PGW - PGG Wrightson

[Crackity]

Lucky me picked up 15,000 @ .415c 4.58pm this arvo:). Many more wanted thank you. I am looking forward to a takeover bid for PGW one day:cool:.

And till then you get a 13 per cent yield assuming the wheels don't fall off.....

[Beagle]

Lucky me picked up 15,000 @ .415c 4.58pm this arvo:). Many more wanted thank you. I am looking forward to a takeover bid for PGW one day:cool:.

Yes lucky you indeed. I was right behind you in the queue...shame there wasn't some more kind donations from nervous nelly sellers that will enhance my retirement fund.

[Snoopy]

Lucky me picked up 15,000 @ .415c 4.58pm this arvo:). Many more wanted thank you. I am looking forward to a takeover bid for PGW one day:cool:.


You will be waiting a long time see weed. 50.1% shareholder Agria can't afford a takeover. Nor can they afford to be bought out by anyone else as on paper they are well underwater on their PGW investment. So you are stuck, and your punishment is - a 13% gross yield - forever! Hah hah hah hah.

Can I suggest now that you are relieved of your A2 duties, that you instead go to Japan and drum up more support for the Konka shower clean business suit:

https://www.youtube.com/watch?v=9PUyCqiKKzk

Konka is the company that is using the PGW supplied Merino Wool. Not sure if that is in the suit you can shower in though!

Edit: Crikey, it is!

http://jqrmag.com/en/quality-review-eng/konaka-shower-clean-suit/

New Zealand Wool Super 100’s Shower Clean Suit ￥45,000, (or about $NZ560)

I might just have to buy one of those! I wonder if they sell them in NZ? Why isn't PGW selling these? Farmers can get up early and milk the cows, then get a quick hose down and be all ready for church!

SNOOPY

[Snoopy]

Should cut that tax figure since earnings are lower. Also they paid a high % of tax in 2015, c 30% of NPBT.
I estimated 12.6m.


Quite right Banter. My quick and dirty 'take out last years EBITDA figure' and put in the forecast EBITDA figure while keeping all other figures the same was a bit crude. However, at least it was crude in a conservative sense!



I sold half yesterday - falling earnings (0.4cps), fine coming,


There is already a provision for the fine in last years accounts, granted it may not be enough.



raised chance of a significant drought.


The share price is already down 20% from its recent peak.



Div yield should fall to 'only' 11.5% if the company's mid point earnings forecast holds and their payout ratio is the same.


You are a hard punter to satisfy Banter!

SNOOPY

[banter]

You are a hard punter to satisfy Banter!
SNOOPY
Well I've been thinking about growth vs dividend (http://www.sharetrader.co.nz/showthread.php?10404-PEG-ratios) lately, and looks like growth is worth more. PGW is exhibiting negative growth just now.

Yes the yield is fine, looks like a decent company, but even 13% div is only 9.4% net, and there are shares out there that seem to offer over twice that, div and growth combined, all going well.

And the 13% is not like money in the bank. If PGW has a bad year the market won't show much sympathy.

[Crackity]

Yes the yield is fine, looks like a decent company, but even 13% div is only 9.4% net, and there are shares out there that seem to offer over twice that, div and growth combined, all going well.

.

Im interested Banter - what shares are you referring to?

[Beagle]

Well I've been thinking about growth vs dividend (http://www.sharetrader.co.nz/showthread.php?10404-PEG-ratios) lately, and looks like growth is worth more. PGW is exhibiting negative growth just now.

Yes the yield is fine, looks like a decent company, but even 13% div is only 9.4% net, and there are shares out there that seem to offer over twice that, div and growth combined, all going well.

And the 13% is not like money in the bank. If PGW has a bad year the market won't show much sympathy.

Seems to me its being priced like a no growth cyclical on a forward PE of 10. Seems fairly well diversified in the agri sector so seeing as some think this might be the bottom of the dairy cycle I see good value at the closing SP and would have been happy to buy if I could have got any. Any growth in future years will see a rebound in the SP so on a risk reward basis I'd suggest we're being paid handsomely to wait with the balance of risk possibly a little skewed to the upside. If the SP flatlines from here and shareholders simply enjoy a 13% gross divvy that's hardly a disappointment in a fully priced market is it :)

[winner69]

From his (rough) forecast looks like Snoopy I expecting falling revenues in FY16 (unless expecting a decent increase in margins)

Must have heard that Mark comment the other day 'we will get a fair share of all the business that's out there'. A candid and refreshingly honest remark (no hype) that suggests that the market (ie revenues) is going to be pretty tough this year.

Not surprising that share price down ~5% since the announcement

[Snoopy]

To be comparable 'year to year', I have removed all evidence of the now sold finance division from the results. This involved splitting the finance division off as if it was 'stand alone', then subtracting the finance division NPAT taking out from the total 'NPAT'. Please note these figures represent operational NPAT, discounting one off earnings effects.

Earnings Per Share here is defined as NPAT / No. shares on Issue at end of year

FY2011 (*): $5.9m/ 754.8m = 0.8c
FY2012 (*): $25.2m/ 754.8m = 3.3c
FY2013 (*): $24.3m/ 754.8m = 3.2c
FY2014 : $33.8m/ 754.8m = 4.5c
FY2015 : $34.8m/ 754.8m = 4.6c

(Asterisked figures have been adjusted to remove the former finance division NPAT profit or loss from that year)

Conclusion: Pass Test

SNOOPY

[Snoopy]

To be comparable 'year to year', I have removed all evidence of the now sold finance division from the results. This involved splitting the finance division off as if it was 'stand alone', and assigning the given shareholders equity between the finance division and all other divisions, then removing the finance division component from the total equity.


ROE here is defined as: NPAT / End of Year Shareholder Equity

FY2011 (*): $5.9m/ ($604.3m - 0.4171($766.814m)) = 2.13%
FY2012 (*): $25.2m/ ($577.7m - 0.5892($51.736m)) = 4.61%
FY2013 (*): $24.3m/($256.1m - 0.4134($19.155m)) = 9.79%
FY2014 : $33.8m/ $269.7m = 12.5%
FY2015 : $34.8m/ $267.4m = 13.0%

(Asterisked figures have been adjusted to remove the former finance division NPAT profit or loss from that year AND a portion of equity relating to the finance division of that year)

Conclusion: Fail test

SNOOPY

[Snoopy]

This test does not mean that PGW will always be able to raise margins above the rate of inflation. But it does mean that under certain market conditions it can, thus avoiding an eventual commodity price spiral to the bottom. The revenue associated with the now sold finance division has been removed from the appropriate years

Margin here is defined as NPAT/Sales

FY2011 (*): $5.9m/ ($1,243m - $55m) = 0.50%
FY2012 (*): $25.2m/ ($1,337m - $7m) = 1.91%
FY2013 (*): $24.3m/($1,132m - $2m) = 2.15%
FY2014 : $33.8m/ $1,219m = 2.77%
FY2015 : $34.8m/ $1,103m = 2.89%

(Asterisked figures have been adjusted to remove the former finance division NPAT profit or loss from that year AND the sales revenue relating to the finance division of that year)

Conclusion: Pass Test

SNOOPY

[Snoopy]

We cannot apply a Warren Buffett style growth model to valuing PGW because it has failed test 3, the 'Return on Equity' test. The failure is not unexpected as this is a tough hurdle for companies that must carry a high level of stock and sell that stock a relatively low margins to pass. The risk here of having a large amount of stock on hand that spoils or must otherwise be heavily discounted below cost is very real in companies that sell commodities. This doesn't necessarily that one should avoid PGW as an investment though. It means that you should probably use a more conservative evaluation method. The method I prefer in these circumstances is an (at least) five year average of dividend flows, with the underlying assumption of a steady rather than a growing market. I will have a look at that next.

SNOOPY

[Snoopy]

Revenues struggle to grow at the rate of inflation and NPAT much the same as it always has been. Not actually exciting is it - pretty boring eh. I can't really see how this time its any different


Winner, I think the revenue dip shown in you graph is addressed by Mark Dewdney's CEO report for FY2013. Here is the quote from page 5

"Sales revenue fpor the group decreased although this has no bearing on the underlying business activity. Sale of the Agri-feeds molasses business rsulted in it being being accountede as equity earnings from associates, meaning the revenue is no longer recognised in our accounts. In addition, a number of key product lines in the retail business are now transacted on an agency basis, meaning that although gross profit generated by these transactions remains unchanged, only commission income is recorded as revenue rather than the full transaction value."

This change of policy is also reflected in the steadily increasing margins since FY2013. Smokes and mirrors? Or a genuine increase in margin performance?

SNOOPY

[Snoopy]

The method I prefer in these circumstances is an (at least) five year average of dividend flows, with the underlying assumption of a steady rather than a growing market. I will have a look at that next.


A slight change in tack to my valuation method. PGW has now largely finished restructuring. They also have a policy of paying 100% of earnings out as dividends. So I shall assume all earnings over the last five years would have been paid out as dividends and make my PGW valuation from that.

eps figures, adjusted for the removal of the finance division over the last five years were as follows:

FY2011 : $5.9m/ 754.8m = 0.8c
FY2012 : $25.2m/ 754.8m = 3.3c
FY2013 : $24.3m/ 754.8m = 3.2c
FY2014 : $33.8m/ 754.8m = 4.5c
FY2015 : $34.8m/ 754.8m = 4.6c

I calculate that as an average earnings rate of 16.4c/5 = 3.3c

For a cyclical like this I would require a 'gross return' of some 8.5%. Given a 28% tax rate (72% reatined earnings rate), my valuation over the business cycle of PGW is that it should average:

3.3 / (0.085 x 0.72) = 54c

Increase that required gross return to 9%, and the valuation drops to

3.3 / (0.09 x 0.72) = 51c

SNOOPY

[Snoopy]

Voracious shareholders are milking PGW of all the dividends they can. Yet PGW is not debt free. Could the long term future of PGW be at risk because of the high dividend draw down? This is a question that needs looking into:



20152014


Debt Short Term$57.195m$35.573m


Deriv Liabilities Short Term$3.266m$0.887m


Debt Long Term$66.000m$65.000m


Deriv Liabilities Long Term$1.980m$0.005m


Long Term Provisions$5.597m$6.609m


Defined Benefit Liability$14.655m$13.528m


Change in Receivables/Payables Adjustment (*)-$5.745m$1.304m


Total$143.758m$120.298m



(*) The Change in Receivables/Payables Adjustment takes into account that you can hide debt by:

1/ not paying your bills OR
2/ by collecting money that is owed to you faster than is normal, when you may not be able to do that in the future.

Alternatively if you do the opposite of 1/ and 2/ (as is the case in both years here) , then the debt is actually smaller than it appears. This is why the adjustment is negative for FY2015 and FY2014.

Taking the above debts and dividing them by normalised profits will give us a theoretical 'minimum debt repayment time - minDRT' (assuming all profits from the current year are directed to paying down debt). This assumption is not management policy. But it nevertheless gives us a measure of the indebtedness of PGW relative to underlying earnings.

min DRT(2015) = $143.758m / $34.8m = 4.1 years

Compare that with last years figure

minDRT(2014) = $120.298m / $33.8m = 3.6 years

Despite the slight deterioration, I rate this as OK. A debt repayment time of under two years I regard as low. Up to five years I would regard as a 'medium sized debt'. Once the minimum debt repayment time gets above ten years, this is a very definite warning flag for me.

SNOOPY

[winner69]

A slight change in tack to my valuation method. PGW has now largely finished restructuring. They also have a policy of paying 100% of earnings out as dividends. So I shall assume all earnings over the last five years woudl have been paid out as dividends and make my PGW valuation from that.

eps figures, adjusted for the removal of the finance division over the last five years were as follows:

FY2011 : $5.9m/ 754.8m = 0.8c
FY2012 : $25.2m/ 754.8m = 3.3c
FY2013 : $24.3m/ 754.8m = 3.2c
FY2014 : $33.8m/ 754.8m = 4.5c
FY2015 : $34.8m/ 754.8m = 4.6c

I calculate that as an average earnings rate of 16.4c/5 = 3.3c

For a cyclical like this I would require a 'gross return' of some 8.5%. Given a 28% tax rate (72% reatined earnings rate), my valuation over the business cycle of PGW is that it should average:

3.3 / (0.085 x 0.72) = 54c

Increase that required gross return to 9%, and the valuation drops to

3.3 / (0.09 x 0.72) = 51c

SNOOPY

C'mon Snoops. You can do better than this

A good analyst presents things in best possible light, esp when like you they have been adjusting numbers left right and centre.

We all know 2011 was a ****e year. Thus ignore and replace it with a 2016 figure of 4.6 cents. It's in the bag so a 'proper' treatment and aren't markets forward looking

Sothe 5 year average is just over 4 cents

Valuation thus 60 cents

Much more acceptable eh

[banter]

Im interested Banter - what shares are you referring to?

See this thread (http://www.sharetrader.co.nz/showthread.php?10405-Forecasting-total-returns&goto=newpost)

[Plutus]

IMO the dividend is being driven by a majority shareholder who has a need for cash, rather than being in the best interests of PGW itself,so not sure it an appropriate measure of EV. Have held shares but sold - still looking for the 'game-changer' strategy - all I see is same old same old.

[Crackity]

IMO the dividend is being driven by a majority shareholder who has a need for cash, rather than being in the best interests of PGW itself,so not sure it an appropriate measure of EV. Have held shares but sold - still looking for the 'game-changer' strategy - all I see is same old same old.

that is definitely a valid viewpoint but in the medium to long term if you are comparing a bank deposit rate to the fully imputed div yield and possible capital gain there may possibly be a case to consider an investment in PGW? Unless the wheels totally fall off as mentioned previously?.....

[winner69]

IMO the dividend is being driven by a majority shareholder who has a need for cash, rather than being in the best interests of PGW itself,so not sure it an appropriate measure of EV. Have held shares but sold - still looking for the 'game-changer' strategy - all I see is same old same old.

Aren't the tablets and associated apps for the sales reps are 'game changer'.........

Like you it all seems much of the same with PGW .....with probably the results being much the same.

[Beagle]

Well the PE is about 10 and the dividend yield is about 13%. Its hard to find pockets of value in the NZX now...not so hard for those that are prepared to accept the same old same old I suppose...
I'm happy to simply sit and collect 13%. Company has invested in new initiatives last year and long term prognosis seems sound to me.

You could make the case that notwithstanding the major shareholders need for cash dividends its extremely unlikely they'd do anything that would materially harm their investment so maybe their need for cash is actually a good thing. Those that like the largest possible dividend within reason will take comfort from the fact that the major shareholder is motivated to pay it.
Is this the perfect company for dividend hounds who are extremely bored with 2% return in their call account ?

[Baa_Baa]

Well the PE is about 10 and the dividend yield is about 13%. Its hard to find pockets of value in the NZX now...not so hard for those that are prepared to accept the same old same old I suppose...
I'm happy to simply sit and collect 13%. Company has invested in new initiatives last year and long term prognosis seems sound to me.

You could make the case that notwithstanding the major shareholders need for cash dividends its extremely unlikely they'd do anything that would materially harm their investment so maybe their need for cash is actually a good thing. Those that like the largest possible dividend within reason will take comfort from the fact that the major shareholder is motivated to pay it.
Is this the perfect company for dividend hounds who are extremely bored with 2% return in their call account ?

If this is so predictable, would it also be a realistic approach to be in when it's time to qualify for and lock in the dividends, and be out (and in something else that's got growth) during the interim periods? It seems some here accept the yield predictability, and predictability is a rare thing in equities, however why would one hold a no/low-growth position in-between dividends? This question does assume capital can be better utilised elsewhere in the in-between times and that one can navigate the balance between investing and trading.

[Beagle]

If this is so predictable, would it also be a realistic approach to be in when it's time to qualify for and lock in the dividends, and be out (and in something else that's got growth) during the interim periods? It seems some here accept the yield predictability, and predictability is a rare thing in equities, however why would one hold a no/low-growth position in-between dividends? This question does assume capital can be better utilised elsewhere in the in-between times and that one can navigate the balance between investing and trading.

Excellent question Baa Baa, one that could be pondered for a number of high yielding stocks.

