Seeka

[iceman]

So in the last couple of weeks, we have gone XD of 10c fully imputed and SP up 90c or 20% last 2 months. Furthermore, last couple of days indicate somebody is very interested as just about anything on offer is being snapped up, particularly today. Not much for sale now at current prices.. I know, it isn't ATM, THL, SUM or AIR which are discussed a lot on ST, but SEK sure has kept up with all of them in last couple of years. I believe we have further to run on this one albeit probably a bit slower. Glad to be holding.

[LAC]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11837112

Sounds good so far, hope the cyclone dont cause too much damage.....

[LAC]

Probably spoke to soon...
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11837757

[Joshuatree]

High winds cause fruit rub and a greater % of 2nds. Rain drops the brix (sweetness ) levels and fruit have to be dry before harvesting. If delays go on too long(weeks) and the leaf canopy drops, thats when the frosts can cause major damage is my understanding. Hopefully it will all be over quickly and they carry on as usual harvesting on the dry days and get it all in as they usually do.

[DarkHorse]

Did anyone make the meeting? And/or any thoughts on their prospects from presentation?

[Joshuatree]

Wow two kiwifruit orchards just sold for $1 mill a hectare!

Read more » (http://sendy.tarawera.co.nz/l/QQMrKma8h6MjbHw96gBRew/J5RecMZFyNvMl7ZJl0PC5w/sGUxCFrd763LeIAbNJ8KgO6Q)

[winner69]

That announcement the other daymust have been OK seeing no comment on here

PE pushing the 13 to 14 mark .....hmm


Another wait and see and hope that F18 will be the year ?

[iceman]

It was pretty well signaled winner and the update in line with earlier announcements. Kiwifruit harvest in NZ has been much lower this year than it was in the exceptional 2016.
Some of the slack for SEK has been picked up by good growth in avocados and a steady improvement in Australia. I am watching Australia with interest, particularly the export of Kiwifruit where SEK is not constrained by a monopoly like Zespri, which potentially opens up some new avenues !!

[LAC]

I am watching at the moment as well. Sold out 75% of position after previous announcement. Think 2017 will be much lower and the insurance claim did help in 2016. Maybe with a little better news I will jump back in.

[iceman]

I am watching at the moment as well. Sold out 75% of position after previous announcement. Think 2017 will be much lower and the insurance claim did help in 2016. Maybe with a little better news I will jump back in.

I also sold 60% of mine 3-5 months ago but happy to hold the rest, which is still a substantial part of my NZX holdings. A well managed and growing company that is diversifying in a fast growing industry

[bull....]

Next year will be interesting to see how kiwifuit volumes go still a lot of guess work at the moment, avocados are a down year next I believe so a lot of guess work still.

I dont hold at the moment but still follow with interest- sold out 3.75- 3.80 way short of current prices as mentioned some time ago, brought into costa grp in aus instead which im more than happy with as it has outperformed seeka by 75% in the time frame since.

[Joshuatree]

Hey Bull thats what the ASX thread is for; it needs more input; ideas and stocks shared ;chewed ;and talked about!!!? You and black peter and how many others don't bother; shame; i encourage anyone one into the ASX to put it out there .

[winner69]

Right on bull - Costa done well over the last year, especially relative to both Seeka and Scales.

Berries, citrus, tomatoes, avocado and mushrooms a better bet along with the ASX rewarding growth better than the NZX

JT, some discussed Costa on the Scales thread and Macduffy and me had a short dialogue at the IPO time but punters on ST didn't seem interested in them.

[Joshuatree]

Thanks w69. Post it and they will come i reckon. ASX thread struggles at times to get enough posts hence readers/reponses/comment /ideas ;unfortunately. I doubt most people would only have exposure to NZX; there must be heaps with Aus stocks too. Great rising diagonal chart there for Costa:mellow::closed eyes::sneaky2::huh::drool:

[iceman]

Quite happy to have exposure through SEK to this growing industry http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11882767

[Joshuatree]

Thanks Iceman ,Pure Gold
"That forecast growth is almost entirely based on gold kiwifruit, with exports jumping to $1.3b from $524m, while exports of green fruit actually fall by 2021 to $810m from $917m"

[bull....]

Quite happy to have exposure through SEK to this growing industry http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11882767

how can you get this job growth when thew robots are coming to kiwifruit?

http://www.roboticsplus.co.nz/multipurpose-orchard-robotics

all the new zespri licences will bring substantial volume on to the market , where the new markets?

[Joshuatree]

There is a large growing demand for kiwifruit esp from Asia atm bull.

Jobs will be displaced for sure but there will still need to be pickers to clean up after the bots and to pick the side skirts too for a while anyway. And the pruning and tying down is a high labour person job. still atp.

I used to pick way back to boost my coffers. Was in the "A" team ,fastest and most efficient; up to 8 bins or more each day; we had it good and were slightly favoured by the organisers. But then one day a picking gang entered the far side of the large block we were picking(we could hear the 3 bin tractor start up move 30 metres ,stop then repeat.) Alarmingly the sound moved ahead of us and we could almost hear a rising sound of thousands of little snapping pops as kiwifruit were pulled off the vine with an accompanied noisy babble.
The first Indian workers had arrived. We tried to best them and only occasionally matched them, maybe our fruit quality had less bruising.:ohmy:

[bull....]

http://www.thebull.com.au/articles/a/68158-costa-aiming-to-smash-avocado-rivals.html

costa aiming to dominate the aus avo market - implications for nz exports? as they grow there supply

[Jantar]

http://www.thebull.com.au/articles/a/68158-costa-aiming-to-smash-avocado-rivals.html

... - implications for nz exports? as they grow there supply No real implications for NZ exports. They bought out existing orchards, rather than have new plantings. So there is no further avacados being grown, just a change in the name of the supplier.

[whatsup]

There is a large growing demand for kiwifruit esp from Asia atm bull.

Jobs will be displaced for sure but there will still need to be pickers to clean up after the bots and to pick the side skirts too for a while anyway. And the pruning and tying down is a high labour person job. still atp.

I used to pick way back to boost my coffers. Was in the "A" team ,fastest and most efficient; up to 8 bins or more each day; we had it good and were slightly favoured by the organisers. But then one day a picking gang entered the far side of the large block we were picking(we could hear the 3 bin tractor start up move 30 metres ,stop then repeat.) Alarmingly the sound moved ahead of us and we could almost hear a rising sound of thousands of little snapping pops as kiwifruit were pulled off the vine with an accompanied noisy babble.
The first Indian workers had arrived. We tried to best them and only occasionally matched them, maybe our fruit quality had less bruising.:ohmy:


Yeh Josh, we had Indian pickers and the best one picked 16 BINS per day , but on the whole they picked 12-14 bins, fantastic pickers/workers.

[macduffy]

Not specifically SEK but I noticed the local supermarket's kiwifruit was Italian-imported this week. Rather early in the season for that? Either the result of last season's low NZ crop, or strong exports - or both?

Disc: Not holding.

[iceman]

Not specifically SEK but I noticed the local supermarket's kiwifruit was Italian-imported this week. Rather early in the season for that? Either the result of last season's low NZ crop, or strong exports - or both?

Disc: Not holding.

It is normal to start seeing foreign grown Kiwifruit appearing in our supermarkets around now

[macduffy]

Thanks, iceman. It's going to be a long wait till next season!

:(

[IAK]

Seeka at $6.10 doing a Scales. Looks like horticulture stocks in vogue atm.

Disc. Holding Scales and Seeka.

[iceman]

Seeka at $6.10 doing a Scales. Looks like horticulture stocks in vogue atm.

Disc. Holding Scales and Seeka.

The increase this week in the SP appears to be a response to the roadshow SEK did with fund managers. They must have liked what they heard !

[bull....]

Seeka at $6.10 doing a Scales. Looks like horticulture stocks in vogue atm.

Disc. Holding Scales and Seeka.

in vogue for sure add costa grp to your two and you have a winning trifecta lol

[Filthy]

https://www.nzx.com/announcements/314589

12 cent divi just announced.... but no results?

[iceman]

https://www.nzx.com/announcements/314589

12 cent divi just announced.... but no results?

Normal for them. LAst year dividend was announced 23 Feb and FY results on 27 Feb. I expect a solid result.

[LAC]

Report doesnt make for good reading....
I expected an average result this year but this a little worse than expected to be honest

[iceman]

Have only read the highlights but I am reasonably satisifed with it. The much lower volumes (Zespri controlled) were well signalled and they have obviously done things more efficiently this year due to pressure on volumes. Should be good for future years.
Hopefully kiwifruit volumes will rise to a better level this year and the avocados are looking extremely good. Australia steadily improving.
Debt increasing but so are assets but they need to watch the debt levels.

Still holding 1/3 of what I had this time last year and happy to keep holding it

[iceman]

LAC I wonder if opthers have seen something much better in the report than we did !. SP up nearly 10% in the last 10 days and very good volume in this stock today with all the sellers taken out. Interesting development.

[LAC]

LAC I wonder if opthers have seen something much better in the report than we did !. SP up nearly 10% in the last 10 days and very good volume in this stock today with all the sellers taken out. Interesting development.
Was just following the same thing, I have a very small chunk of shares left as I sold almost 90% last year, was planning to sell the remaining parcel after that announcement but lucky I held it:)

[LAC]

LAC I wonder if opthers have seen something much better in the report than we did !. SP up nearly 10% in the last 10 days and very good volume in this stock today with all the sellers taken out. Interesting development.
$7 now.... I give up, I dont understand how these things work anymore lol

[IAK]

Hmmm Seeka hits $7 (altbeit on light volume). Outlook return to average for green, increase in gold, avocados performing well, expenditure on capital growth completed.


Disc. Holding

[iceman]

Kiwifruit is definitely a big growth industry and I like being invested in it. Growth similar to tourism. If Zespri's sales estimates come to fruition, or should that be fruitition, this industry will export 1/3 of what the the dairy industry does.
But the road ahead is far from straight and level heads will be needed to manage it. Interesting article in the Herald today and I like Seeka's CEO's careful approach.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12015919

[iceman]

Interesting to note SEK has sold its shares in Zespri, receiving just over $6m which will be used to fund its growth strategy. I like the way they are confidently growing their business in NZ and Australia.

[percy]

Interesting to note SEK has sold its shares in Zespri, receiving just over $6m which will be used to fund its growth strategy. I like the way they are confidently growing their business in NZ and Australia.

So they don't need to own Zespri share to supply Zespri.
Hope they have retained one share so M.Franks can ask "interesting" questions at Zespri agms should he wish to.?

[iceman]

So they don't need to own Zespri share to supply Zespri.
Hope they have retained one share so M.Franks can ask "interesting" questions at Zespri agms should he wish to.?

No, apparently this is a recent change to Zespri's constitution. Agree Michael Franks has been a constant and necessary critic of Zespri and has always said SEK would be better off without them !
I believe some freedom outside of Zespri is part of their growth strategy in Australia.

[iceman]

Interesting interview on NBR yesterday with Seeka's CEO. He says that the 1st reason for the sale of their shares in Zespri is that they were unhappy with and voted against the recent changes to Zespri's constitution that they felt treated those leasing land for growing worse than the landowner. Bearing in mind that SEK is the biggest grower in NZ and most of it from leased land, that is understandable.
He says once the constitutional changes went through, they then considered the best use of their capital would be to sell Zespri shares and put some in the bank to support current and future growth plans and rest to pay down debt.

