Seeka

[iceman]

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

Fair enough. I will hold them and see how they track along over the next year or two. They are doing some major restructuring of their balance sheet with the divestments and leasebacks after getting a bit ahead of themselves in buying growth. They also need to start showing some returns from Australia to show us that was a wortwhile investment

I am not very impressed with SEK packing "only" 31M trays this season, albeit much higher portion of it Gold than previously, during a season that is being reported as a record season.
Maybe SEK is having some teething problems with all the new orchards and all that goes with it !?

[bull....]

Fair enough. I will hold them and see how they track along over the next year or two. They are doing some major restructuring of their balance sheet with the divestments and leasebacks after getting a bit ahead of themselves in buying growth. They also need to start showing some returns from Australia to show us that was a wortwhile investment

I am not very impressed with SEK packing "only" 31M trays this season, albeit much higher portion of it Gold than previously, during a season that is being reported as a record season.
Maybe SEK is having some teething problems with all the new orchards and all that goes with it !?

they must be having operational issues , cost blow outs and volumes are well down , so some of there orchards must not be performing very well. the aus operations have not performed at all yet.
So its no good buying all the growth if you cannot get the purchased assets to perform. AS we know now it only leads to no dividend being paid

[peat]

And yet guidance remains in place.
But cancelling of div suggests it might be at the lower end which would mean negative growth as high as (-) 10%
So yeh PE gets expensive but if there is no covid by next season then growth could be restored. especially if the programme of divestments is completed.
afaik that is tracking okay.

[whatsup]

No , From a K fruit supplier to SEK, they are conserving funds to pay down debt after purchasing Turners northland operations last year, yes disappointing that they did not pay a div as they could have afforded a small one but could pay one later on during the year once their debt is paired back to more prudent levels.

[bull....]

No , From a K fruit supplier to SEK, they are conserving funds to pay down debt after purchasing Turners northland operations last year, yes disappointing that they did not pay a div as they could have afforded a small one but could pay one later on during the year once their debt is paired back to more prudent levels.

which means its a non income stock with small growth at the moment that trades at expensive multiples

[bull....]

250k trade at 3.93 in seeka today. someone ( grower ? ) selling out

[iceman]

250k trade at 3.93 in seeka today. someone ( grower ? ) selling out

That is an unusually large trade for SEK. Someone is keen to get out as you pointed out, but clearly someone is equally keen to get in !

[bull....]

That is an unusually large trade for SEK. Someone is keen to get out as you pointed out, but clearly someone is equally keen to get in !

looks like the seller was right , hitting new lows 3.90 on this run down. looks like it wants to test the covid lows just under 3.60 ?

[bull....]

Zespri worried about extent of illegal NZ gold fruit growing in China
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12357647

[Getty]

The same thing will be happening with our premium apple varieties.
As various trade delegations, pickers, call them what you like, go through Hawkes Bay orchards, many a cut twig is 'removed' for an overseas trip.
Must be revenge for NZ taking the Chinese gooseberry.

Dr JPG.

Eating an APPLE a day will make you sick.
TRY a MICROSOFT instead.

[iceman]

At first glance:
* Forecasting NPAT for FY20 similar to FY 19 (ranging -9% to +22) but includes estimated $5.5m on COVID costs, $2.5m gain on orchard sales and
$5.6m one off deferred tax gain
* Net debt down $18.8 M
* A$ 26.5 million from sale of Aussie orchards to be used for repayment of debt and orchard development
* Aussie operation finally making a small profit
* Dividend reinstated in September 10c fully imputed
* Incredibly, access to labour still a big issue
* future growth being built in with new orchard development (NZ & Aus)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/358299/328755.pdf

[bull....]

obviously got heaps of blowback about no dividend , else why would you say in june no dividend cause of market uncertainty and now announce one on a lower forecast. irrattic

[iceman]

bull they’re at the end of the shipping out of this year’s product so are in a much better position to know the COVID effect than they were back in June.
Only 6 million (20%) trays yet to be shipped and 2 m of that going this week and next

[BlackPeter]

obviously got heaps of blowback about no dividend , else why would you say in june no dividend cause of market uncertainty and now announce one on a lower forecast. irrattic

How terrible they didn't comply with your views. Unforgettable - expect them to be be b/s-ted for decades to come.

[bull....]

How terrible they didn't comply with your views. Unforgettable - expect them to be be b/s-ted for decades to come.

guess your enjoying the share price being down considerably from there june statement of no div.

[BlackPeter]

guess your enjoying the share price being down considerably from there june statement of no div.

Why would the recent share price drop matter to me except that it was a good opportunity to accumulate some more. Loved your regular down ramping ... as so often an outstanding buy in opportunity. I am sure you bought as well, didn't you?

I certainly enjoy that this was their best first half year in 5 years or so ... (though admittedly tax changes did help) - and yes, I will enjoy the divvie and the rising SP! All good - win- win - win!

[bull....]

Why would the recent share price drop matter to me except that it was a good opportunity to accumulate some more. Loved your regular down ramping ... as so often an outstanding buy in opportunity. I am sure you bought as well, didn't you?

I certainly enjoy that this was their best first half year in 5 years or so ... (though admittedly tax changes did help) - and yes, I will enjoy the divvie and the rising SP! All good - win- win - win!

got pretty close to my target 3.60 posted earlier but no i didnt buy only because i find there communication around dividends very irrattic

[peat]

i find there communication around dividends very irrattic

agreed ! not a massive issue of itself i guess - the poor communication that is, but to me paying steady divs is a big deal and so it can change my view.

[iceman]

I don't find it erratic at all. Clearly they had little idea in June how or if they could get all their perishable product to market in a timely and safe manner due to serious labour shortages/difficulties and COVID being rampant around the World affecting all their markets and freight routes.
They are now seeing all the product getting to market.

Perfectly prudent in my view.

In prior years the policy of slowly but surely increasing dividends has been followed, but this is not a normal year by any stretch of the imagination.

[bull....]

19/3/2020
Seeka cancels dividend
This decision reflects the uncertainty in the current business environment, the reported shortage of labour, and the lower forecast kiwifruit returns from Zespri rather than anything that has happened in the business to date

20/5/2020
Seeka provides market update and guidance

the effects and costs associated with COVID 19 have been significant together with very dry growing conditions in New Zealand and Australia lowering crop volumes. This being the second year of lower yields and volumes for Hayward in New Zealand.

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

17/6/2020
Seeka provides dividend update
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.


So all of a sudden things are wonderful , yea right. ( lower returns next 6 mths ) I stick to my view they were pressured into paying a dividend by big s/h or growers otherwise there announcements to this year make no sense esp when zespri were saying what a great year it was.

[BlackPeter]

...

So all of a sudden things are wonderful , yea right. ( lower returns next 6 mths ) I stick to my view they were pressured into paying a dividend by big s/h or growers otherwise there announcements to this year make no sense esp when zespri were saying what a great year it was.

