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Silverlight
01-10-2010, 01:45 PM
Any comments on their new Ordinary Share structure, and does anyone own any.

A quick look suggests a market cap of 75m, with Net assets in excess of 200m

This is priced similar to Affco, which trades at a discount.

Armillary Private Capital
12-10-2010, 10:53 AM
Silver Fern Farms to repay bonds early


http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1772

Armillary Private Capital
26-11-2010, 03:30 PM
Silver Fern Farms has reported a net operating loss before tax for the 12 months ended 30
September 2010 of $800,000 (2009 profit $5.4m) from total revenue of $1,810m (2009
$2,014m).

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1799

Armillary Private Capital
01-12-2010, 02:14 PM
Acquisition of Shares
Silver Fern Farms advises that it has purchased 39,843 of its ordinary rebate shares and 480 of its ordinary supplier investment shares from shareholders electing to surrender those shares in accordance with the Co-operative Companies Act 1996 and/or Silver Fern Farms’ Constitution.

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1801

Armillary Private Capital
01-12-2010, 02:15 PM
Declaration of a Taxable Bonus Issue
The directors declared a taxable bonus issue of 1 new ordinary share for every 5 new ordinary shares held at the record date of Tuesday 7 December 2010. The bonus issue will apply to all fully paid and partly paid “Ordinary Shares” (as defined in the Company’s constitution) and the bonus share issue price will be $1.00 per share.

The bonus shares will be issued fully paid from the Company’s retained earnings on 8 December 2010. Bonus shares will not be eligible to be voted in this year’s director election or at the Company’s annual meeting to be held on 27 January 2011, but will carry such voting rights thereafter.

The bonus issue will be fully credited with imputation credits, at the rate of 30%, and will also have resident withholding tax credits attached which will be paid by the Company.

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1802

Armillary Private Capital
20-12-2010, 08:03 AM
Silver Fern Farms 2010 Annual Report
Annual Report for the Year ended 30 September 2010

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1814

Armillary Private Capital
27-01-2011, 04:22 PM
Directors election result a vote of confidence in Silver Fern Farms’ leadership

See link for a news release pertaining to the outcome of the Silver Fern Farms’ recent Directors election, announced today at the 63rd Annual Meeting of Shareholders in Waipukurau.

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1817

Armillary Private Capital
25-02-2011, 02:36 PM
Silver Fern Farms makes more fresh water stores available for Christchurch

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1826

Armillary Private Capital
29-03-2011, 08:29 AM
Silver Fern Farms’ innovative new digital campaign a first for the red meat category

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1830

Armillary Private Capital
04-11-2011, 09:53 AM
Silver Fern Farms announces partnership with Annabel Langbein
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=1936

GTM 3442
21-11-2011, 05:39 PM
Good 12-month result, with a 10cps dividend.

Armillary Private Capital
16-10-2012, 10:26 AM
Silver Fern Farms Director Election

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2107

Armillary Private Capital
24-10-2012, 10:03 AM
Silver Fern Farms sees positive signs in Europe

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2117

Armillary Private Capital
13-11-2012, 03:35 PM
Silver Fern Farms 2012 Annual Result

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2128

Armillary Private Capital
27-11-2012, 04:39 PM
Silver Fern Farms' Annual Report for the year ending 30 September 2012

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2136

Armillary Private Capital
07-12-2012, 01:49 PM
Silver Fern Farms’ Te Aroha plant opens

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2143

Armillary Private Capital
29-01-2013, 01:58 PM
Farmer Funding Decision

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2159

Armillary Private Capital
24-10-2013, 01:42 PM
Retirement and appointment of directors announced, along with notice of annual meeting and the results of scientific testing:


http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2299
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2300
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2301
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2302

Armillary Private Capital
07-11-2013, 09:06 AM
Nominations for director elections are posted:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2311

Armillary Private Capital
18-11-2013, 10:39 AM
Annual results:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2314

Armillary Private Capital
04-12-2013, 03:31 PM
Annual report and notice of meeting:
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2335
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2336

Armillary Private Capital
16-12-2013, 09:09 AM
Two new directors have been appointed (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2345).

Armillary Private Capital
15-01-2014, 02:41 PM
SFF announce the launching of direct lamb retail sales into China (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2352).

Armillary Private Capital
20-02-2014, 07:37 AM
Silver Fern Farms host large Chinese delegation, new announcement (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2358).

Armillary Private Capital
03-03-2014, 02:02 PM
New media release (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2362) on SFF's 'new age of beef'.

Armillary Private Capital
13-03-2014, 11:37 AM
Silver Fern Farms and Lowe Corporation have entered into aconditional agreement t (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2365)o sell the cooperative’s Napier hide processing plant aspart of a toll processing arrangement for North Island hides.

Armillary Private Capital
26-03-2014, 01:33 PM
Leathers sale agreement confirmed (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2369).

Armillary Private Capital
03-04-2014, 01:02 PM
An updated issuer has been posted (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2372)for SFF.

Armillary Private Capital
13-06-2014, 02:06 PM
Silver Fern Farms & Federation of Maori Authorities Join Forces (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2394)

Armillary Private Capital
18-02-2015, 04:15 PM
Result of director elections. (https://www.unlisted.co.nz/Members/unlisted.mt_announcement.showannouncement?p_announ cement_id=2478)

Armillary Private Capital
04-03-2015, 12:50 PM
SFF calling directors of the (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2483)future.

Armillary Private Capital
09-04-2015, 01:40 PM
News release (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2498)on China office being opened.

Armillary Private Capital
03-07-2015, 02:46 PM
Clarity needed on shareholder resolution. (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2546)

Armillary Private Capital
22-07-2015, 05:15 PM
Silver Fern Farms sells stake in rendering joint venture. (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2561)

Sideshow Bob
27-07-2015, 03:52 PM
SFF is in a trading halt since last week pending capital raising developments.

GTM 3442
10-09-2015, 12:45 AM
So who will it be?

The Chinese? The Brazilians? Or some dark horse from out of left field?

Any ideas? Any suggestions? Any preferences?

Plutus
10-09-2015, 07:26 AM
So who will it be?

The Chinese? The Brazilians? Or some dark horse from out of left field?

Any ideas? Any suggestions? Any preferences?

Going with the Chinese could be a Bright idea. A shame for farmers to lose control of an asset but they are their own worst enemy. Sucked in by egotistical management who wouldn't consolidate the co-ops.

Sideshow Bob
10-09-2015, 12:10 PM
Investment is one thing, but control is another. If they give away control, think farmers will vote with their feet.

GTM 3442
10-09-2015, 12:56 PM
Investment is one thing, but control is another. If they give away control, think farmers will vote with their feet.

I rather suspect that the farmers will vote with their wallets.

Marilyn Munroe
10-09-2015, 04:10 PM
I blame a failure of governance by the farmer shareholders for Siver Fern Farms current siuation.

They should have used the outcome of the Bell Group & others v PPCS litigation as an excuse to clear out directors and management.

Boop boop de do
Marilyn

1leon
11-09-2015, 08:34 AM
Anyone thinking Chinese investment is a home run for Chinese access should look carefully at the sequence of Bright Investment in Synlait Milk and its insistence on control even when dropping under 50% shareholding. And the aggressive takeout of shareholders in Synlait Farms provides equally little ground for optimism for long term future of a farmer partnership with a large corporate shareholder.

Investment is one thing, but control is another. If they give away control, think farmers will vote with their feet.

Plutus
11-09-2015, 03:41 PM
How does an Investor get control and still be confident the farmers will supply. An interesting set of interests to negotiate through.

GTM 3442
11-09-2015, 10:54 PM
Anyone thinking Chinese investment is a home run for Chinese access should look carefully at the sequence of Bright Investment in Synlait Milk and its insistence on control even when dropping under 50% shareholding. And the aggressive takeout of shareholders in Synlait Farms provides equally little ground for optimism for long term future of a farmer partnership with a large corporate shareholder.

A farmer grows stuff to sell.

A corporate farmer generally looks at vertical integration. In the case of SFF, from the pasture to the plate. In the case of Exxon, from the oil well to the petrol pump.

It allows for much closer control of costs, and provides options as to where the profit can be made or declared.

It is not easy to see the interests of farmers and corporate farmers aligning closely over time.

Newman
12-09-2015, 10:35 PM
Farmers want the best price for their sheep and cattle and the best profitability of SFF. How could it be achieved? Who forced SFF borrowing so much? Farmers, not foreign investors!

1leon
15-09-2015, 03:04 PM
A farmer grows stuff to sell.

A corporate farmer generally looks at vertical integration. In the case of SFF, from the pasture to the plate.

It allows for much closer control of costs, and provides options as to where the profit can be made or declared.

It is not easy to see the interests of farmers and corporate farmers aligning closely over time.
Neither Shanghai Maling, the now revealed purchaser, nor SFF seem to fit corporate farming in that neither company actually owns farms. However your comment as to options as to where the profit can be taken seems to fit well with both Bright and Shanhai Maling retail and wholesale distributing operations. Somewhat surprisingly with Synlait Milk, Bright did not seem to give any advantage to Synlait when NZ powder exporters were subjected to banning and later individual approvals.

GTM 3442
16-09-2015, 04:01 AM
Neither Shanghai Maling, the now revealed purchaser, nor SFF seem to fit corporate farming in that neither company actually owns farms. However your comment as to options as to where the profit can be taken seems to fit well with both Bright and Shanhai Maling retail and wholesale distributing operations. Somewhat surprisingly with Synlait Milk, Bright did not seem to give any advantage to Synlait when NZ powder exporters were subjected to banning and later individual approvals.

Have a look at how the Gulf monarchies are buying up Africa to ensure food security.

SFF grow the beasts, process them, sell them to Bright, who move them through to retail.

GTM 3442
16-09-2015, 04:04 AM
Neither Shanghai Maling, the now revealed purchaser, nor SFF seem to fit corporate farming in that neither company actually owns farms. However your comment as to options as to where the profit can be taken seems to fit well with both Bright and Shanhai Maling retail and wholesale distributing operations. Somewhat surprisingly with Synlait Milk, Bright did not seem to give any advantage to Synlait when NZ powder exporters were subjected to banning and later individual approvals.

Have a look at how the Gulf monarchies are buying up Africa to ensure food security.

SFF grow the beasts, process them, sell them to Bright, who move them through to retail.

macduffy
16-09-2015, 07:41 AM
This reminds me of the "old" days in the meat industry when overseas firms such as the Vesteys and Borthwicks had a large measure of control of the NZ industry. They, too, had the overseas contacts for distribution and sale to the consumers of the product. The wheel turns?

kiora
16-09-2015, 08:38 AM
Appairs to be good for farmer shareholders now for the short term,longer term ??? Who would know
http://www.interest.co.nz/rural-news/77618/allan-barber-points-out-shanghai-maling-both-replacing-short-term-banks-plus-it

1leon
16-09-2015, 09:05 PM
Have a look at how the Gulf monarchies are buying up Africa to ensure food security.

SFF grow the beasts, process them, sell them to Bright, who move them through to retail.
SFF doesn't own the farms. How then does SFF grow the beasts? The reality is the farmers own the farms and operate SFF as a co op to do the processing. Shanghai Maling/Bright is proposed to own half the processing and already has enormous retail and wholesale operations in China. As one commentator points out SH/Bright could still sell SFF products without owning half it. The question is whether the advantage Shanghai Maling sees in a stake in the processor will be consistent with the farmers interests in the long term.

Newman
23-09-2015, 10:01 AM
Last year the financial cost of SFF was $37.4 m. Assuming everything remains the same, SFF share holders would get a $0.187 saving per year per share (50% of the financial cost/100 m shares) after Shanghai Maling inject capital. It would be good return to shareholders if the saving becomes divident.