[LAC]

Interesting interview on NBR yesterday with Seeka's CEO. He says that the 1st reason for the sale of their shares in Zespri is that they were unhappy with and voted against the recent changes to Zespri's constitution that they felt treated those leasing land for growing worse than the landowner. Bearing in mind that SEK is the biggest grower in NZ and most of it from leased land, that is understandable.
He says once the constitutional changes went through, they then considered the best use of their capital would be to sell Zespri shares and put some in the bank to support current and future growth plans and rest to pay down debt.

Yeah I read that article yesterday, sounds reasonable and I like the fact they talk about using the $ for future growth. I have a very tiny holding in SEK but will look at accum at the lows as I like the way this business as diversified itself. A few years of good crop would be ideal for me to hold.

[iceman]

The growth continues apace https://www.nzx.com/announcements/317017

[Filthy]

The growth continues apace https://www.nzx.com/announcements/317017

yep, happy holder!! - I wonder how they got on with the PSA class action. I have not seen any news on this since last year (maybe I missed something?)

[Filthy]

https://www.stuff.co.nz/business/farming/104897179/free-trade-deal-with-europe-could-deliver-a-30m-windfall-for-kiwifruit-exports

could provide a bit of a boost for SEK eh....

[Filthy]

yep, happy holder!! - I wonder how they got on with the PSA class action. I have not seen any news on this since last year (maybe I missed something?)

Seeka responds to Kiwifruit Claim Judgement
The High Court of New Zealand today announced its decision in relation to the Claim by Strathboss Kiwifruit Limited (including a class action for kiwifruit growers) and Seeka Limited [NZX:SEK] for losses for kiwifruit post-harvest, in relation to the circumstances of the devastating outbreak of the PSA disease in New Zealand.
The decision was in favour of growers for the growers’ loss, which includes Seeka as a grower. Seeka did not succeed in its claims as a post-harvest operator.
While Seeka is disappointed by the decision in relation to the post-harvest losses, it confirms that it is a claimant alongside the growers and set to benefit in any final determination of damages.
Seeka advises that the decision is still new, the appeal period still open and that it is too early to quantify the extent or likelihood of any outcome with any certainty to update the market.
Seeka thanks the Claim Committee for their courage and dedication in taking the claim on behalf of growers and Seeka, the litigation funder LPF Group for backing the claim and to the legal counsel, Lee Salmon Long, for their service in representing the claimants.
Seeka will update the market when any outcome if known with sufficient certainty.

[iceman]

Sounds like SEK has had quite a good kiwifruit harvesting season with just on 30 million trays packed, low early fruit loss and good quality fruit. Half already shipped and rest still in our stores.
Meanwhile the 2nd stage of the acquisition of T&G Northland completed.
Should be another good year for SEK.

[Filthy]

https://www.stuff.co.nz/business/farming/106065223/kiwifruit-growers-claiming-450m-file-cross-appeal-over-psa-damages-case

[winner69]

https://www.stuff.co.nz/business/farming/106065223/kiwifruit-growers-claiming-450m-file-cross-appeal-over-psa-damages-case

Hope they lose ....even the initial judgement creates a dangerous precedent

[RTM]

Hope they lose ....even the initial judgement creates a dangerous precedent

I hope by "they" you mean the Government / MPI ?

[winner69]

I hope by "they" you mean the Government / MPI ?

Seeka of course .....and anybody else who thinks they can do the same.

[IAK]

Seeka of course .....and anybody else who thinks they can do the same.
-
Agree, maybe they should be blaming those who imported it. Industry is it's own worse enemy e.g., PSA - pollen imports; varroa mite smuggled Queen bees; Mycoplasma bovis take your pick on this one imported bull semen, second hand dairy plant etc.

Disc. holding

[iceman]

A healthy 2c (20%) increase in interim dividend compared to last year. Not to be sneezed at. Have to wonder whether the money would be better spent on reducing debt though. Personally that would be my preference.

[bull....]

A healthy 2c (20%) increase in interim dividend compared to last year. Not to be sneezed at. Have to wonder whether the money would be better spent on reducing debt though. Personally that would be my preference.

debt levels quite high , so i agree

[BlackPeter]

Oops - Seeka just dropped below the EMA200. Historically seen an outstanding buying opportunity which I couldn't resist :p.

They are in my books with a forward PE of 12.6 (I know, analysts are not always right, particularly in an industry so weather dependent like this one) and with a forward CAGR of 16 (admittedly jumping quite a lot around depending on how you set the window). Makes a PEG of 0.79.

Add to that a board with lots of skin in the game (but not too much - roughly 10% of all shares) and a quite optimistic future outlook - what possibly can go wrong?

Good enough for me to invest a little bit of money into a well run agricultural company.

[iceman]

Oops - Seeka just dropped below the EMA200. Historically seen an outstanding buying opportunity which I couldn't resist :p.

They are in my books with a forward PE of 12.6 (I know, analysts are not always right, particularly in an industry so weather dependent like this one) and with a forward CAGR of 16 (admittedly jumping quite a lot around depending on how you set the window). Makes a PEG of 0.79.

Add to that a board with lots of skin in the game (but not too much - roughly 10% of all shares) and a quite optimistic future outlook - what possibly can go wrong?

Good enough for me to invest a little bit of money into a well run agricultural company.

Welcome aboard. A well run company in a fast growing industry. Has been a very good investment for the last few years and I have no doubt it has a steady and successful future as well.

[iceman]

I find the recent investor presentation underwhelming with flat revenue and underlying profit despite a return to better levels of harvest than the poor 2017. Good to see them selling some of the recently purchased farms in Northland to reduce debt and a definite focus on further debt reduction and control. I suggest this may stop the steadily growing dividends we've seen over the last few years, as it should.
The disappointment for me is the lacklustre performance in Australia where EBIDTA has gone from $2.2M last year to zero this year. They are still forecasting good growth in volumes in Australia for the next 4-5 years but need to do so profitably. The discovery of PSA may make Australia more challenging.

So I've sold out my remaining shares and will stay on the sidelins for now. Still believe this is a well managed company with a bright future and will look at re-entering when I see some of the current clouds disappear. Been a great ride.

[BlackPeter]

Looking for fresh money to deleverage their balance sheet and support their growth strategy:

1 new share at $4.25 for every 1.5 shares holding.


This represents a 25.4% discount to the closing share price on the NZX on 9 November 2018 and a 17.0% discount to the theoretical ex-rights price (TERP) of $5.12 per share, post the Rights Offer, based on the preannouncement close of $5.70.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/326674/290279.pdf

I guess considering that their debt to equity ratio is closer to the upper boundary of what's sensible in potentially a bit roughter times to come and considering that these times might offer as well some aquisition opportunities - probably a wise move.

Market so far seems to take the news in its stride - already expected?

Could (obviously after going ex-rights) well form the bottom for the trend to change ...

[iceman]

Looking for fresh money to deleverage their balance sheet and support their growth strategy:

1 new share at $4.25 for every 1.5 shares holding.



http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/326674/290279.pdf

I guess considering that their debt to equity ratio is closer to the upper boundary of what's sensible in potentially a bit roughter times to come and considering that these times might offer as well some aquisition opportunities - probably a wise move.

Market so far seems to take the news in its stride - already expected?

Could (obviously after going ex-rights) well form the bottom for the trend to change ...

Agree BP. This is sensible as their debt has been getting uncomfortably high for this risky industry. Glad to be out for now but will watch with interest what happens to SP after this "restructure" of the balance sheet.

[BlackPeter]

SP up from $5.70 to $5.83. Not that often that you see the SP rise after the announcement of a capital rise.

Feels like punters value the rights to buy discounted SEK shares.

[Lewylewylewy]

The capital raise is an announcement of the start of a growth strategy being put in place

[iceman]

The capital raise is an announcement of the start of a growth strategy being put in place

The growth strategy is already well underway with the purchase of the Australian operation in 2015, KiwiCrush in 2016 and Turners & Growers Northland operation earlier this year, as well as packouse facility upgrades in this period as well. They intend to continue growing the business quite significantly in both NZ and Australia.
This has lead to a fairly highly geared balance sheet which they are de-risking with the new capital and the continuation of a share scheme for suppliers. This is a sensible strategy.

They now need significant focus on making Australia profitable and deal with the PSA issue there.

[peat]

I've jump[ed onboard board today , in a small way bearing in mind the rights issue - looking for some diversity
thanks for earlier comments by Iceman and BP.

[bull....]

money raised is for very high debt levels. s/h will be diluted next yr by grower share scheme and staff bonus scheme. what about the div on the doubling of the shares on issue will it remain the same?

[BlackPeter]

money raised is for very high debt levels. s/h will be diluted next yr by grower share scheme and staff bonus scheme. what about the div on the doubling of the shares on issue will it remain the same?

Hmm - bear, let us think.

If they put all this additional capital under the boards pillows, than yes, we are likely to see a reduction in earnings per share. However - what would happen if they (shudder) use this money for a more useful purpose? Maybe they pay back their loans (and save interest) - or maybe they buy even earnings accreditve business ;); Who knows?

BTW - liabilities to assets was at last FY-report 55.6%. This is in the upper half of what I would consider sensible debts for a business like SEK (40 to 60% debt). But calling less than 56% "very high debt levels?". Probably just your bearish lingo going through with you ... :p?

[iceman]

They've already announced they're selling several of the orchards they got in the T&G purchase and will use the proceeds to reduce debt. I think management is well aware of the need to reduce debt. I can not see them being able to maintain DPS next year on the substantially higher number of shares.
But I thik they are doing the right thing focusing on strengthening the balance sheet after a few years of expansion.
My biggest concern at the moment is Australia. Until I see them turning it into a profitable operation, I'm likely to stay out.

[bull....]

They've already announced they're selling several of the orchards they got in the T&G purchase and will use the proceeds to reduce debt. I think management is well aware of the need to reduce debt. I can not see them being able to maintain DPS next year on the substantially higher number of shares.
But I thik they are doing the right thing focusing on strengthening the balance sheet after a few years of expansion.
My biggest concern at the moment is Australia. Until I see them turning it into a profitable operation, I'm likely to stay out.

i agree the div payout on the increased shares would be roughly 5.8m + some more for growers issue and staff issue. they forecasting 6.5 - 7.2m npat so the payout ratio would be very high if they maintained the div.

no room for growth then or a bad season.
i think historically the div has been lumpy anyway ? if you take account of poor seasons

[RTM]

SP up from $5.70 to $5.83. Not that often that you see the SP rise after the announcement of a capital rise.

Feels like punters value the rights to buy discounted SEK shares.

Not so much value placed on the rights now with SP ~$4.85.
Will be interesting to see where the SP is as we approach Dec 7. At the moment I am thinking I will probably take up the offer...however would like some indication re future dividend on the increased share count.
Hoping there might be an indication in the offer documents.

[IAK]

Not so much value placed on the rights now with SP ~$4.85.
Will be interesting to see where the SP is as we approach Dec 7. At the moment I am thinking I will probably take up the offer...however would like some indication re future dividend on the increased share count.
Hoping there might be an indication in the offer documents.

The only green in my portfolio today. I'm also considering taking up the offer depending on future dividend.

[RTM]

So received the documentation via email last night. As an investor who needs dividends to buy my Panhead & Kombucha I'm trying to determine if I will take up the offer. I would like to, as I am keen to hold a few more SEEKA shares. It's nice seeing their signs around where I live.


In the document I see below as to how they will use the money:


"Seeka will use proceeds of the Offer (following payment of Offer costs) to strengthen
its balance sheet, repay bank debt and undertake planned capital expenditure."

and with respect to the dividend....