It seems to have escaped your attention that Seeka are an agricultural company, and that their revenues are ALWAYS lower in the second half :):

[JSwan]

Did someone not realise that they're selling 462 shares for $4,050 each? Seeka to be the next Amazon?

11870

[bull....]

Did someone not realise that they're selling 462 shares for $4,050 each? Seeka to be the next Amazon?

11870

lol only on sharesis

[turnip]

"Seeka expects to pack 900,000 trays [of avocado] this season of its own and its growers fruit which is a record for the company."
https://www.freshplaza.com/article/9242427/it-makes-for-an-interesting-dynamic-demand-and-prices-for-good-quality-fruit-are-strong/ (21 August 2020)

[BlackPeter]

"Seeka expects to pack 900,000 trays [of avocado] this season of its own and its growers fruit which is a record for the company."
https://www.freshplaza.com/article/9242427/it-makes-for-an-interesting-dynamic-demand-and-prices-for-good-quality-fruit-are-strong/ (21 August 2020)

Interesting - thanks for sharing!

[iceman]

Sad news from SEK today with 7 of their Samoan workers having a car accident on their way home from last day at work yesterday, before going back home to Samoa. Sadly one of them died at the scene but the others expected to make a full recovery. Thoughts are with those affected.

[whatsup]

Sad news from SEK today with 7 of their Samoan workers having a car accident on their way home from last day at work yesterday, before going back home to Samoa. Sadly one of them died at the scene but the others expected to make a full recovery. Thoughts are with those affected.

Our thought go with them and their family, so far from home due to this b!oody virus.

[turnip]

If New Zealanders want horticultural work then the Australian govt. is currently offering a A$2000 (https://jobsearch.gov.au/harvest/workers/relocation-assistance) incentive to cross the ditch, while the New Zealand govt. is offering a $3100 (https://www.miq.govt.nz/being-in-managed-isolation/charges-for-managed-isolation/) incentive not to come back. This can't be helpful to the NZ hort. industry at the moment.

(Holding SEK/TGG/PLP)

[Getty]

At face value, you make a good point Turnip, but when one thinks about it deeper, its not so simple.

When these casuals come back to NZ, they may only earn $10k for their seasonal work.
So if the NZ taxpayer bears the cost of $3100 to isolate them on return, we are providing a 31% subsidy to that worker, for what result?

How much should the NZ taxpayer prop up some of these ventures, when all development & running costs get written off to tax?
If the employee costs then come back onto the state as well, whats the point of it all?
The company, that we have subsidised all the way through, then gets sold off to a foreign buyer, a few owners make a big profit, and NZ is shafted once more.

Much better to point out to these potentially departing workers, they are better off here as true patriots.

[bull....]

Surge in lending for horticulture needs watching: Reserve Bank
https://www.nzherald.co.nz/business/surge-in-lending-for-horticulture-needs-watching-reserve-bank/WGT3DEFRRQJVIWXSMC6VSMX3SU/

i have heard some banks are not lending on horticulture already ... for real

[iceman]

Surge in lending for horticulture needs watching: Reserve Bank
https://www.nzherald.co.nz/business/surge-in-lending-for-horticulture-needs-watching-reserve-bank/WGT3DEFRRQJVIWXSMC6VSMX3SU/

i have heard some banks are not lending on horticulture already ... for real

Well the banks need to be careful here, since the industry can't get people to pick the fruit and shipping to and from NZ in crisis. A perfect storm. Been out for awhile now as I just simply can't see how next year will turn out. Madness.

[Filthy]

https://www.stuff.co.nz/business/farming/123527409/govt-offers-kiwis-1000-bonus-to-take-up-horticulture-work-amid-labour-shortage

[BlackPeter]

BINGO - Love it!

https://www.nzx.com/announcements/364656


Seeka Limited [NZX:SEK] advises that its current year earnings guidance is
for a profit before tax between $15m and $17m compared to previous guidance
of between $9m and $12m.

Significant earnings upgrade (up 50+%) - and this despite Covid, worker shortages and climate issues.

Just wondering what they can do in a good year?

[peat]

Massive! Nice...

[Biscuit]

Massive! Nice...

Not clear how much of that is operational though. But yes, upgrades are good.

[Jaa]

Didn't even take a wage subsidy. Good on them.

Anyone know how much the one off gain on sale of the Aussie orchards is?

[Getty]

Its a good question

The sale price is A$26.5M, yet todays ann says they will reduce debt by $41.8/51.8M

Either way, its good news.

My concern is only over labour shortage.

[iceman]

Its a good question

The sale price is A$26.5M, yet todays ann says they will reduce debt by $41.8/51.8M

Either way, its good news.

My concern is only over labour shortage.

That may well include some settlement from the Northland orchards they sold and leased back, but not 100% sure. Either way, it is great to see the business doing well and paying down some of the debt that was getting to worrisome levels

[kiwidollabill]

Gold kiwi pricing has kept up in the market (maybe they were concerned about that?), green is week.

[RTM]

You beauty !

CORPACT: SEK: Seeka Announces 12 cent Special Dividend 09:43a.m.
SEK
16/12/2020 09:43
CORPACT
PRICE SENSITIVE
REL: 0943 HRS Seeka Limited

CORPACT: SEK: Seeka Announces 12 cent Special Dividend

Seeka Limited [NZX:SEK] advises the announcement of a special $0.12 per share
dividend. The dividend will be paid on 27 January 2021 to all holders of
ordinary shares in the Company recorded in the Company's share register at
the close of business on the record date of 24 December 2020 and that the
Company's Dividend Reinvestment Plan will apply in respect of the Special
Dividend.

Seeka considers a special dividend appropriate given the stronger than
expected earnings in the current financial year, a reflection of tight
financial management and the settled sale and lease back of part of the
Australian kiwifruit orchard portfolio. Seeka received no Government wage
subsidy and expects to end the year with much lower debt in accordance with
prior guidance.

[bull....]

looks like the share price is breaking out from the downtrend from 2018.

[bull....]

that huge volume on friday was 9.5% sub holder selling out from tokoyo. so the big question is who brought that 9.5% stake?

[RTM]

that huge volume on friday was 9.5% sub holder selling out from tokoyo. so the big question is who brought that 9.5% stake?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/365384/337838.pdf

Here is the announcement. Hopefully we see the purchaser soon.

[peat]

could well release the price somewhat eh?? ;+)

[bull....]

could well release the price somewhat eh?? ;+)


could do , i think the 5% + return you get for holding till after there march dividend will be a bigger attraction to alot of people. special of 12c on wednesday + march div of 12c = 24c of divs for 4 mths 5%+ return.

being a t/a person yourself you must have noticed the break out of the down trend from 2018 as well

[peat]

Joseph Wallace is the beneficial owner of the 9%.
A Blenheim businessmen I believe and I found his cell phone number too haha but I wont publish it.