Newman
08-03-2016, 12:39 AM
Words from SFF Annual Report on Shanghai Maling investment: "The investment is now only subject to regulatory approvals in China and New Zealand. We hope to positively conclude these processes, and commence the partnership in the second quarter of calendar 2016".

The is no sign that the regulatory approval on Chinese side has been obtained or close to that. What if approval cannot be obtained in China (due to capital control or other reasons)? I would guess the promised special dividend would be impossible. Further, it seems that the agreement with Maling does not have a compensation clause as SFF did with PGG Wrightson many years ago. Would the banks still support SFF?

Sideshow Bob
08-03-2016, 09:37 AM
You would have to presume there is some compensation clause etc within their agreement.

All silent in recent months, but hasn't been an easy season - lamb markets are difficult and the kill gone - but less farmgate competition. Beef probably not really going to hit a peak kill = get farmer prices down and maximum plant efficiencies.

Would think the banks are looking at them more kindly but still with the hammer down. Looking at their cashflow from operations, over $100m out of $152m was from inventory and trade & receivables - so can only do this once.

Newman
09-03-2016, 03:19 PM
You would have to presume there is some compensation clause etc within their agreement.

All silent in recent months, but hasn't been an easy season - lamb markets are difficult and the kill gone - but less farmgate competition. Beef probably not really going to hit a peak kill = get farmer prices down and maximum plant efficiencies.

Would think the banks are looking at them more kindly but still with the hammer down. Looking at their cashflow from operations, over $100m out of $152m was from inventory and trade & receivables - so can only do this once.

I examined SFF's latest annual report and its "Notice of meeting and shareholder information pack"(Sept. 2015) and could not find a compensation clause (if Shanghai Maling discontinues investment in SFF) .

A recent article on NBR reported the receivership of Maling's subsidiary company in Czech Republic.
http://www.nbr.co.nz/article/silver-fern-buyer-czech-bankruptcy-woes-what-tune-harmoney-playing-whos-next-negative

Maling's share price has dived from around 14 Yuan at the beginning of 2016 to about 9 Yuan today.
http://data.p5w.net/stock/index.php?code=sh600073

Maling recently announced that it has closed two subsidiary companies in China, with big losses.

Although Maling is a big and thus unlikely to change its mind in establishing the joint venture with SFF, nobody from SFF has mentioned the consequence if the joint venture could not be established. Can SFF still survive without the investment from Maling?

SFF was extremely luck in 2008 when Craig Norgate made a mistake to sign an unconditional agreement to buy 50% SFF and could not borrow from banks. It got $10m compensation from PGG Wrightson (?).

Sideshow Bob
09-03-2016, 07:48 PM
$30m and 10m shares - https://pggwrightson.co.nz/~/media/Documents/NZX-Announcements/2009-NZX-Announcements/04-Apr/PGW-and-SFF-Mediation-Concluded-Successfully_240409.ashx?la=en

The recent record of Other Chinese investment in the meat industry is less than stellar - Prime Range Meats and BX Foods.

As they say, watch this space.....

Newman
13-04-2016, 11:56 AM
The June 30 deadline for settlement is approaching.

Six months after SFF shareholders voted for capital injection from Shanghai Maling, there is little news on the matter. would John Key's visit to Beijing next week catalyses the process of regulatory approvals on both sides? or an extention to deadline would be required?

Marilyn Munroe
20-04-2016, 12:39 PM
Given the Bell Group and Others legal action and now Winston Peters wanting to re-run a Wine Box inquiry on SFF, being told there is someone at reception from SFF wanting advice on a matter of securities law any prudent solicitor would be wise to hide under their desk.

http://www.stuff.co.nz/business/farming/79089207/nz-first-lays-complaints-over-silver-fern-farms-conduct

Boop boop de do
Marilyn

Newman
21-04-2016, 12:32 PM
Given the Bell Group and Others legal action and now Winston Peters wanting to re-run a Wine Box inquiry on SFF, being told there is someone at reception from SFF wanting advice on a matter of securities law any prudent solicitor would be wise to hide under their desk.

http://www.stuff.co.nz/business/farming/79089207/nz-first-lays-complaints-over-silver-fern-farms-conduct

Boop boop de do
Marilyn

I would believe it was a stupid business decision to buy half of SFF at $261m. If the transaction is blocked by NZ side there would be two implications: 1) SFF would not be able to find a new buyer who is willing to pay $261 for half of the company; 2) it gives Chinese an excuse to delay the FTA upgrading. The world is not short of protein supply. As recent as 2 years ago people believed Chinese would not survive without NZ milk. Look at the market now! Milk is flooding everywhere. Red meat would follow the milk story.

If anyone loves to own SFF they could achieve the goal by starting to buy SFF shares at unlisted market at $1.00/share. Eventually beef/sheep farmers would retire and they have to sell shares at $1 or lower.

Marilyn Munroe
02-05-2016, 12:41 PM
I wonder if the difference in future outlook in supporting information given to farmers before the merger approval meeting and the positive profit announcement after the vote will end up biting the bankers who control SFF in the bum.

http://www.scoop.co.nz/stories/BU1605/S00010/silver-fern-farms-response-to-requsition.htm

Boop boop de do
Marilyn

Marilyn Munroe
02-05-2016, 04:20 PM
http://www.stuff.co.nz/business/farming/79534358/silver-fern-farms-spectacular-backdown-over-shanghai-maling-meeting

Will this turn into a rerun of Bell Group and Others v PPCS?

Who advises these guys on securities law, Lionel Hutz?

Boop boop de do
Marilyn

Newman
03-05-2016, 02:01 PM
Share price would drop to 40 cents again, and SFF shareholders would lose over $200 m to make a few persons happy who would grab up SFF cheaply. Poor farmers! Beginning of the end for the FTA with China.

Newman
03-05-2016, 08:52 PM
Interesting information on John Shrimpton's involvement in purchasing land in Canterbury.
http://www.odt.co.nz/news/business/381801/meeting-will-not-stop-deal-sff-says

Marilyn Munroe
03-05-2016, 08:59 PM
I watched Stephen Joyces response to Winston Peters parlimentary question today.

Stephen seemed to so delighted with mocking Winston Peters that he was oblivious to the spluttering fuse on a barrel of gunpowder this issue is.

Boop boop de do
Marilyn

Sideshow Bob
04-05-2016, 07:25 AM
One commentators take:

http://meatexportnz.co.nz/2016/05/03/barbers-wire-sff-special-meeting-frustrating-waste-of-time-and-money-but-its-the-price-of-democracy/

When they tried to sell 50% to PGW in 2007, they needed a binding vote of 75% to do this and only just scraped in. This time around the vote wasn't actually needed and was non-binding.

Newman
09-05-2016, 08:54 PM
What if SFF and Maling partnership fails?

1. Goldman Sachs will still collect fees ($ xx millions?) for making the deal. Would the fees be shared by SFF and Maling? or all to be paid by SFF?

2. Grand Samuel's forecast of the NPAT of $46.6m for FY2016 was based on the assumption that Maling's capital of $261m was injected on 1 October 2015 to save a financial cost of $12.8m. This was a ridiculous assumption and the interest saving in any case cannot be realised. Would a NPAT of $35m for FY2016 achievable?

3. If a $30m NPAT could be achieved sustainably year after year it would be better not to form the partnership with Maling. The questions remain if SFF could afford paying the fees to Goldman Sachs and penalties to other parties, and whether banks would continue lending.

4. Blocking the partnership with Maling sounds good if SFF could survive alone. Otherwise a share price of 40 cents is expectable in near future.

Anything wrong?

Newman
25-05-2016, 10:03 AM
Allan Barber posted an opinion on SFF on website, here is the link:
http://www.interest.co.nz/rural-news/81774/allan-barber-investigates-issues-being-raised-disgruntled-shareholders-silver-fern

Apparently some are betting Goldman Sachs and SFF Board have made mistakes in legal aspect and thus shareholders could make the partnership agreement with Maling voidable.

I would bet the partnership deal will be completed soon. The reason is simple: Goldman Sachs is not as stupid as some SFF shareholders hoped, and the shareholders' assumption that the market would remain the same if the agreement is made voidable is unlikely true. SFF and its shareholders cannot afford the penalty cost (in relation to GS) and the non-trade barrier consequence if the agreement fails.

What the unhappy shareholders can do is to vote Mr Rob Hewett out of the board in the next election. Meanwhile, they could consider who would compensate their loss after the partnership agreement is made void. Can they blame John Shrimpton?

Apathy
25-05-2016, 09:19 PM
Allan Barber posted an opinion on SFF on website, here is the link:
http://www.interest.co.nz/rural-news/81774/allan-barber-investigates-issues-being-raised-disgruntled-shareholders-silver-fern

Apparently some are betting Goldman Sachs and SFF Board have made mistakes in legal aspect and thus shareholders could make the partnership agreement with Maling voidable.

I would bet the partnership deal will be completed soon. The reason is simple: Goldman Sachs is not as stupid as some SFF shareholders hoped, and the shareholders' assumption that the market would remain the same if the agreement is made voidable is unlikely true. SFF and its shareholders cannot afford the penalty cost (in relation to GS) and the non-trade barrier consequence if the agreement fails.

What the unhappy shareholders can do is to vote Mr Rob Hewett out of the board in the next election. Meanwhile, they could consider who would compensate their loss after the partnership agreement is made void. Can they blame John Shrimpton?

It won't be going ahead and SFF board are in panic mode. The level of deception from understated forecasts through to 'restructuring' are unbelievable. There will be carnage and while it might be precipitated by Shrimpton the blame lies elsewhere. Won't be much longer to wait by all accounts.

Marilyn Munroe
25-05-2016, 11:13 PM
Stuff headline;

Financial authority rejects NZ First complaints over Silver Fern Farms deal

Here is how it seems to work. If I sell someone a harbour bridge and they complain to the Financial Markets Authority its not mine to sell Mr Colin Magee the FMA head of conduct contacts me. I then create a document that says movie stars don't do that sort of thing. Mr Magee then says "Thats fine, by the way can I have your autograph?"

Boop boop de do
Marilyn

Apathy
26-05-2016, 06:58 AM
Stuff headline;

Financial authority rejects NZ First complaints over Silver Fern Farms deal

Here is how it seems to work. If I sell someone a harbour bridge and they complain to the Financial Markets Authority its not mine to sell Mr Colin Magee the FMA head of conduct contacts me. I then create a document that says movie stars don't do that sort of thing. Mr Magee then says "Thats fine, by the way can I have your autograph?"

Boop boop de do
Marilyn

Brilliant summary - though you forgot that having 'dealt' with the problem they throw a series of high fives around the office - empty the fridge and head to lunch for the rest of the day!

Newman
27-05-2016, 02:41 PM
"Details of special meeting" announced.

At the end of special meeting on July 11, I guess some shareholders would demand:

1) Mr Rob Hewett resign from the the board; and

2) Mr John Shrimpton put his shares on unlisted market for sale.

Newman
21-06-2016, 12:40 PM
Statement from OIO last Friday suggests that approval would not be given before SFF special meeting. What's the point for OIO to make a decision if SFF shareholders have not decided? For the same token, Shanghai Maling would NOT bother to deal with OIO unless SFF special meeting re-approves the sale, which looks unlikely given the high hurdle of 75% approval rate.

The next logical issue would be how much SFF has to pay for the services of Goldman Sachs and others. It was SFF, not Shanghai Maling, appointed Goldman Sachs for capital raising.

Would SFF be able to continue to collaborate with Shanghai Maling after the special meeting? Probably not. The reputation of SFF board and mangers would not be regarded in China. Shanghai Maling learnt a lesson and would find alternative sources of beef from Australia and Brazil, rather than wasting time in NZ.

SFF would be 100% retained in NZ. I would expect a share price of 40 cents after the special meeting.

Marilyn Munroe
22-06-2016, 01:49 PM
The next logical issue would be how much SFF has to pay for the services of Goldman Sachs and others. It was SFF, not Shanghai Maling, appointed Goldman Sachs for capital raising.