"Dividend Policy
Seeka’s dividend policy is to declare dividends at a rate of
up to 75% of net profit after tax in conjunction with the
release of Seeka’s half year and full year results. Payment of
dividends is proposed to be in March and September each
year.
Each dividend will be determined by the Board after due
consideration of the capital requirements, operating
performance, financial position, debt levels, and cash flows
of the Group at the time.
The Board reserves the right to amend the dividend policy at
any time."


and with respect to the number of shares issued...
"Seeka presently has 17,590,482 Shares on issue"
"The number of Shares on issue after the Offer will
increase to 29,317,470 Shares "

What concerns me is that I don't see in their intended use of the funds raised anything that will drive revenue up enough to maintain the dividend rate on the significantly increased share count. Is this to simplistic a way to look at this ? If so, what am I missing ? Will repaying bank debt provide significantly increased revenue per share ? Am I on the right track thinking about it on these terms ?
Look forward to comments.

Cheers
RTM

[bull....]

17 - 18 cps ? div

[iceman]

17 - 18 cps ? div

I agree based on what RTM said above that DPS for FY18 based on the increased number of shares and their guidance is likely to be 16-18c. But like RTM says, what exactly are they going to use the funds for, apart from a significant amount of it going on debt reduction, which they must do. Their debt is too high at the moment but the sale of orchards in Northland will also help reducing that burden.

[bull....]

I agree based on what RTM said above that DPS for FY18 based on the increased number of shares and their guidance is likely to be 16-18c. But like RTM says, what exactly are they going to use the funds for, apart from a significant amount of it going on debt reduction, which they must do. Their debt is too high at the moment but the sale of orchards in Northland will also help reducing that burden.

50m from issue and 10m from sale gives 60m in cash , i reckon 24m on debt reduction as its in current liabilities and the rest on capital expenditure and growth initiatives. aus probably needs alot of the cap i reckon.

[iceman]

50m from issue and 10m from sale gives 60m in cash , i reckon 24m on debt reduction as its in current liabilities and the rest on capital expenditure and growth initiatives. aus probably needs alot of the cap i reckon.

That makes sense. Agree Australia probably will gobble up a significant amount. I will wait on the sidelines until I see real progress in Aussie.

[RTM]

At 16 - 18 cents per share dividend on the increased share count, that's an increase of 21-36% in the dividend. From what they say they are spending the money on....I am just not seeing where this is going to come from. I feel they should have provided some clarification on this.


I think I will ask the company.
Appreciate the comments.

RTM

[bull....]

At 16 - 18 cents per share dividend on the increased share count, that's an increase of 21-36% in the dividend. From what they say they are spending the money on....I am just not seeing where this is going to come from. I feel they should have provided some clarification on this.


I think I will ask the company.
Appreciate the comments.

RTM

thats a max div if you take 75% of the npat forecast they are saying of 6.5 - 7.2 in this current yr.
i used 7m for my working. in reality it could be less if they dont get the increased earnings. i think last yr it was a payout of 66% of npat

they dont give a npat tax forecast for 2019?

this is what they are saying



For FY2019, Seeka is targeting EBITDA of $27.5 million to $28.5 million,


assuming:


- Expected increases in kiwifruit volumes in 2019 (in particular gold


kiwifruit).


- Normal operating conditions across Australia and New Zealand.


- Any material change in guidance will be advised to the market through NZX.

[bull....]

That makes sense. Agree Australia probably will gobble up a significant amount. I will wait on the sidelines until I see real progress in Aussie.

im waiting too to re - enter. aus operations with all the orchard development will take 3 - 5 years they say to really start producing serious income. also the northland assets need work so all in all a while for them too really start making seriously more npat and increased divs

[RTM]

im waiting too to re - enter. aus operations with all the orchard development will take 3 - 5 years they say to really start producing serious income. also the northland assets need work so all in all a while for them too really start making seriously more npat and increased divs

OK...thanks all for the comments and help with my analysis. I think on balance I will be going ahead with my allocation of shares. 16 - 18 cents per share div seems about right on the numbers we have....not a disaster at share prices from $4 - $5...and fingers crossed they deploy the money well for growth in the future.

Cheers,
RTM

[BlackPeter]

Oh dear - only 34.1% of new shares taken off by optionholders. The rest goes today into the auction, but the additional over-subscriptions are far lower than the remaining (unsold) shares:

https://www.nzx.com/announcements/328140

Bad time to rise new capital. Lucky for them the rights issue was fully underwritten.

[iceman]

Yes BP not a vote of confidence. Glad to be looking on from the sidelines for now.

[bull....]

yep next few years looks like bedding in there aquisitions / plantings little growth

[BlackPeter]

CEO buys himself some shares for Christmas:

https://www.nzx.com/announcements/329034

[BlackPeter]

Early days yet, but anybody else noticed these tender green shoots?

10324

Might well be the begin of a recovery?

[Lewylewylewy]

Pot reported an increase in kiwifruit

[iceman]

Early days yet, but anybody else noticed these tender green shoots?

10324

Might well be the begin of a recovery?

Yes have been watching with interest and weighing up whether to buy into this good company again. But China relations concern me a little for this industry at the moment and I'd like to see SEK make a more steady progress into good profitability with their Australian operations so will hold off for awhile longer I think.

[Lewylewylewy]

The debt is the only worry for me with this stock. Prt of Tauranga reported 30% increase in kiwifruit shipment, i believe

[BlackPeter]

Financials should be out soon (last week it was the 23rd), but I would imagine that the debt load dropped after the CR ... this was one of the reasons they did it - wasn't it?

[bull....]

50m from issue and 10m from sale gives 60m in cash , i reckon 24m on debt reduction as its in current liabilities and the rest on capital expenditure and growth initiatives. aus probably needs alot of the cap i reckon.

div 17 - 18c per yr

see how my guesses work out

[BlackPeter]

50m from issue and 10m from sale gives 60m in cash , i reckon 24m on debt reduction as its in current liabilities and the rest on capital expenditure and growth initiatives. aus probably needs alot of the cap i reckon.

div 17 - 18c per yr

see how my guesses work out

Well, I guess money from issue and earnings was not too hard to estimate - and divie a bit bearish - as one would expect from a bear in disguise :D;

But first lets look at the overall results:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/331039/295586.pdf

Revenue 204m, up from 187m

EPS 37 cents, up from 35 cents (company says up from 32 cents, but this is recalculating last years EPS based on current number of shares); Anyway - however one is calculating it - they had a capital rise and still increased their EPS. Sweet - well done, team!

Dividend is 24 cents (total year), up from 22 cents.

Net debt slightly down (79.1m, was 83.1m), but total assets nicely up (269.8m, was 222m);

Leverage (total liabilities / total assets) down to 43.1% from 55.6%;

NTA now $4.96 per share;

... not bad for a share you could buy this morning still at $4.60 (... these were the days :);

Outlook - cautiously optimistic ...

Quite happy with my small holding :);

[peat]

debt only down 4m but divi 24c per annum following the next one

with only a quick read the result looks ok to me

[BlackPeter]

nice to see this relentless SP uptrend :); Now SP confirmed above MA 100 ($4.70) :t_up:! Next stop: MA 200 ($5.00);

[winner69]

Wow ...some upgrade or is it an announcement I should read more throughly?


EBITDA guidance updated
Seeka updates its previous guidance of EBITDA for FY2019 to a range of between $36.5m to $37.5m, from the previous guidance of between $27.5m and $28.5m.

[iceman]

Wow ...some upgrade or is it an announcement I should read more throughly?


EBITDA guidance updated
Seeka updates its previous guidance of EBITDA for FY2019 to a range of between $36.5m to $37.5m, from the previous guidance of between $27.5m and $28.5m.

Looks very good indeed. The dry weather has been good for them and they are forecasting an overall harvesting of 32 million trays, up nearly 2 million from last year's record. All of the increase is in Sun Gold which is great to see. Tempting to start buying SEK again

[BlackPeter]

Looks very good indeed. The dry weather has been good for them and they are forecasting an overall harvesting of 32 million trays, up nearly 2 million from last year's record. All of the increase is in Sun Gold which is great to see. Tempting to start buying SEK again

Good buying around $4.30 ;);

[iceman]

Good buying around $4.30 ;);

And even better selling in the $6.30 - $ 6.50 range last year :-)
But seriously, I feel it is time to reenter very soon. Only lack of funds holding me back right now.

[peat]

Wow ...some upgrade or is it an announcement I should read more throughly?


EBITDA guidance updated
Seeka updates its previous guidance of EBITDA for FY2019 to a range of between $36.5m to $37.5m, from the previous guidance of between $27.5m and $28.5m.

half of this is in property sales , however so cannot be relied on for future years.



Subsequent sales of Seeka's


Northland orchard portfolio that are either agreed or have settled relate to


an aggregate total sum of $25.9m, representing a gain on sale of $4.2m,


assuming all sales achieve settlement.

[Joshuatree]

The more profitable SunGold production will for the first time exceed green kiwi tray production, got to be a booster.

[iceman]

Correct Peat that half the forecasted increase in the profit update is from property sales but that also means the other half is from underlying earnings. That is quite a substantial upgrade from the earlier guidance. Sun Gold production fast increasing and market for all we can produce basically.
I note that post harvest operations increased EBIDTA 46% between 2017 & 2018 which indicates that the economies of scale, after the Kerikeri acquisition and growth in the last few years, is starting to deliver benefits.
But retail and Australia still disappointing.

Overall I think with the re-capitalisation through the rights issue giving them an extra $48m, the size of the post harvest operations and capital already invested for further growth, SEK is well positioned for further growth in volumes and profits.

[bull....]

and some of the earnings uplift is due to smaller sweeter fruit and the implied assumption it obtains higher prices so theres a seasonal factor in that seeka never expected this to happen in there forecasting. so need to discount this portion of earnings as a one off

[iceman]

Lates addition:

SEK
13/03/2019 09:37
TRANSACT
PRICE SENSITIVE
REL: 0937 HRS Seeka Limited

TRANSACT: SEK: SEEKA CONTINUES ITS HEARTLAND GROWTH STORY

Seeka Limited [NZX:SEK] announces that it has agreed to purchase 100% of
Aongatete Coolstores Limited for a combined business value of $25m, subject
to adjustments. This acquisition is part of Seeka's heartland growth strategy
and is expected to add an estimated 4m to 4.5m trays to Seeka's catchment and
to deliver sustainable EBITDA of between $3.5m and $4.5m.

Seeka's current guidance for FY2019 excludes the impact of this crop and
EBITDA.

Seeka expects its net bank debt to EBITDA ratio to be within the policy range
of 1.5x to 2.5x by the end of the year taking into account anticipated
orchard sales, gains on those sales, operational performance, and capital
expenditure.

Aongatete is an integrated kiwifruit orcharding and post-harvest company
operating across the Bay of Plenty. Its location is within Seeka's
traditional catchment, the assets acquired are of excellent quality and the
people and operation are renowned for their excellent performance for
growers, grower focus and innovation.

The purchase is anticipated to settle on 18 March 2019.
Ends.

[BlackPeter]

Seeka have paid a stupid amount of money for a landlocked site with no growth potential and only 1m TE of supply (~25%) that can be committed long term. Interesting that a forecast earnings multiple of between 6 and 7 has been paid based on forward earnings projections but on actual results for the target business would equate to something around 15 to 20x. Will be worth watching to see if the earnings are generated or not in years to come...

Care to tell us the base for your statement? I can't read out of Seekas anouncement the current earnings?

Did you happen to be the losing bidder for the site?

[Joshuatree]

Come on Pmdv, you need to back up a statement like that , it would be appreciated and give your comments some weight.

[iceman]

Come on Pmdv, you need to back up a statement like that , it would be appreciated and give your comments some weight.

Ooops. Pmvd has deleted his two recent posts !!

[winner69]

Like the way you guys have bullied pmdv77 into deleting his post (though BP copied it) and probably never posting again.