I think this falls under the general heading of does dividend stripping work ? There will no doubt be an army of people prepared to put up a varying array of anecdotal evidence to support their case one way or the other but if we sheet this question back to this particular stock the most recent evidence suggests it doesn't, i.e the stock fell by more than the 2 cent final dividend and has stayed down. Whether this most recent decline can be attributed to the particular specific aspects of the profit outlook declining to a marginal extent compared to the FY15 result or not is debateable, but I would argue the SP decline before the dividend went ex this time, (dropped from about 50 cents to 44 cents before going ex divvy), probably already accounted for the slight dimming of outlook going from FY15 to FY16. I would therefore argue that dividend stripping didn't work for the most recent final divvy.

Last year we saw at the time of the final dividend plus the special that PGW took an unusually long time for the SP to recover its dividends suggesting that the XXXL size thereof relative to its share price is material as is the number of people looking to employ a dividend strip investment strategy. Perhaps we see a repeat this year ?

Many years ago I have noted a number of U.S. studies suggesting some outperformance is possible using dividend stripping and generally the higher yield the greater you chances of success. More recently I have noted a major Australian study that supports the earlier studies so I do believe at a theoretical level some outperformance is possible but the trick in such a small market like N.Z. when many public companies pay their interim and final dividends at similar times is to employ your capital effectively elsewhere in the intervening periods. in practice I think many high yielding stocks in N.Z. exhibit some tendency towards rising about 4-6 weeks before a known or widely predicted dividend and may take a similar period of time after going ex to recover, (sometimes a lot quicker to recover..a good example of this was the interim HLG 14 cent divvy paid earlier this year which was recovered within a week.).

When you take into account brokerage to buy and sell twice a year, the fact that you may need to hold the shares for many weeks before and several weeks after each dividend and the difficulty of finding attractive alternative options in the intervening months and also factor in the current low call account yields the task to achieve outperformance using dividend stripping becomes somewhat more difficult to execute successfully but yes in general I agree that some attempt to employ dividend stripping as part of your investment strategies can be useful but its a bit hit and miss.

Market sentiment has this stock at a low level notwithstanding that the FY16 outlook isn't too shabby. I tend to think dairy is close to its low and the current pricing is unsustainable so some supply will be cut on a world-wide basis so we're probably at a low for dairy with more upside potential than downside. PGW seem to be performing okay to me in the current indifferent economic conditions.

[Baa_Baa]

Thanks Roger, your comprehensive reply is appreciated. It seems that timing is very important, to a dividend stripping strategy, i.e to be in at the precise price to achieve yield, and ditto out to retain yield, as you say the market factors in SP appreciation prior, and depreciation post dividend. So that seems a challenge in itself! A nice divi and begone has some appeal, as it must boost the yield when measured against capital time exposure and opportunity cost of tied up capital. The challenge therefore is whether something more profitable can be achieved with the free capital float (certainly not guaranteed), which of course is another challenge in itself, notwithstanding attracting attention as a trader does. Active investing is full of opportunity but no-one said it was easy huh?

[Beagle]

Never easy that's for sure mate. In N.Z. I think there's a majority of stocks with a June 30 balance date so most companies pay their interim dividends in March or April after reporting in February and their final divvies in September or October after reporting in August. It would be interesting to do a study of the NZX 50 performance in those four heavy dividend paying months relative to the other months.

[Sideshow Bob]

http://viewer.zmags.com/publication/48267a67#/48267a67/20

[Snoopy]

C'mon Snoops. You can do better than this

A good analyst presents things in best possible light, esp when like you they have been adjusting numbers left right and centre.


There are no 'fudge factors' in any of my adjusted earnings figures Winner. Yes I have made assumptions. For example I have taken the revenue in the 'Other' operating segment in FY2015 as indicative of head office costs. In the past where disclosure was was more full (AR2013) this was more obvious. Back then, this 'Other' section also included the financial business. So I was able to subtract the operating core costs out (assuming they had not changed between 2013 and 2015) to get accurate estimates of finance division revenue and profitablity in those prior years. IOW I am satisfied that all my adjustments are rigorous in the sense that all the adjustments have been derived directly from published PGGW annual report figures.



We all know 2011 was a ****e year. Thus ignore and replace it with a 2016 figure of 4.6 cents. It's in the bag so a 'proper' treatment and aren't markets forward looking

Sothe 5 year average is just over 4 cents

Valuation thus 60 cents

Much more acceptable eh


Curiously I both agree and disagree with your tongue in cheek valuation Winner. I disagree in the sense that deliberately leaving out the bad year when evaluating any business over a business cycle will rather obviously give you an inaccurate result. However, when I say that PGW is worth 51c (I have pulled back from 54c because of the medium sized debt position which could start to look high again should earnings deteriorate) based on a five year dividend average (I am rolling today's dividend policy dps=eps backwards to derive historical indicative dividends), then that 51c is very specifically an average valuation.

An average valuation means that you can expect the share price to fluctuate around this. Thus is you regard 42c as the 'bottom of the cycle' (51c-9c) you might also regard 60c (51c + 9c) as the top. So to this extent I am predicting 60c at some point (just don't ask me when). I hope you can see that predicting an 'average' share value is quite a different kind of prediction to what your satorized 'sharebroker coupled analysts' are predicting: looking a couple of years out and guessing a share price target figure. My 51c 'average cycle valuation' is not a target price in that sense.

SNOOPY

[RTM]

Thanks Roger, your comprehensive reply is appreciated. It seems that timing is very important, to a dividend stripping strategy, i.e to be in at the precise price to achieve yield, and ditto out to retain yield, as you say the market factors in SP appreciation prior, and depreciation post dividend. So that seems a challenge in itself! A nice divi and begone has some appeal, as it must boost the yield when measured against capital time exposure and opportunity cost of tied up capital. The challenge therefore is whether something more profitable can be achieved with the free capital float (certainly not guaranteed), which of course is another challenge in itself, notwithstanding attracting attention as a trader does. Active investing is full of opportunity but no-one said it was easy huh?

Nice discussion and worth thinking about.
Maybe something simple like a HNZ Direct call account would make the money work when not in PGW. Interest Rate 3.6%
The danger would be that PGW might scoot up to 60c or so when one wants to re-enter. PE around 10 at moment...would this happen ? Not sure I'm up for the internal angst !

[see weed]

Might start picking up a few more PGW before Christmas. Ex div in about 12 weeks. And nice yield 9.52% and probably 2c div.

[Beagle]

Might start picking up a few more PGW before Christmas. Ex div in about 12 weeks. And nice yield 9.52% and probably 2c div.
9.52% net, i.e. 13.22% gross. Sounds like a good plan to me...the kind of gift you give yourself for Xmas that keeps on giving :)

[RTM]

https://stockx.co.nz/

I guess this will have some kind of effect on PGW's stock sales, especially if it gains momentum. Just heard on National Radio that some farmers using it to sell stock from South Island (drought) to North Island.

[nextbigthing]

Good to see this matter now settled for a reasonable sum, onwards and upwards from here.

https://www.nzx.com/companies/PGW/announcements/275571

Interestingly they promised to review the charges in relation to NAIT. Hopefully they decide they have been undercharging and to raise charges :t_up:

[percy]

Good to see this matter now settled for a reasonable sum, onwards and upwards from here.

https://www.nzx.com/companies/PGW/announcements/275571

Interestingly they promised to review the charges in relation to NAIT. Hopefully they decide they have been undercharging and to raise charges :t_up:

Yes I think PGW will be pleased to have it behind them.
As you point out a reasonable sum.

[babymonster]

topped it up today with small amount.. expecting a reasonable half year result

[kura]

I'm thinking of getting more PGW (mainly due to Div Yield of near 10% )
Is there something I'm missing here ? As apart from normal agricultural type risks, I can't see any great downside ( not much upside either, mind you)
Cheers

[Lewylewylewy]

What bothers me about pgw is that they don't seem to have a pile of money in the bank to safeguard against a rainy day... As far as I'm aware..?

Feels like they're waiting for a disaster

[kura]

Good Point, Div don't seem sustainable in terms of their 2015 operating cash flow !

[nextbigthing]

Happy farmers. Perhaps this year will work out better than people are anticipating.

http://www.stuff.co.nz/business/farming/75594062/north-canterbury-farmers-happy-as-rain-falls-where-its-needed.html

[James108]

To me it seems like the GDT milk price is very elastic. i.e. an expected 7% drop in volumes results in far more than a 7% rise in prices. Maybe its better for dairy farmers if there is a drought?

[see weed]

Roger Roger look at that 900,000 block at 42c . Buyers are starting to nibble away at 42, ex div in about 6 weeks. Might buy another 100k before they disappear.:t_up:

[percy]

Roger Roger look at that 900,000 block at 42c . Buyers are starting to nibble away at 42, ex div in about 6 weeks. Might buy another 100k before they disappear.:t_up:

Take care See Weed it looks as though the tide is going out, as the sp at 41.5 cents is under the 50 day EMA [42cents],the 100 day EMA[42cents], and the 200day EMA[43cents].
You could end up well under water.
May pay for you to wait and catch an incoming tide.

[see weed]

Take care See Weed it looks as though the tide is going out, as the sp at 41.5 cents is under the 50 day EMA [42cents],the 100 day EMA[42cents], and the 200day EMA[43cents].
You could end up well under water.
May pay for you to wait and catch an incoming tide.
Thanks for advice percy. Typical me trying to get in too early. Lots of rain lately, might help to change the tide. If it goes out any further, will just have to buy more. It seems easy buying more when divy in a couple of months.

[see weed]

Nibble nibble nibble at 42c.

[ghostrider68]

where did you get the future dividend information from, I can't find it anywhere. Or are you just going off last years dates? And what size will the dividend be and where is that information, or is it yet to be announced? Thanks


Roger Roger look at that 900,000 block at 42c . Buyers are starting to nibble away at 42, ex div in about 6 weeks. Might buy another 100k before they disappear.:t_up:

[mshierlaw]

where did you get the future dividend information from, I can't find it anywhere. Or are you just going off last years dates? And what size will the dividend be and where is that information, or is it yet to be announced? Thanks



Future dividend date is normally the same as last year. Dividend amount is a wait & see.

Chairman's address in annual report should indicate the future earnings unless a profit announcement has been made, which could be the fine as notified by PGW previously.

I'm still looking for a top up but my low trigger has not yet activated. No hurry EH!

[Beagle]

Roger Roger look at that 900,000 block at 42c . Buyers are starting to nibble away at 42, ex div in about 6 weeks. Might buy another 100k before they disappear.:t_up:

Hi mate,

I don't think there's any hurry. Dairy is still well and truly in the doldrums and the comcom settlement will cost them 0.42 cps and could impact the half year dividend. Maybe with legal costs half a cent per share.
Good to see a fair bit of rain around so far this summer, (not so good for boaties), so the farmers will be slightly less grumpy about that.

Feels to me like its building a base around the current low level but I think we'll need to be patient waiting for the recovery.

[BlackPeter]

Hi mate,

I don't think there's any hurry. Dairy is still well and truly in the doldrums and the comcom settlement will cost them 0.42 cps and could impact the half year dividend. Maybe with legal costs half a cent per share.
Good to see a fair bit of rain around so far this summer, (not so good for boaties), so the farmers will be slightly less grumpy about that.

Feels to me like its building a base around the current low level but I think we'll need to be patient waiting for the recovery.

Welcome back, Roger - great to have you back!

Re PGW ... I agree, they might just bottoming out and I don't see at this stage a big rush to buy more.

On the other hand ...
* the current rain is great news for agriculture - it might well rescue the season (just remembering all this El Nino doom and gloom)!
* Not sure whether it is relevant - but we have so far this year on our section in mid Canterbury the best harvest ever since we own the block (ie.e more than 20 years), referring to various pip and stone fruit: Cherries, Plums, Apricot, Apple, Pears, ...), so I think that the professionals might do well as well.
* diesel and other transport cost for agriculture (probably fertilizer as well, but this is just a guess) are lower than they have been in decades. Power (for irrigation) is as well quite cheap in comparison.
* just wondering what the lifting of the Iran sanction might mean. Iran used to be a big trading partner for NZ - and now they have again access to money and they might want to buy some more meat / wool / milk / fruit (and by the way - even NZ made electronics, but this is another thread). 82 million potential customers are nothing to spit at ...
* (added later): and how could I forget ... the exchange rate is as well much better than it used to be for years ...

To cut a long story short - personally I think that the upwards potential for PGW is higher than the downside risks. While you never know, what the fickle markets are doing - I do see them at this stage as a worthwhile investment! Not a screaming buy, but an "accumulate on dips".

Discl: holding (and roughly around purchase price ... but "harvested" already some nice dividends over the last couple of years); Obviously - DYOR;

[Beagle]

Thanks for the warm welcome back BP. You make some good points. Hearing El Nino mentioned in the weather forecast every day got a bit tiresome in December didn't it but we seem to be travelling quite well compared to last year in the soil moisture stakes and there's all the other positive factors you've mentioned so I agree with you. Accumulate on the dips makes sense to me.

[Agrarinvestor]

Help!!!!
Agria's CEO Adam Lai will ouster their shareholders. 2 Jears ago they write off 65 million land use rights. The arable land was purchased for sheep breeding 8 years ago. Lamb price demand is increasing in china. Therfore it is not acceptable that they wrote of 65 Million shareholder assets!
The CEO will do everything to destroy shareholder value.

[BlackPeter]

Help!!!!
Agria's CEO Adam Lai will ouster their shareholders. 2 Jears ago they write off 65 million land use rights. The arable land was purchased for sheep breeding 8 years ago. Lamb price demand is increasing in china. Therfore it is not acceptable that they wrote of 65 Million shareholder assets!
The CEO will do everything to destroy shareholder value.

Not sure I understand the problem. As you describe it did Agria write down some at the time overvalued assets. This is what they are required to do. But even if the act of writing down the assets would have been a problem for Agria shareholders ... why would this be an issue for PGW and relevant for this thread?

[Snoopy]

Help!!!!
Agria's CEO Adam Lai will oust their shareholders. 2 Years ago they write off 65 million land use rights. The arable land was purchased for sheep breeding 8 years ago. Lamb price demand is increasing in china. Therfore it is not acceptable that they wrote of 65 Million shareholder assets!
The CEO will do everything to destroy shareholder value.


Agrainvestor, at the moment this is only a proposal and there is no guarantee that the independent directors will accept the proposed offer of $US1.20 per ADR as reasonable. On the face of things it looks opportunisitic. The Agria share price only dipped below $US1.20 on 12th January 2016. Remember Agria will have problems with the listing authorities in the USA if their share price is below $1 for a sustained period. So floating the possibility of a takeover offer at $1.20 is one way to stop that.

Not sure you can object to a previous accounting period write down at this late stage. It is the sort of thing that you should have brought up at the relevant AGM at the time.

As a minority shareholder you are in for the ride now. What will happen, will happen. If you are pushed out, take your money and reinvest in PGW directly.

SNOOPY

[frostyboy]

At of 27 January, 6 commercial properties tenanted by PGG wrightson were listed for sale http://www.primecommercial.co.nz/commercial/search/keywords/pgg+wrightson

I assume PGW are the owners. Could be a omen of PGW needing cash. Of course management would spin otherwise

[BlackPeter]

At of 27 January, 6 commercial properties tenanted by PGG wrightson were listed for sale http://www.primecommercial.co.nz/commercial/search/keywords/pgg+wrightson

I assume PGW are the owners. Could be a omen of PGW needing cash. Of course management would spin otherwise

Not sure whether they currently own the properties - why would they sign a lease to rent agreement with themselves - and the offers talk about existing agreements?

As well - most companies get away from owning their own premises. specialists can look after these buildings much more efficiently - and the tax position is as well much more positive if you lease your premises instead of owning them.

Remember - lease rates are fully tax deductible; Owning a building is not.

[Queenstfarmer]

Not sure whether they currently own the properties - why would they sign a lease to rent agreement with themselves - and the offers talk about existing agreements?

As well - most companies get away from owning their own premises. specialists can look after these buildings much more efficiently - and the tax position is as well much more positive if you lease your premises instead of owning them.

Remember - lease rates are fully tax deductible; Owning a building is not.

PGW acquired these properties back in June 2014. AG Property Holdings Ltd. The properties listed for sale are just a few of the entire portfolio they purchased for $30 mil.