You hire a merchant bank for their expertise in mergers and aquisitions for which they charge a fat fee.

Having a merger(or whatever) go t*ts up because of an issue with the co-ops articles of association suggest the advice recievied was not worth the fat fee charged.

If I was Silver Fern Farms I would stiff them the fee on account of Goldman Sucks being useless.

Boop boop de do
Marilyn

Sideshow Bob
27-06-2016, 11:43 AM
http://www.stuff.co.nz/business/farming/agribusiness/81483582/aussie-media-speculation-silver-fern-farms-investor-has-walked-away

Marilyn Munroe
27-06-2016, 11:44 AM
SFF CEO says Shanghai Maling is still in the hunt and announces delay to special shareholder meeting.

http://www.stuff.co.nz/business/farming/agribusiness/81483582/aussie-media-speculation-silver-fern-farms-investor-has-walked-away

Boop boop de do
Marilyn

Edit: Gazumped by Sideshow Bob

Newman
01-07-2016, 11:57 AM
According to the press release of Mr Peters on June 30, Goldman Sachs received $695,000 a month from SFF. It started advising SFF on capital raising on November 2014. When would its service end, 4 January 2017 (the revised settlement date with Shanghai Maling)?

Regardless of their votes on August 11, SFF shareholders have to pay Goldman Sachs a huge fee, possibly 26 months * $695,000.

Newman
01-07-2016, 12:04 PM
Now I understand why SFF management said it was a huge waste of money to hold the shareholder requisitioned
meeting.

Sideshow Bob
01-07-2016, 08:22 PM
Here is the article......interesting.

http://www.scoop.co.nz/stories/PA1606/S00521/silver-fern-farms.htm

Marilyn Munroe
03-07-2016, 12:28 PM
Rural commentator Allan Barber has an item on the Interest web site discussing the latest developments on the SFF takeover saga.

http://www.interest.co.nz/rural-news/82408/silver-fern-farms-announces-contract-extension-and-new-special-meeting-date-allan

He says the Shrimpton Group will have hard time getting the FMA and Companies Office to change their minds. He is correct in his assumption as both these are do-nothing organisations whoose purpose is to deflect responsibility from cabinet ministers.

Mr Shrimpton and associates would be more successful if they head to court.

The danger is after the Bell Group & others V PPCS litigation the courts may take a view that SFF is a repeat offender.

Mr Bell makes an interesting observation in this NZ Herald article about the aftermath of this litigation;

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=3581562

It is so applicable to current circumstances that I am going to quote it;

"Bell says he is not entirely convinced PPCS has learned from the messy takeover process."

Sideshow Bob
03-07-2016, 04:51 PM
Mr Shrimpton and associates would be more successful if they head to court.

The danger is after the Bell Group & others V PPCS litigation the courts may take a view that SFF is a repeat offender.

Mr Bell makes an interesting observation in this NZ Herald article about the aftermath of this litigation;

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=3581562

It is so applicable to current circumstances that I am going to quote it;

"Bell says he is not entirely convinced PPCS has learned from the messy takeover process."

Agree re court. PGW was viewed as a substantial transaction to buy 50%, 50% to Shanghai Maling was not.

Not sure re Bell Group and learning from the past. All different board and senior management from then to now.

Apathy
04-07-2016, 09:54 PM
Here is the article......interesting.

http://www.scoop.co.nz/stories/PA1606/S00521/silver-fern-farms.htm

He is 100% on the money and by the time it all plays out he will be the king maker next election.

It is the dream trifecta for Winston - offshore investment, domestic corruption and the big banks....

Sound bites aside - it is very ugly what is going on and it needs to be exposed.

kiora
05-07-2016, 05:23 AM
Here is the article......interesting.

http://www.scoop.co.nz/stories/PA1606/S00521/silver-fern-farms.htm

Ooch that smells & looks like P.. S..t
Another Richmond anyone?

Sideshow Bob
08-07-2016, 09:20 PM
Winston has another crack.....

http://www.scoop.co.nz/stories/PA1607/S00136/whats-going-on-at-silver-fern-farms.htm

GTM 3442
10-07-2016, 05:26 PM
Sadly, with the New Zealand media descending into an urban, turgid, celebrity-driven bog, I doubt that Mister Peters will be able to get the traction required for this rural issue to make a difference.

Sideshow Bob
19-07-2016, 08:26 PM
http://www.scoop.co.nz/stories/BU1607/S00565/silver-fern-farms-says-profit-wiped-out-in-2016.htm

Marilyn Munroe
19-07-2016, 11:59 PM
http://www.scoop.co.nz/stories/BU1607/S00565/silver-fern-farms-says-profit-wiped-out-in-2016.htm

Given their past record how can we be sure this break-even result won't magically change into a profit in a few months time?

Boop boop de do
Marilyn

PS. Mr Shrimptons PR consultant earning his fee;

http://www.stuff.co.nz/business/farming/82243084/private-runholder-leads-public-campaign-against-silver-fern-farms-deal

Sideshow Bob
20-07-2016, 11:25 AM
Given their past record how can we be sure this break-even result won't magically change into a profit in a few months time?

Boop boop de do
Marilyn

PS. Mr Shrimptons PR consultant earning his fee;

http://www.stuff.co.nz/business/farming/82243084/private-runholder-leads-public-campaign-against-silver-fern-farms-deal

Or the break-even turning into a loss.......I think if they were making money they'd be telling people.....

Marilyn Munroe
20-07-2016, 10:07 PM
Or the break-even turning into a loss.......I think if they were making money they'd be telling people.....

Plausable, I have a diferent spin.

The top brass at SFF are hunkered down inside the fort hoping the band of renegade Injuns attacking them will give up and go away.

If they anounce the storerooms inside the fort are packed with baccy firewater and muskets the attackers will be more determined in the assault.

Worse other Injuns would be encouraged to join in for their share of the loot.

Boop boop de do
Marilyn

Newman
21-07-2016, 12:05 PM
Quote Originally Posted by Sideshow Bob View Post
Or the break-even turning into a loss.......I think if they were making money they'd be telling people.....

Blue Sky Meats has announced a big loss. This is the 3rd time in the last 4 or 5 years, indicating how difficult to make money in the business.

All SFF shareholders can hope is that OIO approval is granted soon and the 50:50 partnership deal is reconfirmed before SFF's annual results are announced and Shanghai Maling goes away. I believe the deal would not go ahead as Maling executives are not stupid enough to make decisions that would make themselves jailed. I expect share price of SFF return to 40 cents.

Marilyn Munroe
25-07-2016, 12:08 PM
From the Otago Daily Times;

"Mr Hewett said the SFF board remained unanimous in its view the 50:50 partnership with Shanghai Maling was in the best interests of shareholders......."

The SFF board was probably advised by the ghost of former US President Benjamin Franklin.

"We must, indeed, all hang together or, most assuredly, we shall all hang separately."

Boop boop de do
Marilyn

Sideshow Bob
25-07-2016, 03:40 PM
Winnie still banging the drum, but not many are listening so far:

http://www.voxy.co.nz/politics/5/258229

Sideshow Bob
26-07-2016, 11:02 AM
Keith Woodford

http://www.interest.co.nz/rural-news/82748/keith-woodford-says-silver-fern-farms-drowning-financial-underperformance-it-time

Sideshow Bob
04-08-2016, 07:22 PM
Winnie still bangin' the drum!

http://www.scoop.co.nz/stories/PA1608/S00060/nz-farmers-being-led-up-river-with-shanghai-maling-deal.htm

Sideshow Bob
10-08-2016, 11:31 AM
Still bangin!

http://www.nzherald.co.nz/hawkes-bay-today/news/article.cfm?c_id=1503462&objectid=11690303

Marilyn Munroe
10-08-2016, 01:01 PM
Still bangin!

http://www.nzherald.co.nz/hawkes-bay-today/news/article.cfm?c_id=1503462&objectid=11690303

I like this quote;

[The SFF Directors]....."be as useful as a milk bucket under a bull."

Boop boop de do
Marilyn

Newman
12-08-2016, 03:12 PM
Mr Peters will be unhappy.
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2823

Marilyn Munroe
13-08-2016, 12:10 AM
The flip-flop from she's gunna go under to nex minit huuge profit was arrogant cynicism.

If co-operative members are happy to be feed bull manure why should I care.

Boop boop de do
Marilyn

Sideshow Bob
13-08-2016, 09:12 AM
The problem they have is that there will always be some disaffected. Only a portion voted (others may not have cared) but in the first vote 16% was against and in the 2ns 20% against. If they walk and go elsewhere, then it makes a material hole, especially when running a business with a heavy fixed cost. No stock = no business.

Sideshow Bob
19-08-2016, 07:40 AM
Doesn't give up!

http://www.voxy.co.nz/politics/5/260411

GTM 3442
20-09-2016, 10:20 PM
Well, we're on, then.

Hopefully it'll be an interesting ride. . .

Sideshow Bob
16-01-2017, 09:12 PM
http://www.unlisted.co.nz/uPublic/docs/sff/Silver%20Fern%20Farms%20Media%20Release_Result%202 016_160117.pdf

Armillary Private Capital
23-01-2017, 10:27 AM
Silver Fern Farms media release on $34.5m dividend. Click here (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2932) to view announcement.

Sideshow Bob
27-03-2020, 09:54 PM
Must be about time for a result? Think its going to be (relatively) good????

GTM 3442
28-03-2020, 02:05 AM
Must be about time for a result? Think its going to be (relatively) good????

It was about the 12th of April last year. Fingers crossed?

Mr Slothbear
12-04-2020, 12:40 PM
Have seen a lot of sponsered social media advertising from Silver Fern of late particularly on instagram.

Sideshow Bob
12-04-2020, 03:20 PM
Have seen a lot of sponsered social media advertising from Silver Fern of late particularly on instagram.

Part of all their branding work - wouldn't say it would bear any resemblance to their local retail branded sales.....

Sideshow Bob
15-04-2020, 08:32 PM
Yep! No word on divvies for the co-op

https://www.stuff.co.nz/business/farming/121040667/silver-fern-farms-profits-nudge-71m-on-back-of-strong-chinese-demand

Pretty easy to see how much it costs to run the coop. Not cheap!

kiora
15-04-2020, 09:09 PM
Yep! No word on divvies for the co-op

https://www.stuff.co.nz/business/farming/121040667/silver-fern-farms-profits-nudge-71m-on-back-of-strong-chinese-demand

Pretty easy to see how much it costs to run the coop. Not cheap!

The coop or Silver Fern Farms Ltd ?
I see it as an excellent result for both shareholders of Silver Fern Farms Ltd

percy
16-04-2020, 07:21 AM
Yes a strong result.
Positive
https://www.usx.co.nz/uploads/paperclip/documents/1990/original/2019_Financial_overview.pdf?1586919432

Sideshow Bob
18-04-2020, 05:56 PM
The coop or Silver Fern Farms Ltd ?
I see it as an excellent result for both shareholders of Silver Fern Farms Ltd

Co-op listed on USX. There only asset/business is a 50% shareholding in SFF Ltd. Other 50% is Shanghai Maling - part of Bright Food (Synlait)

nztx
18-04-2020, 07:02 PM
Did I read no dividend from SFF to the two shareholders - Co-op & Shanghai ?

The result is quite telling on what may have been possible even with Farmers stumping proportionately more cash to retain
more control of SFF IMO, rather than quazi 50/50 if I remember correctly & China having casting vote..

percy
18-04-2020, 07:21 PM
The two shareholders Silver Fern Farms Co-Op and Shanghai Maling, asked Silver Fern Farms Ltd not to pay the dividend.
Perhaps we will receive further advice on the divie and a trading update at the agm on the 30th April.