Based on reading between the lines of the announcement Seeka what pmdv77 probably has some substance ...but you guys didn’t like what he (assuming male) said so got stuck into him big time. Talk about not having an open mind.

Wouldn’t it have been better to interact with pmdv77 in a friendly way and coax further information out of him ...he might have be a mine of info but you have now lost that opportunity to glean more.

I agree with pmdv11 ....Seeka at face value on current performance have paid over the odds for Aongatete but were obviously prepared to do so for ‘strategic reasons’ as part of the Heartland growth strategy.

No you can get stuck into me,:p

[bull....]

yea seeka overpaid thats why the price was down yesterday. based on pmnd77 statement 1m is committed long term either thru lease or contract the rest seeka must be fairly confident of retaining as usually smaller packhouse dont have many of there contracts longer than season to season. notice also seeka didnt mention any costs associated with redundacies etc as i imagine most of the Aongatete admin people or duplicate roles will get the boot.

[iceman]

winner69, two people commented on the posts in question and politely asked for explanations of his/her statements. You call them bullies but its hardly bullying by any stretch of the imaginations ! Most threads on here have seen much more robust debates :confused:

[winner69]

winner69, two people commented on the posts in question and politely asked for explanations of his/her statements. You call them bullies but its hardly bullying by any stretch of the imaginations ! Most threads on here have seen much more robust debates :confused:

OK bullies maybe not ....but pretty 'direct' comments from those two which has made him go away when we should have 'encouraged' him/her to tell us more

[BlackPeter]

yea seeka overpaid thats why the price was down yesterday. based on pmnd77 statement 1m is committed long term either thru lease or contract the rest seeka must be fairly confident of retaining as usually smaller packhouse dont have many of there contracts longer than season to season. notice also seeka didnt mention any costs associated with redundacies etc as i imagine most of the Aongatete admin people or duplicate roles will get the boot.

pmnd77's post used strong language to make a number of unsubstantiated claims and either (s)he or STMOD deleted it anyway. I suppose there is a reason for that. Not a good way to join a forum - and obviously not good as a reference.

If I look at Aongatete (https://www.coolstore.co.nz/who-we-are) than it appears they are much more than just a coolstore and offering quite similar services to Seeka (https://www.coolstore.co.nz/ourservices) including orchard management. Maybe Seeka just purchased an annoying competitor? Or maybe it was cheaper for them to buy an existing company including experienced local staff than to build up new facilities and / or expand their other facilities and compete for experienced staff in a tight labour market?

I can't remember people complaining when Synlait bought the North Island factory of a (potential) competitor. This was quite a deal, wasn't it?

Now - I don't know whether $25m they are paying is too much for the site and the buildings alone (anybody seen a valuation?), but Seeka gets as well experienced staff (and they emphasise this in their announcement), established business relationships and a strengthened market positon.

If people feel that they still paid too much than I would be more than happy to look at and discuss the facts.

If this turns however just into people living out their hidden agendas and grinding their axes, than maybe we should find a better way to spend our time.

[bull....]

pmnd77's post used strong language to make a number of unsubstantiated claims and either (s)he or STMOD deleted it anyway. I suppose there is a reason for that. Not a good way to join a forum - and obviously not good as a reference.

If I look at Aongatete (https://www.coolstore.co.nz/who-we-are) than it appears they are much more than just a coolstore and offering quite similar services to Seeka (https://www.coolstore.co.nz/ourservices) including orchard management. Maybe Seeka just purchased an annoying competitor? Or maybe it was cheaper for them to buy an existing company including experienced local staff than to build up new facilities and / or expand their other facilities and compete for experienced staff in a tight labour market?

I can't remember people complaining when Synlait bought the North Island factory of a (potential) competitor. This was quite a deal, wasn't it?

Now - I don't know whether $25m they are paying is too much for the site and the buildings alone (anybody seen a valuation?), but Seeka gets as well experienced staff (and they emphasise this in their announcement), established business relationships and a strengthened market positon.

If people feel that they still paid too much than I would be more than happy to look at and discuss the facts.

If this turns however just into people living out their hidden agendas and grinding their axes, than maybe we should find a better way to spend our time.

Aongatete is very small compared to seeka and eastpack which is the other big player( which merged with satara) in the bay of plenty area. they paid to much because as we said and that other person said and you should read in seeka announcement ( there estimated tray from aquisition ) the supply is not guaranteed only the 1m that other person implied.

[Joshuatree]

OK bullies maybe not ....but pretty 'direct' comments from those two which has made him go away when we should have 'encouraged' him/her to tell us more


S/he was encouraged w69 and chose to not back up. It would be great if PMV comes back with some more detail but it looks like it doesn't stand up atpit. I do not accept your muddy comments at all.Maybe someone PM'd Pmvd, who knows what.
Disclose: not a shareholder atpit but was awhile back when i started this thread.

[Pmdv77]

The issue with knowledge is understanding where the legalities sit in situations like this. I know the target company very well indeed (how else would I have the detail around tied in trays etc) but am not going to risk potential action against me especially with how quickly a number of people were quick to call BS on my statement...

[Joshuatree]

Appreciate you sharing Pmdv77. And why risk any potential action , fair enough. No one is calling BS , you are being bit precious there imo.Anyone sharing on here under a moniker is open to questioning and a little scrutiny is healthy to back up your opinion, details. Hope you stick around as genuine contrarian views are at least as important on here.

[BlackPeter]

Aongatete is very small compared to seeka and eastpack which is the other big player( which merged with satara) in the bay of plenty area. they paid to much because as we said and that other person said and you should read in seeka announcement ( there estimated tray from aquisition ) the supply is not guaranteed only the 1m that other person implied.

bull, I just don't think that the market has the data to assess this.

Sure - if we measure their value only in committed trays to store, than yes - it appears that Seeka paid much more for them (per tray) then what Seeka is worth if measured in trays of Kiwifruit. However - Seeka is bigger than that, and I suppose so is Aongatete.

Not sure though how to value the worth of their other services, connections, know how and staff. To make this assessment we would need to do due diligence and analyse their books. A bit difficult given that they are not yet a public company. Have you done that and want to share your knowledge with us?

... and just looking into number of trays - the announcemnt (I am sure you read it -didn't you?) talks as well about a much higher number of expected trays. Who knows - maybe Seeka has already a secured supply but had no processing facilities? Is this unthinkable?

But, if you think they overpaid - how much do you think Aongatete are really worth (and why) - and why do you think the SEK board decided to throw money away?

[bull....]

bull, I just don't think that the market has the data to assess this.

Sure - if we measure their value only in committed trays to store, than yes - it appears that Seeka paid much more for them (per tray) then what Seeka is worth if measured in trays of Kiwifruit. However - Seeka is bigger than that, and I suppose so is Aongatete.

Not sure though how to value the worth of their other services, connections, know how and staff. To make this assessment we would need to do due diligence and analyse their books. A bit difficult given that they are not yet a public company. Have you done that and want to share your knowledge with us?

... and just looking into number of trays - the announcemnt (I am sure you read it -didn't you?) talks as well about a much higher number of expected trays. Who knows - maybe Seeka has already a secured supply but had no processing facilities? Is this unthinkable?

But, if you think they overpaid - how much do you think Aongatete are really worth (and why) - and why do you think the SEK board decided to throw money away?

its about wrapping up the market , taking out the smaller players sometimes you got to pay more to get these people too sell , probably people who have been doing this business most of there lives . seeka will get some coin back on the deal by getting rid of people in duplicate roles and other savings and synergies.

anyway if they dont secure the supply ( who know may have already ) then it was well overpaid

[winner69]

Valuing things that fit ‘strategic’ purposes is never an exact science.

What matters is that Seeka reckon that they can get Ebitda up to ~$4m

Interesting though that the price/ebitda multiple of ~6 is higher than what SEK is trading at now.

[Pmdv77]

Kiwifruit Post-Harvest takeovers and mergers are interesting. Dynamics are a little different now that the industry remains in full organic growth mode with recent G3/Sungold areas starting to come online. If you look at Apata and its merger with Aerocool, within 4 years, Apata's volumes were back where they were under a single site operation. The industry is getting better at getting longer term commitment from its orchards as Seeka demonstrated with the purchase of the Northland facility last year - only selling off the orchards to those who would commit to 10 year contracts.

In terms of the other revenue streams within post-harvest, orchard management is precarious at best and a number of operations only break even, safe in the knowledge that they can clip the ticket on packing and coolstorage.

[iceman]

Thanks for joining us in the discussion again Pmdv77. You clearly have knowledge of the industry and I for one very much appreciate such knowledge and views being shared on here. I find the industry very interesting and like being invested in through SEK so any comments and debates are helpful.

[Jaa]

Is this "Heartland Strategy" of Seeka's simply a bid to roll-up and monopolise the Tauranga region?

Post Harvest Operators


Eastpack Limited
Seeka Kiwifruit Industries Limited
Apata Group Limited
DMS Progrowers Limited
Trevelyan’s Pack and Cool Limited
Hume Pack-N-Cool Limited
Aongatete Coolstores Limited
Opotiki Packing and Cool storage Limited (OPAC)
Auckland Pack and Cool (APAC)
Mount Pack and Cool (MPAC)
Riverlock
Orangewood Kiwifruit Post-harvest & Orchard Management
Birchwood Packhouse Limited


From https://www.nzkgi.org.nz/industry/industry-players/

[Pmdv77]

It would require a lot of capital to monopolise - taking Seeka purchase of Aongatete, the facility is probably 4mTE status quo throughput historically with max capacity being 4.5m TE (and heavily caveated in that the fruit would need to be Kiwistart due to coolstorage volume limitations). $25m / 4m TE = $6.25 per Tray. Aongatete only had around 2.5% market share.

[IAK]

The issue with knowledge is understanding where the legalities sit in situations like this. I know the target company very well indeed (how else would I have the detail around tied in trays etc) but am not going to risk potential action against me especially with how quickly a number of people were quick to call BS on my statement...
Thanks for your input to the forum Pmdv77.

[BlackPeter]

yea seeka overpaid thats why the price was down yesterday. based on pmnd77 statement 1m is committed long term either thru lease or contract the rest seeka must be fairly confident of retaining as usually smaller packhouse dont have many of there contracts longer than season to season. notice also seeka didnt mention any costs associated with redundacies etc as i imagine most of the Aongatete admin people or duplicate roles will get the boot.

Actually - just noticed that Seeka went ex-dividend (12 cents per share) - but I am sure this can't have anything to do with the SP drop ... must the the purchase, isn't it?

[Jaa]

It would require a lot of capital to monopolise - taking Seeka purchase of Aongatete, the facility is probably 4mTE status quo throughput historically with max capacity being 4.5m TE (and heavily caveated in that the fruit would need to be Kiwistart due to coolstorage volume limitations). $25m / 4m TE = $6.25 per Tray. Aongatete only had around 2.5% market share.

As a listed company, Seeka has access to capital.

Looks a bit like a "rollup" strategy to me, like what Aussie listed companies often do with dentists, medical imaging companies, camping grounds etc and other small/medium sized businesses. The share market values their earnings at a higher P/E than private investors. Some of this is justified by economies of scale and reduced risk through diversification, the rest by increased prices.

No need to be a monopoly, a duopoly or even a 4-5 company oligopoly will have more pricing power.

[winner69]

In light of recent events interesting project name

https://www.nzx.com/announcements/332140

[BlackPeter]

In light of recent events interesting project name

https://www.nzx.com/announcements/332140

Ouch ... you can't be careful enough, can you?

Pretty sure though this has been unintentional ...

[winner69]

Ouch ... you can't be careful enough, can you?