[Agrarinvestor]

Agrainvestor, at the moment this is only a proposal and there is no guarantee that the independent directors will accept the proposed offer of $US1.20 per ADR as reasonable. On the face of things it looks opportunisitic. The Agria share price only dipped below $US1.20 on 12th January 2016. Remember Agria will have problems with the listing authorities in the USA if their share price is below $1 for a sustained period. So floating the possibility of a takeover offer at $1.20 is one way to stop that.

Not sure you can object to a previous accounting period write down at this late stage. It is the sort of thing that you should have brought up at the relevant AGM at the time.

As a minority shareholder you are in for the ride now. What will happen, will happen. If you are pushed out, take your money and reinvest in PGW directly.

SNOOPY
Many Thanks for your answer. Writing land use rights to zero to the disadvantage of minority shareholders is ugly thing.
CEO is holding 80% of the voting rights.

Imagine they write to 50% of the Assets of PGW. One year later Adam Lai give you an offer for 20 cents.
As a PGW shareholder yiu should take close attention to this wrongfulness.
The same can happen to you. IF Adam Lai succeded with his maneuver he can fool you also.

[BlackPeter]

Many Thanks for your answer. Writing land use rights to zero to the disadvantage of minority shareholders is ugly thing.
CEO is holding 80% of the voting rights.

Imagine they write to 50% of the Assets of PGW. One year later Adam Lai give you an offer for 20 cents.
As a PGW shareholder yiu should take close attention to this wrongfulness.
The same can happen to you. IF Adam Lai succeded with his maneuver he can fool you also.

Can't really comment on the story in Agria (don't follow them), but what I've seen so far of Alan Lai and Agria's dealings with PGW - everything I have seen so far appears to be above board. And remember - PGW would not be around today if Agria would not have paid 60 cents per share at the last capital raising (and their average share price paid is still well above that mark). So - I think PGW does owe Agria and Alan Lai. Would not justify them to do dodgy things, but as i said, I don't see any evidence for that either.

Related to the perceived low ball offer for Agria: Well, I guess everybody is allowed to make low ball offers for anything ... and I have no idea whatsoever, what the take over rules are on the NYSE. I don't know either whether the price you suggested ($1.20) is undervaluing the company or not.

However - PGW is listed on the NZX. So, if we assume for arguments sake that Alan Lai would want to play a game as you described with PGW, than he first would need to convince the independent directors that his offer is fair and reasonable. Otherwise he would not get their recommendation for this move. Than he would need to convince at least 80% of the remaining share holders (he is currently just holding 50%) that his offer is a good and fair one (nobody forces them to sell).

Only than could he use the rules for compulsory acquisition of the remaining 10% of shares - and even than would these remaining share holders have the right to call for an arbitration panel if they don't like the price offered.

The other thing is - what benefit would he have of turning PGW into a 100% Chinese company? Do you think that this would help them in the NZ market place?

So - I guess I wouldn't be too concerned for PGW share holders ... and as indicated, what happens with Agria would probably belong into to some different thread.

[Beagle]

Very well said BP.

[Snoopy]

So - I guess I wouldn't be too concerned for PGW share holders ... and as indicated, what happens with Agria would probably belong into to some different thread.


I for one am very grateful for Agrainvestor keeping us informed of what is happening at Agria on this thread. Agria at last reporting date had 5 directors in total, three of whom were independent.

Joo Hai Lee 59 Independent Director
Sean Shao 58 Independent Director
Wah Kwong Tsang 63 Independent Director

The last name on that list should be familiar, because he is also a director of PGW! Consequently I think it will be highly relevant to this thread exactly what Wah Kwong Tsang signs off as the 'fair value' of PGW today in any independent report, valuing Agria.

Agria's external turnover for FY2015 (YE 30th June, same balance date as PGW) was $US944.714m. Using the 30th June 2015 NZD to USD exchange rate:

$USD944.714m x 1.462 NZD/USD = $NZD1,381.2m

Now, turnover for PGW that year was $NZD1,202.835. (Note that PGW is fully consolidated into the accounts of Agria). By turnover then, PGW makes up

$NZD1,202.835/ $NZD1,381.2m = 87% of the activity of Agria.

So you can see that Agria is largely a leveraged US listed proxy for direct investment in PGW. Accordingly, whatever goes on at Agria is highly relevant to PGW and IMO discussion on Agria should not be on a separate thread.

SNOOPY

[Agrarinvestor]

@Snoopy,
thanks. As you know I'm invested since years in Agria. My holding was 55.000. I reduced it to 10.000 because of the land use right write of.
>>land use rights and non-current prepayments of $57.0 million made in 2013<<

CEO Adam Lai has not explained us why this land use right are worth nothing!! It's a crime.
He has misused his voting rights and he has a rope team as independent directors.
My investment has a large china stake. I'm not a friend of the all chinese are criminals theory.
But these chinese CEO's misuse their voting power to the disadvatage of minority shareholders.
It's my third Squeeze Out.
Please help and raise some attention to New Zealands press. I don't see a real chance for PGW's shareprice to raise in the future.
It will always be bonded to the level of dividend they can generate.

[Beagle]

@Snoopy,
thanks. As you know I'm invested since years in Agria. My holding was 55.000. I reduced it to 10.000 because of the land use right write of.
>>land use rights and non-current prepayments of $57.0 million made in 2013<<

CEO Adam Lai has not explained us why this land use right are worth nothing!! It's a crime.
He has misused his voting rights and he has a rope team as independent directors.
My investment has a large china stake. I'm not a friend of the all chinese are criminals theory.
But these chinese CEO's misuse their voting power to the disadvatage of minority shareholders.
It's my third Squeeze Out.
Please help and raise some attention to New Zealands press. I don't see a real chance for PGW's shareprice to raise in the future.
It will always be bonded to the level of dividend they can generate.



I've got burned before as a minority shareholder in a Chinese majority owned listed NZX company so I'm a little concerned by what you've said especially given the direct connection with the directors involved. Yet another fall in the GDT auction price when we are supposed to be experiencing a recovery is frustrating.

[Snoopy]

@Snoopy,
thanks. As you know I'm invested since years in Agria. My holding was 55.000. I reduced it to 10.000 because of the land use right write of.
>>land use rights and non-current prepayments of $57.0 million made in 2013<<

CEO Adam Lai has not explained us why this land use right are worth nothing!! It's a crime.


I presume the Chinese land use rights have been written off because the use of that can no longer deliver any profits to Agria?



He has misused his voting rights and he has a rope team as independent directors.


You previously suggested that Alan Lai has 80% of voting rights in Agria. However page 51 of the latest Agria annual report suggests Alan's interest is actually 47.8%.

As for independent directors being 'independent'. With 47.8% of the votes,an independent director will not be appointed without Lai's approval to be sure. Exactly the same at PGW where Lai controls over 50% of the shares. But this doesn't mean that independent directors have no duty to look after minority shareholders.

One thing I am curious about is how Wah Kwong Tsang is declared an Independent Director of Agria. Yet in New Zealand the same man controlling the same assets becomes a non-independent director? Something doesn't sit right there.



I don't see a real chance for PGW's shareprice to raise in the future. It will always be bonded to the level of dividend they can generate.


If a company pays out all of their earnings as dividends,then it will struggle to raise its share price at the same time. I think this is a given, and understood by most investors in PGW today. Nevertheless in the case of PGW, if they can show an ability to keep paying dividends throughout the rural cycle (even if those dividends fall at the cycle low point), I think there is a fair chance the share price will be rerated, 100% earnings payout policy notwithstanding.

SNOOPY

[BlackPeter]

I for one am very grateful for Agrainvestor keeping us informed of what is happening at Agria on this thread. Agria at last reporting date had 5 directors in total, three of whom were independent.

Joo Hai Lee 59 Independent Director
Sean Shao 58 Independent Director
Wah Kwong Tsang 63 Independent Director

The last name on that list should be familiar, because he is also a director of PGW! Consequently I think it will be highly relevant to this thread exactly what Wah Kwong Tsang signs off as the 'fair value' of PGW today in any independent report, valuing Agria.

Agria's external turnover for FY2015 (YE 30th June, same balance date as PGW) was $US944.714m. Using the 30th June 2015 NZD to USD exchange rate:

$USD944.714m x 1.462 NZD/USD = $NZD1,381.2m

Now, turnover for PGW that year was $NZD1,202.835. (Note that PGW is fully consolidated into the accounts of Agria). By turnover then, PGW makes up

$NZD1,202.835/ $NZD1,381.2m = 87% of the activity of Agria.

So you can see that Agria is largely a leveraged US listed proxy for direct investment in PGW. Accordingly, whatever goes on at Agria is highly relevant to PGW and IMO discussion on Agria should not be on a separate thread.

SNOOPY

Hi Snoopy & Agrarinvestor ... fair enough (re informing PGW share holders), though what I am a bit concerned about is - there are normally two sides to any story, and given that this is the PGW thread am I not sure how many people are around on this thread who might know more about the other side of this particular Agria story (well - I don't).

I understand that Agrarinvestor is unhappy (and looking into the Agria share price he might have a reason for that), but he used several times the word "criminal" to describe Alan Lai's behaviour.

While it is not unheard of that directors of companies break the law, do I still think that we should give them as well the presumption of innocence until proven guilty. Question - is any authority looking into this by Agrarinvestor alleged misconduct? Has anybody been convicted for it by a court of law? If no to both - why not, and why would it be o.k. to call Alan Lai's behaviour criminal?

Agrarinvestor ... just let me ask you a question: If we take your side of the story at face value, than it sounds like you might have a real grievance. What did you do to rectify the situation?

It obviously will not help you to spread rumours in a NZ PGW thread against the majority share holder of PGW. Even if we wanted, we could not even vote for the removal of Agria as a majority share holder - couldn't we? What however might help you is to work together with other Agria shareholders to get what you think is rightly yours.

Did you contact already Ngai Tahu? They hold from memory more than 7% of Agria. What is their sentiment? If they see the story similar to you, than they might have already a handful of lawyers working on this case and be happy to allow other minority share holders to join into a class action?

Or do they have a different view to yours? If yes - why?

[Snoopy]

Hi Snoopy & Agrarinvestor ... fair enough (re informing PGW share holders), though what I am a bit concerned about is - there are normally two sides to any story, and given that this is the PGW thread am I not sure how many people are around on this thread who might know more about the other side of this particular Agria story (well - I don't).

<snip>

What however might help you is to work together with other Agria shareholders to get what you think is rightly yours.

Did you contact already Ngai Tahu? They hold from memory more than 7% of Agria. What is their sentiment? If they see the story similar to you, than they might have already a handful of lawyers working on this case and be happy to allow other minority share holders to join into a class action?

Or do they have a different view to yours? If yes - why?

Admirable advice BP. But Ngai Tahu is a 7% shareholdler in Agria Asia. Agria Asia has as their principal shareholder Agria Corporation. But Ngai Tahu is not invested in Agria Corporation, which is where Agrainvestor finds himself. Agria Asia is not a listed company. By all means Agrainvestor should team up with other Agria Corporation Shareholders - a good idea. But Ngai Tahu is not one of them.

SNOOPY

[BlackPeter]

Admirable advice BP. But Ngai Tahu is a 7% shareholdler in Agria Asia. Agria Asia has as their principal shareholder Agria Corporation. But Ngai Tahu is not invested in Agria Corporation, which is where Agrainvestor finds himself. Agria Asia is not a listed company. By all means Agrainvestor should team up with other Agria Corporation Shareholders - a good idea. But Ngai Tahu is not one of them.

SNOOPY

Good point - as indicated, I didn't know a lot about Agria. Looked after your post at their corporate structure - and you are correct - Ngai Tahu owns a share in Agria Asia, not in the Agria Corporation.

7860

The only question I now would have - why would anybody want to invest into a company with head quarter in the Cayman Islands. They even warn in their annual reports that people don't need to bother to sue them -

7862

and that (small) share holder rights are limited:

7861

(all snippets from their 2015 annual report)

Agrarinvestor - did you ever read the Agria annual reports? It feels they are quite relevant regarding to your concerns ...

[Snoopy]

Agrarinvestor - did you ever read the Agria annual reports? It feels they are quite relevant regarding to your concerns ...


"There is a risk that our existing shareholders may not always act in the best interests of the company."

LOL Say it all!

SNOOPY

[see weed]

Hey Roger, one buyer came in and bought 300,000 at 4.55pm. Was that you:)? Must be another divy hunter. Looks like sellers disappearing. Looking good for now.

[Beagle]

Not me mate. I'm keeping my powder dry for a big play on something else shortly.

[see weed]

Not me mate. I'm keeping my powder dry for a big play on something else shortly.
Let us know how you get on with big play. I'm looking at a little play on TTK with yield of 11.76%, could be tempted.

[Ellipsis]

If you have access to NBR Paid Content, there is an article today headlined "PGG Wrightson chairman attracts Takeovers Panel attention". Looks like there is a proposed takeover of Agria Corp.

[Beagle]

If you have access to NBR Paid Content, there is an article today headlined "PGG Wrightson chairman attracts Takeovers Panel attention". Looks like there is a proposed takeover of Agria Corp.

PGW sold off aggressively at the close.

[percy]

If you have access to NBR Paid Content, there is an article today headlined "PGG Wrightson chairman attracts Takeovers Panel attention". Looks like there is a proposed takeover of Agria Corp.

The phrase that comes to mind is;
"Don't buy a pig in a poke."

[Agrarinvestor]

Hi Snoopy & Agrarinvestor ... fair enough (re informing PGW share holders), though what I am a bit concerned about is - there are normally two sides to any story, and given that this is the PGW thread am I not sure how many people are around on this thread who might know more about the other side of this particular Agria story (well - I don't).

I understand that Agrarinvestor is unhappy (and looking into the Agria share price he might have a reason for that), but he used several times the word "criminal" to describe Alan Lai's behaviour.

While it is not unheard of that directors of companies break the law, do I still think that we should give them as well the presumption of innocence until proven guilty. Question - is any authority looking into this by Agrarinvestor alleged misconduct? Has anybody been convicted for it by a court of law? If no to both - why not, and why would it be o.k. to call Alan Lai's behaviour criminal?

Agrarinvestor ... just let me ask you a question: If we take your side of the story at face value, than it sounds like you might have a real grievance. What did you do to rectify the situation?

It obviously will not help you to spread rumours in a NZ PGW thread against the majority share holder of PGW. Even if we wanted, we could not even vote for the removal of Agria as a majority share holder - couldn't we? What however might help you is to work together with other Agria shareholders to get what you think is rightly yours.

Did you contact already Ngai Tahu? They hold from memory more than 7% of Agria. What is their sentiment? If they see the story similar to you, than they might have already a handful of lawyers working on this case and be happy to allow other minority share holders to join into a class action?

Or do they have a different view to yours? If yes - why?

>>"criminal" to describe Alan Lai's behaviour.<<

Agria bought Land use right for 57 million US$, and they simply write that down to ZERO. It can be that AGRIA can not use it for Seed growing. OK, i belief it. But it's not worthless. They can sell it.

[BlackPeter]

The phrase that comes to mind is;
"Don't buy a pig in a poke."

Percy - just wondering ... who would be the pig you are here referring here to? PGW? Agria?

If we look at PGW ... I guess yes, I think we have by now established that their indirect majority shareholder (Agria Corporation) might be subject to a different set of what is right and what's wrong than typical Western Companies (who are not subject to Cayman island jurisdiction) ... but than - I am still not sure, how this might effect PGW's operation (unless we assume that the PGW board operates under the same presumptions and lack of responsibilities as the board of their Cayman island based majority owner may or may not do)

As well - yes, dairy (from memory something like 15% of the PGW business) is currently in the doldrums ... but on the other hand - most other parts of the NZ agriculture (fruit, wine, red meat, wool) have this year a bumper year ... e.g. Canterbury had this January more than twice as much rain than the long term average and I see (and hear) the harvesting machines work day and night ...

Question - are you referring in your concerns re PGW to one of both of the above ... or are there as well other issues you think shareholders should be concerned about?

[iceman]

The NBR story is a good read for anyone interested. The takeover proposal of Agria may have implications for PGW. This sentence gives some idea to the article's contents: "If the code did apply, it would require the acquirer to get the approval of the downstream company’s shareholders (eg, PGG Wrightson’s) or complete a takeover of the downstream company."

[percy]

Percy - just wondering ... who would be the pig you are here referring here to? PGW? Agria?

