Maybe i have understood your statement wrong. IMO Alain Lai has forced PGW to make write downs on goodwill, because these goodwill is very old, years before Agria has taken over the leadership of PGW. These writedowns were predictable since march 2013 when AGRIA has anounced his own write Offs (60 Million US$ Land use rights). I think it is a good idea to clean the books.

Please have a look at You Tube and open your ears at 4:30:
http://www.youtube.com/watch?v=irmrmWBYs8Y

Snoopy

10-09-2013, 05:33 PM

>>goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid.<<

Maybe i have understood your statement wrong. IMO Alain Lai has forced PGW to make write downs on goodwill, because these goodwill is very old, years before Agria has taken over the leadership of PGW. These writedowns were predictable since march 2013 when AGRIA has anounced his own write Offs (60 Million US$ Land use rights). I think it is a good idea to clean the books.

Agrarinvestor, the goodwill on the PGW books certainly had value when Alan Lai bought into the company. His vision was for Agritech to become the Monsanto of the Southern Hemisphere. Unfortunately Agritech have fallen badly at the first hurdle, Australia, and their goodwill has gonre down with them. Make no mistake, Lai will not be pleased with Agritech. Can you imagine anyone paying 60c for PGW shares now? And it is the New Zealand auditors that have demanded the PGW goodwill writedown, not Lai. The auditors tagged the PGW accounts last year noting unrealistic assumptions by PGW management. I do agree that it is a good idea to clean the books. The problem for Lai is that with this latest clean out, the Agria book is reduced to a fancy looking cover with no pages at all inside! Still, you can't get cleaner than that I suppose.

SNOOPY

winner69

11-09-2013, 08:13 AM

I've mentioned a few times that the PGW Pension Fund isn't in the best shape and the company didn't appear to be too worried about it. If I was a member, current or beneficiary, I would be feeling uncomfortable.

Chalkie on the case now
http://www.stuff.co.nz/business/opinion-analysis/9150969/Investors-beware-companies-pension-practices

Fancy the fund investing so much n the company itself.

Spose all this was too hard for George and John to sort out. All I can say is the trustees must be in the company's back pocket

percy

11-09-2013, 08:47 AM

Do not think George will be too concerned.Being on contract most probably looking after his own pension.
Now left to Sir John and Mark.
My own view is a pension fund should not have any funds invested in their own company.

iceman

11-09-2013, 09:02 AM

Thanks for posting the link W69. I hadn't seen it. This is a seriously bad look and good on Chalkie for discussing it. agree with Percy that the pension fund should not invest in PGW at all and having Cushing on the PGW Board, Trustee on the pension fund and a shareholder in the investment firm handling the scheme's funds is a serious breach of ethics

Snoopy

11-09-2013, 07:03 PM

Unless I am completely wrong about US accounting standards, and I may be, the muddy waters for PGWs controlling shareholder Agria will clear on September 11th our time. For on September 10th NYSE time Agria release their full year results. The huge right down that PGW has taken on their goodwill should now flow through to Agria, which is precisely what I thought Alan Lai was trying to avoid. Let's see what trade offs 'twinkle toes' Lai has made to get out of this!

Agria result out. A huge loss as expected. Maybe not all shareholders expected it though. The GRO share price fell nearly 8% from $1.16 to $1.07. The 20F filing was not released as yet, so it is hard to get a handle on the behind the scenes machinations. My initial calculations showed the result to be a little better than I expected. But I feel we will need to wait for the more detailed accounts to pass judgement. I am still willing to buy a package of PGW shares off Lai should they pop out at a discount.

SNOOPY

winner69

13-09-2013, 05:33 AM

Does the irrigation part of PGW get to cash in with all those broken systems in the wind this week?

percy

13-09-2013, 07:03 AM

Does the irrigation part of PGW get to cash in with all those broken systems in the wind this week?

They most certainly will.

winner69

13-09-2013, 07:40 AM

They most certainly will.