Pretty sure though this has been unintentional ...

Seem to have put up a new announcement leaving the project name out ...pretty quick eh ...somebody must have pointed it out to them

[IAK]

Could be a worry for Seeka. Avocado-wrecking beetle discovered in New Zealand.
https://www.stuff.co.nz/business/farming/111533063/avocadowrecking-beetle-discovered-in-new-zealand

[Joshuatree]

Bad , potentially very bad news.Found in five areas already suggests it may be too late. heres hoping not. They spray enough insecticide etc already on Export avos, but this may have little effect on a wood borer.

[BlackPeter]

Could be a worry for Seeka. Avocado-wrecking beetle discovered in New Zealand.
https://www.stuff.co.nz/business/farming/111533063/avocadowrecking-beetle-discovered-in-new-zealand

I guess this would be a worry for any orchard planting "broadleaf trees", including apple, pears, figs, nut trees, cherries - this is not just Seeka and Avocado.


Biosecurity Surveillance and Incursion Manager, Brendan Gould said the beetle was regarded as a pest overseas and was known to feed on a wide range of broadleaf trees, including horticultural species such as avocado, and could spread fungal diseases.

On the other hand - I haven't heard yet that orchards in the rest of the globe all had to shut down - they could (despite having the beetle endemic in many countries) compete very nicely against our (previously beetle free) orchards.

If it establishes in NZ it will be just another threat our overseas competitors are dealing already a long time with. I am sure our farmers will to learn to manage it as well.

Here is what they do in Missouri: http://www.missouribotanicalgarden.org/gardens-gardening/your-garden/help-for-the-home-gardener/advice-tips-resources/pests-and-problems/insects/beetles/granulate-ambrosia-beetle.aspx

[Joshuatree]

You are right it won't kill off the avo industry but it may well lower production volumes and add another layer of costs and more chemical/insecticide/fungicide use when we need to find ways to use less as bees are on the decline and insecticides are a poison. And we dont know how well the beetle will adapt here ,it could explode in numbers or hardly be noticed. The beetle spreading fungal diseases to many other tree varieties is another big unknown. Once it is in the tree sprays are ineffective. Any comments from growers welcome.

[sb9]

Sudden surge of buyer interest this morning.

[BlackPeter]

SP for some time now above MA100 and for the last week above MA200. This is a confirmed uptrend.

Just wondering where all the "doom and gloom" merchants on this thread went?

Ah right - they are now busy down ramping the retirement stocks ...

[peat]

just hanging around holding at the moment BP

I read the presentation, yesterday. NTA down a little but EPS and divvy increased.
becoming more dependent on post harvest operations

[BlackPeter]

You wrote March 14th:

yea seeka overpaid thats why the price was down yesterday. based on pmnd77 statement 1m is committed long term either thru lease or contract the rest seeka must be fairly confident of retaining as usually smaller packhouse dont have many of there contracts longer than season to season. notice also seeka didnt mention any costs associated with redundacies etc as i imagine most of the Aongatete admin people or duplicate roles will get the boot.

LOL - looks like market changed its views quite fast. But how do they say - market is always right .. you just need to keep up ;);

Interesting depth this morning - One lonely seller (at $5.50) left!

10491

[bull....]

You wrote March 14th:


LOL - looks like market changed its views quite fast. But how do they say - market is always right .. you just need to keep up ;);

Interesting depth this morning - One lonely seller (at $5.50) left!

10491

BP im glad one of your shares is working out , it feels good to let everyone know doesnt it :) i prefer scales by the way as my exposure to the sector

[BlackPeter]

BP im glad one of your shares is working out , it feels good to let everyone know doesnt it :) i prefer scales by the way as my exposure to the sector

Just trying to create some balance against the constant negativity coming from one particular poster around here ...

BTW ... just looking into my portfolio - 15 of my holdings are up, 4 are down (3 of them hardly material). Total is nicely up. I can live with that result ;);

[sb9]

Moving along nicely...

[bull....]

buyers vanished again?

[BlackPeter]

buyers vanished again?

It is a stock with low liquidity. Already forgotten?

[iceman]

It is a stock with low liquidity. Already forgotten?

Yes it can be difficult to sell shares in this fine company due to very low liquidity and mostly held my long term investors that are not trading the shares. But a great company to have a few shares in.
I took a big punt on SEK back in 2015 and it became 40% of my NZX portfolio. Would not do that again as it took a long time to get out due to lack of liquidity and took a lot of patience, but turned out very good in the end.
Now ready for re-entry at the right price as/when funds allow. Definitely a long term growth opportunity here.

[iceman]

A big downgrade due to unusually hot summer both in NZ and Australia. Will be interesting to see if Mr Market reacts https://www.nzx.com/announcements/334328

[whatsup]

A big downgrade due to unusually hot summer both in NZ and Australia. Will be interesting to see if Mr Market reacts https://www.nzx.com/announcements/334328

LOWER VOLUME equals higher prices usually !!

[iceman]

LOWER VOLUME equals higher prices usually !!

They have lowered their EBIDTA guidance by $4m

[BlackPeter]

A big downgrade due to unusually hot summer both in NZ and Australia. Will be interesting to see if Mr Market reacts https://www.nzx.com/announcements/334328

Interesting - analysts based their estimates on a Group EBITDA of only $30.7m in FY2019: https://www.marketscreener.com/SEEKA-LTD-6496860/financials/

If the company now forecasts a group EBITDA of between $32.5m and $33.5m, than this actually would be an earnings upgrade ;);

But anyway - it is a seasonal business and I assume that competitors are hit in a similar way, though I am a bit surprised about the reduced harvest: We had (on our mid Canterbury "orchard") this year a bumper harvest ... but obviously - not everybody has as great climatic conditions as we have (and no, we neither grow Kiwifruit nor Avocado);

[iceman]

Agree BP. I don't think this downgrade will have much effect on investors or SP. People invested in this game are there for the long term and take the good with the bad in this industry.

[bull....]

big downgrade . in nz not surprised hot weather means smaller fruit and more to fill a tray. AUS big dis appointment but again hot weather is the cause.
As i mentioned sometime back it wasnt worth re entering as growth would be constrained for a while in this company

[peat]

Agree BP. I don't think this downgrade will have much effect on investors or SP. People invested in this game are there for the long term and take the good with the bad in this industry.

what he said.

[iceman]

what he said.

Definitely not. Shook out a few non believers :-)
Time to seriously think about re-entry, in a few months time !

[winner69]

Interesting - analysts based their estimates on a Group EBITDA of only $30.7m in FY2019: https://www.marketscreener.com/SEEKA-LTD-6496860/financials/

If the company now forecasts a group EBITDA of between $32.5m and $33.5m, than this actually would be an earnings upgrade ;);

But anyway - it is a seasonal business and I assume that competitors are hit in a similar way, though I am a bit surprised about the reduced harvest: We had (on our mid Canterbury "orchard") this year a bumper harvest ... but obviously - not everybody has as great climatic conditions as we have (and no, we neither grow Kiwifruit nor Avocado);

Guru analysts probably hadn’t included the $5.6m IFRS16 adjustment

[Jaa]

A big downgrade due to unusually hot summer both in NZ and Australia. Will be interesting to see if Mr Market reacts https://www.nzx.com/announcements/334328

Not sure I would see this as a one off, it could be the new normal. Climate change, global deforestation and loss of diversity will ensure many more hot and dry summers with less natural pollinators in the years ahead.

A new cultivar could eventually be needed.

[sb9]

Looking to get rid of Aussie orchards and rightly so as not much growth coming from there.

[percy]

Sale and lease back.

[iceman]

Just doing what they've successfully done with their Northland operation. Makes sense to release some of the capital tied up there but still get the fruit through the packhouse and sales in Aussie

[sb9]

12c divvy just announced and based on current price its about 6.3% gross yield, not bad.

[peat]

12c divvy just announced and based on current price its about 6.3% gross yield, not bad.

hows that exactly ?

24cps per annum over $4.99 ?

[sb9]

hows that exactly ?

24cps per annum over $4.99 ?

I just went off by what was on NZX website.

[peat]

I See(ka)
and that will be on previous years figures wont it unless they update that very quickly indeed.

[bull....]

SP for some time now above MA100 and for the last week above MA200. This is a confirmed uptrend.

Just wondering where all the "doom and gloom" merchants on this thread went?

Ah right - they are now busy down ramping the retirement stocks ...

since you posted this the price has drifted down more and actually has been down trending for a yr and a half now from the highs wouldnt surprise me at some stage if it tests those lows at 4.25 again. wonder if the drought in aus is causing problems and obtaining water rights? costa group in aus has been smashed as well as numerous other companies because of the drought. anyway do you hold still?

[BlackPeter]

since you posted this the price has drifted down more and actually has been down trending for a yr and a half now from the highs wouldnt surprise me at some stage if it tests those lows at 4.25 again. wonder if the drought in aus is causing problems and obtaining water rights? costa group in aus has been smashed as well as numerous other companies because of the drought. anyway do you hold still?

Not sure about short term oscillations - this is a cyclical industry, but if I look at the chart than I find it difficult to correlate that with the doom and gloom described in your post. Still looks like a long term uptrend to me:

10880

I think Seeka is a reasonably managed company in an industry with lots of future potential. The need for fresh fruit can only increase ... and while climate change no doubt will make the game more interesting, all players will be effected by it.

Do I still hold? Well yes, this is in my view bottom drawer material. Sure - my SEK holding is at current roughly 8% less worth than 6 months ago, but if I compare the Seeka share price with some other much discussed shares, than it is basically a haven of stability.

I prefer to sell cyclical's when they are up ... and buy them when they are down, i.e. now might be a better time to buy.

And now you mentioned it - have a look at the RSI (red potato below):

10881

- you well might have identified a bottom and it is all up from here ... who knows?

[Lewylewylewy]

From stats nz:

Kiwifruit prices were at an all-time high in December 2019, with prices for seasonal fruit and vegetables also up, Stats NZ said today.

“Kiwifruit prices rose 32 percent in December to a weighted average price of $8.27 per kilo, an all-time high,” acting consumer prices manager James Griffin said.

“This compares with $4.24 in December last year.”

[turnip]

I came across this article from 24 Dec 2019, a bit superficial, but it sounds like conditions are still managable for Seeka in Australia:

"Seeka Australia are looking forward to a good kiwifruit season despite the very hot and dry conditions."

"Next year we are forecasting a volume of 73,000 cartons of Rico® pears, this represents a 25% increase in marketable volume from the 2019 season."

https://www.freshplaza.com/article/9174290/we-will-see-a-steady-increase-in-volumes-over-each-season-ahead-as-more-production-comes-online/

Does anyone have suggestions of good places to look for news about the company, other than its infrequent announcements to the NZX?

[BlackPeter]

Cheers for posting the link ... and no, I am afraid I didn't found yet a regular and freely accessible source of information about Seeka. Anybody else?

Obviously you can check the industry regulars which may or may not report about Seeka as well.

https://www.hortnz.co.nz/news-events-and-media/magazines/the-orchardist/

or

https://kiwifruitjournal.co.nz

both are subscription based (cost money) and I don't know how useful they are for Seeka investors. You might find them though in a library close to you.

During the fire season in Australia it might as well pay to watch the fire reports for Bunbaartha.