[iceman]

Seeka has secured 217 RSE workers from the current Government allocation of 2000. The extra cost of getting these workers to work is $ 6,200 per person before they start paying wages. They're using them as "insurance" as the local people replacing them are unskilled, slower and taking longer to come up to speed. So the experienced RSE workers are critical. Seeka estimates manual labour costs have risen 30% due to this !!!!

[RTM]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12417010

[bull....]

looks like seeka may get a big payday

Government pays $40m to settle long-running kiwifruit Psa claim

The out-of-court settlement brings to an end years of legal disputes after 212 kiwifruit orchardists, and Te Puke-based post-harvest operator Seeka, brought a class action alleging the Government was liable for losses caused by the devastating plant disease.

https://www.stuff.co.nz/business/300229318/government-pays-40m-to-settle-longrunning-kiwifruit-psa-claim

[nztx]

https://www.nzx.com/announcements/368231

"Seeka Announces 12 cent Dividend
Record date is 5 March 2021
Payable on 30 March 2021"

[bull....]

https://www.nzx.com/announcements/368231

"Seeka Announces 12 cent Dividend
Record date is 5 March 2021
Payable on 30 March 2021"

the resumption of dividends puts them at 6.8% gross return for a year not to shabby dividend return in this environment

[Getty]

Yes.
The question now is how much of the crop will make it through the packhouse, and to market, thanks to shortage of pickers.

Lack of RSE workers/covid will get the blame, while our local benefit recipients cruise past on their way to the beach, watching the fruit fall to the ground.
Even then they wont pick it up, much easier to wait for a koha to be delivered to the food bank, and wait for someone to deliver their kids school lunches, and personal hygiene products.

This poverty is tough you know...

[whatsup]

Yes.
The question now is how much of the crop will make it through the packhouse, and to market, thanks to shortage of pickers.

Lack of RSE workers/covid will get the blame, while our local benefit recipients cruise past on their way to the beach, watching the fruit fall to the ground.
Even then they wont pick it up, much easier to wait for a koha to be delivered to the food bank, and wait for someone to deliver their kids school lunches, and personal hygiene products.

This poverty is tough you know...


Believe you it will all be picked, from someone who knows.

[Getty]

Good on ya mate.

Thats what we want to hear!

[bull....]

Seeka announces its 31 December 2020 result$15.2m net profit after tax - up 120% on 2019
* $0.12 per share dividend payable 30 March 2021

https://www.nzx.com/announcements/368293

I like how they say in there commentary that seeka is a growth company

[BlackPeter]

Seeka announces its 31 December 2020 result$15.2m net profit after tax - up 120% on 2019
* $0.12 per share dividend payable 30 March 2021

https://www.nzx.com/announcements/368293

I like how they say in there commentary that seeka is a growth company

Not quite sure though how they calculate 52 cents EPS (the table on page 3 of their report) - based on the current number of shares $15.2m NPAT should be 47 cents per share, but they probably did some averaging of new shares. That's what accountants are for, isn't it?

Otherwise: liabilities to assets down (from 57.9% down to 53%), Return on funds employed up from ~5.5% to 8.6%;

Great result, positive outlook ... happy holder.

[turnip]

Not quite sure though how they calculate 52 cents EPS (the table on page 3 of their report) - based on the current number of shares $15.2m NPAT should be 47 cents per share, but they probably did some averaging of new shares. That's what accountants are for, isn't it?

The footnote on p.12 of the presentation has this explaination:

"1 As required by NZ IAS 33, 2,748,877 shares held by Seeka Trustee Limited for the Grower Loyalty and Employee Share Schemes are excluded from EPS calculations. If included, the EPS would be $0.47 (2019: $0.22)"

[BlackPeter]

The footnote on p.12 of the presentation has this explaination:

"1 As required by NZ IAS 33, 2,748,877 shares held by Seeka Trustee Limited for the Grower Loyalty and Employee Share Schemes are excluded from EPS calculations. If included, the EPS would be $0.47 (2019: $0.22)"

Cheers - interesting, I didn't catch that. Shows again it pays to read all the footnotes :):

[iceman]

A very interesting development and makes perfect sense:

Leading Kiwifruit Companies to Amalgamate
Seeka Limited (“Seeka”) and Opotiki Packing and Cool Storage Limited (“OPAC”) are to join via amalgamation. This transaction will see Seeka expand further to be operational in all of New Zealand’s major kiwifruit growing regions in a deal that continues to consolidate the New Zealand kiwifruit industry.
The OPAC shareholders will receive new shares in Seeka at the ratio of 1.4833 Seeka shares for every 1 OPAC share held, valuing the net assets of OPAC at $33.94m provided OPAC shareholders approve the transaction with a 75% approval required. Seeka will assume approximately $25.06m of debt as part of the acquisition bringing the total deal to $59.00m.
The offer is subject to a number of conditions, including approval of OPAC’s shareholders to the amalgamation at a shareholders’ meeting to be held on Tuesday 13 April 2021; and approval by Seeka’s shareholders to the issue of up to 7,042,574 new shares in Seeka at the ASM to be held on Friday 16 April 2021. Further details will be advised in the respective Notice of Meeting to be sent to each Company’s shareholders prior to their meetings.
OPAC’s Chairman, Tony de Farias, in announcing the deal, said: “The amalgamation brings together two companies with a long relationship and similar ownership structures. Many OPAC shareholders and growers are also shareholders in Seeka. The Board of OPAC recommends the deal to shareholders believing the enterprise value of $59m to be fair, with good opportunities for growth and synergies. The combined group will deliver efficiencies, new technology and grower support”.
Seeka Chairman, Fred Hutchings said: “The purchase of OPAC is consistent with our strategy and delivers the Eastern Bay of Plenty kiwifruit growing region to Seeka’s operations, a region in which Seeka is already experiencing growth through new orchard developments. The transaction is expected to be accretive to shareholders once the combined business is fully integrated. Seeka expects the bigger business to generate material efficiencies, synergy benefits and cost savings for the benefit of all stakeholders.”
The Boards of Seeka and OPAC have unanimously recommended the amalgamation.
For further information, please contact:
Michael Franks Ian Coventry
Seeka Chief Executive OPAC Chief Executive
021 356 516 021 505 708
www.seeka.co.nz www.opac.co.nz

[peat]

a nice divvy received today considering the small size of my holding in this company.

A 2.5% return on current market price in one payment

Share price rising....

[bull....]

a nice divvy received today considering the small size of my holding in this company.

A 2.5% return on current market price in one payment

Share price rising....

enjoyed my div too

[IAK]

Just watched the SEEKA AGM online. Some highlights:

- Director opened the meeting with a karakia - that's good.

- Did well in Australia - buying and selling (leasing production back) orchards - that's good.

- Successfully managed Covid-19 lockdown - no wage subsidy taken - that's good- round of applause from the shareholders.