If we look at PGW ... I guess yes, I think we have by now established that their indirect majority shareholder (Agria Corporation) might be subject to a different set of what is right and what's wrong than typical Western Companies (who are not subject to Cayman island jurisdiction) ... but than - I am still not sure, how this might effect PGW's operation (unless we assume that the PGW board operates under the same presumptions and lack of responsibilities as the board of their Cayman island based majority owner may or may not do)

As well - yes, dairy (from memory something like 15% of the PGW business) is currently in the doldrums ... but on the other hand - most other parts of the NZ agriculture (fruit, wine, red meat, wool) have this year a bumper year ... e.g. Canterbury had this January more than twice as much rain than the long term average and I see (and hear) the harvesting machines work day and night ...

Question - are you referring in your concerns re PGW to one of both of the above ... or are there as well other issues you think shareholders should be concerned about?

The meaning of the quote is;"That something is sold or brought without the buyer knowing its true nature or value."
So Agria "carry on" means what to PGW?
Well their history is not exactly something to be proud of if you read Agrainvestor's posts, and would greatly concern me if I held PGW shares.
ps.PGW's exposure to dairying is between 23% and 25%,not 15%.

[Beagle]

Percy's right, Dairy has historically been 24% of PGW's business.

[nextbigthing]

Currently 40 cents. Upcoming dividend 1.5 - 2c meaning people are effectively valuing it at 38 - 38.5 cents. As BlackPeter says, sure dairying is down but everything else is up. The El Nino drought hasn't amounted to much. Still in a bit of a downtrend. Watching with interest.

[Beagle]

Currently 40 cents. Upcoming dividend 1.5 - 2c meaning people are effectively valuing it at 38 - 38.5 cents. As BlackPeter says, sure dairying is down but everything else is up. The El Nino drought hasn't amounted to much. Still in a bit of a downtrend. Watching with interest.

http://www.sharechat.co.nz/article/c7d52612/nzx-dairy-futures-point-to-further-decline-in-whole-milk-powder-from-six-month-low.html

It just goes from bad to worse to even worse still for 24% of their customers. The rumour mill around alleged improprieties with the parent company isn't helping either.
Very tough for shareholders of PGW...just be glad we're not dairy farmers :eek2:

[Agrarinvestor]

Yes i read their filings. The main reason whay i have invested in AGRIA was the fact that their main asset is in NZ. Therefore i thought that they will not fool us.
And they can laugh about their investors in Agria, and they can laugh about PGW investors. You can do nothing. They have the majority and they will ignore your interest.
If you sell, and PGW price goes lower they will offer you a compensation.
It's really a mess. The chinese are buying companies in the whole world, and they can be sure that everyone treat them fairly.
But if you are an investor in China, they have always a chinese majority shareholder and you righs are ignored.

I have a large investment in CGA. A chinese US listed company. Nett assets above 300 million US$ and Market Cap of 30 million. Today is conference call. They treat us like ****.
IR department is ignoring western investors.

Here are the voting rights of Adam Lai. Difficult to understand:



Number of shares as to which such person has:


Reporting Person
Amount Beneficially Owned
Percent of Class
Sole Power to Vote or Direct the Vote
Shared Power to Vote or to Direct the Vote
Sole Power to Dispose or to Direct the Disposition of
Shared Power to Dispose or to Direct the Disposition of


Guanglin Lai
49,534,202(1)(2)
44.72%
49,534,202(1)(2)
0
49,534,202(1)(2)
0


Brothers Capital Limited
48,522,000(2)
43.81 %
48,522,000(2)
0
48,522,000(2)
0


Morgan Finanz Capital Limited
31,076,750(2)
28.06%
31,076,750(2)
0
31,076,750(2)
0


* Based on a total of 110,766,600 outstanding shares of the Issuer as of December 31, 2013.




(1)
Includes 1,012,202 ordinary shares in the form of American Depositary Shares held by Mr. Guanglin Lai.






(2)
Brothers Capital Limited, a British Virgin Islands company, is the record owner of 17,445,250 ordinary shares of the issuer. Morgan Finanz Capital Limited, a British Virgin Islands company, is the record owner of 31,076,750 ordinary shares of the issuer. Morgan Finanz Capital Limited is wholly owned by Brothers Capital Limited, which in turn is wholly owned by Mr. Guanglin Lai. Mr. Guanglin Lai is the sole director of both Brothers Capital Limited and Morgan Finanz Capital Limited. Pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Brothers Capital Limited may be deemed to beneficially own all of the shares held by Morgan Finanz Capital Limited, and Mr. Guanglin Lai may be deemed to beneficially own all of the shares held by Brothers Capital Limited and Morgan Finanz Capital Limited.



Let us know if you have any questions on this. Thanks

Gary Dvorchak, CFA
ICR on behalf of Agria Corporation

[see weed]

There is so much rain here, might have to mow the lawns twice a week or get in a couple of sheep. Where would sp go if world wide mad cow broke out in those overseas countries?:)

[winner69]

Sign of things to come for PGW?

Livestock Improvement first-half profit drops 46% as farmers spend less
http://www.sharechat.co.nz/article/30099005/livestock-improvement-first-half-profit-drops-46-as-farmers-spend-less.html

[percy]

Sign of things to come for PGW?

Livestock Improvement first-half profit drops 46% as farmers spend less
http://www.sharechat.co.nz/article/30099005/livestock-improvement-first-half-profit-drops-46-as-farmers-spend-less.html

$23mil turnaround in cashflow is not good.In fact not very good at all.!!
Can't see PGW being able to extend the same sort of terms to their customers.
We live in interesting times?!

[BlackPeter]

Sign of things to come for PGW?

Livestock Improvement first-half profit drops 46% as farmers spend less
http://www.sharechat.co.nz/article/30099005/livestock-improvement-first-half-profit-drops-46-as-farmers-spend-less.html

sure, however ...

maybe too early to become depressed ... the rural news this morning (RNZ) have been actually quite upbeat:
http://www.radionz.co.nz/national/programmes/ruralnews/audio/201788801/morning-rural-news-for-11-february-2016
(talking about fruit, honey, wool) and I remember as well a recent report (as well RNZ, but don't remember the date)
stating that farmers (I think that report was referring to South Island) are actually quite busy investing ...

[Beagle]

Credible result given the very strong headwinds in the dairy industry. Outlook looks okay to me too. Performing well considering...

[babymonster]

The market still feels a bit disappointed and uncertaint about the future. I guess that's why sp fell.

[see weed]

The market still feels a bit disappointed and uncertaint about the future. I guess that's why sp fell.
That was my fault. Sold a very small portion at 4.55pm, but someone else jumped in at 4.59pm to sell some and pushed my order to 0.405c.

[Beagle]

That was my fault. Sold a very small portion at 4.55pm, but someone else jumped in at 4.59pm to sell some and pushed my order to 0.405c.

Why are you selling mate ? I would have thought all the bad news is fully priced in at 40.5 - 41 cents trading cum a 1.75 cent dividend ? I'm thinking of buying there to be honest. Maybe we could do an off market deal and save the brokerage, you go walking in the Waitakere ranges and drink coffee at Titirangi...so do I :)

[see weed]

Why are you selling mate ? I would have thought all the bad news is fully priced in at 40.5 - 41 cents trading cum a 1.75 cent dividend ? I'm thinking of buying there to be honest. Maybe we could do an off market deal and save the brokerage, you go walking in the Waitakere ranges and drink coffee at Titirangi...so do I :)
Not to worry, still have over 400ks. But am getting divs for brm, mln and 4c div for ttk in the next 3 weeks:D.ps Don't drink coffee any more. Some good walks at Titi and Piha.

[Snoopy]

Why are you selling mate ? I would have thought all the bad news is fully priced in at 40.5 - 41 cents trading cum a 1.75 cent dividend ? I'm thinking of buying there to be honest. Maybe we could do an off market deal and save the brokerage, you go walking in the Waitakere ranges and drink coffee at Titirangi...so do I :)

Not so sure all the bad news is priced in for the business cycle yet. If dairy's recovery is being pushed out over the visible horizon, and beef and horticulture start to come down from their highs, then what will that do to the forward outlook for PGW? I was hoping for some -significant- share price weakness after the result that would allow me to top up cheaply. But it didn't really happen. So good work from 'the Dewd' and his crew.

Of course if PGW continues to perform in this low interest rate environment, the market may rerate the share upwards to bring down the yield, even as profits are static or slightly falling. In that case my top up strategy will fail. But since I regard myself as 'neutrally weighted' with my PGW holding this will be OK. I will simply have to 'put up' with the shares that I already have :-)

SNOOPY

[Beagle]

So many if's, but's and maybe's in the N.Z. economy at the moment isn't there ! Bottom line for me is they're doing pretty well considering a whopping 24% of their customers are really suffering very badly. Good dividend yield stock and with interest rates set to plumb 70 year lows this year I think it's well supported around the current SP.

[see weed]

So many if's, but's and maybe's in the N.Z. economy at the moment isn't there ! Bottom line for me is they're doing pretty well considering a whopping 24% of their customers are really suffering very badly. Good dividend yield stock and with interest rates set to plumb 70 year lows this year I think it's well supported around the current SP.
And .415c disappearing fast. 42c just around the corner.

[babymonster]

people must getting ready for the div

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11600252

http://www.sharechat.co.nz/article/85d0a925/low-borrowing-costs-weaker-kiwi-to-underpin-nz-m-a-activity-in-2016.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+5+ March+2016

Looks like PGW could be in play...one way or other it looks sound value to me at 41.5 cps trading cum a fully imputed 1.75 cps dividend.

[see weed]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11600252

http://www.sharechat.co.nz/article/85d0a925/low-borrowing-costs-weaker-kiwi-to-underpin-nz-m-a-activity-in-2016.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+5+ March+2016

Looks like PGW could be in play...one way or other it looks sound value to me at 41.5 cps trading cum a fully imputed 1.75 cps dividend.
Wonder what Monday will bring for PGW?

[Snoopy]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11600252

http://www.sharechat.co.nz/article/85d0a925/low-borrowing-costs-weaker-kiwi-to-underpin-nz-m-a-activity-in-2016.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+5+ March+2016

Looks like PGW could be in play...one way or other it looks sound value to me at 41.5 cps trading cum a fully imputed 1.75 cps dividend.

I think the best that can be assumed here is that Alan Lai might be required to bid for the rest of PGW. However, I don't believe that Alan has the money to fund such a bid. The bid for full control of Agria I read as a cost saving measure for Alan, removing a level of (Agria) bureaucracy, that is no longer required now that Agria is little more than a holding company for Alan's investment in PGW.

Nor do I believe that Alan wants to end what has become a successful joint NZ/Chinese partnership. If Alan is forced to make a bid by the takeovers panel, a contingency I don't think likely, then expect it to be a low ball offer, say 30c, which would be rejected by all by all shareholders that can still stand up. Don't speculate on being bought out of this one is my advice to potential new PGW shareholders, speaking as a long term PGW shareholder. But on fundamental terms, PGW is I believe a sound place for investors to park a proportion of a balanced investment portfolio.

SNOOPY

[Beagle]

Be that as it may Snoopy but the world is awash with really cheap money and banks are only too keen to lend.

[winner69]

I think the best that can be assumed here is that Alan Lai might be required to bid for the rest of PGW. However, I don't believe that Alan has the money to fund such a bid. The bid for full control of Agria I read as a cost saving measure for Alan, removing a level of (Agria) bureaucracy, that is no longer required now that Agria is little more than a holding company for Alan's investment in PGW.

Nor do I believe that Alan wants to end what has become a successful joint NZ/Chinese partnership. If Alan is forced to make a bid by the takeovers panel, a contingency I don't think likely, then expect it to be a low ball offer, say 30c, which would be rejected by all by all shareholders that can still stand up. Don't speculate on being bought out of this one is my advice to potential new PGW shareholders, speaking as a long term PGW shareholder. But on fundamental terms, PGW is I believe a sound place for investors to park a proportion of a balanced investment portfolio.

SNOOPY

Snoops - be fair to the man - offer at 35 cents maybe

Not he first time somebody been in this situation and 'forced' to make a takeover offer to meet the regs.

[Beagle]

Or a takeover is self funding at 50 cps on earnings of 4.2 cps, 8.4% at the bottom of the cycle. Plenty of banks will fund a takeover at less than that especially @ Chinese interest rates !!!!.

[see weed]

Pgw ex div tomorrow. So if I Buy PGW today I get div. And if I sell PGW tomorrow I still get div.? Correct me if I'm wrong.

[Beagle]

You're spot on mate so people buying today at 42 cents taking a medium term view are really only effectivly paying 40.25 cps at the bottom of the dairy cycle once they get their dividend back in 5 minutes time so too speak.

Consensus EPS for the next 3 years is 4.3 cps, 4.6 cps and 5.0 cps. Consensus target price 48 cps. http://www.4-traders.com/PGG-WRIGHTSON-LIMITED-6497113/financials/

Trading on a forward PE of 9.36 for Fy16 and consensus dividend of 3.75 cps fully imputed so gross of 5.21 cps so gross dividend yield .0521 / .4025 = 12.94% plus possibility of getting taken over at north of 50 cps at some stage....Hmmm...fairly compelling value in a somewhat otherwise stretched market I would have thought.

[RGR367]

Pgw ex div tomorrow. So if I Buy PGW today I get div. And if I sell PGW tomorrow I still get div.? Correct me if I'm wrong.
You will no longer get the divs on the shares that you buy today as it takes 2 days for settlement. But you get the divs on whatever you’re holding (i.e., registered under your name as of today) that you sell tomorrow.

[percy]

ANZ Securities are showing them CD.

[Under Surveillance]

ANZ Securities are showing them CD.
Yes, and NZX shows them as ex dividend tomorrow (that's 9 March for those who know how to use a calendar).
The T+2 just shortens the interval between them becoming XD and the record date, 10 March.

[winner69]

Pgw ex div tomorrow. So if I Buy PGW today I get div. And if I sell PGW tomorrow I still get div.? Correct me if I'm wrong.

Well see weed - bet you now totally and utterly confused after reading the responses in the last hour

Made your mind up yet

[Beagle]

See weed strikes me as a very canny investor...I'd bet my left one he knew the answer before his post on the subject and was just trying to help the young ones understand the opportunity :)

[RGR367]

Thanks, just to confirm, I purchased a portion yesterday, so I think I just sneaked through to get the divy (T2 Settlement)? not that I intend to sell anytime soon!
Sorry Guys, my fault :(. I was thinking more about the "record date". Up to "record date" is when you still get divs.
TY too Couta.

[kerryo]

ANZ Securities are showing them CD.

What does cum dividend mean Percy? I had never noticed that in ANZ's depth before.
Cheers.

[kura]

Cum Div = With Div
Ex Div = Without

If you care to search Cum you will find other meanings for the word.

[kerryo]

Cum Div = With Div
Ex Div = Without

If you care to search Cum you will find other meanings for the word.

Thanks kura, so tomorrow will it be ex div?

[Joshuatree]

kerryo always go to the source for this info ,NZX.;)

DIVIDENDSUpcoming Dividends

Ex Dividend
Period
Amount
Supp.
Imputation
Payable
Currency


09/03/2016
Interim
1.750c
0.309c
0.681c
05/04/2016
NZD

[see weed]

I wonder if any institutions are buying up this stock? SP is starting to lift off. Perhaps index funds are buying in.

Wow - what a day...the stock surged to a high of $2.45, before backtracking a bit...and there was NO NEWS. I think I'll hold on this one a bit longer! :D
The good old days.....3/11/05:).

[Snoopy]

Or a takeover is self funding at 50 cps on earnings of 4.2 cps, 8.4% at the bottom of the cycle. Plenty of banks will fund a takeover at less than that especially @ Chinese interest rates !!!!.


Alan Lai may have to negotiate terms better than his current banking arrangements for a theoretical 100% debt funded buyout of the rest of PGW to work. Below are the latest reporting period results of the current 50.1% leveraged buyout.



PGG WrightsonAgria (50.1% PGW shareholder)


Net Profit: 1/2YR FY2016+NZD16.066m-USD3.832m


Net Profit: 1/2YR FY2016-NZD5.782m (based on USD/NZD 0.6627)


50.1% Net Profit: 1/2YR FY2016+NZD8.033m



It seems the structure of the Agria business has turned an underlying $NZ8m half year Agria share of profit at PGW into a near $NZ6m loss. Yet there was no mention in the Agria press release of any one offs that might cause such a discrepancy. So I'm guessing it is structural?