[BlackPeter]

Good news - it is raining in Bunbaartha! This reduces the local fire risk for our crop ... and obviously will help with the irrigation:

https://live.harvest.com/?hsn=12060&grp=Main

and more to come:

https://www.google.com/search?sxsrf=ACYBGNTl1DPn-OspCQXUN8DvDbWi1yfkFg%3A1579471106711&ei=AtEkXqiRK4KG4-EPxKuYsAI&q=seeka+australia+bunbartha+weather

... add to that the rising Kiwifruit prices and we should sit nice and fluffy :);

[BlackPeter]

... ah yes, forgot - somebody on this thread asked previously about water rights for irrigation. Here is an interesting summary about Seekas Australian operation:

https://www.freshplaza.com/article/2197094/seeka-innovates-in-australia/

Goulburn storages (including Lake Eildon which is their main source for irrigation at 41%) still between 36 and 98% full. Should be sufficient through to harvest time (which starts in February), particularly given the rain.

https://www.g-mwater.com.au/water-resources/catchments/storage-levels

[Onion]

Goulburn storages (including Lake Eildon which is their main source for irrigation at 41%) still between 36 and 98% full. Should be sufficient through to harvest time (which starts in February), particularly given the rain.

https://www.g-mwater.com.au/water-resources/catchments/storage-levels

"Bonnie Doon", the Kerrigan's holiday house from the movie "The Castle" is on the shores of Lake Eildon.

https://www.bonniedoon.net/home/sights-worth-seeing/13-the-castle


The little guy, being the Kerrigan family who had a holiday house in Bonnie Doon and came regularly to enjoy the serenity and the power lines which span Lake Eildon.

[Biscuit]

... add to that the rising Kiwifruit prices and we should sit nice and fluffy :);

Just bought a little nibble of SEK. Seems to me there could be a growth story from here for a company that is positioned to take advantage of predicted industry growth.

[peat]

I tripled my small holding on this today. Buying into a weak phase of the general market and it could well be that the long slow decline is now over with a hammer candle right at the 78.6% retracement point of $ 4.59 and a upwards blip after that to confirm. This pattern is a perfect bullish gartley as the earlier correction changed direction at exactly the 61.8% retracement
10972

Technically this trade would have a stop loss at $4.20 but I wouldnt neccessarily act on that unless it was a weekly close figure for example.
They will report in Feb and all expectations are that it should be okay or even good (there is no change to guidance)

[iceman]

I've also re-entered the SH register Peat, after 18 month of absence. Feel this is now looking good a again with a good harvest expected this autumn and the uncomfortably high leverage well attended to by selling lots of orchards in Northland. Australia still needs lots of work to make it as good as it should be but I'm now again content enough to take a modest holding.

[bull....]

since you posted this the price has drifted down more and actually has been down trending for a yr and a half now from the highs wouldnt surprise me at some stage if it tests those lows at 4.25 again. wonder if the drought in aus is causing problems and obtaining water rights? costa group in aus has been smashed as well as numerous other companies because of the drought. anyway do you hold still?

yep heading towards testing those lows around 4.25 sure looks like it from the chart action

[BlackPeter]

yep heading towards testing those lows around 4.25 sure looks like it from the chart action

Possible .. and the volume is really amazing, isn't it :p?

Run for the hills ....

[iceman]

yep heading towards testing those lows around 4.25 sure looks like it from the chart action

Then it will be time, after dipping my toe in a couple of weeks ago, to dive in fully. But not before April-May when we will have a clearer understanding on whether the coronavirus will have any significant effect on fruit shipments to China

[bull....]

Then it will be time, after dipping my toe in a couple of weeks ago, to dive in fully. But not before April-May when we will have a clearer understanding on whether the coronavirus will have any significant effect on fruit shipments to China

true time is what is important to see what the effects of virus are , dont know if i would dive full in until this unknown is known.

[BlackPeter]

true time is what is important to see what the effects of virus are , dont know if i would dive full in until this unknown is known.

Not quite sure I see a big virus impact on either production nor the sale of fresh fruit (though, demand might well increase), but yes - it certainly will be interesting to see how this years Australian harvest (quality and volume) looks like.

The effects of global warming including the extended Australian bush fire season might well require some adaptation for all fruit growers ...

[bull....]

Not quite sure I see a big virus impact on either production nor the sale of fresh fruit (though, demand might well increase), but yes - it certainly will be interesting to see how this years Australian harvest (quality and volume) looks like.

The effects of global warming including the extended Australian bush fire season might well require some adaptation for all fruit growers ...

virus have no effect on nz production , if the virus got worse it just be on being able to move the product to china or even around china therefore sales would be down in this market. guess they can just put it in storage what they cant export which i think a lot of exporters are already doing.

[Onion]

it certainly will be interesting to see how this years Australian harvest (quality and volume) looks like.

A Victorian winemaker tells me that they have had rain at the right time and in the right amounts for grape growing - no problems from the drought or wildfires.

I don't know what that means for pears and kiwifruit production however but illustrates that Australia is a big place and not everywhere has been affected by the wildfires.

[bull....]

NZ on high alert for stink bug invasion
https://www.stuff.co.nz/business/farming/119535159/nz-on-high-alert-for-stink-bug-invasion

probably concern for seeka and scales

[BlackPeter]

NZ on high alert for stink bug invasion
https://www.stuff.co.nz/business/farming/119535159/nz-on-high-alert-for-stink-bug-invasion

probably concern for seeka and scales

Well, yes - but they say it took in Italy roughly 10 years for them to become a problem and apparently there is as well a natural enemy of these bugs which MAF already cleared for introduction.


The brown marmorated stinkbug originates from Asia, where its numbers are kept in check by predators such as the samurai wasp, which lays its eggs inside the eggs of the stinkbug. About the same size as an ant, and with none of the annoying habits of the common wasps that dominate our summer, the samurai wasp has approval for release in New Zealand if a stinkbug invasion should occur.

No need to panic yet :):

[BlackPeter]

... somebody sold me yesterday some more for $4.25. Quite pleased.

[Onion]

Last year the 12c March dividend was announced on the 21st Feb. This year's announcement is probably close.

Do you reckon there is any chance they will reduce or hold back the dividend because of the potential effect of Cobid-19?

[iceman]

Last year the 12c March dividend was announced on the 21st Feb. This year's announcement is probably close.

Do you reckon there is any chance they will reduce or hold back the dividend because of the potential effect of Cobid-19?

I don't think they would send such a panic signal to the market. I'm sure they are monitoring the situation as we ll as they can and will be dealing with it to the best of their ability

[BlackPeter]

Last year the 12c March dividend was announced on the 21st Feb. This year's announcement is probably close.

Do you reckon there is any chance they will reduce or hold back the dividend because of the potential effect of Cobid-19?

Which effects would you think the virus might have on their business? Seeka is exporting into many countries, eating fresh fruit is highly recommended to improve anybody's immune system ... and the Chinese have said that they are going to prioritize processing perishable food at their ports ...

[iceman]

Which effects would you think the virus might have on their business? Seeka is exporting into many countries, eating fresh fruit is highly recommended to improve anybody's immune system ... and the Chinese have said that they are going to prioritize processing perishable food at their ports ...

Yes the Chinese have said that and I am sure that is their intention. But SEK is well aware of the risks this chaos in the Chinese infrastructure can cause, not only ports but also freighting from the ports to end users. It is a real business risk and China is a huge market for Kiwifruit. Luckily we have 2-3 months yet before shipping starts and hopefully things will be a lot clearer and better by then

[Gerald]

Total revenue of $236.9m (2018: $203.7m); an increase of 16%.
– $6.9m profit after tax (2018: $6.7m); up 3%.
– $34.5m EBITDA (2018: $33.3m); up 4% and ahead of the guidance range of between $32.5m to $33.5m.
– $368.2m of assets; up 22% from 2018.
– $116.8m net debt; an increase of $37.7m.
– $0.22 earnings per share; reflecting the full-year dilution of the late-2018 capital raise.

Opinions on the result? As expected?

[bull....]

Total revenue of $236.9m (2018: $203.7m); an increase of 16%.
– $6.9m profit after tax (2018: $6.7m); up 3%.
– $34.5m EBITDA (2018: $33.3m); up 4% and ahead of the guidance range of between $32.5m to $33.5m.
– $368.2m of assets; up 22% from 2018.
– $116.8m net debt; an increase of $37.7m.
– $0.22 earnings per share; reflecting the full-year dilution of the late-2018 capital raise.

Opinions on the result? As expected?



as expected. I say on the thread a while ago i didnt expect the share to go higher because growth will be a few years away, i still maintain the view

[peat]

ONe cant complain when guidance is achieved though of course one can hope for more.
EPS down quite a lot really, but we knew it would be that way
I thought debt was decreasing???
Solid divi - I'm holding, but I must admit I was hoping for better.

[BlackPeter]

ONe cant complain when guidance is achieved though of course one can hope for more.
EPS down quite a lot really, but we knew it would be that way
I thought debt was decreasing???
Solid divi - I'm holding, but I must admit I was hoping for better.

Agree.

Re debt - I think this is more a timing issue, should be already lower now (with one orchard sale settled in February).

Positive outlook, but obviously - it is a weather dependent industry ...

[peat]

Agree.

Re debt - I think this is more a timing issue, should be already lower now (with one orchard sale settled in February).

Positive outlook, but obviously - it is a weather dependent industry ...

Yeh good point about the debt.
Hopefully the orchards have irrigation.
One thing that is concerning me about this company though is that it may over reward growers vs shareholders. They are its stated focus whereas shareholders should be the focus and growers can be shareholders if they choose.

[BlackPeter]

Yeh good point about the debt.
Hopefully the orchards have irrigation.
One thing that is concerning me about this company though is that it may over reward growers vs shareholders. They are its stated focus whereas shareholders should be the focus and growers can be shareholders if they choose.

Don't think you can operate a commercial orchard in NZ and certainly not in Australia without irrigation.

I take that in NZ as given and did recently some research re their Australian site ... and they look fine (i.e. they have irrigation and the water supply looks safe to the end of the harvesting period).

Not so sure re focus on shareholders vs growers. I guess - you could say that the growers are basically part of their customer base (they pay for consultation, for space in the cool storage and Seeka basically clips the ticket for every crate sold. No growers, no profit). Normally it is good if a company is looking after their customers. They say - look after your customers and the profits look after themselves.

Obviously - there needs to be long term a fair payback for the capital as well. Do you think this is not the case?

[iceman]

I do like what they are doing. They have greatly increased their geological presence by buying up large in Northland and Australia. To do this they took on a lot of debt but they nare now selling a lot of the orchards to growers that will have contracts to supply to SEK for several years and use the proceeds (and rleased gains) to lower debt again. They have now said they will look at a similar program in Australia.

Peat has a valid point about grower focus vs shareholder focus but the reward scheme they ran for several years and finished a couple of years ago from memory, was paid out in shares so the rewarded growers became shareholders with increasing holding sizes. Would be interesting to know how many have held onto those shares.

But overall I think SEK is doing the right thing and setting themselves up well for the future. We may well be a couple of (or several) years away from seeing the real results from this strategy but I like it anjd will be buying more in the near future if prices stay at current level or slightly lower. Currently only have a miniscule holding bought recently

[BlackPeter]

Expecting 2020 Kiwifruit crop to be 10% larger than last year:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/349310/318041.pdf

... this can't be bad news, can it?

[peat]

Expecting 2020 Kiwifruit crop to be 10% larger than last year:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/349310/318041.pdf

... this can't be bad news, can it?

one would hope not for sure

but price taker huh ? so if glutted then could be less overall revenue
BUT with drought conditions it is less likely that a glut will occur?
I'm just surmising here...…..

[bull....]

Expecting 2020 Kiwifruit crop to be 10% larger than last year:

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/349310/318041.pdf

... this can't be bad news, can it?

be more informative if they provided a comparison before the northland aquisitions , looks like the lift is only due to this could actually be worse if nortland taken out

[BlackPeter]

be more informative if they provided a comparison before the northland aquisitions , looks like the lift is only due to this could actually be worse if nortland taken out

what a surprise - black sludge coming from the bull. LOL.