So millions more unexpected/unplanned profit eh .... time for an rerating then to allow for this

Hope was a strategy then ...though no one really hoped for the damage done in the first place

Will it affect farming overall? Farmers are really resilient so probably not

Snoopy

13-09-2013, 11:48 AM

So millions more unexpected/unplanned profit eh .... time for an rerating then to allow for this

Hope was a strategy then ...though no one really hoped for the damage done in the first place

Will it affect farming overall? Farmers are really resilient so probably not

Having a large section of Canterbury irrigation assets out of action going into a dry spring is not good for farming in general and dairying in Canterbury in particular. Perhaps it will help keep the milk price up though? I agree in the short term it might help PGW's 'Pumping and Irrigation', although that is assuming that unit was not close to capacity already. I would guess the wind storm is neutral overall for PGW for the current season. Probably not so good for Synlait Processing.

SNOOPY

Blue Horseshoe

18-09-2013, 09:14 AM

PGW acquires Water Dynamics and Aquaspec businesses
Nice move PGG Wrightson.

Master98

18-09-2013, 09:25 AM

From last year drought show how important irrigation is for agriculture sector.yes nice move for pgw.

GR8DAY

18-09-2013, 10:19 AM

From last year drought show how important irrigation is for agriculture sector.yes nice move for pgw.

.......AGREE NICE WORK DIRECTORS........ALL ADDING TO A SLOW STEADY RECOVERY, THE WAY WE ALL LIKE IT (keeps the traders at bay.....every cent gain in SP equals about a 2.6% gain in value).....keep building you good thing, still a lot of ground to make up...........AND irrigate for that matter!!

Wolf

18-09-2013, 05:26 PM

Quite interesting how the share price goes up and down 10c most days. It was switching between 0.330c and 0.340c for weeks a while ago. Now it' slowly creeping up. I was going to do some day trading buying at 0.330c selling at 0.340c a while ago but didn't have any spare funds.

Snow Leopard

18-09-2013, 05:31 PM

Quite interesting how the share price goes up and down 10c most days. It was switching between 330c and 340c for weeks a while ago. Now it' slowly creeping up. I was going to do some day trading buying at 330c selling at 340c a while ago but didn't have any spare funds.

You had me worried for a while but I have checked and it definitely trades at a tenth of the prices you state.

When I was young AIR used to oscillate between 41 & 42c, did it for ages, then it fell out the sky.

Best Wishes
Paper Tiger

iceman

18-09-2013, 05:32 PM

Wolf

18-09-2013, 05:52 PM

Haha my bad.
https://ost.asbbank.co.nz/85C2C98F25837B1EA5820E65A722EF6D/external/largeimage/pgw/nzx?range=1m&adjust=1&chart=line&ma1=30&ma2=60&scale=linear&indicator=vol

Doesn't show day changes but i remember it dropping and raising every day.
I expect it to change between 0.360-0.370 looking at this for a couple of days which it has done today. I'm no technical analyst expert though.

Snoopy

18-09-2013, 11:05 PM

PGW acquires Water Dynamics and Aquaspec businesses
Nice move PGG Wrightson.

Acquiring a bolt on acquisition to the PGW irrigation business probably is a good move. Yet it goes against last weeks strategy of quitting the small stake in Heartland for the purposes of reducing debt. Possibly both were good steps for PGW. But the way the two press releases were written, does not to me present a coherent strategy going forwards.

SNOOPY

percy

19-09-2013, 07:25 AM

Acquiring a bolt on acquisition to the PGW irrigation business probably is a good move. Yet it goes against last weeks strategy of quitting the small stake in Heartland for the purposes of reducing debt. Possibly both were good steps for PGW. But the way the two press releases were written, does not to me present a coherent strategy going forwards.

SNOOPY

Once PGW sold their finance company there was no reason [other than a good investment] for them to hold HNZ shares.
Expanding the irrigation business is an excellent move.Irrigation is now part of PGW's core business of servicing the rural sector.

winner69

19-09-2013, 08:08 AM

Surprised they gave little indication as to what the acquisition brings to PGW except to say they bring a few new things (obviously products or technology) and Parker seems excited about having a greater presence in the North Island

So they have bought a Tyco company .....for how much? .turnover not stated....wonder what it is?
How much does this add to pgw's 100 milll of sales and what does it do the bottom line.