- Health and Safety issues - 3 serious harm incidents -one guy came off second best against a fork lift, another got crushed between 2 stacks of kiwifruit and a tractor rolled (near miss) - not good. But, everyone has recovered and now a a new tractor fleet and a new H & S team - that's good.

- Utilising waste kiwifruit for medical purposes i.e., to assist people to evacuate their bowels properly - that's good.

- SEEKA was the only kiwifruit company that sent fruit to rural communities during Covid lockdown. One of the director's, Peter Ratahi Cross, drove the truck - that's good.

- Acquisition of OPAC (Opotiki Packing and Cool store) - $59m approved. Chairman is excited. They've done the due diligence give's SEEKA scale. Time will tell I guess.

- The usual climate change, sustainability, waste minimisation stuff. Pretty standard these days.

- Asked about the potrential impact of the illegally grown gold kiwifruit in China. They don't know yet, could well be an issue :scared:

- Directors got a pay rise. A fait accompli.

- No idea of the quality and quantity of the afternoon tea. One of the downsides of on-line attendance. Not good.

- The live link feed dropped out during question time - not too good.

The end.

[Getty]

Appreciate the update, thankyou.

[whatsup]

Just watched the SEEKA AGM online. Some highlights:

- Director opened the meeting with a karakia - that's good.

- Did well in Australia - buying and selling (leasing production back) orchards - that's good.

- Successfully managed Covid-19 lockdown - no wage subsidy taken - that's good- round of applause from the shareholders.

- Health and Safety issues - 3 serious harm incidents -one guy came off second best against a fork lift, another got crushed between 2 stacks of kiwifruit and a tractor rolled (near miss) - not good. But, everyone has recovered and now a a new tractor fleet and a new H & S team - that's good.

- Utilising waste kiwifruit for medical purposes i.e., to assist people to evacuate their bowels properly - that's good.

- SEEKA was the only kiwifruit company that sent fruit to rural communities during Covid lockdown. One of the director's, Peter Ratahi, drove the truck - that's good.

- Acquisition of OPAC (Opotiki Packing and Cool store) - $59m approved. Chairman is excited. They've done the due diligence give's SEEKA scale. Time will tell I guess.

- The usual climate change, sustainability, waste minimisation stuff. Pretty standard these days.

- Asked about the potrential impact of the illegally grown gold kiwifruit in China. They don't know yet, could well be an issue :scared:

- Directors got a pay rise. A fait accompli.

- No idea of the quality and quantity of the afternoon tea. One of the downsides of on-line attendance. Not good.

- The live link feed dropped out during question time - not too good.

The end.

All good and thats good !!

[IAK]

Yes, all good except the issue of the illegally grown KiwiGold in China.

Impressive performance from the chief executive, Michael Franks.

[blackie]

can someone please explain what this means, from todays announcement

"5. Approval of Issue of new Ordinary Shares in relation to acquisition of
OPAC by Amalgamation
"That Seeka issue up to 7,042,574 new fully paid ordinary shares of Seeka, at
the issue price, and for the consideration, described in the explanatory note
pursuant to the Amalgamation Proposal described in the explanatory note and
accompanying the Notice of Meeting." "

is it like a payment for the recent amalgamation?

[Getty]

yes. .

[Getty]

Seeka is being sought out.

$209K gone through at $5.35

NTA $5.20
P/E 11.35
Div 6.36%

Their slice of the $40M PSA settlement yet to come, and synergies from the OPAC amalgamation.

Broken out on its chart.

[BlackPeter]

Looks like market likes their growth strategy:

12469

SP today up another 11 cents (on top of what the chart shows) :t_up:

Discl: holding and enjoying the trend ...

[IAK]

Gold and red kiwifruit license bids reach record highs this season signalling strong confidence in the industry.

https://www.rnz.co.nz/news/country/442036/gold-and-red-kiwifruit-license-bids-reach-record-highs-this-season

[Getty]

My back of envelope calculations give this share at least 25% SP re rate.

Simply Wall St give it @ 23% on outdated info, no PSA payout or OPAC amalgamation factored in.

[peat]

yes seems cheap
I bought some more... way overloaded now as a percentage of my diminishing portfolio but look at that revenue projection and look at that NTA and look at that PE and the yield too !!

[Getty]

tick
tick
tick
tick.

I was going to say like a smooth Swiss watch, but they are pretty quiet.

[blackie]

paywalled article in Nz herald today

"NZ kiwifruit season off to cracking start with record crop likely, the biggest shipment ever sent to Europe......"

[Getty]

Positive news in that article.

Good to have over a third of the crop already dispatched to international destinations, so soon after picking.

Well done to Zespri, on behalf of Seeka, especially in light of other companies facing shipping issues.
Seems like Zespri have the other 2 thirds well catered for as well, and for a record crop.

19% revenue increase forecast for Seeka.

In spite of this, a large volume of shares has traded today, easing the SP back.

An opportunity for bargain Seeka's?

[epower]

Fruit this year is extremely soft, lots of growers not meeting dry matter requirements for Zespri and a large repack season ahead of us.

This is going to be a pretty tough year for kiwifruit packhouses. 10-15% increases in wages across the board too

I’m hanging out for a less than favourable result for March 2022 financials at this stage

[bull....]

Fruit this year is extremely soft, lots of growers not meeting dry matter requirements for Zespri and a large repack season ahead of us.

This is going to be a pretty tough year for kiwifruit packhouses. 10-15% increases in wages across the board too

I’m hanging out for a less than favourable result for March 2022 financials at this stage

i sold mine recently , had heard of the higher costs also

[Getty]

Thanks for sharing that info.

I would assume the wage increases are being passed on in the sales.

SEK packs 2.5 times more than it produces, for other growers, so if repacking is due to poorer quality, wouldn't that be passed onto those growers, leading to more profit opportunity for SEK?

Thanks in anticipation of a reply.

[bull....]

Thanks for sharing that info.

I would assume the wage increases are being passed on in the sales.

SEK packs 2.5 times more than it produces, for other growers, so if repacking is due to poorer quality, wouldn't that be passed onto those growers, leading to more profit opportunity for SEK?

Thanks in anticipation of a reply.


yea sek makes some money but depends on the grower pool rules which growers ultimately wears all the cost. also when was the fruit soft before picking or after? before pick sek would lose out as less thru put thru packhouse

[Getty]

My understanding with regard to contract packing is that the moment the packhouse forklifts the fruitbins off the back of the truck, they are making money.
Even if say 20% more was rejected in the sorting process to juice, than previous seasons, the packhouse has still done a chargeable job.
That may mean that less full tray stacking/ packing can be charged for compared to previous seasons, but with a record crop coming in, one would offset the other.

The offset would also work for any grower who is sending in more fruit than normal.
While the "packout" is lower, the volume compensates.

[peat]

revenue was given guidance......

[epower]

Thanks for sharing that info.

I would assume the wage increases are being passed on in the sales.