SNOOPY

[Beagle]

Half year report didn't inspire confidence. No question the prolonged dairy downturn will have a substantial effect on companies with a meaningful exposure incl PGW, the banks and SKL.

Recent NBR survey showed 86% of participants thought any upturn in dairy wouldn't be forthcoming anytime soon with many thinking it was years away.

Recent flattening in the GDT auction futures for the rest of the year says the market thinks there's very little prospect of a recovery anytime in 2016.

Dairy is 24% of PGW's business. REINZ index of dairy farm sales fell a whopping 14% in the single month of February 2016. Vast over-supply of farms for sale and few buyers.

I fear that down on the dairy farm things are FAR worse than many of us townies realise. Might we see a real reversion to predominantly grass fed cows with land values halving as the only way to survive many years of $4 dairy pay-out's ? Implications for PGW's supplementary feeds business over the long term ? Current slight reduced dividend level safe ?????

[couta1]

As a long term hold for the divvy I see no problem with this iconic stock even though I'm very much in the red currently:cool: PS-Farming has always had up and down cycles, that's the nature of the business.

[Snoopy]

Recent NBR survey showed 86% of participants thought any upturn in dairy wouldn't be forthcoming anytime soon with many thinking it was years away.

Recent flattening in the GDT auction futures for the rest of the year says the market thinks there's very little prospect of a recovery anytime in 2016.

Dairy is 24% of PGW's business. REINZ index of dairy farm sales fell a whopping 14% in the single month of February 2016. Vast over-supply of farms for sale and few buyers.

I fear that down on the dairy farm things are FAR worse than many of us townies realise. Might we see a real reversion to predominantly grass fed cows with land values halving as the only way to survive many years of $4 dairy pay-out's ? Implications for PGW's supplementary feeds business over the long term ? Current slight reduced dividend level safe ?????


PGW divested their 50% interest in the 4Seasons Feeds joint venture in FY2014 (31st May 2014) to their joint venture partner International Nutritionals Limited. Of course, this didn't mean that PGW are getting out of supplementary feed at the retail level. But it does now mean they can choose the level of feedstock in their stores to 'meet the market', rather than being tied to accept the output of their joint venture regardless of market conditions. I remember criticising Dewdney at the time on this forum for selling out of what was then a high margin profitable joint venture. But perhaps this is why Dewdney is CEO of PGW and not someone like me! PGW booked a $4.65m profit on the sale of this 4Seasons Feeds stake.

Subsequently to all this, 'The Dewd' spent around $6.5m acquiring Waterforce, later integrating that into the existing 'PGW Irrigation' division. I would be hard pressed to say anything except that PGGW Irrigation has been badly affected by what is happening in dairy. Are there enough golf courses around Auckland that they can irrigate to make up for this? Maybe overall the strategic timing of both events added together is more neutral!? I guess time will tell!

Dairy farm sales will be positive for the Real Estate division, if not for the farmers selling.

Shareholders have to remember that 76% of PGW's business is not dairy. Personally I am expecting some decrease in earnings for FY2016, and that means a decrease in dividend too. Yet that means the dividend yield will only be high rather than exceptionally high. Furthermore these very low prevailing interest rates will likely support the share price at near to today's levels, even if the dividend is reduced. I am not nervous about holding PGW myself. If the share price does fall agian, I'll be lining up to buy some more.

SNOOPY

[winner69]

As a long term hold for the divvy I see no problem with this iconic stock even though I'm very much in the red currently:cool: PS-Farming has always had up and down cycles, that's the nature of the business.

A very long term chart of PGW shows it is either

A cyclical and we are due boom times and the share price heading to the skies again

or

One of those companies that is always gunna do something special but never seems to deliver. Except for the time our recently departed Craig was in charge the share price has always been about 40 cents/50cents - even going back to last century. Been changes in strategy, restructures, droughts, extreme milk prices and everything else good and bad but stuck in that range.

What's different this time? Probably in 2030 the share price is still 40 cents and all its good for is a steady divie (most years)

And I have not mentioned share price follows eps growth

Chart from ft.com and it says adjusted for any splits etc but no doubt Snoopy will point out that on rights adjusted basis and some bonus shares the chart is a load of crap
I

[Beagle]

Thanks Snoopy, appreciate your thoughts. I agree that interest rates are looking like plumbing hitherto unheard of lows which will be supportive of the market overall and high dividend yield shares in particular but I get a real sense of foreboding this dairy downturn will drag on and on.

Thanks for the chart Winner.

[RTM]

"Might we see a real reversion to predominantly grass fed cows....etc "

Is above necessarily a bad outcome longer term ? Isn't this where NZ's edge lies within dairying ?

RTM

[Beagle]

Yes before the craziness of intensification and massive amounts of supplementary feeds, (some would argue greed for capital gains) set in and land values soared this is how they used to farm in dairy and made reasonable money for many, many years with $4 kg pay-out's.

History repeats, land values will eventually halve or decline potentially even more and dairy farmers will have to revert to traditional low cost farming techniques. Banks will take massive haircuts and then several years later once fear has subsided along with global milk production the craziness will start all over again with the GDT auction prices start going up.

In the meantime I think PGW just scrapes along at the bottom of the cycle of its trading range at ~ 40 cents.

[zymwh]

hi, just want to know if everyone has received the dividend already? i still have not received the check yet....

[janner]

In the meantime I think PGW just scrapes along at the bottom of the cycle of its trading range at ~ 40 cents.

Agree..

Disc. Holder :-(((

[RGR367]

hi, just want to know if everyone has received the dividend already? i still have not received the check yet....

Yes. Credited to my bank A/C on payment date, 5 April '16. Just got the paper about the dividend statement today though. You'll probably have yours on the mail tomorrow if are being paid by a cheque.

[BeeBop]

Yes. Credited to my bank A/C on payment date, 5 April '16. Just got the paper about the dividend statement today though. You'll probably have yours on the mail tomorrow if are being paid by a cheque.

Mine came in on the 5th also. Sold them as with the dividends and a two year hold I was only break even (bought at 46 and 52). Felt that there was no real growth imminent, so sold out and into SCL for a new slice of primary industry with other 'strings'. Still would buy to hold at these prices for the dividend...it is a low for some agriculture so maybe there will upside in the future at current prices and with the current yield, it may be a return option for me once I have more cash.

[janner]

Felt that there was no real growth imminent, so sold out and into SCL for a new slice of primary industry with other 'strings'.

Ditto !!..

[BeeBop]

Ditto !!..

Let's our assessments are correct!

[Snoopy]

Agrainvestor, at the moment this is only a proposal and there is no guarantee that the independent directors will accept the proposed offer of $US1.20 per ADR as reasonable. On the face of things it looks opportunisitic. The Agria share price only dipped below $US1.20 on 12th January 2016. Remember Agria will have problems with the listing authorities in the USA if their share price is below $1 for a sustained period. So floating the possibility of a takeover offer at $1.20 is one way to stop that.


Controlling Agria Alan Lai has withdrawn his preliminary non binding intent to make an offer for all of Agria! Consequently the committee formed by PGW independent directors to consider the downstream consequences of this has been dissolved. Agrinvestor will not be forced out of Agria! But the share price of Agria is only US98c. That is below the price that the NYSE regards as acceptable in the long term. The Agria (GRO) share price has flirted with the dollar level before.

Not sure how to fix this as while PGW is profitable, the leveraged buyout vehicle Agria that holds the PGW controlling stake is not. Possibly Alan Lai could make a preliminary non binding share consolidation proposal for GRO?

SNOOPY

[BlackPeter]

Controlling Agria Alan Lai has withdrawn his preliminary non binding intent to make an offer for all of Agria! Consequently the committee formed by PGW independent directors to consider the downstream consequences of this has been dissolved. Agrinvestor will not be forced out of Agria! But the share price of Agria is only US98c. That is below the price that the NYSE regards as acceptable in the long term. The Agria (GRO) share price has flirted with the dollar level before.

Not sure how to fix this as while PGW is profitable, the leveraged buyout vehicle Agria that holds the PGW controlling stake is not. Possibly Alan Lai could make a preliminary non binding share consolidation proposal for GRO?

SNOOPY

Not that this is really a PGW issue, but I guess a simple share consolidation for Agria (say 1 new share for 2 or 3 existing shares) would be a very simple way to resolve the problem of the SP flirting with the ominous $1 mark ...

[Snoopy]

At of 27 January, 6 commercial properties tenanted by PGG wrightson were listed for sale http://www.primecommercial.co.nz/commercial/search/keywords/pgg+wrightson

I assume PGW are the owners. Could be a omen of PGW needing cash. Of course management would spin otherwise

Can't see what properties PGW were selling in January from this link. I don't think it is any secret that PGW is structured to be 'an efficient user of equity'. Non-core assets will be put up for sale if doing so improves the overall financial strength of the company. Particularly so in this era of 'building depreciation' being disallowed as an expense.


Not sure whether they currently own the properties - why would they sign a lease to rent agreement with themselves - and the offers talk about existing agreements?

As well - most companies get away from owning their own premises. specialists can look after these buildings much more efficiently - and the tax position is as well much more positive if you lease your premises instead of owning them.

Remember - lease rates are fully tax deductible; Owning a building is not.


PGW acquired these properties back in June 2014. AG Property Holdings Ltd. The properties listed for sale are just a few of the entire portfolio they purchased for $30 mil.

Big advert on page C9 of the Press today. Oamaru, Gore, Fairlie, Tapanui, Kurow, Roxburgh and Tuatapere branches of PGW, all up for tender! I wonder if this big property sell down has a mirror image sale going on for PGW's North Island branches?

SNOOPY

[babymonster]

seems they push hard on PGG W real estate..heard a few ad on the radio.. maybe this is a new area that could make money?

[LAC]

https://www.nzx.com/companies/PGW/announcements/281125

Flooding in Uruguay, they might hit lower part of forecast now

[Big Blind]

https://www.nzx.com/companies/PGW/announcements/281125

Flooding in Uruguay, they might hit lower part of forecast now

It never rains but it pours these days for PGW :(

[winner69]

It never rains but it pours these days for PGW :(


So $69.5m last year and $61m this year .......hmmm

[Beagle]

Reminds me of the old Toyota Ute advertisement...Bugger ! Disc - Sold out a little while back...(won't own anything with a significant exposure to dairy until we see clear evidence that dairy is making a meaningful recovery)

[BeeBop]

Things do seem tough but I am now wondering about buying back in just to hold for the yield. If things are tough and they haven't tanked, then it possibly the next direction a gradual upwards climb? I shall watch and wait for a short while and maybe see if the next dairy auction is another improved one.

[winner69]

Things do seem tough but I am now wondering about buying back in just to hold for the yield. If things are tough and they haven't tanked, then it possibly the next direction a gradual upwards climb? I shall watch and wait for a short while and maybe see if the next dairy auction is another improved one.

Take the yield but don't expect much else

As i said the other day pgw is one of those companies that is always gunna do something special but never seems to deliver. Doesnt really matter what the market conditions / environment is lke

[BeeBop]

Yield it shall be will be happy enough to pay in high 30 to low 40s to get the dividend when there isn't a better place for the cash. I have ust put our spare cash into Trifast on the London exchange TRI.LSE, so now I need to wait a bit to get some more cash to buy some PGW for yield (I also get to optimise share purchases by favourable exchange rates currently choosing EUR, GBP and NZD). Everyday bank account has been nearly emptied so I could maximise the money leaving the country (not good to keep money in the bank where we are living). Even though we will be living off the smell of an oily rag this week, I still paid double to buy my NZ Jaz apples...marketed to me as 'new seasons apple, not soft one, like other one' so I purchased if only to boost my SCL dividend!

[JBmurc]

Can't see what properties PGW were selling in January from this link. I don't think it is any secret that PGW is structured to be 'an efficient user of equity'. Non-core assets will be put up for sale if doing so improves the overall financial strength of the company. Particularly so in this era of 'building depreciation' being disallowed as an expense.





Big advert on page C9 of the Press today. Oamaru, Gore, Fairlie, Tapanui, Kurow, Roxburgh and Tuatapere branches of PGW, all up for tender! I wonder if this big pr0perty sell down has a mirror image sale going on for PGW's North Island branches?

SNOOPY

Yes currently looking over a couple down south .... 10yr fixed lease on settlement ...many have now sold some as low as 6% yields all pretty much the same 1960's concrete block/ steel NBS-67% .. does tick many boxes for this investors(at the right price) to diverse my investments ..esp when we will likely see two more rate cuts
3-4% interest rates over the term of the

[Snoopy]

Snoopy wrote:
"Big advert on page C9 of the Press today (13-04-2016). Oamaru, Gore, Fairlie, Tapanui, Kurow, Roxburgh and Tuatapere branches of PGW, all up for tender! I wonder if this big pr0perty sell down has a mirror image sale going on for PGW's North Island branches?"

Yes currently looking over a couple down south .... 10yr fixed lease on settlement ...many have now sold some as low as 6% yields all pretty much the same 1960's concrete block/ steel NBS-67% .. does tick many boxes for this investors(at the right price) to diverse my investments ..esp when we will likely see two more rate cuts
3-4% interest rates over the term of the

You are Auckland based JB? So how far down South are you looking? North Island rural towns? Or some of those South Island PGGW business premises that I listed earlier?

SNOOPY

[JBmurc]

You are Auckland based JB? So how far down South are you looking? North Island rural towns? Or some of those South Island PGGW business premises that I listed earlier?

SNOOPY

Central otago based .. so am looking at a couple out in the sticks ...but within 1hr half drive etc from home

[percy]

Yes currently looking over a couple down south .... 10yr fixed lease on settlement ...many have now sold some as low as 6% yields all pretty much the same 1960's concrete block/ steel NBS-67% .. does tick many boxes for this investors(at the right price) to diverse my investments ..esp when we will likely see two more rate cuts
3-4% interest rates over the term of the

Do you think PGW will still want branches in these towns in 11 years time?
I ask that as the biggest suppliers of books to the NZ book trade are based in Victoria,and deliveries take about the same time as they did from Auckland.
Bit like Pack'n'Save replacing the corner shop.
Can't see tenants lining up for a prime downtown site in Kurow,or any of those towns.

[JBmurc]

Do you think PGW will still want branches in these towns in 11 years time?
I ask that as the biggest suppliers of books to the NZ book trade are based in Victoria,and deliveries take about the same time as they did from Auckland.
Bit like Pack'n'Save replacing the corner shop.
Can't see tenants lining up for a prime downtown site in Kurow,or any of those towns.

I'd agree on most other commercial properties ...but Rural services seem to be one of the few that need to keep premises close to the farming communities

You do find farmers aren't really into ordering everything online aka supporting the dorklanders etc ....going to the local farming store talking with the local PGW workers face to face is still very well received from the farmers I know(father in-law,brother in-law etc) .... also the long 10yr lease at the current yield does give a great pay back of capital ....then if you believe we will continue to have inflation in building costs it would be more unlikely a tenant to want to build in 10yrs time for a much higher cost ....etc

[winner69]

Wow, share price 38.5 cents

Hasn't been this low for a while

Things not looking good for them?

Came out with a trading update this time last year - maybe one on the way in next day or two

[Agrarinvestor]

Has anyone seen the buyback announcement of Agria? It should be a good sign for PGW shareholders regarding earnings and dividends.

http://ir.agriacorp.com/phoenix.zhtml?c=216437&p=irol-newsArticle&ID=2176021

[nextbigthing]

Has anyone seen the buyback announcement of Agria? It should be a good sign for PGW shareholders regarding earnings and dividends.

http://ir.agriacorp.com/phoenix.zhtml?c=216437&p=irol-newsArticle&ID=2176021

That is interesting.

"Our Board of Directors and senior management strongly believe that the current valuation of Agria shares does not reflect the intrinsic value of the Company and the growth and strategic opportunities of PGW"

[BlackPeter]

That is interesting.

"Our Board of Directors and senior management strongly believe that the current valuation of Agria shares does not reflect the intrinsic value of the Company and the growth and strategic opportunities of PGW"

Interesting indeed. Given Alan's board position is it probably fair to assume that he knows more about the coming earnings report than we do.