Baa_Baa
18-04-2020, 07:35 PM
The two shareholders Silver Fern Farms Co-Op and Shanghai Maling, asked Silver Fern Farms Ltd not to pay the dividend.
Perhaps we will receive further advice on the divie and a trading update at the agm on the 30th April.

Smart (or large) money not wanting to impact their balance sheets by paying out dividends to shareholders in uncertain times, just wait until this escalates across the wider NZX bourse. End up with a truck load of investments returning nothing in cash, it will be a watershed moment and reflection on where returns are literally coming from, instead of waiting/holding companies that have no capacity to return earnings to investors.

nztx
18-04-2020, 08:34 PM
Smart (or large) money not wanting to impact their balance sheets by paying out dividends to shareholders in uncertain times, just wait until this escalates across the wider NZX bourse. End up with a truck load of investments returning nothing in cash, it will be a watershed moment and reflection on where returns are literally coming from, instead of waiting/holding companies that have no capacity to return earnings to investors.

I think we've already have seen this starting with a bundle of the March/April Div paying NZX companies.. undoubtedly more to follow soon or slash payouts between now & the Sept/Oct round of Div payouts too..

Likely to bring sobering reality back to those on where they sunk their NZX investment cash in places

With SF Co-op, farmer shareholders on the receiving end of this may or may not seen too much dividend return in the preceding 12 months either

kiora
18-04-2020, 08:53 PM
Update from SFF today says they are considering a dividend

percy
18-04-2020, 08:58 PM
Silver Fern Farms Co-operative and Shanghai Maling
have made the decision and requested Silver Fern
Farms Limited defer the dividend payment until
the outlook for the global operating environment
becomes clearer. As we come through the current
crisis and enter a ‘new normal’ Silver Fern Farms
Limited’s Board will gain more clarity around timing
payment of the dividend.

Above from their annual report.17th April
https://usx.co.nz/uploads/paperclip/documents/1992/original/2019_Coop_Annual_Report_web.pdf?1587091395

Sideshow Bob
19-04-2020, 10:12 AM
Certainly 2020 started out a much tougher this year - China effectively closed down for shipments through February, which is the peak of the production season. Lack of consumption through being closed through CNY and prices coming off the peak at the end of last year (but still at historically high levels). Now with distancing rules, plants are still operating under essential, but only at 30-50% because people can't stand in their normal place - cost of production would be relatively horrendous (and seeing schedules decrease despite better currency).

Europe and the US in lockdown, and their foodservice sectors are dead for the time being. Scramble for more into retail - but some cuts are unsuitable for retail.

I would fully expected after the start of the year that with their result they would have been as conservative as able.

2020 would be a record profit and plenty of tail winds - but can understand not paying a divvy until the Covid dust has settled. Alliance (their main competitor and next biggest company) only made about $9m net (YE 30/9). They'd be shuddering at a cashed up SFF, and ANZCO are coming off a couple of poor seasons/results.

It is clear though that SFF is a beef story and a China story. Alliance don't have a big beef share, so would be interesting to see what ANZCO (Japanese owned) and AFFCO (Talley-ban owned) make - as they are the next biggest beef processors.

Still, with the Co-Op, circa $100m shares on issue, makes $34m net = 0.34c per share. PE of about 1.6 at todays price. Historic performance counts against them, but could be worth a punt and not many (listed) vehicles in the sector. Just not sure on the policies and difference in treatment between being a supplying shareholder, and an ordinary shareholder....

kiora
27-04-2020, 09:11 AM
More supply disruptions
https://finance.yahoo.com/news/meat-supply-threats-grow-first-181155792.html

Sideshow Bob
27-04-2020, 05:26 PM
More supply disruptions
https://finance.yahoo.com/news/meat-supply-threats-grow-first-181155792.html

Pity most plants have been at 30-50% capacity through Level 4. Should return to more normal production levels this week.

Still, would be giving the opportunity to ship hard and move stocks - but realistically 4-5 weeks transit.




Great for manufacturing beef. But the lack of hospitality/restaurant trade problem for the higher-value cuts.

kiora
28-04-2020, 09:28 PM
SFF don't process pork but.....what a shambles
""There are 700,000 pigs across the nation that cannot be processed each week and must be humanely euthanized," said the April 27 letter."
"Even as livestock and crop prices plummet, prices for meat and eggs at grocery stores are up. The average retail price of eggs was up nearly 40% for the week ended April 18, compared to a year earlier, according to Nielsen data. Average retail fresh chicken prices were up 5.4%, while beef was up 5.8% and pork up 6.6%."
https://finance.yahoo.com/news/piglets-aborted-chickens-gassed-pandemic-214016462.html
The comments are enlightening too,sad
Some realism
"This is a classic example of the media taking advantage of the ignorance of others to instill fear and panic. Hitler and Stalin did this too. But I'll teach you so you will know what happens and why it happens."
"Thats all it means, it DOESN"T mean we are going to run out of food. There are thousands of food processing plants in this nation and in order for us to have a food shortage over half of them would have to go down at once. The thought of that happening is ridiculous.

The real motivation here is the media wants to instill as much fear and insecurity because its a election year and they hate the President."

But the supply chains are chaotic & the prices are going up

And this one !!!Sound familiar?
"The President should step in and order the slaughterhouses to reopen with government assistance as essential industries. The owners appear to be taking the easy way out, figuring on bail-out money either way, and need to be reoriented."

kiwidollabill
29-04-2020, 09:44 AM
SFF don't process pork but.....what a shambles
""There are 700,000 pigs across the nation that cannot be processed each week and must be humanely euthanized," said the April 27 letter."
"Even as livestock and crop prices plummet, prices for meat and eggs at grocery stores are up. The average retail price of eggs was up nearly 40% for the week ended April 18, compared to a year earlier, according to Nielsen data. Average retail fresh chicken prices were up 5.4%, while beef was up 5.8% and pork up 6.6%."
https://finance.yahoo.com/news/piglets-aborted-chickens-gassed-pandemic-214016462.html
The comments are enlightening too,sad
Some realism
"This is a classic example of the media taking advantage of the ignorance of others to instill fear and panic. Hitler and Stalin did this too. But I'll teach you so you will know what happens and why it happens."
"Thats all it means, it DOESN"T mean we are going to run out of food. There are thousands of food processing plants in this nation and in order for us to have a food shortage over half of them would have to go down at once. The thought of that happening is ridiculous.

The real motivation here is the media wants to instill as much fear and insecurity because its a election year and they hate the President."

But the supply chains are chaotic & the prices are going up

And this one !!!Sound familiar?
"The President should step in and order the slaughterhouses to reopen with government assistance as essential industries. The owners appear to be taking the easy way out, figuring on bail-out money either way, and need to be reoriented."

Large proportion of US meat goes into food service (moreso than NZL), poultry/pigs have faster growth cycle so operates on more of a 'just in time' supply chain. Prices are up to wack as difficult to understand 'real' supply/demand curve. Will have impact on SFF with lower returns on processing beef sales to the US, unsure the impact of some of the premium lines they are looking to launch there.

DarkHorse
17-07-2020, 01:12 PM
Just having a look at these. They sure look good value. Looking at online news beef and lamb prices overall are off their highs but still at historically strong levels. Wondering about the effect of lockdowns and social distancing on sales of higher margin (presumably) cuts supplied to restaurants. I'm also wondering how this type of co-operative structure is generally assessed in valuations. Any comments would be much appreciated.

freddagg
17-07-2020, 08:59 PM
Just having a look at these. They sure look good value. Looking at online news beef and lamb prices overall are off their highs but still at historically strong levels. Wondering about the effect of lockdowns and social distancing on sales of higher margin (presumably) cuts supplied to restaurants. I'm also wondering how this type of co-operative structure is generally assessed in valuations. Any comments would be much appreciated.

Shareholders will always get the rough end of the pineapple with this company. They are only interested in looking after their livestock suppliers.

kiora
18-07-2020, 07:46 AM
So where do the Chinese shareholders fit in?

iceman
18-07-2020, 09:15 AM
So where do the Chinese shareholders fit in?

Shanghai Maling own half of Silver Fern Farms and the listed Coop SFF the other half

iceman
23-07-2020, 09:54 PM
Media release out this afternoon following a board meeting of the operating company.
It is pleasing to hear that they have performed strongly, managed to deliver to customers and maintained all staff, through COVID so far. It is a clear signal of confidence that they have decided to release the deferred dividend to their shareholders, allowing SFF to pay out a 5.4c dividend to ordinary SH.
I have to say I am surprised how much cash buffer the Co-op has decided to retain but 8.3% fully imputed dividend is pretty good in today's environment and the PE is still well under 2.
A pretty sound investment in my view.

Discl: Have been buying up quite a bit in the last few months

https://www.usx.co.nz/uploads/paperclip/documents/2053/original/Silver_Fern_Farms_Co-operative_Media_Release_Dividend_230720.pdf?159547 8544

kiora
24-07-2020, 02:45 AM
A great result & reward for both sets of shareholders

percy
24-07-2020, 08:00 AM
Shareholders will always get the rough end of the pineapple with this company. They are only interested in looking after their livestock suppliers.

Yesterday's announcement proves otherwise.
Very positive for all shareholders.

Sideshow Bob
24-07-2020, 08:23 AM
Yesterday's announcement proves otherwise.
Very positive for all shareholders.

The key point for me (aside from the divvy :p) was in some of the communication yesterday that they said they had had a strong financial start to 2020 - which will be the busier part of the year and through Covid. Retained $45m of FY19 profit in the business.

Disc: Holder

percy
24-07-2020, 08:41 AM
The key point for me (aside from the divvy :p) was in some of the communication yesterday that they said they had had a strong financial start to 2020 - which will be the busier part of the year and through Covid. Retained $45m of FY19 profit in the business.

Disc: Holder

Agreed.....................
Nice divie ,and a very positive outlook.

ps.Yes I am also a holder.

iceman
24-07-2020, 08:59 AM
The key point for me (aside from the divvy :p) was in some of the communication yesterday that they said they had had a strong financial start to 2020 - which will be the busier part of the year and through Covid. Retained $45m of FY19 profit in the business.

Disc: Holder

Exactly my view too. They have stated clearly that 2020 has started well, they repaid the wage subsidy in full, kept all staff, paid out a healthy dividend AND kept a lot of cash in both the operating company and more surprisingly, in the listed Co-op as well.
Certainly gives me great confidence for good future dividends as well.
With Percy onboard, we could even say we are well positioned.

Sideshow Bob
24-07-2020, 09:06 AM
With Percy onboard, we could even say we are well positioned.

I'd be disappointed if we couldn't say that!!

percy
24-07-2020, 03:52 PM
"All ordinary and rebate shareholders at the record date of 31st July 2020 will receive a fully imputed
dividend of 5.4 cents per share."

"A fully imputed Patronage Reward of 6.0 cents per share is payable on qualifying shares to supplying
shareholders based on supply during 2019. Both payments will be made on 14 August 2020."

We have record date and payment date but not ex dividend date.
Any one buying SFF shares over the next few days, need advice from their broker, that they are buying "cum div".

iceman
27-07-2020, 06:38 AM
You are right Percy. This seems odd and needs to be clarified. Anyone buying for the upcoming fat divie should definitely be aware of this.

iceman
27-07-2020, 09:41 AM
I have had a confirmation from SFF's "Shareholder Relationship Manager" that shares held at close of business on 31 July will receive the dividend but seems difficult to get an XD for the USX.

Sideshow Bob
30-07-2020, 01:32 PM
Sold to the Talley-ban.

https://farmersweekly.co.nz/section/horticulture/view/has-been-plant-gets-new-growth

iceman
30-07-2020, 01:58 PM
Sold to the Talley-ban.

https://farmersweekly.co.nz/section/horticulture/view/has-been-plant-gets-new-growth

This is probably a very good plant and area for the Talley's to buy and they sure as hell wouldn't be buying it without a firm plan to do something with it very quickly. They don't like idle assets.
Would be interesting to know how much we sold it for !!

percy
30-07-2020, 03:29 PM
Sold to the Talley-ban.

https://farmersweekly.co.nz/section/horticulture/view/has-been-plant-gets-new-growth

Thanks for the link.
Good fit for Talley's vegetable division ie the farm land and the cool stores.
Like Iceman,I am interested to know what SFF received for it.