SEK packs 2.5 times more than it produces, for other growers, so if repacking is due to poorer quality, wouldn't that be passed onto those growers, leading to more profit opportunity for SEK?

Thanks in anticipation of a reply.

Wage increases weren’t factored in prior to arrangements with growers so it’s a hit to the bottom line. I’m a Coolstore manager at a competitor to Seeka and it’s a 5-10 million dollar hit to Seeka according to their throughputs and staff levels.

The poorer quality (soft pressure, low dry matter) fruit is two fold. Firstly instead of going into palletised trays/bulk packaging, it goes straight into a reject bin and feeds the pigs or gets made into fruit juice concentrate which is pennies on the dollar, so less volume of fruit for Seeka to charge packaging, packing, logistics, Coolstore, CC checking, etc where they clip the ticket. Secondly for the fruit that does make the cut, it needs to be quality checked more, more thrown to reject, which are a cost that Seeka and the likes can get reimbursed for by growers, however it’s an average of seasons, if Seeka hiked their costs back in Jan/Feb knowing it’s a low dry matter/soft year then who would pack with them? So the costs are outweighing the reimbursement. For any orchard Seeka owns themselves the problems above just compound.

[epower]

yea sek makes some money but depends on the grower pool rules which growers ultimately wears all the cost. also when was the fruit soft before picking or after? before pick sek would lose out as less thru put thru packhouse

Before picking. Essentially growers are waiting for sunny days and cold nights for sugar to accumulate in the fruit, but the fruit is going soft and rotting on the vines whilst they wait.

[epower]

My understanding with regard to contract packing is that the moment the packhouse forklifts the fruitbins off the back of the truck, they are making money.
Even if say 20% more was rejected in the sorting process to juice, than previous seasons, the packhouse has still done a chargeable job.
That may mean that less full tray stacking/ packing can be charged for compared to previous seasons, but with a record crop coming in, one would offset the other.

The offset would also work for any grower who is sending in more fruit than normal.
While the "packout" is lower, the volume compensates.

In a sense, yes still charge for putting fruit into a reject bin for juice/stock feed but you clip the ticket less times.

No Coolstore, no packaging, no condition checking, no loading onto a container truck, where you clip the ticket every time, etc

All I’m saying is, the PE and dividend yield look ripe for the picking, but Seeka has a lot of shareholders that pack and grow kiwifruit and they know what the years been like this far with a week to go of GA packing and a few more weeks of HW

[Getty]

Thanks very much for the enlightenment.

A few things to reflect on there.

[bull....]

good insights thx epower

[bull....]

Kiwifruit growers set to decide on contentious Zespri-China deal, after major diplomatic push

https://www.stuff.co.nz/national/politics/125530554/kiwifruit-growers-set-to-decide-on-contentious-zesprichina-deal-after-major-diplomatic-push


the only winner is china. kiwifruit plantings in china expand regardless of outcome of vote , but if growers approve the deal china gets the expertise to grow it as well. zespri market share in china will never be huge either way as growers in china will eventually market it as made in china which is currently more popular and is the party line for all business in china than overseas brands

[Biscuit]

Kiwifruit growers set to decide on contentious Zespri-China deal, after major diplomatic push



https://www.stuff.co.nz/national/politics/125530554/kiwifruit-growers-set-to-decide-on-contentious-zesprichina-deal-after-major-diplomatic-push


the only winner is china. kiwifruit plantings in china expand regardless of outcome of vote , but if growers approve the deal china gets the expertise to grow it as well. zespri market share in china will never be huge either way as growers in china will eventually market it as made in china which is currently more popular and is the party line for all business in china than overseas brands


When I was a kid, these were Chinese Gooseberries. The plant is a native of China and used there for food for thousands of years. Taken to New Zealand, rebranded as kiwifruit and grown commercially. A new variety, bred in New Zealand, has been taken back to China and grown there commercially .... and we are offended?

Seeka grows fruit in other countries with arrangements with local growers. That is fairly standard practice.

[Balance]

When I was a kid, these were Chinese Gooseberries. The plant is a native of China and used there for food for thousands of years. Taken to New Zealand, rebranded as kiwifruit and grown commercially. A new variety, bred in New Zealand, has been taken back to China and grown there commercially .... and we are offended?

Seeka grows fruit in other countries with arrangements with local growers. That is fairly standard practice.

The gold hybrid variety was developed in NZ and subject to IP protection. That is what this whole issue is about.

[Jiggs]

When I was a kid, these were Chinese Gooseberries. The plant is a native of China and used there for food for thousands of years. Taken to New Zealand, rebranded as kiwifruit and grown commercially. A new variety, bred in New Zealand, has been taken back to China and grown there commercially .... and we are offended?

When I was a kid, chinese gooseberries were smaller than golf balls, and the plants had come from seeds of the 'Yang Tau' or 'Mi Hau Tau' vines that a missionary woman had brought back to Wanganui from the Yangtze gorge area sometime about 1910?. In about 1920? large numbers of seeds from the vines she grew were sent to nurserymen Hayward Wright near Auckland and Bruno Just near Palmerston North.

Hyperactive Bruno grew hundreds of vines and sold them as ornamentals at first, he then cross-pollenated flowers from the sturdiest plants with the biggest fruit, and kept repeating the process until after about 30? years he had a disease-resistant plant, and huge-but-coarse fruit.

Over the same decades Hayward Wright had produced a tasty and moderately large fruited variety, but susceptible to root-rot. So Bruno spent the next ten years figuring out how to graft the soft-tissued Hayward shoots onto his bullet-proof roots. (His grafts kept producing big foaming callouses thought to be disease cankers) When Bruno had it perfected, the NZ kiwifruit boom started, and DSIR staff took over developing other varieties. I worked with a member of the Just family.

The big disease-resistant Hayward/Bruno plants was/is very different from the Yang-Tau vines growing near the Yangtze gorge.

[blackie]

brilliant Jiggs :t_up:
this is why i try to read every post on every thread on sharetrader.
an absolute gem

[Biscuit]

When I was a kid, chinese gooseberries were smaller than golf balls, and the plants had come from seeds of the 'Yang Tau' or 'Mi Hau Tau' vines that a missionary woman had brought back to Wanganui from the Yangtze gorge area sometime about 1910?. In about 1920? large numbers of seeds from the vines she grew were sent to nurserymen Hayward Wright near Auckland and Bruno Just near Palmerston North.

Hyperactive Bruno grew hundreds of vines and sold them as ornamentals at first, he then cross-pollenated flowers from the sturdiest plants with the biggest fruit, and kept repeating the process until after about 30? years he had a disease-resistant plant, and huge-but-coarse fruit.

Over the same decades Hayward Wright had produced a tasty and moderately large fruited variety, but susceptible to root-rot. So Bruno spent the next ten years figuring out how to graft the soft-tissued Hayward shoots onto his bullet-proof roots. (His grafts kept producing big foaming callouses thought to be disease cankers) When Bruno had it perfected, the NZ kiwifruit boom started, and DSIR staff took over developing other varieties. I worked with a member of the Just family.