On the other hand - he would continue to reiterate PGW's value proposition - wouldn't he? I think Agria bought in their last big stake at something like 60 cents per share (and their average price must be still higher) - i.e. if they (Agria) can't see the value in PGW, than what have they done?

Discl: Holding some - and sort of sitting on the fence ...

[winner69]

Interesting indeed. Given Alan's board position is it probably fair to assume that he knows more about the coming earnings report than we do.

..

Spot on again BP

Bit of tightening up of the rather large previous guidance range and suppose we could call it an 'upgrade'

Still less than last year though

[percy]

Spot on again BP

Bit of tightening up of the rather large previous guidance range and suppose we could call it an 'upgrade'

Still less than last year though

A lot better than I would have expected.

[Snoopy]

A lot better than I would have expected.

There is a lot of attention paid to dairy as NZ's rural headline act. But PGW also own Fruitfed that services the horticultural sector. And horticulture is near an all time high. Those same irrigation people at "PGGW Irrigation" can be redeployed from dairy farm conversions to frost turbines for vineyards and fruit and vegetable irrigation. Furthermore when you look at the likes lamb farming, which is not booming nor crashing, there is still much everyday expenditure to be done on those farms. These farmers may not be buying new tractors. But they will be buying new fenceposts and pasture seed. Not glamorous. But enough to keep the likes of PGG Wrightson ticking along.

SNOOPY

discl: holder

[Beagle]

Given the severity of the protracted downturn in dairy I think this guidance is a very credible outcome. Gives encouragement to divvy hounds looking for their regular feed but beagles are unlikely to get fat on capital gains anytime soon IMO. Disc: This hound likes dividends too, count me in.

[winner69]

Given the severity of the protracted downturn in dairy I think this guidance is a very credible outcome. Gives encouragement to divvy hounds looking for their regular feed but beagles are unlikely to get fat on capital gains anytime soon IMO. Disc: This hound likes dividends too, count me in.

Yes - one of those relief announcements and seen as 'good news' because it wasn't 'really bad news'

[BlackPeter]

Yes - one of those relief announcements and seen as 'good news' because it wasn't 'really bad news'

Quite happy with the update ... and a big "Thank You" to whoever sold me yesterday some more at 38.5 cents :cool:. Agree with Roger that PGW SP is unlikely to shoot for the stars anytime soon, but if you can get the shares below 40 cents, than the dividend yield is not too shabby - and hey, I think it is a good way to invest into New Zealand's largest industry sector with some "build-in" diversification.

[winner69]

Came across a term today - the happiness of lower expectations

Seems appropriate here

Must have another look through my behavioural finance library

[babymonster]

41.5c is about to be taken out... fingers corssed

[kura]

To me it is weird that has been tightly range bound (between 38.......41 ) for longer than my dim brain cells can recall.

[babymonster]

wow... 42c is gone... this one is finally moving... oopss.. for only a very brief monent

[babymonster]

wow... 42c is gone... this one is finally moving... oopss.. for only a very brief monent

I wasn't expecting 43c early today. What a nice little run. Big volume too

[BlackPeter]

Wow - 1.5 million already through this morning at 43 cents .. and much more buyers than sellers! Looks like somebody wants in.

[percy]

Wow - 1.5 million already through this morning at 43 cents .. and much more buyers than sellers! Looks like somebody wants in.

Looking very strong.
Surprised me how well they are doing with floods in Uruguay and NZ dairy exposure.
Confirms it is a very well run solid business.

[babymonster]

now it's at 44c and more sellers are emerged.. i would be happy with 44c close...

[BlackPeter]

I reccon markets are just positioning for another juicy dividend payment towards the end of next month ... We obviously don't know yet how much it will be exactly, but after the more recent profit updates would I expect 2 cents as a minimum. Hmmmm - nice!

[Hectorplains]

https://www.nzx.com/companies/PGW/announcements/286554

Top end of guidance NPAT up 20%.... No wonder the sp has been creeping up (hmmmm). Should at least maintain dividend yield - surprised there wasn't a bit more gas in the tank after this announcement - 11.7% yield at current level.

[Beagle]

https://www.nzx.com/companies/PGW/announcements/286554

Top end of guidance NPAT up 20%.... No wonder the sp has been creeping up (hmmmm). Should at least maintain dividend yield - surprised there wasn't a bit more gas in the tank after this announcement - 11.7% yield at current level.

Very surprising. Gives a useful insight into the fact that many aspects of our primary sector including pip fruit are going gang busters this year even if dairy isn't. Underscores that this is arguably a very good diversified play in the agricultural sector. I think they've done extremely well in what has been a cataclysmic year for dairy when most dairy farmers have had to face up to the possibility of several years of low payouts and the obvious downstream spending implications of that. Exceptional trading update and gives a valuable clue to other potential profits of other agri stocks, SCL springs to mind, only because I have heaps LOL.

[winner69]

https://www.nzx.com/companies/PGW/announcements/286554

Top end of guidance NPAT up 20%.... No wonder the sp has been creeping up (hmmmm). Should at least maintain dividend yield - surprised there wasn't a bit more gas in the tank after this announcement - 11.7% yield at current level.

Ebitda will still be less than last year.

I always have a little laugh to myself when a company who hardly ever mentions NPAT suddenly thinks it's good to have a rave about it - story always has been 'ebitda better represents the underlying performance of the business'

Never mind - they done quite well this year in the circumstances, but not that brilliantly

[mshierlaw]

Well I feel like a right NANA now.

Been looking to top up for twelve months, waiting, waiting, waiting. But this time distracted by the ultimate distraction that is ...... a HOLIDAY.

FOCUS

[couta1]

Well I feel like a right NANA now.

Been looking to top up for twelve months, waiting, waiting, waiting. But this time distracted by the ultimate distraction that is ...... a HOLIDAY.

FOCUS A Holiday need never distract you from the market, with a tablet and smart phone your always in touch. Skied hard out at Coronet this morning, come down for lunch, bought some shares, did a few more runs, come down and bought some more shares, caught the bus back to Q/town then bought a few more (Multi tasking is the name of the game) Disc-Holding a good number and until today have been in the red for quite a while but view it as a bottom drawer stock.

[LAC]

Story of my life....lol
Sold out last week and topped up AWK. oh well..... still think it's a better move long term.

[Beagle]

A Holiday need never distract you from the market, with a tablet and smart phone your always in touch. Skied hard out at Coronet this morning, come down for lunch, bought some shares, did a few more runs, come down and bought some more shares, caught the bus back to Q/town then bought a few more (Multi tasking is the name of the game)

Busy chap you are...No flies on you mate...might be a few snow flakes though :) Have a couple of bevvies tonight on the big AIR you got today and I'm not talking about over the ski jump :D

[couta1]

Busy chap you are...No flies on you mate...might be a few snow flakes though :) Have a couple of bevvies tonight on the big AIR you got today :D Sure will mate, packed Air flight yesterday and only planes on the ground upon arrival were 3 X Air birds. Keep the Faith.

[BlackPeter]

https://www.nzx.com/companies/PGW/announcements/286554

Top end of guidance NPAT up 20%.... No wonder the sp has been creeping up (hmmmm). Should at least maintain dividend yield - surprised there wasn't a bit more gas in the tank after this announcement - 11.7% yield at current level.

Great announcement and yes, better than even I dared to hope for. Re markets running out of gas ... they might "fill up" the tank over night. Announcement was only short before market close, some might first need to find the money and than instruct their brokers to fill up ...

[Agrarinvestor]

Hi,
I'm asking myself if this will have an impact on Agria. They downsized there chinese businnes a bit last year. And doing everything to be profitable. They announced a larger repurchase program. Until now it had
not delivered any positive momentum. Will the recent PGW announcement have an impact? I'm still hesitating to pul the BUY trigger. I would feel more comforetable if i have some Investors from NZ on the Agria ship.

[nextbigthing]

I always have a little laugh to myself when a company who hardly ever mentions NPAT suddenly thinks it's good to have a rave about it - story always has been 'ebitda better represents the underlying performance of the business'


It is expected that PGW will now announce that its full year Operating EBITDA will exceed $68 million (the top of the current guidance range) - straight from the announcement.

Shesh Winner they mention the EBITDA before NPAT, and it's an amazing result given all that has been going on. You're a hard man to please, next you'll only be happy if the Canes win by 20 points! ;)

[winner69]

It is expected that PGW will now announce that its full year Operating EBITDA will exceed $68 million (the top of the current guidance range) - straight from the announcement.

Shesh Winner they mention the EBITDA before NPAT, and it's an amazing result given all that has been going on. You're a hard man to please, next you'll only be happy if the Canes win by 20 points! ;)



Still less than last year -- and I did say pretty good in the circumstances

and suppose they pretty chuffed with the 20% increase in NPAT - so may as well crow about it even though NPAT doesn't normally feature in their guidance

As long as the punters are happy - happy punters will believe anything

Lost me dosh when the Chiefs didn't win last week - Canes history hmmm .... maybe these Lions are the ones

Hope Julian gets a decent run this weekend seeing he got sent off for 10 minutes last week - maybe should be hooker

[babymonster]

It shoud move a bit more tomorrow I guess. The announcement is very close to the market close and it is better than I thought. Well done

[winner69]

Around 5o seems to be a major stumbling block for the share price in recent years

Get over that tomorrow and stay there its all all blue sky again (if you forget about the god old Norgate days of old)

[Beagle]

Around 5o seems to be a major stumbling block for the share price in recent years

Get over that tomorrow and stay there its all all blue sky again (if you forget about the god old Norgate days of old)

Yes that's true but you have to admire what looks like a stunning result in a year in which a major part of their business, (dairy) has been at its lowest ebb for many years. Underscores the diversified nature of this agri business and its resilance . Dividend hounds will look at the yield which based on 4 cps fully imputed, (gross 5.55 cps) is 11.1% even at 50 cents and based on how the business has tracked in the last few years there's now a case to be made that this yield is reasonably reliable and sustainable going forward and therein in my view lies the key attraction of the stock in a era of the lowest interest rates we've seen in N.Z. for many decades. Disc bought more at the close yesterday at 47 cps.

[BlackPeter]

Around 5o seems to be a major stumbling block for the share price in recent years

Get over that tomorrow and stay there its all all blue sky again (if you forget about the god old Norgate days of old)

Here we are - 15 minutes into the trading day, 50 cents already reached ... and not that many sellers at that price left. This was quick!

[janner]

Yes that's true but you have to admire what looks like a stunning result in a year in which a " MINOR " part of their business, (dairy) has been at its lowest ebb for many years. Underscores the diversified nature of this " BANKING " business and its resilance . .

Hopefully Roger, you will be able to repeat this when percy's ( and mine to be truthful ). " STAR " company reports..

[Beagle]

Here we are - 15 minutes into the trading day, 50 cents already reached ... and not that many sellers at that price left. This was quick!

http://www.sharechat.co.nz/article/68fe4ee1/wrightson-shares-hit-14-month-high-after-profit-upgrade-gets-nod-of-approval.html

Best analysts in the business upgrade target price from 50 cps to 65 cps. Trading cum a final divvy this good huntaway puppy has the legs to run !

P.S. I wonder if a 1 cps special divvy is on the cards this year to go with the 2 cps final ?

[percy]

Hopefully Roger, you will be able to repeat this when percy's ( and mine to be truthful ). " STAR " company reports..

All credit to PGW.Being able to deliver a good result with NZ dairying and Uruguay floods is outstanding.
I think their dividend will be maintained, as they do not need more capital in the business.An extremely well run business.
Janner.The other day my big three stocks HBL,EBO and SCL all fell,so I remain "well positioned" for my day of redemption .Being practising my long version of "hallelujah".You can expect to hear it soon...lol.

[janner]

All credit to PGW.Being able to deliver a good result with NZ dairying and Uruguay floods is outstanding.
I think their dividend will be maintained, as they do not need more capital in the business.An extremely well run business.
Janner.The other day my big three stocks HBL,EBO and SCL all fell,so I remain "well positioned" for my day of redemption .Being practising my long version of "hallelujah".You can expect to hear it soon...lol.

My second largest went up.... :-)))))))))))

CAV..

[sb9]

Would this point to possible turnaround in the Dairy sector that the nation is looking for, if so very good news for farmers looking ahead.

[Beagle]

Hopefully Roger, you will be able to repeat this when percy's ( and mine to be truthful ). " STAR " company reports..

Please accept that I do not wish to offend but with the greatest of respect I would appreciate it if you would please not change my posts and re-quote them. I acknowledge I have done this once or twice in times gone by but the mods have said this is frowned on and I understand why so I don't ever do this now.

Dairy was 23% of PGW's business as per the last annual report, HBL's direct exposure to dairy is about 8% of their loan book but I suspect with all affiliated industries impacted by dairy their effective exposure is considerably more. In the context of PGW's business being so heavily exposed to dairy I think their latest guidance is stunning and I am not surprised First N.Z. have upgraded their target price by 30% as this years indicated result speaks volumes about PGW's ability to perform in the future.

My mate Seeweed with his large holding will be having a very good day :t_up:

[RTM]

"Re markets running out of gas."
Do keep in mind that those Aucklanders are still busy selling houses and moving out. The ones who are retiring will look around for somewhere to earn a dollar. And they will need to keep looking to the stock market in the current environment. Unless they want to eat their capital gain. Which some will do.
Yes....I am one of those, but did take the plunge a few years earlier.

[nextbigthing]

http://www.sharechat.co.nz/article/68fe4ee1/wrightson-shares-hit-14-month-high-after-profit-upgrade-gets-nod-of-approval.html

Best analysts in the business upgrade target price from 50 cps to 65 cps. Trading cum a final divvy this good huntaway puppy has the legs to run !

P.S. I wonder if a 1 cps special divvy is on the cards this year to go with the 2 cps final ?

Too right Roger. These were rated a buy with a target of 48c PRIOR to this upgrade. First analyst has upgraded his buy recommendation to 65c. Currently trading at 51c. Just saying.

Edit; Now 52c.

[winner69]

Would this point to possible turnaround in the Dairy sector that the nation is looking for, if so very good news for farmers looking ahead.

The general economy is really strong at the moment - GDP close to 4% this year

You would expect PGW to benefit from this, even if dairy is a bit weak

And Wheeler being sucked in the bank economists / commentators and will be adding heaps more fuel to the fire over the next few months with more OCR cuts.

So the boom will continue - no wonder FNZC are bullish

[Beagle]

The general economy is really strong at the moment - GDP close to 4% this year

You would expect PGW to benefit from this, even if dairy is a bit weak

And Wheeler being sucked in the bank economists / commentators and will be adding heaps more fuel to the fire over the next few months with more OCR cuts.

So the boom will continue - no wonder FNZC are bullish

Totally agree that all yield stocks will benefit from RBNZ cutting interest rates. Any stock that can deliver sustainable strong dividend yield will look increasingly attractive in an environment of the lowest interest rates most of us have ever seen. Gross yield at 52 cps on 4 cents fully imputed is still 10.7% ! Even at 56 cents is still just on 10%. I think FCNZ are right, PGW are due for a major re-rating, only some of which has already occurred. It wouldn't surprise me to see First's target price of 65 cps achieved within 12 months.

Thanks for sharing Fox. FWIW and just my personal opinion as a former client, I no longer "rate" Forbar's analysts.

[Fox]

Thanks for sharing Fox. FWIW and just my personal opinion as a former client, I no longer "rate" Forbar's analysts.

No worries. I always take a grain of salt when assessing their judgements and figures, but their overview of the business environment can prove useful if you missed anything.

[Snow Leopard]

I had PGW marked down as 'cheap as' (as in value greater than $0.50; price less than $0.40) back in mid-June just before I put my pack on my back and went bush for a month.

Fortunately I put some money where my analysis was and can claim to be:
a: happy about the current state of affairs;
b: wondering whether this is going to achieve 3rd spot in my portfolio of NZX stocks, edging out EBO.

One of the things about PGW annual results over the last few years is that they have been all over the place and there has been a great disconnect between 'Operating EBITDA' and NPAT due to a variety of factors in the accounts, some of which become clear when you look into it and some of which don't.

So I am not in the bit surprised that NPAT is expected to be up 20% YoY, after all it was down 20%ish YoY last year.