Sideshow Bob
30-07-2020, 09:37 PM
This is probably a very good plant and area for the Talley's to buy and they sure as hell wouldn't be buying it without a firm plan to do something with it very quickly. They don't like idle assets.
Would be interesting to know how much we sold it for !!

Old plant and would have been decomissioned, but also likely sold with a covenant that would preclude meat processing (-and regardless SPM plant nearby).

iceman
31-07-2020, 04:34 AM
Old plant and would have been decomissioned, but also likely sold with a covenant that would preclude meat processing (-and regardless SPM plant nearby).

Probably have plans to grow their vegetables business as they indicated in the article. What an empire Talley's is becoming, invested only in the food business (fish, vegetables, ice cream, cheese, lamb), that they know so well

Sideshow Bob
31-07-2020, 07:29 AM
Probably have plans to grow their vegetables business as they indicated in the article. What an empire Talley's is becoming, invested only in the food business (fish, vegetables, ice cream, cheese, lamb), that they know so well

Plant building themselves are old. But would also have various resource/water/discharge consents that the Talley's will be keen on.

Yes, Talleys slowly becomes more of an empire - even coal mines to help supply energy for their plants. If SFF had a good profit, and ANZCO did OK, then bet AFFCO had a good year last year also.

percy
31-07-2020, 08:08 AM
From Silver Fern Farms Ltd latest set of accounts as per NZ Companies office.Note 11 is of interest to us.[Land value $18.13mil]

11. Current assets - non-current assets classified as held for sale
2019 2018
$'000 $'000
Land 18,130 -
Buildings - -
Plant and equipment - -
Total 18,130 -
Following the Group's announcement to close the pelt house at Fairton in August 2019, the Group plans to sell the farm
and processing plant at Fairton and has initiated an active programme to identify a buyer and complete the sale. The sale
is expected to be completed within the next 12 months.
Buildings, plant and equipment at Fairton have been classified as held for sale with a current net book value of nil.
.

iceman
31-07-2020, 09:00 AM
From Silver Fern Farms Ltd latest set of accounts as per NZ Companies office.Note 11 is of interest to us.[Land value $18.13mil]

11. Current assets - non-current assets classified as held for sale
2019 2018
$'000 $'000
Land 18,130 -
Buildings - -
Plant and equipment - -
Total 18,130 -
Following the Group's announcement to close the pelt house at Fairton in August 2019, the Group plans to sell the farm
and processing plant at Fairton and has initiated an active programme to identify a buyer and complete the sale. The sale
is expected to be completed within the next 12 months.
Buildings, plant and equipment at Fairton have been classified as held for sale with a current net book value of nil.
.

That would be a substantial addition to the already very healthy cash position of the operating company !!

percy
31-07-2020, 09:18 AM
That would be a substantial addition to the already very healthy cash position of the operating company !!

Having another memory lapse,!..Can't find where I read it,
Thought I read they were spending $17mil upgrading their beef processing plant in The Hawke's Bay.
If so the Fairton sale will either cover this cost, or go a long way to..
Found it.................
https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjxxcXrgfbqAhUCyzgGHUUOBnEQFjAAegQIARAB&url=https%3A%2F%2Fcdn.hbapp.co.nz%2Fnews%2Fsilver-fern-farms-confirm-17m-infrastructure-investment-in-hawkes-bay&usg=AOvVaw3k8n-gg2Su8Q6b7Vim1Nfu

Sideshow Bob
31-07-2020, 09:24 AM
Having another memory lapse,!..Can't find where I read it,
Thought I read they were spending $17mil upgrading their beef processing plant in The Hawke's Bay.
If so the Fairton sale will either cover this cost, or go a long way to..

While they don't release details by segment, beef would be responsible for a big chunk of their profit - so not surprised if spending some coin. There will be a bit of catch-up in terms of under-investment in plants in previous years when some lean years.

Puts them in a great cash position after retaining most of last years profits.

iceman
31-07-2020, 09:32 AM
Having another memory lapse,!..Can't find where I read it,
Thought I read they were spending $17mil upgrading their beef processing plant in The Hawke's Bay.
If so the Fairton sale will either cover this cost, or go a long way to..
Found it.................
https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjxxcXrgfbqAhUCyzgGHUUOBnEQFjAAegQIARAB&url=https%3A%2F%2Fcdn.hbapp.co.nz%2Fnews%2Fsilver-fern-farms-confirm-17m-infrastructure-investment-in-hawkes-bay&usg=AOvVaw3k8n-gg2Su8Q6b7Vim1Nfu

Thanks for this Percy. We are definitely well positioned with this one

percy
31-07-2020, 09:41 AM
Thanks for this Percy. We are definitely well positioned with this one

Funny you should say that: I was thinking the same myself.............lol.

percy
06-08-2020, 03:15 PM
http://business.scoop.co.nz/2020/08/06/red-meat-exports-record-seven-per-cent-increase-year-on-year/

iceman
06-08-2020, 03:52 PM
http://business.scoop.co.nz/2020/08/06/red-meat-exports-record-seven-per-cent-increase-year-on-year/

Very interesting reading and numbers and very good for NZ Inc.
The numbers that surprise me the most from this are the strong numbers from USA & UK in June. But great to see this industry doing well. We need primary industries to do well to pull NZ out of the economic hole we're in right now

Sideshow Bob
07-08-2020, 09:13 AM
Very interesting reading and numbers and very good for NZ Inc.
The numbers that surprise me the most from this are the strong numbers from USA & UK in June. But great to see this industry doing well. We need primary industries to do well to pull NZ out of the economic hole we're in right now

Much of that pricing was the tailwind that helped SFF last FY - African Swine Fever certainly had an impact, and historically 'disease' or something similar only provides a short-term boost and can create a hangover later (ie FMD, BSE etc). Companies swing into 1 market to follow the bucks and be competitive and ignore other markets etc etc etc.....

The other aspect would have been the dip in the dollar through Covid, when it got down to circa 0.56 USD. Money in the bank, especially when schedules were more reflective of Covid/feed, rather than currency/markets.

From what I understand, most markets going 'OK', China is OK without the price peaks from some months ago, but foodservice in various markets is battling - so high-end cuts like lamb French racks, prime beef cuts etc are difficult. Heard that some of the US retail is phenomenal.

Local supermarket last night - premium beef mince $18.99/Kg, beef tenderloin $24.99/Kg! :confused:

kiora
07-08-2020, 12:29 PM
And PakNsave $19.99 for vaccum packed eye fillet from Greenlea ???

Sideshow Bob
07-08-2020, 01:13 PM
And PakNsave $19.99 for vaccum packed eye fillet from Greenlea ???

Cheap as....!

Crazy. PNS won't be doing it for nothing....

Beagle
10-08-2020, 10:47 AM
Okay... so my friends have been highlighting this one as a possible investment and at first glance the shares look stupidly cheap BUT meat processors have a truly shocking, actually notoriously shocking track record of massive swings in profitability (and I am still very time poor this week), so what I will do is pose some devil's advocate questions and seek feedback.

Co-op structure leads to an ill defined dividend policy.
What exactly is their policy in terms of payout's for patronage reward v dividends ?
Last year they paid a 3 cent patronage reward but no dividend ? Why were suppliers favored over shareholders ?
What evidence is there to suggest this is anything other than a pure cyclical stock ?
Normal PE valuation methods appear flawed in that there appears to be no set methodology for distribution of profits and a share is ultimately only ever worth the net present value of what it can pay you in dividends over its lifetime so a dividend yield valuation model seems most appropriate to me.

Assuming for a moment this is a pure cyclical company and looking at their dividend history over the last 3 years they have paid 2.8 cents, 0 cents and 5.4 cents, total 8.2 cents = average 2.73 cents. Grossing this up for imputation credits gives gross average payments of 3.79 cents per share per annum. If I expect a 7% gross return from a no growth cyclical company an average annual return of 3.79 cents suggests the shares to me are worth 3.79 / 0.07 = 54 cents.

I invite a full rebuttal from those invested as to why their investment thesis is different and a higher valuation is warranted and look forward to reading people's responses.

percy
10-08-2020, 11:48 AM
https://usx.co.nz/uploads/paperclip/documents/1990/original/2019_Financial_overview.pdf?1586919432
https://usx.co.nz/uploads/paperclip/documents/1992/original/2019_Coop_Annual_Report_web.pdf?1587091395
https://usx.co.nz/uploads/paperclip/documents/2053/original/Silver_Fern_Farms_Co-operative_Media_Release_Dividend_230720.pdf?159547 8544

So Silver Fern CoOp owns 50% of Silver Fern Farms Ltd.The other 50%owner is Chinese Shanghai Maling.
The CoOp's earnings are equity accounted.
SFF [Unlisted].
100,378,874 shares on issue at 65.1 cents gives a market cap of $65,346,647
eps 34.78 cps
PE..1.872 yes one point eight seven two....Note PE ratio is under 2 [two].
Net dividend per share 5.4 cps [in the bank this Friday]
Net dividend yield is 8.29% over 12 % gross.[ie fully imputed].
Equity ratio 81.93%
ROE 12.2%.This is based on their Total Equity of $304 mil.
Dividend policy of SFF Ltd.Minimum 30% of NPAT with target of 50% NPAT split 50/50 between CoOp and Shanghai Maling.
Note the latest payment was 37.5%.
I believe there is a strong future for "New Zealand grass feed red meats.".

My Valuation...$1.30....[note twice current share price].

iceman
10-08-2020, 01:46 PM
Good points Beagle.
As percy has pointed out, the operating company has a clear dividend policy of paying out a minimum of 30% of NPAT to its 2 equal shareholders, SFF (Co-op) and Shanghai Maling.
You are correct that for the FY18 they paid out no dividend, due to a very poor year.

Once SFF receives its dividend from the operating company, its first step is to ascertain any need to cover operating deficits which includes cost of its own Board as well as its representatives on the SFF Ltd Board.
This year they also decided to keep $4.5m to replenish reserves to cover themselves should they not receive divies from SFF Ltd in future years.
Once they decide on a pool to be distributed, the formula they use to decide on a split is that a MINIMUM of 65% should be paid out as dividend and MAXIMUM 35% as Patronage Reward. As I said above, 2018 was an exception due to a low dividend.

Of interest is that SFF Ltd has a clear strategy that it has been implementing for a couple of years now, on where it is going and where it wants to be. There is a strong focus on capital investment to have best practice operation to deliver the "Plate to Pasture" market lead plan. They have clear goals on greenhouse gas emissions reductions and marketing. This focus has resulted in SFF Ltd being in the strongest financial position it has been in for the last 10 years with a goal of $150m aggregated profit over the 5 years period to 2023. It looks clear to me that Shanghai Maling has been a good partner and inserted some strong business focus to the company.

COVID has resulted in more consumer awareness and people now, more than ever, want to know where their food comes from and that it is clean and safe. Grass fed red meat meets that increased awareness perfectly.

Beagle
10-08-2020, 03:51 PM
Many thanks Percy and Iceman. I really appreciate you sharing your opinions and helpful links both above and by email..

My initial reservations include:-

I find Shanghai Malings effective control over SFF Ltd to be a concern here. They're part of the Bright Dairy group and as major shareholders of Synlait and with representatives on the board I'm on record several times as calling their strategy at Pokeno to not only be extremely risky but also the actions of progressing the building and commissioning of that facility, flying in the face of a high court ruling against them but proceeding to build anyway and risking the combined total of the last 6 years of Synlait's profits on a supreme court outcome...this is gross recklessness in the most extreme way I can recall for many many years.