The big disease-resistant Hayward/Bruno plants was/is very different from the Yang-Tau vines growing near the Yangtze gorge.

So, that's great. Now New Zealand and Chinese growers both benefit from the hard work of Wright and Just and researchers at Hort Research improving a Chinese plant. Surely that is a good thing isn't it? What's the problem?

[Biscuit]

The gold hybrid variety was developed in NZ and subject to IP protection. That is what this whole issue is about.

Except that its not is it? If it were subject to IP protection, we could enforce it. We can't enforce it in China, therefore it is not subject to IP protection, at least in China. So, legally, no its not protected. Morally? Well, I'd say it was a Chinese plant originally, so get over it.

[Joshuatree]

China has screwed us over big time on this. .Over 4000 acres or hectares now of these Goldie's growing there. Growers here have to pay well into 6 figs per hectare.Its a lose/ lose for us.

[Biscuit]

China has screwed us over big time on this. .Over 4000 acres or hectares now of these Goldie's growing there. Growers here have to pay well into 6 figs per hectare.Its a lose/ lose for us.

Growers here have to pay to grow the variety in New Zealand because it is IP protected here. That's just business right, no one is losing. In China, the IP is not protected, they just took cuttings from New Zealand and now they are growing them. So, I don't think they are losing? How is that lose-lose?

[kiora]

IP pretty tricky really. How does this compare to Pinot Noir in NZ
https://www.newworld.co.nz/discover/wine/pinot-noir-history

"Introducing Malcolm Abel
Malcolm Abel was a Customs Officer at Auckland Airport. One day, he discovered a grape vine cutting inside the gumboot of a returning passenger.

Curious, he questioned the passenger and was told the cutting had been taken in secret from the legendary La Tache Vineyard in Domaine Romanee Conti.

This got Abel’s attention!

Abel was in the process of establishing a vineyard in Kumeu, North of Auckland and he saw the value in keeping the cutting. So, rather than destroy it, he confiscated it, saw it through the correct quarantine process and planted it in his vineyard."

[BlackPeter]

IP pretty tricky really. How does this compare to Pinot Noir in NZ
https://www.newworld.co.nz/discover/wine/pinot-noir-history

"Introducing Malcolm Abel
Malcolm Abel was a Customs Officer at Auckland Airport. One day, he discovered a grape vine cutting inside the gumboot of a returning passenger.

Curious, he questioned the passenger and was told the cutting had been taken in secret from the legendary La Tache Vineyard in Domaine Romanee Conti.

This got Abel’s attention!

Abel was in the process of establishing a vineyard in Kumeu, North of Auckland and he saw the value in keeping the cutting. So, rather than destroy it, he confiscated it, saw it through the correct quarantine process and planted it in his vineyard."

I agree. It is just a normal human habit (and actually the habit which brought us to the top of the food chain) to copy / steal / reproduce good ideas ...

Nobody paid IP for copying the use of the wheel or the use of fire ... and New Zealand benefitted as anybody else from copying good ideas (IP) as well as using genetic material developed and grown by others.

Nobody paid IP fees to the people who developed the fruit trees the early settler brought to New Zealand ... and I am sure more than one brought material secretly taken from some of the top growers in Europe who put a lot of effort into growing this particular strain or breed.

Don't think either we can take the moral high ground on this issue while selling e.g. Gouda or Edamer or Parmesan cheese made in New Zealand. We copy / steal ideas and cultures if we can get away with it, and so does anybody else.

Sure - people need to abide the law of their land, and - in general - there is a case for IP protection (as long as it does not strangle general improvements), but pointing fingers to a whole country just because we think that in this particular case some individuals in this country managed to benefit from something developed in New Zealand is pretty ridiculous.

[BlackPeter]

China has screwed us over big time on this. .Over 4000 acres or hectares now of these Goldie's growing there. Growers here have to pay well into 6 figs per hectare.Its a lose/ lose for us.

Actually - It is quite easy to grow Kiwi fruit from their seeds. Given that we sell these fruit for lots of money to overseas countries, what would be wrong with anybody just following these simple steps to grow their own?

https://foodiegardener.com/how-to-grow-kiwi-from-store-bought-kiwi-fruit/

Just because somebody in NZ thinks that they don't like it (I doubt it is illegal ...) - why should somebody in China care ... particularly if they legally bought the fruit they use to grow the plant?

[Joshuatree]

Diff culture for sure.Naive kiwis take the head nodding on ,IP and licensing to find they've been conned..Then there is the fake labelling of fruit. They just don't care.

[RTM]

I recall similar debate re A2M with respect to patents.....

[RTM]

I recall similar debate re A2M with respect to patents.....

[kiora]

A2M milk test Patent expired?
https://www.foodanddrinkbusiness.com.au/news/a2-milk-patent-expires
"A patent filed in New Zealand 20 years ago by the founders of The a2 Milk Company to protect their milk testing method expired yesterday, but the growing company says it's business as usual."

Marketing in ASA?

[peat]

I recall similar debate re A2M with respect to patents.....

unlikely to be relevant imo.
There is no patent for A2 milk though the above link shows a patent for the testing ....

BTW to prevent double posting you need to wait for the hourglass and status bar updates to finish. I Click once and then go and make a cup of tea.

[Baa_Baa]

A2M milk test Patent expired?
https://www.foodanddrinkbusiness.com.au/news/a2-milk-patent-expires
"A patent filed in New Zealand 20 years ago by the founders of The a2 Milk Company to protect their milk testing method expired yesterday, but the growing company says it's business as usual."

Marketing in ASA?

The date of the article appears to be, 4 November 2015

[RTM]

BTW to prevent double posting you need to wait for the hourglass and status bar updates to finish. I Click once and then go and make a cup of tea.

Yes...I succeed with this occasionally. Thanks.

But lately...without touching anything...I seem to bet getting a pop-up message saying " Leave Site ? Changes you made may not be saved." And two boxes...Leave and Cancel. Then it just sits and not sure what I end up doing to exit cleanly. Annoying. Must be really p.......ing off the frequent posters.

[kiora]

The date of the article appears to be, 4 November 2015

Yes it does BB. That's when the milk test patent expired?

[peat]

Then it just sits and not sure what I end up doing to exit cleanly. Annoying. Must be really p.......ing off the frequent posters.

No no we just love our time being soaked up in the name of community spirit!! (Edit - remove stuff that might annoy The Gods)

[Biscuit]

.....But lately...without touching anything...I seem to bet getting a pop-up message saying " Leave Site ? Changes you made may not be saved." And two boxes...Leave and Cancel. ....