So the question is: Is this announcement that has over-excited a few people representative of 'the new normal' and a good basis of upping your valuation by 30% or should one perhaps wait for the details?

But for what it is worth the current Tiger valuation is $0.557 now, $0.585 in a year.

Best Wishes
Paper Tiger

[Beagle]

Effectively trades cum a (probably) 2 cent final divvy so using my sometimes creative investment psychology people buying now at the start of the FY17 year at 52 cents are effectively only really paying 50 cents for all FY17 onwards earnings, (they have only held for 5 minutes so to speak if they buy now so treating the 16 final divvy as a partial reimbursement of acquisition price makes sense to me analysing this stock as a medium term investment coming in now). On that basis I think the stock appears to be very good value even after today's strong rise but as PT suggests, it will be good to review the result in more detail on Tuesday morning next week. Wonder if the resident paper tiger could become more bullish if he took lessons for these guys http://www.trademe.co.nz/travel-events-activities/activities/auction-1131152850.htm

[Beagle]

Closed today on a five year high @ 54 cps ahead of the annual result tomorrow. Interesting times ahead, looking forward to the running the ruler over the announcement tomorrow morning.

[babymonster]

it's out, no new surprises. may pull back a bit today?

[winner69]

Love the 'worthy of praise' comment

Nice

[Beagle]

No new surprises and outlook is cautious so market a little underwhelmed BUT they were extremely cautious last year and they did exceptionally well given incredibly tough operating conditions in the dairy sector which they previously said as circa 23% of their business so with the recent rebound in GDT auction prices and given how they performed this year I think trading cum a final divvy of 2 cps they're a good hold for dividend hounds like me.

First impressions, (have been very busy on urgent business this morning so haven't had time for a good look), but EPS is 5.2 cps so PE is 10..on that basis if they can make those earnings with dairy at the bottom of the cycle I see no reason not to hold.

[Fox]

~10% gross yield with a PE of 10. Sounds like excellent value on a stable company with good diversification in its industry. I doubt you will find many others like this.

[Snow Leopard]

Normalise the results and compare them to last years normalised results and you instantly spot that it is a Copy & Paste job.

As far as I am concerned EPS is really 4.7c, same as last year.

Not a growth stock per se, but hopefully they can at least keep up with inflation going forward.

My $0.557 current valuation from a few posts back may be a slightly optimistic but $0.523 is definitely good for the day.

Best Wishes
Paper Tiger

[winner69]

Normalise the results and compare them to last years normalised results and you instantly spot that it is a Copy & Paste job.

As far as I am concerned EPS is really 4.7c, same as last year.

Not a growth stock per se, but hopefully they can at least keep up with inflation going forward.

My $0.557 current valuation from a few posts back may be a slightly optimistic but $0.523 is definitely good for the day.

Best Wishes
Paper Tiger

Love that 'cut and paste' quote mate - financials are remarkably consistent with last year

That Pension Fund they have is a burden - love reading Note 19 to see how much progress they make in getting it in reasonable order. Last thing they would want is a share market crash with so much of the fund invested in equities.

[Beagle]

~10% gross yield with a PE of 10. Sounds like excellent value on a stable company with good diversification in its industry. I doubt you will find many others like this.

Agree and it definitely is hard to find value in this market. Its not a term deposit but I get what PT is suggesting.
I think the yield rewards investors well for the risk involved.

[Snoopy]

Love that 'cut and paste' quote mate - financials are remarkably consistent with last year

That Pension Fund they have is a burden - love reading Note 19 to see how much progress they make in getting it in reasonable order. Last thing they would want is a share market crash with so much of the fund invested in equities.

Am I right in saying that it is low interest rates, lowering the discount factor on future liabilities, that is doing the damage here? Somehow in a rising market, the value of pension plan assets dropped by 10%. Who are the fund managers that did that?

Did I read that expected Group contribution figure to the pension funds of $9.51m for FY2017, up from just $1.08m this year correctly? That is one hell of a hit on next years profit!

SNOOPY

[kiora]

Am I right in saying that it is low interest rates, lowering the discount factor on future liabilities, that is doing the damage here? Somehow in a rising market, the value of pension plan assets dropped by 10%. Who are the fund managers that did that?

Did I read that expected Group contribution figure to the pension funds of $9.51m for FY2017, up from just $1.08m this year correctly? That is one hell of a hit on next years profit!

SNOOPY

19 DEFINED BENEFIT ASSET / LIABILITY
2016 2015
$000 $000
Present value of funded obligations (73,417) (72,153)
Fair value of plan assets 52,702 57,498
Net defined benefit asset / (liability) (20,715) (14,655)
ESCT on committed contributions – short-term (2,642) –
ESCT on committed contributions – long-term (2,372) –
Total defined benefit asset / (liability) (25,729) (14,655)

Doesn't this indicate liability went up by $11m?

[winner69]

Am I right in saying that it is low interest rates, lowering the discount factor on future liabilities, that is doing the damage here? Somehow in a rising market, the value of pension plan assets dropped by 10%. Who are the fund managers that did that?

Did I read that expected Group contribution figure to the pension funds of $9.51m for FY2017, up from just $1.08m this year correctly? That is one hell of a hit on next years profit!

SNOOPY

I think it is a lot more complicated than that Snoops

Most of the increase you mentioned will probably go through as part of the Other Comprehensive Income stuff anyway

I just follow the state of these Pension Schemes out of morbid fascination more than anything else. If I was a member (all long serving staff and old retired people) I would be asking serious questions as to whether I would be getting my full entitlements in the future. Could be an issue to resolve if PGW is taken over. Not saying that it's anything like that knighted gentleman who cleaned out a pension fund in Britain but PGW like many companies are finding it hard to fully fund these defined benefit schemes - the problem just doesn't go away At least they are trying their best and making extra contributions (probably had a long contributions holiday in the past)

Some irony in current shareholders still paying the pensions of people who retired zonks ago - probably those people made the company what it is today so just getting what they deserve .....but I bet the trustees/company are hoping they die earlier than expected

[Snow Leopard]

Pension scheme:

Firstly a Big Grrrrh! to winner69 for bring up the subject in the first place.

Moving any amount of money into funding the pension scheme does not affect the profit at all per se.

But if you read Note 19 first then the entire accounts through twice, you should work it all out to the extent that is humanly/felinely/caninely possible.

Not something I am going to worry about at this point in time.

Best Wishes
Paper Tiger

[winner69]

Pension scheme:

Firstly a Big Grrrrh! to winner69 for bring up the subject in the first place.

Moving any amount of money into funding the pension scheme does not affect the profit at all per se.

But if you read Note 19 first then the entire accounts through twice, you should work it all out to the extent that is humanly/felinely/caninely possible.

Not something I am going to worry about at this point in time.

Best Wishes
Paper Tiger

Meeow to you tiger

I did tell Snoops it was complicated .... with a lot of the impact going through Other stuff but good to see shareholders still paying the old pensioners

And I see you use the word 'yet'

[Beagle]

This dog is with the cat on this non issue.

[winner69]

This dog is with the cat on this non issue.

I never said it was an issue - but maybe it is for long serving and ex emplyees


(PGW should just do the decent thing and put the $25m odd into the pensions funds and ensure they are always fully funded to meet promised employee entitlements, now and in the future)

[Snoopy]

Moving any amount of money into funding the pension scheme does not affect the profit at all per se.


Rolling some of the company debt around to shore up the PGW pension funds does not affect the underlying profits of the PGW operation, that's true. IMO it is the underlying operating profit that is most important.

Pension funds rise in and out of deficit with the vicissitudes of the investment market. It is important not to put too much weight on one event in one particular year. But the PGW pension funds have been washing around for quite a few years since Agria came on board. And they have always been in deficit to the tune of $10m plus. It is true that a plan deficit will not directly affect the business until that deficit money has to be paid out. But statistically it will have to be paid out. To do nothing is just to put off the day of reckoning. And there comes a time for 'high noon', on the day of reckoning. Alan Lai has been able to stay out of the high noon sun so far. But look at the big picture (table below), and you will see why Alan is now straightening his stetson.



FY2017(F)FY2016FY2015FY2014FY2013FY2012FY2011


PV of Defined Benefit Obligation$73.417m$72.153m$68.330m$72,765m$$75.495 m$69.425m


FV of Plan Assets($52.702)m$(57.498)m$(54.802)m$(51.946)m$(49 .231)m$(52.175)m


Plan Deficit$20.715m$14.655m$13.528m$20.819m$26.264m$16 .970m


PGW Group Contribution$9.51m$1.08m$1.16m$2.93m$3.81m$2.32m$2 .24m


Member Contribution$0.97m$1.01m$1.08m$1.15m$1.15m$1.13m$1 .38m


Balance Sheet


Total Liabilities$412.9m$285.6m$364.8m$363.4m$402.7m$844 .7m


Total Equity$274.3m$267.4m$269.7m$256.1m$577.7m$604.3m


Equity/Assets39.9%41.0%42.5%41.3%41.1%41.7%



One figure in the table above in the FY2017 column stands out from the others.

The equity position of PGW is now at its weakest since Agria came on board. So now is not the time for big spending unless it is absolutely necessary. So why is PGW management suddenly forecasting that their contribution is to increase in FY2017 by a factor of 10, when PGW is at its weakest? I would argue that he fund has been out of balance for a very long time and now the day of reckoning has arrived. Some may choose to sit in the saloon and drink their beer and claim nothing is wrong. But I think you 'no worries' shareholders should be on the street at high noon if you don't want to miss the action.



Not something I am going to worry about at this point in time.

Best Wishes
Paper Tiger

Not until 'High Noon' anyway :-)

SNOOPY

[winner69]

Snoops - the pension plans were in suplus in 2008. It all turned to custard in 2009 and has got worse since

Wouldn't want another share market collapse would they with 79% assets in equities? The liabilities generally don't reduce unless actuarial wizardry happens.

$25m mightn't sound much but a 34% plan shortfall is significant (and not good) .....and quite significant % of funding/sponsoring company's shareholder equity. The trustees should be worried.

Snoops - i think we pissing punters off, never mind

[Snow Leopard]

...




FY2017(F)
FY2016
FY2015
FY2014
FY2013
FY2012
FY2011


PV of Defined Benefit Obligation

$73.417m
$72.153m
$68.330m
$72,765m
$$75.495m
$69.425m


FV of Plan Assets

($52.702)m
$(57.498)m
$(54.802)m
$(51.946)m
$(49.231)m
$(52.175)m


Plan Deficit

$20.715m
$14.655m
$13.528m
$20.819m
$26.264m
$16.970m


PGW Group Contribution
$9.51m
$1.08m
$1.16m
$2.93m
$3.81m
$2.32m
$2.24m


Member Contribution
$0.97m
$1.01m
$1.08m
$1.15m
$1.15m
$1.13m
$1.38m


Balance Sheet


Total Liabilities

$412.9m
$285.6m
$364.8m
$363.4m
$402.7m
$844.7m


Total Equity

$274.3m
$267.4m
$269.7m
$256.1m
$577.7m
$604.3m


Equity/Assets

39.9%
41.0%
42.5%
41.3%
41.1%
41.7%



One figure in the table above in the FY2017 column stands out from the others...

Of course it does, there are only two numbers (in the column) and you have embolden one of them and put a box around it!



...you should work it all out to the extent that is humanly/felinely/caninely possible...

Well that was a statement of optimism over experience - I never learn.


Best Wishes
Paper Tiger

[Out to lunch]

Can't see much more upside with grain decreasing in price will compress margins.
Also unusual that Agria NYSE.GRO hasn't moved in line with this new PGW profit? Parent's other subs must be dragging the chain or am I missing something here.

[Agrarinvestor]

Can't see much more upside with grain decreasing in price will compress margins.
Also unusual that Agria NYSE.GRO hasn't moved in line with this new PGW profit? Parent's other subs must be dragging the chain or am I missing something here.

Agria has focused on cost reduction in China and NZ. I don't expect a big cash burner in china. Currentli Agria is searching for institutional Investors. IMO they will not start the
share repurchase until they have found some investors. I expect some attention at earnings release conference. If i have the feeling that they have some attention i will buy more.

AGRIAs shareprice has fallen by 10 cent since they announced the 10 Million US$ buyback and the pleasent earnings update of PGW.
Short Sellers have manipulated the price and destroyed confidence.

Yesterday almost 90% of the volume was sold by short sellers: 20160815|GRO|4100|0|4300|Q http://regsho.finra.org/regsho-Index.html

I'm hoping for earnings release on Friday. Should be a good chance for quick profit.

[Agrarinvestor]

Still hoping that AGRIA will make extnsive use of their share buy back.

But this seems to be important for PGW shareholders:
http://www.agriacorp.com/news-show.asp?id=289


And some remarks from the Call Transcript:
http://ir.agriacorp.com/phoenix.zhtml?c=216437&p=irol-presentations
>>Finally, as I mentioned earlier, we have prefunded the purchase of New Hope stake in Agria AsiaInvestments, subject of course to the New Zealand regulatory approval.<<


>>Yes. We will hold actually the closer—by which time we’re done New Hope, we will hold 50.22% togetherwith our New Zealand native partners, which will hold—which will continue to hold about 11%, and unlessof course—unless because—unless of course if that process means that we need to complete the NewZealand Takeover process, it could be a completely different scenario because New Zealand—the NewZealand Takeover rules has very low threshold in terms of mandating a full takeover.<<

>>The most important is this: if you own one Agria ADS, you own two shares of a company thatactively controls and benefits from one of the largest and most respected agricultural companies in thesouthern hemisphere. You own a 40.58% economic interest in that company that is valued at $2.10 perADS. Netting out the debt and other liabilities of your company, we can reasonably argue that the valueof your company is at least $1.60 per ADS.<<

>>Our second source is our China seeds business, NKY. Weowned this business before taking control of PGW. Although it is a small company relative to our currentsize, it is strategically important. We intend to use NKY as the platform for PGW products <<

It seems that Agria is very optimistic about PGW business and ability to generate cash.

[Out to lunch]

Thanks Agrarinvestor, really helpful. Still finding it hard to find value in Agria. Results on Friday were not impressive.
Back to PGW, will be interesting to see how the competition faired:
If only Fonterra disclosed RD1Farmsource separately in their financials, cost cutting hard (hopefully not to the detriment of shareholders!) https://store.nzfarmsource.co.nz/campaigns/fonterra-support-package
and Farmlands have indicated some weakness http://fieldnotes.co.nz/rural-infrastructure/no-rebate-for-farmlands/

[Agrarinvestor]

Currently the Value in Agria is that they are the controlling shareholder of PGW. No idea why it took so long to conquer chinese market with PGW branded products. Perhaps they have to register PGW seeds with government .
At the end of this article you find something about Agria:
http://www.desmoinesregister.com/story/news/2014/10/11/feeding-china-key-players/16479257/

>>"You can really make money in vegetables."http://www.gannett-cdn.com/-mm-/8d7db560ea6e0b3767fc96ec2d088f402e65601b/c=174-0-3511-2509&r=x1767&c=2352x1764/local/-/media/IAGroup/None/2014/10/10/635485612197820274-KEYplayerDAVIDshao.jpgDavid Shao, President of Agria.
(Photo: Rodney White/Pulitzer Center and The Register)



Shao will leave the field corn market to Pioneer and other foreign companies. He sees gold in sweet corn.
"You can really make money in vegetables," he said.
Agria is a Chinese agricultural company whose stock trades on the New York Stock Exchange. Its business includes seed, grain, crop protection and other products and services, and it has major operations in Australia and New Zealand.
Shao said Agria has about 10 percent of the Chinese edible corn market, with lots of room to grow. The company has partnered with the Beijing Agriculture and Forestry Academy to improve the genetics of edible corn.
"I don't think we can fight head-on with field corn multinationals," Shao said. "You're too far ahead of us.<<

[Beagle]

Fontera upgrades forecast payout today to $4.75 which taken in tandem with a dividend on the shares expected 50-60 cps according to some commentators should now see dairy farmers break even this year. Great news for PGW with dairy making up ~ 20% of their business.