No doubt we will find out in due course but the ho hum announcement ( not even flagged as price sensitive) would suggest just a bolt on that not going to do too much. If it was going to make a difference no doubt more detail would have given ....and a little more excitement

Footnote: how much goodwil from this transaction to be written off in the future Snoopy

percy

19-09-2013, 08:26 AM

winner69

19-09-2013, 09:35 AM

Takes water stuff beyond the farm and orchards and vineyards .....into stadiums and racecourses and wonderful places like that

iceman

23-09-2013, 02:49 PM

Sir John exiting after 3.5 years of lots of hard work in the Chair

PGW
23/09/2013 13:56
DIRECTOR

REL: 1356 HRS PGG Wrightson Limited

DIRECTOR: PGW: Retirement of Sir John Anderson, Chairman PGG Wrightson

PGG Wrightson advises that Chairman of the Board, Sir John Anderson is to
retire from the Board and will step down following the Annual Shareholders'
Meeting on 22 October.

Sir John was appointed Chairman in February 2010 and led the Board through a
challenging period of the company's history. Highlights of his time in the
Chair include the sale of the company's finance company, PGG Wrightson
Finance in 2011, a refocusing of the company on its core operating
businesses, repayment of core debt and a resumption of dividends.

In announcing his retirement, Sir John noted that when he joined the Board
his focus was on establishing good governance and addressing the legacy
issues faced by the company.

"When I came to the Chair in 2010 the business was dealing with the after
effects of both the 2005 merger which formed the business and the Global
Financial Crisis. In the last three and a half years we've overseen work to
stabilise the foundations of the business. We've fixed the balance sheet and
invested in the operating systems, staff and infrastructure of the business.
The business is now ready for its next phase of development and I think it's
time for someone else to lead the Board through this."

Chief Executive, Mark Dewdney praised the contribution Sir John had made to
the company. "Sir John is one of New Zealand's most distinguished business
leaders as illustrated by his induction into the Business Hall of Fame
earlier in the year. The leadership he has brought to the Board table has
clearly been a tremendous asset to the business over the last few years."

A new Chairperson will be appointed by the Board following the Annual
Shareholders' Meeting.

percy

23-09-2013, 02:55 PM

Job well done.!
Pity I will miss the agm as it is on the same time as Ebos's.

Snoopy

23-09-2013, 03:22 PM

Sir John exiting after 3.5 years of lots of hard work in the Chair

PGW
23/09/2013 13:56
DIRECTOR

REL: 1356 HRS PGG Wrightson Limited

DIRECTOR: PGW: Retirement of Sir John Anderson, Chairman PGG Wrightson

<snip>

A new Chairperson will be appointed by the Board following the Annual
Shareholders' Meeting.

Interesting that no replacement for Sir John has been announced. Did he jump or was he pushed?

SNOOPY

Snoopy

24-09-2013, 08:51 PM

me thinks the loss of senior management may have a bit to do with Mr Lai and his demands to use PGW as a cash cow to prop up his other interest.
Time to get out and have done.

You may have got this one just right Snapiti. I am always wary about Ag managers cashing in on a boom by buying up rival businesses at premium prices. Inevitably when the market turns, these purchases tend to look not so clever.

PGW paid $5m to extend their irrigation division reach. But even if they earned $500k incremental profit, that amounts to 2% on a baseline company NPAT of $25m. That hardly justifies a share price surge from 34c to 39c I would have thought.

The exchange rate is heading up again. How long will the milk bubble hold up? Maybe that Ozzie seed's business really will turn the corner this year? It would be nice to have a really positive initiative to look forward to from PGW. It is hard to be truly inspired though by stories we have all heard before.

SNOOPY

Xerof

24-09-2013, 09:39 PM

Interesting that no replacement for Sir John has been announced. Did he jump or was he pushed?

SNOOPY

It's my personal opinion only, but I think Sir J was originally installed by their Bankers, to sort out the mess it was in at the time. Job largely done from the perspective of the Bankers, so he can go and put his feet up.

Morpheus

25-09-2013, 02:27 PM

I'm a bit perplexed about why Agria has sold their half stake in Ganxin Seeds Company. Ganxin holds the proprietary right for JiXiang No.1 corn seed, which as I understand has enormous potential.

Jim

25-09-2013, 06:04 PM

I'm a bit perplexed about why Agria has sold their half stake in Ganxin Seeds Company. Ganxin holds the proprietary right for JiXiang No.1 corn seed, which as I understand has enormous potential.