I always just click "Leave" and it posts just one message...eventually

[Joshuatree]

Actually - It is quite easy to grow Kiwi fruit from their seeds. Given that we sell these fruit for lots of money to overseas countries, what would be wrong with anybody just following these simple steps to grow their own?

https://foodiegardener.com/how-to-grow-kiwi-from-store-bought-kiwi-fruit/

Just because somebody in NZ thinks that they don't like it (I doubt it is illegal ...) - why should somebody in China care ... particularly if they legally bought the fruit they use to grow the plant?

They don't care because they know they can get away with it,their govt won't pull them up and there is money to be made,slap a zespri sticker on even better,add value ,and zespri paid for it all.Actually 5,000 hectares now ,10 million trays.Zespri naively think marketing illegal Chinese gold kiwis is a solution!?. Fool me once.....no shame over there though,just milk it.;)

[winner69]

Kiwi fruit industry that they PICKED and exported a record amount of fruit this year

Obviously finding labour not a problem after all

Whatever well done that industry

[iceman]

Kiwi fruit industry that they PICKED and exported a record amount of fruit this year

Obviously finding labour not a problem after all

Whatever well done that industry

It was a huge and very expensive problem

[iceman]

Kiwi fruit industry that they PICKED and exported a record amount of fruit this year

Obviously finding labour not a problem after all

Whatever well done that industry

It was a huge and very expensive problem

[Getty]

https://www.nzherald.co.nz/business/green-gold-freeze-dried-avocado-tipped-to-be-new-super-food/YP7H52AUORNY5FMJCFK64DPDKE/

More possible rub off for SEK, following on from Avocado sales up 40% in value, reported in NZ Herald, 11 June 2021.

[peat]

https://www.nzx.com/announcements/375366

the tech sounds fancy.....

Fruitometry’s new service utilises advances in telemetry, imaging and artificial intelligence (AI) using deep neural networks that quickly digitise orchards to provide insightful reports for targeted orchard management, horticultural process control and supply chain fruit volume estimation. Their proprietary software streamlines real-time image processing, AI training annotation, data warehousing, analytics and comprehensive report generation into a scalable service.

Seeka's minority investment of $2.6 million values Fruitometry at $10 million.

https://fruitometry.com/

- density maps - growers can pinpoint areas of orchards that require attention

- low cost - This makes it economic to scan orchards many times each season

12725

[RTM]

From the Fruitometry web site. Amazing technology.

"Orchard labour costs have more than doubled since 2013 and will continue to increase due to short labour supply and increasing wages.
This impact can be mitigated by using the right tools and metrics to optimise labour inputs."

At the risk of getting political...this is one of / the type of productivity advances that NZ Inc needs.
Shortage and cost of labour making us think about doing stuff in a more scientific way.
Good news...amazing technology. Hope its use can be expanded into other crops.

[iceman]

From the Fruitometry web site. Amazing technology.

"Orchard labour costs have more than doubled since 2013 and will continue to increase due to short labour supply and increasing wages.
This impact can be mitigated by using the right tools and metrics to optimise labour inputs."

At the risk of getting political...this is one of / the type of productivity advances that NZ Inc needs.
Shortage and cost of labour making us think about doing stuff in a more scientific way.
Good news...amazing technology. Hope its use can be expanded into other crops.

It would be great but I think we have a long painful way to achieve it. Not at all limited to horticulture but equally applicable to all primary industries and no doubt other industries as well. I know my industry, fishing, is at crisis point here in NZ and there is no short term technological solution to fix it.

[Getty]

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[Getty]

Article in Northern Advocate, 19/7/21.

Northland had record Kiwifruit crop, worth $76M.

Seeka had most of it, with @1.7M trays packed themselves, and mostly Gold variety.

With BOP, Coromandel & East Coast added, should be plenty of cream on the pavlova, and Avocadoes to be tossed into the salad as well.

[Getty]

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[Getty]

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[Getty]

13 cent divvie ann. today, ahead of tomorrow's reults.

[Getty]

Half year profit $30.8M, up 77% on pcp.

Juicy.

[BlackPeter]

HY results are out ... looking good but full year guidance looking amazing:

https://www.nzx.com/announcements/377529

Basically expecting to repeat the big earnings from last year and on top of that expected settlement from the crown for Kiwi fruit disease ...:



Full year operational guidance
Seeka has substantially improved operational earnings in the period. Full-year net profit before tax (NPBT) is forecast to be between $13.5m and $16.0m. This includes $1.4m of restructuring and acquisition costs, and excludes any one-off gains or extraordinary items (should they settle in the year) and $1.8m of OPAC profit to the acquisition date (NPBT). Note that $9m of pcp NPBT was from a gain on orchard sales.

New Zealand dollars ($ millions)
FY21 Guidance Lower range $13.5m: Change on FY20 ( 17%)
FY21 Guidance Upper range $16.0m: Change on FY20 ( 2%)
FY20 Audited Net profit before tax $16.3m

Full year guidance
Further to the full year operational guidance of net profit before tax, Seeka expects a one-off extraordinary gain from the successful settlement of the kiwifruit claim against the Crown. The actual amount to be received by Seeka is unknown with the distribution subject to High Court approval, with the timing of payment expected to be received before the end of 2021. Seeka is estimating that its share of the distribution could lift the net profit before tax for the 2021 year to between $20.0m and $22.0m.

Seeka - never can have to many (well, at least not at the moment ;) ).

[RTM]

Yes...another pleasing result. Its interesting....for all the bleating about labour shortages etc etc....the Kiwifruit and apples seem to be getting picked, the cows are milked etc etc.
3.5% of our portfolio.

[Filthy]

reported NTA of $5.44 as well...

[BlackPeter]

What a pretty picture:

12851

But wait, there is more:


The company delivered on its strategy to improve earnings while delivering operational excellence, registering multiple highlights across the business in the six months to June. This included the purchase of Ōpōtiki Packing and Cool Storage Limited (OPAC) on 4 May, and in July announced a minority stake in the high-tech orchard-focussed start up Fruitometry. As OPAC was purchased mid-season and had already earned 85% of its full-year EBITDA prior to takeover, Seeka will incur the operating overheads for the remainder of 2021. From next year, these earnings will be recorded in Seeka’s Group f inancial statements. The business is now integrated, operating and cost structures reset, and synergy savings are on target. Acquisition and restructuring costs are included in this interim result.

I take that that 2022 will have potential (obviously, weather permitting - this is agriculture) to trump even a great 2021 ...

[iceman]

A great result indeed. Well done SEK

[BlackPeter]

Yes...another pleasing result. Its interesting....for all the bleating about labour shortages etc etc....the Kiwifruit and apples seem to be getting picked, the cows are milked etc etc.
3.5% of our portfolio.

To be fair - they paid something like $1.9 m for MIQ fees (to get some workers in) alone. Just imagine how the result would have looked without Covid :):

[Filthy]

seller depth looks very slim; reckon this is only going to go one way for awhile!

[Getty]

Interesting to note what causes SP fluctuations.

In 2017, an updated announcement of estimated NETT Profit AFTER tax of $7.8M, led to a SP of $7.10

Today, an ann. of estimated NP Before Tax of $20/22M.