[peat]

a kiwifruit is a kiwifruit is a kiwifruit

[iceman]

Good to see nearly all the increase is in Sun Gold. Hayward estimates pretty much same as last year. Hopefully harvesting, packing and deliveries will go well and not be too badly affected by slowness in Chinese ports and transport.

Nibbled at a few more this morning

[bull....]

no body mentioned if kiwifruit harvest will go smoothly , will seasonal workers be allowed into the country to pick fruit if virus really takes off ? same for scales etc

[Ricky-bobby]

Yeh workers should be fine. I’m in the wine industry and we don’t have any issues yet and Kiwifruit/apples happen around same time as us with the same labour pool. Getting the fruit to market will be interesting... lack of containers currently as they are all stuck in China... zespri hire their ship, so they should be sweet. Hopefully getting It off the ship will happen? Heard ports in China super slow with massive backlogs...

[kiwidollabill]

Yeh workers should be fine. I’m in the wine industry and we don’t have any issues yet and Kiwifruit/apples happen around same time as us with the same labour pool. Getting the fruit to market will be interesting... lack of containers currently as they are all stuck in China... zespri hire their ship, so they should be sweet. Hopefully getting It off the ship will happen? Heard ports in China super slow with massive backlogs...

Ports are struggling to get their workers back, all the labourers went back to their rural home towns for the NY and then couldn't return.... If it can all get sorted in the next month the hort industry might just scrape in and get lucky. Lord knows what the market pricing will end up as so returns are anyones guess....

[iceman]

Yeh workers should be fine. I’m in the wine industry and we don’t have any issues yet and Kiwifruit/apples happen around same time as us with the same labour pool. Getting the fruit to market will be interesting... lack of containers currently as they are all stuck in China... zespri hire their ship, so they should be sweet. Hopefully getting It off the ship will happen? Heard ports in China super slow with massive backlogs...

There sure will be challenges. But in our favour is the Chinese Government's stated intention to give food imports a priority at the ports. One would hope perishables such as fruit would be given a high priority.
In my industry (fishing) we are already seeing higher demand and prices for fish that has not been caught or processed in China or SE Asia, particularly into Europe. This bodes well for NZ food exporters.

[whatsup]

There sure will be challenges. But in our favour is the Chinese Government's stated intention to give food imports a priority at the ports. One would hope perishables such as fruit would be given a high priority.
In my industry (fishing) we are already seeing higher demand and prices for fish that has not been caught or processed in China or SE Asia, particularly into Europe. This bodes well for NZ food exporters.

Apparently with the very high Vitamin C content of Kiwifruit they are in very great demand in China as it helps in the fight of the current virus

[turnip]

“Our growth in volume is coming from new developments, conversion and SunGold orchards coming into production" (https://www.freshplaza.com/article/9195694/our-growth-in-volume-is-coming-from-new-developments-conversion-and-sungold-orchards-coming-into-production/) (4 March 2020)

[peat]

“Our growth in volume is coming from new developments, conversion and SunGold orchards coming into production" (https://www.freshplaza.com/article/9195694/our-growth-in-volume-is-coming-from-new-developments-conversion-and-sungold-orchards-coming-into-production/) (4 March 2020)

great, thanks Turnip. appreciate you drawing this to our attention
it has been somewhat disappointing to see the demand for Seeka drop off recently perhaps this will assist. The company would appear to be doing well with diverse exports in Asia but mainly Australia.

[bull....]

seeka needs your help

Seeka Limited (NZX-SEK), a listed New Zealand produce handler has today announced a labour shortage of 300 positions for local people across their kiwifruit orchard and post-harvest operations in Bay of Plenty, Coromandel and Northland.

https://www.scoop.co.nz/stories/BU2003/S00290/300-vacant-kiwifruit-positions-across-the-bay-of-plenty-coromandel-and-northland.htm

[iceman]

There will be people losing their jobs all over the place in the next few weeks, but I bet not many of them will go and pick kiwifruit. Much better to get the extra benefits just announced !

[Biscuit]

There will be people losing their jobs all over the place in the next few weeks, but I bet not many of them will go and pick kiwifruit. Much better to get the extra benefits just announced !

Can't say I blame them. In my time I have worked picking cabbages, apricots, pears and oranges at different times as a traveler in my 20s. If I were unemployed with no money, I think I would prefer to go on the dole. Having said that, they will find workers and I think food exporters are probably one of the better investments at this time.

[Joshuatree]

The benefit is subsistence at best a miserable place to be. After a quick google,Kiwi fruit workers get $18 to $26 an hour . If you are in a motivated team pickers can earn more when paid by the bin. Weather depended, the fruit need to be dry. Beneficaries get what re $150 to $188 after tax. No brainer.

[Biscuit]

The benefit is subsistence at best a miserable place to be.

A bit off topic but you know, it depends how you organise yourself. I have known a few people who have lived quite well on the dole back in the day. Things are probably different now (few could save and buy a house on the dole today I suspect). More than a few of my friends in rural areas raising families and living a very nice life style on the dole 20 years ago. Not one of them would dream of picking fruit!

[Toddy]

Picking fruit is like going to the gym and getting paid for it. And the gyms will more than likely be closed. If you want to lose some weight and get fit and strong over a few weeks, then this could be a great option.

[iceman]

Picking fruit is like going to the gym and getting paid for it. And the gyms will more than likely be closed. If you want to lose some weight and get fit and strong over a few weeks, then this could be a great option.

Sadly they can not get reliable local people to pick the fruit and have to rely on foreign labour, while many sit on all sorts of benefits to avoid work in both BOP and Northland, where workers are needed the most. Sad.

[Balance]

Sadly they can not get reliable local people to pick the fruit and have to rely on foreign labour, while many sit on all sorts of benefits to avoid work in both BOP and Northland, where workers are needed the most. Sad.

Jacinda’s folly - throwing more money at beneficiaries so she gets their votes this September.

The caring, compassionate and sharing utopia on Earth - all using taxpayers’ money of course.

Meanwhile, companies like Seeka (which contribute hugely to the very same taxpayers’ monies being used to create the utopia of beneficiaries) may have unpicked fruit (read lost revenues)!

On the news, a group of 40 Thai kiwifruit seasonal workers are under quarantine for 14 days after arriving this week!

[whatsup]

Little miss "look at me " and the rest of the "dead heads" have not realised it but throwing additional money at the beneficiaries is a complete waste of money as they are not swing voters, they always vote labour, daaaah , sooooo thick !!

[peat]

dividend cancelled.

disappointing but prudent I suppose
Or, ominous?

[bull....]

dividend cancelled.

disappointing but prudent I suppose
Or, ominous?

wow things not good at zespri , good that seeka being mindful of debt rather than payouts. very sensible

[Biscuit]

dividend cancelled.

disappointing but prudent I suppose
Or, ominous?

I'd say prudent rather than ominous, and it is as likely being deferred as being cancelled

[kiwidollabill]

Definately prudent, but I think they will do better this year than the market is predicting

[iceman]

I agree with this very sensible decision. I think many more companies should be doing the same

[IAK]

Hopefully, Seeka will be able to get their fruit to overseas markets as well.
Coronavirus doesn't stop Zespri getting its first kiwifruit shipment away for 2020
http://www.stuff.co.nz/national/health/coronavirus/120399108/coronavirus-doesnt-stop-zespri-getting-its-first-kiwifruit-shipment-away-for-2020?cid=app-android

[Felonius]

A bit off topic but you know, it depends how you organise yourself. I have known a few people who have lived quite well on the dole back in the day. Things are probably different now (few could save and buy a house on the dole today I suspect). More than a few of my friends in rural areas raising families and living a very nice life style on the dole 20 years ago. Not one of them would dream of picking fruit!

Sorry. Off-topic for a moment.

My pride would not allow me to accept the dole.
Our 3 children have played with the idea during their university semesters and I have successfully discouraged them. The attitude such behavior breeds is not helpful to the recipient long term - (they may of course think they are being clever in accepting free money).

I do accept that under certain circumstances people need to accept the dole.
I am happy to pay my share of tax to help those people.

TAXATION IS THE PRICE OF CIVILISATION.

[peat]

Are they doing a Warehouse?
Probably not by the sounds of it.
https://www.nzx.com/announcements/350656

[kiwidollabill]

Speaking with someone senior in the industry, things box on as usual within significant restrictions (i.e. staff in the packhouse). Early reports out of the market indicate export prices are going to be strong. The hort industry might be the only one to snake in a good year.

[iceman]

Speaking with someone senior in the industry, things box on as usual within significant restrictions (i.e. staff in the packhouse). Early reports out of the market indicate export prices are going to be strong. The hort industry might be the only one to snake in a good year.

Lets hope they get reliable people to do the work normally done by overseas labour. Another industry that will be relatively OK out of this is fishing. SAN should do OK. Sealord offering people affected by COVID and losing jobs in Nelson to contact them for jobs in their Nelson factory for the upcoming Hoki season.

The lower USD/NZD fx rate will be of great help here

[iceman]

A sign of things to come for producers ? https://www.reuters.com/article/us-health-coronavirus-produce-insight/fresh-produce-in-europe-set-to-be-more-scarce-as-coronavirus-strikes-idUSKBN21D12V

[Lewylewylewy]

Good for seeka:
Currency likely to be in their favor.
Product is essential.

Bad for seeka:
I believe from memory they have high debt. Might lead to CR?
Difficulty getting pickers, possibly going forward.

Anything i missed?

[BlackPeter]

Good for seeka:
Currency likely to be in their favor.
Product is essential.


Correct. An overall world wide shortage of fresh food due to an oversupply of dumb populist politicians plays as well in their favor.



Bad for seeka:
I believe from memory they have high debt. Might lead to CR?
Difficulty getting pickers, possibly going forward.


liabilities to assets in last FY report was 57.9%. Yes, this is at the upper limit of a sensible debt load (though I think they reduced the debt in the meantime by selling and back-leasing some orchards). On the other hand - interest rates are low and dropping - i.e. as long as they keep the cash flow going, this should not be a huge problem.

Lack of pickers is an issue, but should be manageable. The problem is not the lack of people who could do the work, but the oversupply of populist politicians who want to stop them. Lots of unemployed tourism and hospitality staff who could do the work.

I suppose our politicians will find the very obvious solution before unharvested fruit start to rot and markets start getting depleted of fresh food, but maybe I am a bit naive by still believing in some common sense?




Anything i missed?

I think you got the main points related to the Covid-19 crisis. Obviously - it is not the only crisis in town, and the jury is still out what climate change (mid term much more damaging than what the corona virus will do) will throw at Seeka and other producers.

There are plenty of risks (like unseasonable hot and cold temperatures, drought conditions, fire, floods, storms, hail) which might damage or destroy their crops, but there would be as well the opportunity that they might be better prepared for all these things than the competition and could benefit from high demand in a low supply situation. They seem to have so far at least safe water supply (even in Australia) - not sure what their preparations are for other issues the climate crisis will throw at them and others.

[kiwidollabill]

Potentially expect an increased COGS

With the requirement to distance workers in their packhouses, likely to decrease efficiency of throughput? Likewise other areas of the business?

[BlackPeter]

Potentially expect an increased COGS

With the requirement to distance workers in their packhouses, likely to decrease efficiency of throughput? Likewise other areas of the business?

In my view the only thing which matters is - how do they do compared to competition? If everybody else around the world has the same problems ... they can put any additional food production costs straight forward to the consumer.

Pretty sure this is what is going to happen. Be prepared for food prices to go up in the supermarkets.