They might want to gain 100 % of PGW while the share price is still low.

Agrarinvestor

27-09-2013, 07:58 AM

Agria had only a minority stake of 49%. I'am sure Mr. Lai has a good reason to sell. Perhaps they prefare PGW's seeds, or they see an advantage in Zhongdan 909. 2014 can be the turnaround for Agria/PGW

Snoopy

27-09-2013, 01:35 PM

Interesting looking at the milk production figures over the first six months of 2013.

http://www.clal.it/en/index.php?section=world_map_consegne_latte

Uruguay was down only 1.3% verses NZ down 12.74%. So the drought 'there' was not as bad as it was here. The problem was PGW sold more stuff in Uruguay in FY2013 vs FY2012, but hardly made any money on it. I am at a loss to explain why.

There is some more information in the annual report text about the poor performance in South America.

AR2013 p11 "During the year we ceased operations through our joint venture livestock export business which led to a year on year decline in earnings."

"While we enjoyed particularly good growth in irrigation, competition in the animal health sector increased while turnover in the real estate market remains subdued with a gap between the price expectations of vendors and purchasers."

While as in New Zealand the poor result in South America is foreshadowed with the compensator 'good growth in irrigation', it would be interesting to know how much of the loss in profitability in South America was because of the end of the livestock contract. In New Zealand the operational side of the livestock had their profits halved in FY2013. Perhaps with a more normal climate year, there is a way back to worthwhile profitability in South America after all?

SNOOPY

Agrarinvestor

02-10-2013, 05:33 AM

Dear Sirs,

any News in the pipe für PGW ? I have seen large volumes for Agria on September 26th, highest volume since 3 month, and today highest volume since Februar.
Do you expect any kind of good news during the next weeks ?

Snoopy

03-10-2013, 02:18 PM

Any News in the pipe for PGW ? I have seen large volumes for Agria on September 26th, highest volume since 3 month, and today highest volume since February.
Do you expect any kind of good news during the next weeks ?

The AGM is coming up in a couple of weeks. Since it is just down the road from me, I will probably go and let you know any new gossip!

It has been reported that millions of dollars worth of irrigation equipment are either being installed in Canterbury, or are on the water. This is all a result of the storm damage we had in Canterbury last month. The Pumping and Irrigation unit of PGW is headquartered in Canterbury so they may be getting some spin off. But Canterbury is very busy for new irrigation installations anyway. So even with no storm, PGW irrigation would not be short of work.

An upgrade to the Fonterra milk price payout over the last week may be helpful for PGW too. But milk farms are only one part of the agricultural businesses that PGW Agriservices deal with.

SNOOPY

RTM

07-10-2013, 01:17 PM

PGW Directors.....Just received the docs for the Annual Meeting which includes the voting papers for directors. None of these folk seem to have significant experience in the agricultural world. I had, perhaps naively, thought that it would be a pre-requisite to have at least some board members with experience in the agricultural segment. To me this seems concerning....any comments ? Maybe I'm off track with this thought pattern and need some calibration.

Wolf

07-10-2013, 09:27 PM

see weed

08-10-2013, 11:01 PM

I'm not giving up on PGW quite yet but am getting close to it, new blood could do good. I reckon the share price could still go up a little bit. I bought in at 0.450 back when i bought based on broker research and was hoping to break even. However if the share price drops to 0.370 i'll cut my losses and call it quits.

I was going to sell at 38c, but had a dream last night, and the broker said don't sell yet. So we will see what happens in the next few weeks or months.

see weed

09-10-2013, 01:28 PM

Which broker was it? ... ;)

He did'nt tell me,:( it was a dream

Master98

09-10-2013, 02:30 PM

I was going to sell at 38c, but had a dream last night, and the broker said don't sell yet. So we will see what happens in the next few weeks or months.
lol, hope your dream come true.

Master98

11-10-2013, 12:21 PM

Agria(GRO)jump 30c to us$1.58 and over 1m shares traded today, what's up?

bryndlefly

11-10-2013, 02:17 PM

pump and dump? that's the gossip on a US stocks message board anyway

Food4Thought

11-10-2013, 02:33 PM

lol, hope your dream come true.