The jury is out, (almost literally, awaiting a decision by the Supreme court) on whether this is one of the greatest corporate risk management fiasco's of recent years or not. I would have expected them to exert their influence as major shareholders and with directors on the board to manage the risk more proactively.

I assume there are different Chinese executives involved in SFF ltd than Synlait ? Even so I see effective Chinese operational control of SFF Ltd as a real negative most especially in the current extremely hostile, (effectively almost a cold war), geopolitical climate. The risk of corporate malfeasance such as for example transfer pricing at inappropriate prices, (sales of large quantities of products to friendly parties in China at below their true open market export value), has to be considered as being a serious risk here especially in the light of historical razor thin margins in this industry. Do I trust Shanghai Maling to run a clean and honest operation ?...that is the $64,000 question.

I have an elephants memory for deals where Kiwi shareholders have been treated very badly by Chinese controlling interests so I will tread very, very carefully and slowly looking further into this one.

percy
10-08-2020, 05:14 PM
http://www.silverfernfarms.co.uk/assets/PDFs/Notice-of-Meeting-October-16-2015-web.pdf

Pages 25 and 26 sets out the safe guards of the Shanghai Maling casting vote.
Look more than satisfactory to me.

iceman
10-08-2020, 05:32 PM
Page 26 of what percy ? Your link is to a 2 pages media release

percy
10-08-2020, 05:42 PM
Page 26 of what percy ? Your link is to a 2 pages media release

I found it I found it.
Was not where i expected it.....
Long story but I found it.
Try it again....it really works..
Thank you Wilkipedia.......lol.http://www.silverfernfarms.co.uk/assets/PDFs/Notice-of-Meeting-October-16-2015-web.pdf

iceman
10-08-2020, 05:54 PM
Thanks percy. I agree. This looks satisfactory.

kiora
10-08-2020, 06:20 PM
Like Mr B have had similar results in business dealings with PRC & wary of businesses tying up with a Chinese partner
But in SFF case the partnership has been a win win for both parties & has been good for SFF NZ shareholders

percy
10-08-2020, 07:32 PM
Not directly but most of China's corn and soy is used to feed chickens and especially pigs which were decimated last year by swine flu and are only just recovering. NZ meat exporters have done well as replacement protein and can expect to continue to do so.

Above posted by Jaa on Chinese/NZ trade relationship thread.

Sideshow Bob
11-08-2020, 10:09 AM
In terms of history, Beagle is correct - the meat industry does have a notorious shocking track record. Plenty of train wrecks and particularly corporate investments I think were almost always a disaster - Fletchers, Brierleys, PGW etc. Very much a checked history.

But at the same time, people definitely do make money out of the meat industry - just a few years ago Craig Hickson was EY Entrepreneur of the Year (ok so was Peter Harris but we'll gloss over that). There are plenty of smaller companies who make money, and of course Talleys own Affco - and for sure they ain't no mugs. A well-run, disciplined business with decent capitalisation in the meat industry does have profitability.

I think one of the big differences now is the old business strategy of "screw the opposition" has gone. While the industry is still very competitive, there appears to be less short-termist behaviour to do whatever to hurt competitors. While livestock numbers have been drifting lower, capacity is a whole lot less. SFF at least appear to be less about market share/volume than what they were in the past.

Senior management has basically changed completely in the last few years (and they had a couple that staff would have been pleased to see the back of). New thinking coming in from other industries is important - while balancing with industry experience is important because it is different to alot of other industries - deconstruction/seasonal/fickleness of supply. But at the same time, their debt levels are something completely different to what they were a few years ago - SFF were near enough to bust pre-Chinese buying 50% share, and this situation drove alot of short-term behavior and made them very vulnerable to competitors. They always struggled post buying Richmond in early 2000's - which while the strategy was right, way they did it wasn't and saddled them with alot of debt and drove away NI farmers - ie driving away supply.

I would expect that a large chunk of profit has been made out of beef, particularly in the North Island - and alot from the Chinese market. While SFF have had their lamb business shrink in relative size, they have defended their beef business - and when gets to the peak season, this is where the money can be made. They do a good job with bobby calves, and that helps get cull cows. Have been consistently around 30% of NZ's beef, and that has expanded with dairy, where as lamb & deer has been declining for years.

With SM, I believe different executives on the board to Synlait. Also, they still deal with other customers in China - not as if they only sell to SM. Believe they have to pay the market price, just like anyone else. Last year at CIE, SFF had a separate stand to Bright/SM. However certainly in terms of market access and in particular plant listings for China, no advantage being part-owned by a Chinese SOE - SFF have had plants waiting for quite a few years.

Can understand the supplier rebate share wariness - however the majority of their shareholders are suppliers - and SFF require supply. They are still at some level a Coop - albeit now a quasi-Coop. Farmers can be fickle beasts, and it is a PR/investment in the business. Consistency will help drive supply and shareholding - albeit for most farmers financially it wouldn't make a substantial financial difference.

Looking at their competition, while difficult to compare, fully capitalised they are well placed - especially against the likes of Alliance & ANZCO.

There are still risks and an industry that can be very fickle, based on demand, market access, seasonality, FX, weather etc, and a business that you pay your supplier in 7 days, but at very best you'd get money back in in 30-40 days. Their financial year end is to align with SM, and is nearing peak season - so now in the off-season, their debt would be likely alot less.

Part of it is that the old "one swallow doesn't make a summer" - which the industry is again a little notorious for. But I would fully expect that they were conservative with their stock valuations etc end of FY 2020 (Covid/China), but they've got through lockdown OK, and recently said they'd made a "strong start" to the year - which would be their bigger financial/throughput half of the year.

Percy has covered off the financials - and I think alot of those figures are compelling. Wouldn't bet the farm on them, but in todays market as one of the few investments can make in NZ agriculture, and have to take a long-term view.

Beagle
11-08-2020, 12:03 PM
Thank you Sideshow Bob for your very good overview of the situation.

Can I ask you this $64,000 question. If someone put a gun to your head so too speak and you had to make a best guess on average earnings per share in the next 5 years what do you see as a reasonably conservative average eps, (knowing this will vary significantly between years) ? Surely any assessment of this stock has to embrace its notoriously cyclical nature ? There's no growth here right ? This is a pure cyclical play ? If so wasn't last year the top of the cycle.
What other reason for the co-op to retain so much of the dividend other than they are worried the current year or next year they won't get much so they want to ensure their operational costs are covered for several years ?
I'm lost at sea here. I don't see any other way to estimate earnings going ahead than to take the average since SM came on board.
What assurance is there that the current year will anything like 2019 ?
What operational / structural / processing matters have been put in place so a repeat of abysmal profitability like 2018 doesn't happen again ?
Sorry for the 101 questions.

Sideshow Bob
11-08-2020, 04:13 PM
Can I ask you this $64,000 question. If someone put a gun to your head so too speak and you had to make a best guess on average earnings per share in the next 5 years what do you see as a reasonably conservative average eps, (knowing this will vary significantly between years) ? Surely any assessment of this stock has to embrace its notoriously cyclical nature ? There's no growth here right ? This is a pure cyclical play ? If so wasn't last year the top of the cycle.
What other reason for the co-op to retain so much of the dividend other than they are worried the current year or next year they won't get much so they want to ensure their operational costs are covered for several years ?
I'm lost at sea here. I don't see any other way to estimate earnings going ahead than to take the average since SM came on board.
What assurance is there that the current year will anything like 2019 ?
What operational / structural / processing matters have been put in place so a repeat of abysmal profitability like 2018 doesn't happen again ?
Sorry for the 101 questions.

I'll have a crack......:eek2:

2019 was a record profit, but in an ordinary year, I'd say $20-40m, 50% share for the Coop, $10-$20m. So earnings of 10-20cps. Looking back over history is not completely applicable now with no long-term debt - which at peak season would blow out. But as a % of turnover, profit margin is typically 1-2% - so it is thin, and certainly vulnerable if some sort of shock or unforeseen event.

Growth from existing operations is difficult. Turnover has grown as a result mainly of prices etc - rather than more volume and have natural constraints with capacity at peak season. Extremely difficult to grow business off-peak. Not sure if any acquisition or similar is on the radar (would highly doubt it), and have pulled back from in-market presence in a number of markets (under previous management). Would largely ignore their retail branded initiatives as won't make a major contribution to the bottom line.

With the dividend, the FY was 31/12 and the dividend was delayed by Covid - and would see that they have paid out a minimal amount - and kept the remainder in the business. A number of companies have cancelled dividends and understand some reinvestment going on in plants/infrastructure - but mostly stuff with return (I think) rather than just things that they need just to keep going. Pre-SM when money was tight, they didn't reinvest into their plants as much as they should of. But with the Coop retaining money, ultimately I think they want that to be self-sustaining financially - not reliant on dividends from SFF Ltd. But in this environment not easy and better to salt some away for a future rainy day and then replenish when they can.

2018 wasn't abysmal profitability in comparison to history......but overall I think have much more discipline in the business, new management at key levels (none from 2015 are still there). Like I said, they aren't driven by volume or procurement share - but seems like if they can't make a dollar from it, why would they process? They shut a number of plants over the years which really costs, but seem to be the right size - and just sold their Fairton site - so more cash.

There is still a number of risks and issues in the macro environment - but certainly not alone in that.

percy
11-08-2020, 05:26 PM
Great post Sideshow Bob.
So eps.at last sale price of 65 cents.
10 cps gives a PE of 6.5
15 cps gives a PE of 4.34
20 cps gives a PE of 3.25
28 cps gives a PE of 2.27.SFF ltd are targeting a 10% ROE.At last year's $571mil it would mean 28cps to the CoOp.
30.75cps gives a PE of 2,11.That is equity of $571 plus retained earnings of $44.1875 total equity $615.18 mil 10%ROE on $61.51 mil equity is eps to CoOp of 30.75 cps.
This year's eps was 34.78 cps......The CoOp held back nearly $5mil rainy day money,and still paid a fully imputed divie of 5.4 cents per share.
So looking at eps from 10 cents to 30.75 cps, they look to have the capacity to pay the same fully imputed divie 5.4cps [8.3% net],or a lot bigger divies in future.
To add a bit of juice.SFF Ltd should receive approx $18mil from the sale of Fairton property.
Lets say they do have another pretty good year,and earn 28 cps.[this year 34.78 cps ]No need to hold back more rainy day money.Divie 8 to 10 cents fully imputed.At a share price of $1.30 net yield would be 6.15% or 7.69%.Double those yields on today's cost price of 65 cents.

iceman
11-08-2020, 05:58 PM
Good posts SB and percy and nothing to add except to say that the operating company's goal is for $150m aggregate NPAT for a 5 years period, which makes the average for the Co-op 15c EPS. If the operating company can average that profit, they should pay out dividends at the upper end of the 30-50% range. The current cash balance and the sale of the Fairton property to Talley's (undisclosed price) , makes them well on their way to fund the $17m upgrade in Hawkes Bay.

I am using that 5 year forecast of theirs as a base average over the business cycle. As percy points out, that gives ample room for very juicy dividends, not less than this year. Whichever way we slice this one, fundamentally it is very cheap.

Beagle
11-08-2020, 06:57 PM
Thanks Sideshow Bob. 1-2% margins makes airlines margins look fat !!
Nice ramp Percy :D
Agree Iceman, looks cheap on paper but needs to be VERY cheap with no growth, wafer thin margins, aging plant and equipment and the genuine prospect, (Ashley Bloomfield thinks this is more likely than not), of another breakout of Covid in the community potentially causing mayhem to processing.
High potential returns and high risk is my initial assessment. Could be okay for a modest portfolio allocation ?...I need to stop asking awkward questions, (thank you for your time and patience guys), and do more reading.

iceman
11-08-2020, 07:06 PM
Thanks Sideshow Bob. 1-2% margins makes airlines margins look fat !!
Nice ramp Percy :D
Agree Iceman, looks cheap on paper but needs to be VERY cheap with no growth, wafer thin margins, aging plant and equipment and the genuine prospect, (Ashley Bloomfield thinks this is more likely than not), of another breakout of Covid in the community potentially causing mayhem to processing.
High potential returns and high risk is my initial assessment. Could be okay for a modest portfolio allocation ?...I need to stop asking awkward questions, (thank you for your time and patience guys), and do more reading.