[peat]

New Zealand’skiwifruit season is just kicking off and so far the industry body is confidentthere are enough pickers and packers for this year's crop.

https://businessdesk.co.nz/article/kiwifruit-growers-have-enough-workers-for-now (paywall)

[iceman]

Good news that kiwifruit growers are finding pickers. Hopefully some reliable hard workers from affected industries like forestry etc. Lets hope all our range of fruit can be picked, packed and sold. The country sure needs it https://www.stuff.co.nz/dominion-post/news/hawkes-bay/120799588/fruit-wine-industries-respond-to-coronavirus-with-vintage-kiwi-adaptability

[kiora]

Good news that kiwifruit growers are finding pickers. Hopefully some reliable hard workers from affected industries like forestry etc. Lets hope all our range of fruit can be picked, packed and sold. The country sure needs it https://www.stuff.co.nz/dominion-post/news/hawkes-bay/120799588/fruit-wine-industries-respond-to-coronavirus-with-vintage-kiwi-adaptability

There are still logs leaving from the wharf stockpiles so need those forestry workers back cutting pretty soon
https://www.napierport.co.nz/quick-links/shipping-schedule/#1521201720580-7be4db5b-5002
https://www.stuff.co.nz/nelson-mail/news/120839025/essential-work-at-port-nelson-a-moveable-feast
And increased prices
https://www.interest.co.nz/rural-news/104300/china-log-prices-rise-new-zealand-and-others-shut-down-and-they-restart-indicating

[peat]

(From the 6th March) it has been somewhat disappointing to see the demand for Seeka drop off recently

so yeh buying demand really dropped off on Seeka during the last six weeks , despite there being indications of it not being disastrous at all, and suddenly now a bit of a rip roar coming back up.
it does show how there are clear opportunities for those keeping an eye open. I picked up a few more at 3.50, but am starting to be too overweight so will lighten up if the buoyancy sticks around.

Zespri saying how it was all going well the other day was also positive news for the industry.

[bull....]

so yeh buying demand really dropped off on Seeka during the last six weeks , despite there being indications of it not being disastrous at all, and suddenly now a bit of a rip roar coming back up.
it does show how there are clear opportunities for those keeping an eye open. I picked up a few more at 3.50, but am starting to be too overweight so will lighten up if the buoyancy sticks around.

Zespri saying how it was all going well the other day was also positive news for the industry.

good trade just sold last mine today brought in just above you

[iceman]

Harvesting going quite well by the sounds of it despite still some issues with getting enough workers. Despite the COVID restrictions, SEK are packing around 90% of pre-COVID volumes and so far have packed 12.5m trays (12.8 in 2019) of which 7.4m (6.4) has been shipped. All looking good so far.

[bull....]

Harvesting going quite well by the sounds of it despite still some issues with getting enough workers. Despite the COVID restrictions, SEK are packing around 90% of pre-COVID volumes and so far have packed 12.5m trays (12.8 in 2019) of which 7.4m (6.4) has been shipped. All looking good so far.

seeka debt being to high is the main issue i think at the moment and they are addressing it with a further 20 - 30m debt reduction from sales in aus. bringing debt down quickly will provide interest savings to the bottom line next year. unless they are going to invest in more growth which isnt bad either.

Seeka enters conditional sale and lease back of orchards
https://www.nzx.com/announcements/353365

also there update yesterday wasnt as bad as sounded

https://www.nzx.com/announcements/353412

The Company’s operational earnings are expected to be significantly lower through lower margins, additional costs and lower volumes in the current year
yet

The Company having considered its current year performance and expecting the completion of its divestment transactions, expects earnings before tax to be in the range between NZD$9m and $11.0m for the full 2020 financial year compared to NZD$9.8m in the previous corresponding period

so if you add back in all the one off bad stuff does that mean the result would have been a cracker?

[iceman]

No question that SEK has had significantly increased costs due to COVID restrictions, with staffing transport, accommodation and placements at working stations requiring "social distancing" and making it difficult. Very hard to say how much of that lower profit is due to that.
But we also have significantly lower Hayward yields for 2 years running due to dry weather, despite SEK now being spread out much more geographically than they were prior.

So not sure if we can say it would have been a bumper year without the unforeseens. It seems we get some unforeseens in this business each year so they probably should be normalised and should they not happen, we should take that as a bonus.

[bull....]

No question that SEK has had significantly increased costs due to COVID restrictions, with staffing transport, accommodation and placements at working stations requiring "social distancing" and making it difficult. Very hard to say how much of that lower profit is due to that.
But we also have significantly lower Hayward yields for 2 years running due to dry weather, despite SEK now being spread out much more geographically than they were prior.

So not sure if we can say it would have been a bumper year without the unforeseens. It seems we get some unforeseens in this business each year so they probably should be normalised and should they not happen, we should take that as a bonus.

whats your call on the div being announced in june ? its a either way bet in my mind

[kiwidollabill]

No question that SEK has had significantly increased costs due to COVID restrictions, with staffing transport, accommodation and placements at working stations requiring "social distancing" and making it difficult. Very hard to say how much of that lower profit is due to that.
But we also have significantly lower Hayward yields for 2 years running due to dry weather, despite SEK now being spread out much more geographically than they were prior.

So not sure if we can say it would have been a bumper year without the unforeseens. It seems we get some unforeseens in this business each year so they probably should be normalised and should they not happen, we should take that as a bonus.

Its an extremely good year for Sungold...

[iceman]

whats your call on the div being announced in june ? its a either way bet in my mind

A good question bull. Probably a bit early to call but I'm expecting unchanged at 12c. You ?

[bull....]

A good question bull. Probably a bit early to call but I'm expecting unchanged at 12c. You ?

i dont know but they did say the last div of 12c was deferred to june decision so you maybe right. im sure growers will be dissappointed in no dividend again.

heres some news

Gold kiwifruit exports continued to rise after a strong showing in March 2020. Gold kiwifruit increased $116 million (37 percent) in April 2020 when compared with April 2019. Exports to Japan led this increase, with gold kiwifruit exports to the country more than doubling compared with April last year.

https://www.scoop.co.nz/stories/BU2005/S00569/logging-halt-undercuts-strong-export-month.htm

[bull....]

director buying shares on market at 4.30 . vote of confidence. look pretty silly though if no dividend is declared and the price falls though

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/353947/323608.pdf

[peat]

director buying shares on market at 4.30 . vote of confidence.

just this is enough. forget the rest.

price ultimately not determined by company success but by market flows.

[turnip]

Its an extremely good year for Sungold...

I'm not a grower, just a consumer, but have noticed the gold have been much better tasting than the green this year.

I gather that the gold cope with the hot, dry weather we have been having better than the green, but does anyone know whether Seeka's increasing production of gold will act as a hedge against drought in the future, or is it just something specific to this year's conditions?

[bull....]

I'm not a grower, just a consumer, but have noticed the gold have been much better tasting than the green this year.

I gather that the gold cope with the hot, dry weather we have been having better than the green, but does anyone know whether Seeka's increasing production of gold will act as a hedge against drought in the future, or is it just something specific to this year's conditions?

no expert about , but gold provides better returns than green , so makes sense to be overweight in gold. maybe gold growers have irrigation thats why they were better this year? dont know about weather they are drought resistant.
i brought some this week too for a div , i think it would be hard to say covid is why they cant pay this time , it would have to be because we had a very bad year as the reason.

[kiwidollabill]

I'm not a grower, just a consumer, but have noticed the gold have been much better tasting than the green this year.

I gather that the gold cope with the hot, dry weather we have been having better than the green, but does anyone know whether Seeka's increasing production of gold will act as a hedge against drought in the future, or is it just something specific to this year's conditions?

Returns per ha are way high for gold c.f. green. Thats why their strategy on the ex T&G orchards in northland has been to graft in gold to the original green rootstock and sell the orchard off.

Yes, the gold loves the hot weather, promotes sweetness. However what we get in NZ is usually the lower grades not suitable for export...

[bull....]

Massive kiwifruit crop this year spurs record revenue, despite Covid-19 worker shortage
https://www.tvnz.co.nz/one-news/new-zealand/massive-kiwifruit-crop-year-spurs-record-revenue-despite-covid-19-worker-shortage

[RTM]

Disappointing update. I don’t fully understand why given the publicity around the Kiwifruit industry.
I had hoped for something.

Seeka Limited [NZX:SEK] provides the following dividend update.

On 19 March 2020 Seeka cancelled the dividend of $0.12 per share to be paid on 17 April and advised that the dividend, and the application of the Dividend Reinvestment Plan, will be considered by Seeka at its Board meeting scheduled for 17 June.

Having reviewed the company’s forecast guidance and the current business environment the Board considers that it is prudent that no dividend be paid at this time.

Seeka confirms its previous earnings guidance before tax to be in the range between NZD$9.0m and $11.0m for the full 2020 financial year after the completion of the Company’s divestment transactions.

[peat]

I would have appreciated more of an explanation given that earlier it was intended to pay out.
however technically they are just giving you you’re own money back so just sell some shares if you need cash

[iceman]

I agree this is a disappointing update. Not only because of the no dividend announcement, but the lack of explanation on why so ! NZ has had a very good Kiwifruit season albeit with much higher than normal costs due to COVID. But SEK has also been undertaking significant divestment both in NZ & Aus to pay down debt. One would hope for a significantly strengthened balance sheet this year.
I wonder if companies are fearful of a Government or public backlash to any dividend announcements. Nothing surprises me in today{s crazy World !!

[RTM]

I agree this is a disappointing update. Not only because of the no dividend announcement, but the lack of explanation on why so ! NZ has had a very good Kiwifruit season albeit with much higher than normal costs due to COVID. But SEK has also been undertaking significant divestment both in NZ & Aus to pay down debt. One would hope for a significantly strengthened balance sheet this year.
I wonder if companies are fearful of a Government or public backlash to any dividend announcements. Nothing surprises me in today{s crazy World !!

I wonder if the markets are not quite as robust as they hope for ? Maybe they are worried about prices or their ability to sell the product if COVID rages longer. So yes, a better explanation would help.

Peat, selling a few is not really something that we want or need to do.

I will just have to go down to the pack house and see if I can get a few more seconds.

[bull....]

disappointing announcement about no div. only excuses i see is the business has performed really badly this last year against record kiwifruit volumes or they are using covid conditions as a excuse to not pay a dividend and use the funds saved from this to reduce debt.

[kiwidollabill]

I wonder if the markets are not quite as robust as they hope for ? Maybe they are worried about prices or their ability to sell the product if COVID rages longer. So yes, a better explanation would help.

Peat, selling a few is not really something that we want or need to do.

I will just have to go down to the pack house and see if I can get a few more seconds.

There is significant uncertainty with where fruit prices will be landing at the end of the year.... same across the entire hort space, exporters/distributors are being cautious with not flooding the market with fruit which isnt sold or is at rock bottom prices.

[RTM]

disappointing announcement about no div. only excuses i see is the business has performed really badly this last year against record kiwifruit volumes or they are using covid conditions as a excuse to not pay a dividend and use the funds saved from this to reduce debt.


There is significant uncertainty with where fruit prices will be landing at the end of the year.... same across the entire hort space, exporters/distributors are being cautious with not flooding the market with fruit which isnt sold or is at rock bottom prices.

Yes...and in the absence of information we can only speculate.
I was thinking this morning that it will be interesting if directors/management buy shares in the next 6 months or so....

[bull....]

Yes...and in the absence of information we can only speculate.
I was thinking this morning that it will be interesting if directors/management buy shares in the next 6 months or so....

i just ditched the last of my shares , not worth holding a highly valued no dividend stock in my opinion. might buy again at cheaper levels