Hope MorningStar didn't feature in your dream...
Winter was good for NZ recovery and spring has started very well...
Plenty of uncertainty with this stock. I hope your dream comes to fruition...

Agrarinvestor

12-10-2013, 05:28 AM

pump and dump? that's the gossip on a US stocks message board anyway
Dont beleave what these Morons at the Yahoo boards are posting. I am a long term shareholder of Agria, during the last
few weeks i saw som large trades on the buying side. There are no pumping storys in the web. I can not find anything.

Agrarinvestor

14-10-2013, 01:06 AM

Beg to differ. If you'd been following those "morons" on the Citibank, BoA, Fannie, etc. threads you'd have been forewarned of the GFC by some 5 years or more.

Beg to differ. If you'd been following those "morons" on the Citibank, BoA, Fannie, etc. threads you'd have been forewarned of the GFC by some 5 years or more.
There are always people who make recommendations of selling or buying some stocks. But most of these recommendations for chinese stocks,are without any arguments. A discussion on Yahoo Boards
is very often with insults and without quality. When i remember last year, the discussion i had with them about "Agria", the only "argument" was :"All Chinese are scum". For my remaining shares i have 90% profit in the meantme.

For example:
http://finance.yahoo.com/mb/CGA/#mbt=What%2520in%2520the%2520HE%25u2026&mbl=http%253A%2F%2Ffinance.yahoo.com%2Fmbview%2Fth readview%2F%253F%2526bn%253D042a9354-74de-34d8-8524-b6b41a04fb0c%2526tid%253D1380939755851-fef80867-a345-41ed-844b-4f318434118e%2526tls%253Dla%25252Cd%25252C0%25252C 3&mbtc=mb-tab-topic

You can see the same user making himself, 25 times "thumb up". This so primitive pumping that you can conclude that his attention must be the short selling,
otherwise, how silly someone must be,who pays money for advices of " Investors Underground".

Agrias pump and Dump on Yahoo:
http://finance.yahoo.com/mb/GRO/#mbt=Topics&mbl=%2Fmb%2Fforumview%2F%253F%2526bn%253D82138b11-a724-394d-98df-2e083d8b7b55&mbtc=mb-tab-allt

I can not find a single article of someone who is pumping Agria, all these puming accusation where frome 2011 and older. During the last 2 weeks i saw
large volumes on 0ctober 1th. I asked on October 2th, for advice on this board. It was a clear signal that something is going on. I have no idea if some is
buying because of good New's at PGW or maybe Agrias chines business.

Oct 11, 2013

1.54

1.54

1.39

1.46

408,500

1.46

Oct 10, 2013

1.23

1.60

1.23

1.58

1,083,200

1.58

Oct 9, 2013

1.14

1.28

1.12

1.28

99,400

1.28

Oct 8, 2013

1.15

1.20

1.12

1.15

15,800

1.15

Oct 7, 2013

1.20

1.20

1.17

1.20

39,900

1.20

Oct 4, 2013

1.16

1.24

1.15

1.23

17,300

1.23

Oct 3, 2013

1.25

1.25

1.18

1.22

16,700

1.22

Oct 2, 2013

1.19

1.22

1.11

1.22

117,100

1.22

Oct 1, 2013

1.10

1.25

1.08

1.20

376,800

1.20

Queenstfarmer

18-10-2013, 11:02 AM

Get rid of all those mums & dads on the sell side, cashing up for a meridian purchase then we may see this stock settle in the low 40's.

Snoopy

22-10-2013, 05:47 PM

The flowing is a summary of highlights from the Chairman of the Board’s and CEO’s address, questions asked with some clarification from chatting to ‘the team’ afterwards. Following the AGM a new board member John Nichol ACA, a former director of the NZ Dairy Board and Chairman of NZ Merino is to be appointed to the board.

The separate ‘Agritech’ sub-committee is to be abolished. This was put in place to support George Gould who was more Agriservices orientated. With Mark Dewdney now at the helm, PGW is to go forwards on a ‘one PGW’ strategy.

Goals for the new “one PGW” business going forwards are as follows:
FY2014: EBITDA of $52m to $56m, driven by a better lookout for lamb and a record payout for dairy. No more large live export contracts have been acquired to date.
Longer term: improve profitability by 50%

Immediate areas of promise in NZ are the expansion of irrigation, with the whole “PGW Irrigation” business rebranded “PGW Water” and the expansion of domestic food and grain with sales of more maize supplement. PGW’s aim is to be the leader in ‘water’ going forwards. CEO Dewdney is not satisfied that PGW have captured their fair share of growth in NZs burgeoning dairy business.