No you don't need to stop "asking awkward questions". . It has brought out a great discussion on a little commented on share. Don't miss the boat :-)

Sideshow Bob
11-08-2020, 07:12 PM
It is interesting to go back to consider late 2015 and when Shanghai Maling bought in. Certainly believe a great job was done by Dean Hamilton, and understand SM's price was massively better (perhaps up to double) that of next best option - at a time when SFF was under financial pressure and banks weren't too happy.

Shanghai Maling paid $261m for a 50% share - at a time when SFF total equity was about $360m.

If you look at the Coop today, which has 100m shares with 50%, they paid $2.61 per share say.

Close on to 5 years on, with the company in a much better place, can buy what SM paid $2.61 for, for only 66c, when the company has total equity of $571m.

As an aside, Chinese entities obviously have deep pockets and have a different investment horizon and other goals. Just need to look at Westland Dairy - different industry but they paid $588m, where by any traditional valuation would be a whole lot less.

Sideshow Bob
11-08-2020, 07:26 PM
Thanks Sideshow Bob. 1-2% margins makes airlines margins look fat !!
Nice ramp Percy :D
Agree Iceman, looks cheap on paper but needs to be VERY cheap with no growth, wafer thin margins, aging plant and equipment and the genuine prospect, (Ashley Bloomfield thinks this is more likely than not), of another breakout of Covid in the community potentially causing mayhem to processing.
High potential returns and high risk is my initial assessment. Could be okay for a modest portfolio allocation ?...I need to stop asking awkward questions, (thank you for your time and patience guys), and do more reading.

Good discussion and definitely pertinent questions.

May not be a Percy holding, but definitely think worth consideration for at least modest dog-sized holding.

percy
11-08-2020, 07:27 PM
Thanks Sideshow Bob. 1-2% margins makes airlines margins look fat !!
Nice ramp Percy :D
Agree Iceman, looks cheap on paper but needs to be VERY cheap with no growth, wafer thin margins, aging plant and equipment and the genuine prospect, (Ashley Bloomfield thinks this is more likely than not), of another breakout of Covid in the community potentially causing mayhem to processing.
High potential returns and high risk is my initial assessment. Could be okay for a modest portfolio allocation ?...I need to stop asking awkward questions, (thank you for your time and patience guys), and do more reading.

In hindsight,had some one a year ago had the foresight to say SFF would pay a fully imputed dive of 5.4 cents per share [8.3% net or over 12%gross], we would have said they were ramping.
The 2018 annual report set out SFF Ltd's objectives.The 2019 annual reports confirms they are meeting those objectives.[Doing as they say they will do]
Both SFF Ltd,and SFF CoOp have very strong balance sheets, little debt in Ltd ,and no debt in the CoOp.On huge revenue, as McDonalds have proven, you do not need large margins to make good profits. The future for "grass feed red meat" is bright ,as more people want to know what they are eating,and where it came from.Again there looks to be a food shortage in China this year,which should under pin the price we sell meat to them at.

iceman
11-08-2020, 07:39 PM
On my last day of isolation and being totally bored, I will add a bit of anecdotal evidence. Some of my co-workers are Chinese. We live together for months on end so have some intimate discussions. Over the last few months I have been sounding them out quite hard on where we stand with trade with China compared to other countries and what COVID has meant to them. They tell me what they read (and believe) which is the Chinese state controlled media.

In summary, I could say that they are 100% in support of following rules with isolation and behaviour such as use of masks and social distancing.They want NO EXEMPTIONS from those rules.
We work in fishing, so they are all well aware of quality and production. But it is clear from what they are saying that China is being told to watch out for where their food comes from to make sure it is safe. Their attitudes towards things such as how the animals they eat are fed/treated has changed a lot. TV has shown bad practices of a salmon farm in Norway so now they tell me they no longer buy Norwegian salmon.
Australia is siding with Trump so they don;t want to buy Australian products.

NZ, they tell me, is different. They have nothing but positive things to say about NZ and our produce, particularly our grass fed red meat. SFF has figured this out , as is clear in all their commentary.

This gives me increased confidence in investing in this company/industry.

Beagle
11-08-2020, 10:09 PM
Hope you get out tomorrow morning and can get back to Nelson to see your family.
More time locked down in Auckland is the last thing you need.
Best wishes mate.

stoploss
11-08-2020, 11:21 PM
Hope you get out tomorrow morning and can get back to Nelson to see your family.
More time locked down in Auckland is the last thing you need.
Best wishes mate.
Beagle have you got a spare kennel ? I'm thinking likely to be a roadblock at the end of the Bombay hills and no flights ....

iceman
12-08-2020, 04:48 AM
Hope you get out tomorrow morning and can get back to Nelson to see your family.
More time locked down in Auckland is the last thing you need.
Best wishes mate.

Thanks mate. Been in negotiations with MOH since 5AM and have managed to convince them to let me out a couple of hours early and get a flight at 8AM. All I can do now is keep my fingers crossed to hope this 195 day journey is nearing an end !! Sorry, not related to SFF except I need to get home to spend my juicy divie on Friday :-)

percy
12-08-2020, 06:42 AM
We are all thinking of you.Trust you get home today.

Beagle
12-08-2020, 08:47 AM
Thanks mate. Been in negotiations with MOH since 5AM and have managed to convince them to let me out a couple of hours early and get a flight at 8AM. All I can do now is keep my fingers crossed to hope this 195 day journey is nearing an end !! Sorry, not related to SFF except I need to get home to spend my juicy divie on Friday :-)

Very happy for you mate. Hope you've touched down in Nelson already and are giving your wife and family a big hug :)

Sideshow Bob
12-08-2020, 08:50 AM
Thanks mate. Been in negotiations with MOH since 5AM and have managed to convince them to let me out a couple of hours early and get a flight at 8AM. All I can do now is keep my fingers crossed to hope this 195 day journey is nearing an end !! Sorry, not related to SFF except I need to get home to spend my juicy divie on Friday :-)

Good luck Iceman and hope it works out......hopefully you're just touching down in Nelson right about now! All the best.

iceman
13-08-2020, 05:58 AM
Thanks guys. Sure is great to return to sunny Nelson. What a beautiful country we've got :-)

Sideshow Bob
14-08-2020, 06:04 PM
HDD! (Happy Dividend Day)

Cash in the bank.

percy
14-08-2020, 07:07 PM
HDD! (Happy Dividend Day)

Cash in the bank.

Mine too,late this afternoon.

Sideshow Bob
16-08-2020, 03:24 PM
https://farmersweekly.co.nz/section/beef/view/red-meat-demand-unstable

percy
16-08-2020, 04:28 PM
Thanks for the link.
Appears we are very reliant on the Chinese.

Sideshow Bob
17-08-2020, 07:46 AM
Thanks for the link.
Appears we are very reliant on the Chinese.

In short, yes - when you see the volume/proportion of NZ's red meat heading to China. Chinese market not so strong for the higher-end cuts - ie lamb French racks, beef steaking cuts - but the lower-end, offals etc is where it is at.

Money has been substantially better in China than other markets for many of these products - especially the likes of lamb flaps & forequarters. If they have to head back into the Middle East in a major way, or the like, then prices will be substantially lower.

We don't need a market access issue into China (Winston).

Mr Slothbear
17-08-2020, 08:24 AM
In short, yes - when you see the volume/proportion of NZ's red meat heading to China. Chinese market not so strong for the higher-end cuts - ie lamb French racks, beef steaking cuts - but the lower-end, offals etc is where it is at.

Money has been substantially better in China than other markets for many of these products - especially the likes of lamb flaps & forequarters. If they have to head back into the Middle East in a major way, or the like, then prices will be substantially lower.

We don't need a market access issue into China (Winston).


i’m appreciating your posts here sideshow bob. Do you think if they did have to send product back to the middle east they can change it to be halal without much increase in cost or is it a non issue?

Sideshow Bob
17-08-2020, 11:36 AM
i’m appreciating your posts here sideshow bob. Do you think if they did have to send product back to the middle east they can change it to be halal without much increase in cost or is it a non issue?

Non-issue. Almost all of the lamb plants in NZ are halal these days, and produce halal as standard. Not really any real cost to do so, and will then certify as halal as/when they need to.

Many customers/markets outside of the Middle East require halal, in the likes of Germany, UK, US etc to service sectors of their market that may require it.

Beef not quite so many plants are halal, but ME isn't such a big beef market.

percy
27-08-2020, 04:12 PM
https://usx.co.nz/uploads/paperclip/documents/2080/original/SFF_Press_Release_NZ_-_Sampler_Box_Launch_27_August_2020.pdf?1598497915

iceman
28-08-2020, 06:04 AM
https://usx.co.nz/uploads/paperclip/documents/2080/original/SFF_Press_Release_NZ_-_Sampler_Box_Launch_27_August_2020.pdf?1598497915

Good to see. I particularly like the below para from the announcement and think this will/is increasingly the case right around the World with COVID-19 having pushed this to the forefront of many people's minds when selecting their food:
“Our US target consumer, the ‘Conscious Foodie’, values the grass-fed and pasture-raised
attributes of New Zealand animals, as well as our sustainable production methods, safe and
thoughtful packaging, and the bold full-bodied flavour of Angus Beef,”

macduffy
31-08-2020, 10:40 AM
From The Herald:

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12360750

iceman
31-08-2020, 10:59 AM
From The Herald:

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12360750

Great read. Thanks for sharing. A lot of historical knowledge and experience of the industry there. I'm surprised the article does not state who his replacement is. He or she will have big boots to fill.

Sideshow Bob
31-08-2020, 08:55 PM
Great read. Thanks for sharing. A lot of historical knowledge and experience of the industry there. I'm surprised the article does not state who his replacement is. He or she will have big boots to fill.

Internal replacement, and an interesting call. Bigger issue is their HK manager retiring who does a lot of the sales.

Jaffray is is a bit of a legend.

percy
03-09-2020, 03:37 PM
http://business.scoop.co.nz/2020/09/03/significant-leap-in-red-meat-exports-to-australia-united-states-the-united-kingdom-and-korea/

Sideshow Bob
18-09-2020, 09:53 AM
Picked up from Zespri latest newsletter:

After nearly a decade with Zespri, Chief Grower and Alliances Officer Dave Courtney will be leaving ourorganisation in December to take on a new role as Chief Customer Officer for Silver Fern Farms.

Looks like their current guy quietly slipped out of the building after not too long??

Also another ex Zespri, so would have worked with the CEO.

Mr Slothbear
18-09-2020, 11:07 AM
Picked up from Zespri latest newsletter:

After nearly a decade with Zespri, Chief Grower and Alliances Officer Dave Courtney will be leaving ourorganisation in December to take on a new role as Chief Customer Officer for Silver Fern Farms.

Looks like their current guy quietly slipped out of the building after not too long??

Also another ex Zespri, so would have worked with the CEO.

Looks to be a good hire at face value. I see many similarities between Zespri and SFF

percy
24-09-2020, 03:32 PM
Across the whole year to August, against the backdrop of a global pandemic and the US-China trade war, all exports have grown by 2.8%, with milk power, butter and cheese exports up 11.1%, meat exports up 9.9%, wine exports up 8.5%, fruit exports up 8.4% and vegetables exports up 6.3%.

Content Sourced from scoop.co.nz

I expect SFF lead the way in meat exports.