Consensus broker valuation now 60 cps and BUY. Trades cum a fully imputed final dividend of 2 cps. Opportunity knocks at 52 cps cum divvy ?
http://www.4-traders.com/PGG-WRIGHTSON-LIMITED-6497113/consensus/

[Out to lunch]

The milk price is currently influenced by a drop in production predominantly due to culling of the herd. Not that great for PGW having less herd but who knows, once we get in the peak production season in September, a potentially high price may encourage farmers to use PGW more and run their farms at a lower gross margin/higher volume but this will be very limited to the number of cows in their herd.
ASB thinks the milk price will be $6 for the season which is against other bank consensus in the low 5s. Maybe they are just saying that so they can justify writing some borderline rural loans lol.

65 cps is based on like a 13ish P/E with 6%ish net yield. Up to you if you think PGW is worthy of such a yield given the current headwinds in commodity prices and fierce competition.

[see weed]

If you want the div, then be in, by 5pm:ohmy:.

[Beagle]

This divvy hound topped up on 25 August, determined for a full sized feed. Looking strong at the close :)

[couta1]

This divvy hound topped up on 25 August, determined for a full sized feed. Looking strong at the close :) This divvy hound sold his holding last night at 53c in order to buy more Air today, bottom line is I get 4 times more in my bank account for the same money.

[Beagle]

This divvy hound sold his holding last night at 53c in order to buy more Air today, bottom line is I get 4 times more in my bank account for the same money.

You greedy hound :D I can trump that though. I sold CVT at just over $10.00 a share before going ex a 2 cps divvy to buy 4.4 times as many AIR shares paying 35 cps thereby getting 4.4 x 35/2 = 77 times the bang for this hounds buck.

[bung5]

This divvy hound sold his holding last night at 53c in order to buy more Air today, bottom line is I get 4 times more in my bank account for the same money.


would expect airnz to drop 35c when it goes ex div negating any short term benefits

[couta1]

You greedy hound :D I can trump that though. I sold CVT at just over $10.00 a share before going ex a 2 cps divvy to buy 4.4 times as many AIR shares paying 35 cps thereby getting 4.4 x 35/2 = 77 times the bang for this hounds buck. A very crafty play mate, puts things in perspective though when a top divvy payer like PGW gets trumped x4 on divvy yield, how often would that happen.

[couta1]

would expect airnz to drop 35c when it goes ex div negating any short term benefits I'm not expecting that big a drop so we're looking through different windows. PS-PGW could drop to 49c over the next few weeks which would equal double the divvy amount based on last night's 53c closing price.

[Beagle]

would expect airnz to drop 35c when it goes ex div negating any short term benefits

Google dividend stripping and have a look at some of the studies and you'll see that in most cases shares recover their initial drop in price within a few weeks. Might take a bit longer with AIR de to the size of the dividend but the key here in your own words is short term.


A very crafty play mate, puts things in perspective though when a top divvy payer like PGW gets trumped x4 on divvy yield, how often would that happen.

Can't remember that in my lifetime mate.

[tim23]

If Air say drops to $1.95xd and 20c share ordinary divvy continues then net yield should see price back over $2.00 in short order

[BlackPeter]

If Air say drops to $1.95xd and 20c share ordinary divvy continues then net yield should see price back over $2.00 in short order

Well, yes - this is if their predictions become true and if the market believes so. It is however not unheard of that companies change their dividend forecasts.

[Gizzajob I can do that]

Well, yes - this is if their predictions become true and if the market believes so. It is however not unheard of that companies change their dividend forecasts.

Well, you would know being an oplus Investor, :D

[tim23]

Pgg and Air 2 great dividend plays if rural sector continues to improve will be adding to my Pgg holding.

[Agrarinvestor]

Agria has a Broker for the repurchase assigned. They will start their 10 Million US$ repurchase.
https://finance.yahoo.com/news/agria-announces-rule-10b5-1-203626564.html

[Agrarinvestor]

Is there someone invested in PGW with a larger stake, or someone who is a professionell investor or analyst.

[Pmdv77]

I am neither a large shareholder in PGW (just a small one) nor a professional (I once owned PPL and GFF for my sins) but I remain very surprised that there are no analysts out there that cover PGW. Craig's and McQuarie have no one that covers it now. I guess years of disappointment have seen the seagulls go elsewhere. A mate who works high up in the investment game noted that PGW essentially trades consistently to earnings multiples with most takeover speculation now off the radar given Agria's ownership stake. So would need two things for a material lift in SP, 1. A consistent rise in earnings or 2. A full takeover bid by Agria.

[Out to lunch]

I am neither a large shareholder in PGW (just a small one) nor a professional (I once owned PPL and GFF for my sins) but I remain very surprised that there are no analysts out there that cover PGW. Craig's and McQuarie have no one that covers it now. I guess years of disappointment have seen the seagulls go elsewhere. A mate who works high up in the investment game noted that PGW essentially trades consistently to earnings multiples with most takeover speculation now off the radar given Agria's ownership stake. So would need two things for a material lift in SP, 1. A consistent rise in earnings or 2. A full takeover bid by Agria.

Credit Suisse and ForBar have coverage on PGW.
Yes pretty much on earnings multiples however I believe the risks around commodity prices has influenced this multiple recently.

[winner69]

So $62m- $68m operating earnings F17 - F16 was $70.2m

Let's hope his guess on light side

Always something difficult to manage their way through - but that's just normal in agri business and should be expected

Lets of negative words (difficult, weaker, lower etc) but they remain optimistic and well positioned - so all honky dory

Buzzed that announcement as well - very high % of buzz words - but then gives us the warm fuzzies

[trader_jackson]

Always something difficult to manage their way through - but that's just normal in agri business and should be expected

Sure is... one of the key reasons many have brought (at least recently) is for the fully grossed up large dividend... lets hope they can maintain this (in my view, it was not a flash annoucement at all this morning)

[Beagle]

Sure is... one of the key reasons many have brought (at least recently) is for the fully grossed up large dividend... lets hope they can maintain this (in my view, it was not a flash annoucement at all this morning) +1, that's how I see it too. Mid point of forecast is EBITDA of $65m. Net profit after tax was artificially high last year due to a much lower tax rate so we could see a material fall in FY17 EPS taking into account lower EBITDA and a normalised tax rate...and then there's my mate Winner's concerns regarding substantial funding requirements of the old superannuation scheme.

Enough concerns there in tandem with a very soft market for me sit on the sidelines with this one for a while.

[winner69]

Even though guidance is less than last years $70.2m it's not really a downgrade per se as no guidance had really been given

Previous guidance / expectations for F17 were 'Repeating this Operating EBITDA result next year will again be a stretch target given current market conditions, but we will give it our best shot.'

So no worries - but still giving it their best shot I hope

[Beagle]

I think previous language gave the clear impression that matching profit was going to be a tough ask and this basically confirms that.
http://www.sharechat.co.nz/article/fff7fe11/pgg-wrightson-warns-annual-operating-earnings-likely-to-fall-amid-weak-commodity-prices.html Given FY16 tax level was very low the potential is definitely there for a meaningful decrease in EPS. Hard to see why they're still over 50 cents in this very weak market with NZX50 down 7% in the last month.

[winner69]

Roger - he said 'At a net profit after tax level it is expected that performance will be broadly in line with the 2016 financial year.'

So EPS will broadly remain unchanged this year

Your divie safe as - no worries

Marked price sensitive as well

[Beagle]

I think we can agree the overall tone of what was said is for earnings to be slightly softer and there is obviously considerable uncertainty at this very early stage in the year. They're possibly fair value at the current level but some stocks are getting hammered and are to be fair, fair value doesn't cut the mustard for me right at the minute.

Very soft market so my inclination is to shoot first on the sell button and asks questions later. Plenty of opportunities to bag bargains in the future is my sense of where things are at.

As I said privately to you and Couta1 last week, I get the sense the market is looking for any excuse to have a good old fashioned correction of 10-15%. At this stage my gut instinct is the correction is only half done. They need to find a lot of cash to fund that superannuation programme this year, was it $9.5m from memory ? Doesn't matter how you account for it they still have to find the cash and that will suck a bit of wind out of their sails.

[Beagle]

I think previous language gave the clear impression that matching profit was going to be a tough ask and this basically confirms that.
http://www.sharechat.co.nz/article/fff7fe11/pgg-wrightson-warns-annual-operating-earnings-likely-to-fall-amid-weak-commodity-prices.html Given FY16 tax level was very low the potential is definitely there for a meaningful decrease in EPS. Hard to see why they're still over 50 cents in this very weak market with NZX50 down 7% in the last month.

As expected. One week on and we're seeing a new reality starting to bite. Back to the mid 40's or possibly even early 40's in due course I reckon.

[see weed]

As expected. One week on and we're seeing a new reality starting to bite. Back to the mid 40's or possibly even early 40's in due course I reckon.
Was lucky to sell my remaining holding on open on 18/10/16 for 53c to someone who had a buy order to buy 100,000, will get in again at a later date, all wrapped up with AIR at the moment.

[Beagle]

So they built a good base at around 40 cents based on 2015's level of profit and then the SP went north when they said we're looking at 20% profit growth for 2016.

It wasn't lost on me that basically all this profit growth was from the lower tax rate and earnings before tax showed little growth at all.

Tax must normalise over time so the question I have been mulling over given that they have this continuing problem with significant funding of their legacy superannuation liability is are the shares really worth any more than 40 cents now ?

Extrapolating this super problem out, if they couldn't get good returns last year when the markets were doing well, then that problem will only get exacerbated in this sort of market so the size of that problem won't diminish anytime soon notwithstanding they are committed to a whopping $9m plus contribution this year.

If we get normalised tax and slightly lower earnings than Fy16 I struggle to make the case for the shares being worth more than 40 cps again. Disc: I'm staying out and letting this correct back down.

Anyone care to share their thoughts on this one ?

[BlackPeter]

So they built a good base at around 40 cents based on 2015's level of profit and then the SP went north when they said we're looking at 20% profit growth for 2016.

It wasn't lost on me that basically all this profit growth was from the lower tax rate and earnings before tax showed little growth at all.

Tax must normalise over time so the question I have been mulling over given that they have this continuing problem with significant funding of their legacy superannuation liability is are the shares really worth any more than 40 cents now ?

Extrapolating this super problem out, if they couldn't get good returns last year when the markets were doing well, then that problem will only get exacerbated in this sort of market so the size of that problem won't diminish anytime soon notwithstanding they are committed to a whopping $9m plus contribution this year.

If we get normalised tax and slightly lower earnings than Fy16 I struggle to make the case for the shares being worth more than 40 cps again. Disc: I'm staying out and letting this correct back down.

Anyone care to share their thoughts on this one ?

Valid points, but feel a bit one sided. Things are not either black or white, but mostly grey ...

PWG has at current (@47cents) a forward PE of below 10 - and while last year was (despite all the dairy gloom) not too bad (but not too good either) I think that a normalisation in the dairy sector is more likely than not. For sure, this should improve PGW's business case?

It feels as well that markets see the NZD at the moment more in the upper part of the cycle. If & when it drops (as it must), this would be a shot into the arm for all of NZ's agriculture. Must be good for PGW.

I'd see "fair value" for this share still above 50 cents (my model puts it at 52 cents), but agree that given the current market volatility it is more likely to drop a bit more from here, before it gets up again. I certainly expect them to fall into the mid 40'ies, and given the markets tendencies of overreacting into the low 40'ies. Anything below that would be in my view an amazing buying opportunity (or more than the expected correction).

Discl: sold out (but a minute number to remind me to check regularly for the trend change ...);

[hogiela]

Valid points, but feel a bit one sided. Things are not either black or white, but mostly grey ...

PWG has at current (@47cents) a forward PE of below 10 - and while last year was (despite all the dairy gloom) not too bad (but not too good either) I think that a normalisation in the dairy sector is more likely than not. For sure, this should improve PGW's business case?

It feels as well that markets see the NZD at the moment more in the upper part of the cycle. If & when it drops (as it must), this would be a shot into the arm for all of NZ's agriculture. Must be good for PGW.

I'd see "fair value" for this share still above 50 cents (my model puts it at 52 cents), but agree that given the current market volatility it is more likely to drop a bit more from here, before it gets up again. I certainly expect them to fall into the mid 40'ies, and given the markets tendencies of overreacting into the low 40'ies. Anything below that would be in my view an amazing buying opportunity (or more than the expected correction).

Discl: sold out (but a minute number to remind me to check regularly for the trend change ...);


I had a gut feeling last week so I sold out at 52c also ... glad I did ... bought a little bit more FBU with the proceeds :) Always looking to re-buy again at a bargain ... the Dividends for PGW have been good to me!

[Beagle]

Hi BP

I've just had another good look at PGW's accounts this morning.

Profit growth in Fy16 was all related to tax, in fact profit from continuing operations before tax for Fy16 was $48.6m, Fy15 $48.8m

Normalising tax and based on EBITDA of $65m (the mid point of their forecast) I see operating profit before tax of $43m this year and net profit after tax of $31m, slightly lower than Fy15 of $32m.

I see EPS of 4.1 cps for Fy17 and using my time honoured PE for agri stocks of 10 which has held me in good stead for ages I see fair value at 41 cps.

Turning now to dividends. Cash flow from operations FY16 $35.2m, Fy15 $29.2m.
Contribution to underfunded superannuation system projected this year $9.51m , last year $1.08m, an extra $8.43m this year coming out of cash flow !!!

Interestingly Fair value of the under funded super liability grew by $9m last year in a year that was pretty good for the markets !

I know they're trying sale and lease back arrangements on many of their rural buildings and I am not surprised as they have to fund this super scheme somehow.

How will they maintain last year's dividend of 3.75 cps given the massive cash requirement of the super scheme and what looks to be a material decline, (my figures not the company's official forecast) in after tax earnings ?

How much will the super scheme liability grow this year given softer equity markets ?

Dairy Recovery - Fair point but I think dairy farmers are moving to a lower cost grass fed model out of necessity to minimise costs so I think there are implications for PGW going forward in terms of the level of sales of supplementary feeds and other on farm expenses. Dairy industry is struggling to break even.

I am bearish on PGW. The numbers just don't add up in terms of how they fund the super scheme and pay for essential stay in business capex and still pay 3.75 cps in dividends. Dividends to be trimmed back to 2 x 1.5 cps ? For what its worth BP I see free cash flow after funding pension obligations from normal operations of only 2.8 cps. Obviously any sale and lease back of rural buildings will boost their ability to fund dividends but effectively they're creating liabilities, (future lease obligations) to fund current year dividends if they pay more than 2.8 cps.

Investor Caution - My figures posted above are to the best of my knowledge how I see it but are dramatically different to average analyst forecast according to 4Traders website so DYOR.

[winner69]

Roger - the last couple of years dividends paid have been more than free cash flow generated (and that includes the $20m odd received from disposals last year)

Difference has been increased borrowings

Nothing oing to change - pay decent divies and if need be increase debt

That's how this works for the majority shareholders i assume

[Snow Leopard]

As I have said before PGW accounts are not the easiest to deal with, containing apparently wild swings in certain YoY numbers and I am mildly fascinated by the part of the guidance that is something on the lines of FY2017 NPAT being "broadly in line" with FY2016".

However I do feel that they are being misunderstood!


https://www.youtube.com/watch?v=mfwN0X8YnWo

Lets see how the years unfold

Best Wishes
Paper Tiger

[kiora]

As I have said before PGW accounts are not the easiest to deal with, containing apparently wild swings in certain YoY numbers and I am mildly fascinated by the part of the guidance that is something on the lines of FY2017 NPAT being "broadly in line" with FY2016".

However I do feel that they are being misunderstood!


https://www.youtube.com/watch?v=mfwN0X8YnWo

Lets see how the years unfold

Best Wishes
Paper Tiger

Great song.Average lip syncing :)

[Agrarinvestor]

Any reasons for the drop?

[winner69]

Any reasons for the drop?

Disappointed with latest guidance?

High expectations set not going to be met?

Another so so year on the way?

But whatever come hook oy crook The high unaffordable dividend will be fortcoming

[Vaygor1]

Any reasons for the drop?
ALF taking market share? :eek2:

[Agrarinvestor]

Disappointed with latest guidance?

High expectations set not going to be met?

Another so so year on the way?

But whatever come hook oy crook The high unaffordable dividend will be fortcoming

I had understood that PGW will pay likely the same high dividend as last year, and i remember that PGW/Agria Management like to set the expectations low, and prefer the market positive.
Currently AGRIA is trying to swallow PGW shares from New Hope. I wonder were all the money comes from. But Chinese banks are seeking investment opportunities in the whole world.