The biggest success in South America to date has been with seed offerings. Uruguay continues to go well, with Brazil the next major market to focus on. Chile will continue to operate through agencies. Argentina is politically difficult, and the fear is that foreign companies’ outlets could be nationalised if the economy goes badly wrong.

Alan Lai has been elected the new chairman, replacing the retiring Sir John Anderson. Lai said that although much more restructuring and refocusing was required than expected, Agria remains committed to PGW for the long term. Agria remains optimistic with their PGW investment.

R&D is still critical to the seed business going forward and PGW have good partnerships with government agencies ‘Agrisearch’ and ‘Plant & Food’. This includes joint research and commercialising CRI research projects.

The pension scheme while still in an actuarial deficit, is forecast to get back on track without any further capital injections.

PGW are now out of finance directly, but all of the $25m Crafar farm exposure was recovered. The partnership with Heartland continues, and management realise the importance of the ‘one stop shop’ concept of supplying goods and seasonal finance as a package. New finance packages associated with livestock trading and deferring major purchases are in the planning stages. These might be rolled out purely with Heartland or some combination of finance providers.

A closing question on China drew a dual response from CEO Dewdney and Chairman elect Alan Lai.
Currently 10-20% of the wool clip handled by PGW goes to China, verses 50% on a national basis. PGW therefore sees some potential for boosting their share of the Chinese market. On a supply chain basis there is room for cutting costs by going straight to the manufacturing source in China and cutting out the middle man. The main cultivars going forwards that are important for future Agritech sales in China are vegetable seeds. Through recent seed company acquisitions in Australia, PGW now has more capacity in this area.

Alan Lai then added that China is some 20years behind NZ in agricultural technology. But the Chiness government is putting a lot of money into catching up, from the seed right through to the processing level of the food train. There is limited really good agricultural land in China, and PGW cannot be all things to all people. The geographic focus will be on the North West provinces with discussions going on with the senior governors administrating those areas. The focus will be on helping farmers achieve the best they can with their land. By 2060 1/3 of the population of China will be fed by imported goods. So there is good scope for improving China’s own food producing infrastructure.

SNOOPY

Food4Thought

01-11-2013, 01:34 PM

Get rid of all those mums & dads on the sell side, cashing up for a meridian purchase then we may see this stock settle in the low 40's.

Nice prediction.

Not so good is, http://www.gisborneherald.co.nz/article/?id=34661
Only a small part of the country so far, but very early dry weather at an important time of the year.
Still like PGW as a brand and a company with much potential, albeit high risk.

Queenstfarmer

07-11-2013, 10:34 AM

A tip for all those investors with a bundle of cash from either selling out of chorus or making big profits from xero and ryman. "HERE'S YOUR NEXT MONEY MAKER" :)

Snoopy

09-11-2013, 10:26 AM

A tip for all those investors with a bundle of cash from either selling out of chorus or making big profits from xero and ryman. "HERE'S YOUR NEXT MONEY MAKER" :)

A buy recommendation for PGW from the farmer on Queen Street? Why not just climb the Sky Tower with a megaphone and shout 'SELL PGW' to the masses? No need to answer that. Your way, you don't get bundled off in a police van while the result is the same.

I wish you had held off calling that top QStF! The market certainly heard though with PGW down 5% since your post. Don't blame me! I still own all my PGW shares, about a billion at last count. Then again I always got lost counting sheep.

The question I ask myself though:
" If I sell my PGW shares, where should I go for my rural exposure?"

There are plenty of great companies out there like Synlait and Fonterra Shareholders Fund. But they look very expensive and are concentrated in one sector (dairy).

To my mind while PGW is not the best company in the rural sector, it is diversified across many rural sub sectors and has growth potential in Brazil. Not pie in the sky stuff but the logical extension of a twenty year South American growth strategy. I am not in the market to buy any more shares at 41c, but I don't see myself selling at that price either. PGW the best value for rural sector investors is what I see in the share price.

SNOOPY