Sideshow Bob
24-09-2020, 08:27 PM
https://www.stuff.co.nz/business/122861810/coronavirus-the-strange-upshot-for-kiwi-meat-processors

iceman
30-10-2020, 07:48 AM
SFF boardmeeting confirms to farmer suppliers that the business continues to track ahead of budget so far in this unprecedented year and pleasingly, a large number of new and current supplier shareholders wanting to become "fully shared. Great to see the farmers vote of confidence in SFF. All pointing to a good year for SFF.

Mr Slothbear
30-10-2020, 09:40 AM
SFF boardmeeting confirms to farmer suppliers that the business continues to track ahead of budget so far in this unprecedented year and pleasingly, a large number of new and current supplier shareholders wanting to become "fully shared. Great to see the farmers vote of confidence in SFF. All pointing to a good year for SFF.

thank you Iceman, have searched a few places but can’t find where you found this?

many thanks and appreciate your post

iceman
30-10-2020, 09:45 AM
thank you Iceman, have searched a few places but can’t find where you found this?

many thanks and appreciate your post

SFF newsletter:

"It is very pleasing to see a high level of interest in both existing and new shareholders enquiring about becoming fully shared. The value proposition shareholders can receive by becoming fully shared is becoming increasingly compelling as we build a track record of delivering consistent financial returns via dividend and patronage reward. Couple this with a commitment from both the Cooperative and Silver Fern Farms to deliver loyal, fully shared suppliers priority access to space and programmes which we believe, although not always perfect, is being delivered in a manner that is transparent and benefits both the Co-op and the operations of our 50% investment, Silver Fern Farms Limited

Simon Limmer updated the Board with a comprehensive view on markets, supply dynamics and the operations within the business. The business continues to track above budget in what has been an extremely challenging year, a real credit to the 7000 staff throughout the business.
As we know in this industry, the next couple of months are always interesting as we balance growth rates with climatic conditions, so I encourage you to plan ahead and have those conversations with your Livestock Rep so planning can be optimised to deliver the best results both for you and the company."

percy
05-11-2020, 07:07 AM
https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/arjDLKLZa0DFRhONLr7xgA/NfNztUfBrwgUayD5UZW3qw

Sideshow Bob
05-11-2020, 11:04 AM
Last trade at 72c, and 92c is the next on offer....

Have the market woken up that have no LT debt, trading above budget for the FY which is 80% gone, still have most of last years profit in their coffers, got cash from the Fairton sale, and trading at a PE of about 2. What can you buy with anything approaching a PE of 2??

I smell something cooking on the BBQ, and could be a juicy divvy......

iceman
05-11-2020, 11:14 AM
Last trade at 72c, and 92c is the next on offer....

Have the market woken up that have no LT debt, trading above budget for the FY which is 80% gone, still have most of last years profit in their coffers, got cash from the Fairton sale, and trading at a PE of about 2. What can you buy with anything approaching a PE of 2??

I smell something cooking on the BBQ, and could be a juicy divvy......

It sure looks like somebody has woken up to this bargain this week. We had a downward pressure on SP for the last couple of weeks but this week has been a complete turnaround and all offers at 72c or less, close to an ATH, have been scooped up. This is a hugely undervalued share, even at 75c. As you point out, next year's divie of at least the same as this year (about 8% on current price) is a pretty sure thing now.

percy
05-11-2020, 11:43 AM
I wonder whether the following has caused the increased interest in SFF CoOp share price.This appeared in the 30th October update, Iceman has previously referred to.Post #199 this thread.

"We’ve also improved the Shares tile
and tab, which allows you to view your
Patronage Reward Stock Units by Year
to Date or by Last 12 Months, and added
the ability to view the share price and
history."

Sideshow Bob
05-11-2020, 04:03 PM
I wonder whether the following has caused the increased interest in SFF CoOp share price.This appeared in the 30th October update, Iceman has previously referred to.Post #199 this thread.

"We’ve also improved the Shares tile
and tab, which allows you to view your
Patronage Reward Stock Units by Year
to Date or by Last 12 Months, and added
the ability to view the share price and
history."

Undeniably they are wanting more suppliers as shareholders, and have stated that. Believe this will happen with a history of performance - one (large) swallow doesn't make a summer but seem to be heading in the right direction. Having a decent balance sheet/little debt is a godsend for this business.

percy
06-11-2020, 06:52 PM
https://youtu.be/g027CA-z6QI

iceman
11-11-2020, 01:14 PM
A new all time high of 75c today. Market starting to see the high dividend yield ?

Beagle
11-11-2020, 03:07 PM
PAZ needs some love too. Worries me a bit you guys ramping this consistently and not talking about PAZ. Makes me wonder who the big seller of PAZ has been lately ?

percy
11-11-2020, 03:20 PM
I think I posted awhile ago I thought the big PAZ seller may have been a large holder whose wife recently died,so it may be for estate purposes.If it is the person I think it is, he paid 7 cents for his original holding, then added at 14 cents.Three holdings totalling 6 million shares.We do know it has not been a director,as they have stated any director's buys/sells would be announced to the market.
PAZ remains my largest holding while SFF is my second largest holding.I thought SFF share price may have drifted a little over summer,and I had grand ideas of picking up a few more in February, before their result anouncement,so I was well positioned for the juicy divie in April.

Breaking News,
Would you believe it,a seller has been off loading shares at 66 cents.!!!

iceman
11-11-2020, 04:00 PM
PAZ needs some love too. Worries me a bit you guys ramping this consistently and not talking about PAZ. Makes me wonder who the big seller of PAZ has been lately ?

No ramping on here mate. If you want ramping, read the HLG thread :-)

percy
12-11-2020, 10:09 AM
Breaking News,
Would you believe it,a seller has been off loading shares at 66 cents.!!![/QUOTE]

Managed to get some at 66 cents before they all went.

iceman
12-11-2020, 11:25 AM
Breaking News,
Would you believe it,a seller has been off loading shares at 66 cents.!!!



Yes I noticed that yesterday. Seemed a bit odd immediately after they reached 75c. Someone must have been overdue a new deck or a tax bill and needed cash in a hurry !! Well done on picking a few of them up.

percy
12-11-2020, 01:29 PM
I tried to buy the 17,571 for sale at 66 cents too late yesterday afternoon.
They went through at 9.27 this morning while I was out.
Then another 17,571 were traded at 66 cents at 9.56 am and 3,046 at 66 cents also at 9.56 am.
So total traded at 66 cents was 88,288.

Sideshow Bob
12-11-2020, 04:29 PM
I tried to buy the 17,571 for sale at 66 cents too late yesterday afternoon.
They went through at 9.27 this morning while I was out.
Then another 17,571 were traded at 66 cents at 9.56 am and 3,046 at 66 cents also at 9.56 am.
So total traded at 66 cents was 88,288.

Looks like they've been cleaned out (for perhaps just for the time being). Only offer is 75c.

percy
17-11-2020, 07:58 AM
RCEP delivers additional tariff elimination on a number of New Zealand food products into Indonesia, including sheepmeat, beef, fish and fish products, liquid milk, grated or powdered cheese, honey, avocados, tomatoes and persimmons.
2018 population was 267.7 million.

Sideshow Bob
17-11-2020, 09:21 PM
RCEP delivers additional tariff elimination on a number of New Zealand food products into Indonesia, including sheepmeat, beef, fish and fish products, liquid milk, grated or powdered cheese, honey, avocados, tomatoes and persimmons.
2018 population was 267.7 million.

Indonesia has been a difficult market in recent times. Would be good to get back into it in a meaningful way. Looks of cheap buffalo meat and also trying to be self-sufficient.

https://www.stuff.co.nz/business/farming/98747297/new-zealand-wins-appeal-to-reopen-profitable-beef-access-into-indonesia
https://farmersweekly.co.nz/section/beef/view/indonesia-misses-meat-deadline

Sideshow Bob
18-11-2020, 11:50 AM
The 75c offer starting to be nibbled at...... :p

Sideshow Bob
20-11-2020, 07:42 AM
Out of interest, Alliance have come out with their result.....hidden down in the detail. On the face of it, reasonable - $27.4m, up from $20.7m. But pretty sure this is EBITDA.

https://www.odt.co.nz/business/decision-pay-affects-alliance

But with the wage subsidy - they got $34m and repaid about 50% in September. Not recognized in the result.

The article/result does highlight a very pertinent issue, one that also affects SFF - the "donning & doffing" issue - where staff have to get in & out of their protective gear for breaks etc and has been on their own time. Meat companies commonly only paid for the time basically standing on the line ready to work and not the time getting ready with their whites etc.

It has been right through the courts, and affects most/all companies, who have to pay it back (and find a mechanism to pay it retrospectively over some years). This has been a known for some time, and not new. It will affect SFF, and if it costs Alliance $20m, then it will probably cost SFF $30m - or quite possibly more. Some companies have paid much more relative to their size.

Probably something also in the board's mind last year when retaining profits in the business - knowing this was coming.

Out to lunch
20-11-2020, 10:55 PM
bear-ish me says:
- Meat prices are down/soft from historic highs. Further reliance on China. SFF have recently lived the dream being in a rising price market.
- Less hospitality-based premium meat demanded in europe over their lockdowns.
- Brexit/EU tariffs resolution remain uncertain
- don & dof contingent liability. No idea how Alliance came to $20m. Maybe best to work that out the $20m as a percentage of Alliance's labour bill over last six years to work back to get an SFF amount? not entirely accurate given mix of employment contract types. I would've thought this would be recorded as a contingent liability given Jan19 made the ruling then.
- huge capex costs expected - I think mostly maintenance capex related. signaled in dec19 report. I guess capex spend will be delayed by covid so we wont see it all in 12m to Dec20. Alliance is on a growth capex program - moving away from venison.
- RCEP trade gains not yet quantifiable - im just assuming nil.
- covid subsidy: sff fully repaid it while alliance retained 50%. I am abhorred at those who have profited from going against the spirit of the wage subsidy scheme.

bull me:
- Expanding in to US
- I am also too inexperienced to have seen the years where meat companies were over-competitive and they lose their discipline when buying and also in maintaining their forward-selling book. I would like to think that it happened because the other meat companies smelt blood when SFF was about to fall over so the competitors just tried to price-war them out. Furthermore you'd like to think internal processes have improved in maintaining buying discipline since then.
- long term strategy makes sense.

discl:holding.

iceman
22-11-2020, 03:20 PM
Hi Out to Lunch. I'm a bit confused about this post. Could you please clarify which parts relate to Alliance and which parts to SFF. I really don't know anything about Alliance but have put some work into SFF, so don't know how to read this post of yours.

Out to lunch
24-11-2020, 08:22 PM
Hi Out to Lunch. I'm a bit confused about this post. Could you please clarify which parts relate to Alliance and which parts to SFF. I really don't know anything about Alliance but have put some work into SFF, so don't know how to read this post of yours.

i said a lot of industry stuff, but specific to SFF: they havent paid any don/dof legal cost yet, they fully repaid their wage subsidy, and theyve got high capex spend from their annual report:
"We havesome ambitious goals to reduce our energyand carbon footprints further, these requirelarge capital expenditure through a plannedprogramme to 2030" "We have commencedwork on a combination of process changes andcapital expenditure to drive emissions reductions" "This level of profitability of the business hasenabled us to maintain our capital investmentprogramme. We have invested in our infrastructure,operations and systems to become safer, to lowerour environmental footprint, and to become a moreefficient and effective market led producer.Our capital reinvestment programme gained pacein 2019. The company invested over $32m in capitalexpenditure for the period. Over the past three yearsthe company has invested over $90m in capitalprojects. In our key markets we also stepped up ourlocal presence in sales and marketing capability andprogrammes. These are essential areas for us tomaintain and build on our premium market positionfor Silver Fern Farms red meat"

Ive also seen that the industry has an issue (or more of an issue than usual) around getting workers in this season with covid - same story as kiwifruit i think.