Where will that take the SP?, considering more efficiencies and synergy than 2017.

Worthwhile to compare result to SKL on a pro rata basis as well.

[iceman]

Interesting to note what causes SP fluctuations.

In 2017, an updated announcement of estimated NETT Profit AFTER tax of $7.8M, led to a SP of $7.10

Today, an ann. of estimated NP Before Tax of $20/22M.

Where will that take the SP?, considering more efficiencies and synergy than 2017.

Worthwhile to compare result to SKL on a pro rata basis as well.

I think you will find the shares on issue have nearly doubled in that time, which needs to be taken into account

[Getty]

I think you will find the shares on issue have nearly doubled in that time, which needs to be taken into account

Yes. fair comment.
16/10/17 17,521,279 shares.
4/5/21 39,430,174 shares, after merger with OPAC.

[peat]

I think you will find the shares on issue have nearly doubled in that time, which needs to be taken into account

yeh thx for quantifying that - I was thinking that was the case

still happy with eps growth tho eh!?

my biggest holding ;+) tho have tended to overpay but despite the vagaries of horticulture I see this as long term resilient. so I enjoy the fruit of the dividends and accept one year they might not be there coz you know stuff happens.

also happy with the corporate side of the business on top of the pure horticultural side.

[iceman]

yeh thx for quantifying that - I was thinking that was the case

still happy with eps growth tho eh!?

my biggest holding ;+) tho have tended to overpay but despite the vagaries of horticulture I see this as long term resilient. so I enjoy the fruit of the dividends and accept one year they might not be there coz you know stuff happens.

also happy with the corporate side of the business on top of the pure horticultural side.

Yes I added a bit this morning after reading the report. Still nowhere near to what I had a few years ago though.
I'm happy with how this one is sailing now. It is a very different and much stronger business to what it was 2-3 years ago and it would be great to see them using the newly created synergies to become more efficient and grow EPS to further reduce debt and continue to pay moderately decent dividends. I'd also like to see some dividend to SEK from the Australian business which has not been as good as I was hoping.

[Getty]

Using current data, my target price is $6.30, and @ 5% divvie based on current price, keeps me in kiwifruit pavlova.

[iceman]

Using current data, my target price is $6.30, and @ 5% divvie based on current price, keeps me in kiwifruit pavlova.

12 months target ? I'd agree with that.

[Getty]

I say near term, as soon as PSA settlement money arrives.

[nztx]

Yes. fair comment.
16/10/17 17,521,279 shares.
4/5/21 39,430,174 shares, after merger with OPAC.


still pretty good result over that one too -- I'm sharing the pavlova here BTW

still not a lot of shares on issue - obviously merger has seen benefits

not a crumb in sight in the other thread -- the resident snails from over Broken Hill Hobby mine must have got in early .. ;)

[iceman]

While the result and outlook is good for SEK, good enough for me to add a few, we need to be mindful of the tough market condition. This from a newsletter yesterday:

"This week Zespri has released the first forecast for this year’s crop. The forecast is for substantially reduced orchard gate returns per tray, and returns per hectare at the lower end of the earlier forecast ranges. Uncertainty remains in the forecast, with cost pressure shipping issues and foreign exchange movements all contributing to a lower per tray return. Thankfully yields are up and this will remedy the reduction to some extent."

[bull....]

looking good for new highs soon , brought back in a while ago

[nztx]

looking good for new highs soon , brought back in a while ago


hope Getty's SEK pavlova doesn't evaporate before he gets closer to seeing it .. ;)

[bull....]

hope Getty's SEK pavlova doesn't evaporate before he gets closer to seeing it .. ;)

nah getty be looking good. this is a growth stock with growing yield , new highs soon

[iceman]

Yet another acquisition :

SEK
14/09/2021 12:23
TRANSACT
PRICE SENSITIVE
REL: 1223 HRS Seeka Limited

TRANSACT: SEK: SEEKA ANNOUNCES FURTHER KIWIFRUIT ACQUISITION

14 September 2021
SEEKA ANNOUNCES FURTHER KIWIFRUIT ACQUISITION BY AMALGAMATION

Seeka Limited ("NZX:SEK") has entered an amalgamation agreement to acquire
leading Northland kiwifruit business Orangewood Limited ("Orangewood").

Orangewood shareholders are offered 0.6630 new Seeka shares and $1.35 in cash
for every Orangewood share. The issue price for each new Seeka share is $5.33
being the volume weighted average price of Seeka shares traded on the NZX
Main Board over the 10 business days ended 13 September 2021 (all fractions
of Seeka Shares are to be rounded up to the nearest whole number).

The amalgamation consideration values Orangewood net assets at $4.71m. Seeka
will assume approximately $1.84m of debt as part of the acquisition bringing
the total transaction value to $6.55m.

The amalgamation proposal released with this announcement summarises certain
key terms and conditions of the acquisition by amalgamation, including that
the offer is conditional on 75% or more of Orangewood shareholders voting in
favour of the amalgamation at a meeting of Orangewood shareholders intended
to be held on Friday 1 October 2021.

If the Amalgamation becomes effective, up to 639,302 new Seeka shares,
representing approximately 1.6214% of the total number of shares currently on
issue, will be issued on the effective date described in the amalgamation
proposal. No recipient of new Seeka shares is a Director of Seeka or an
Associated Person (as that term is defined in the NZX Listing Rules) of Seeka
or a Director of Seeka.

Orangewood Chair Brad Davies says:
"The amalgamation of Orangewood, which needs capital investment, with Seeka
which has invested in Northland, has available processing capacity and a
proven track record of delivering competitive returns to its growers and
stakeholders, makes sense from every perspective and we recommend it to
Orangewood stakeholders."

Seeka Chair Fred Hutchings says:
"This amalgamation is consistent with Seeka's heartland growth strategy,
further expanding our service delivery in the key Northland region. Seeka
expects the amalgamation will be accretive to shareholders upon full
integration, with the bigger business generating material efficiencies,
synergies and cost savings that will benefit all stakeholders."

The Boards of Seeka and Orangewood unanimously recommended the amalgamation.

[bull....]

Yet another acquisition :

SEK
14/09/2021 12:23
TRANSACT
PRICE SENSITIVE
REL: 1223 HRS Seeka Limited

TRANSACT: SEK: SEEKA ANNOUNCES FURTHER KIWIFRUIT ACQUISITION

14 September 2021
SEEKA ANNOUNCES FURTHER KIWIFRUIT ACQUISITION BY AMALGAMATION

Seeka Limited ("NZX:SEK") has entered an amalgamation agreement to acquire
leading Northland kiwifruit business Orangewood Limited ("Orangewood").

Orangewood shareholders are offered 0.6630 new Seeka shares and $1.35 in cash
for every Orangewood share. The issue price for each new Seeka share is $5.33
being the volume weighted average price of Seeka shares traded on the NZX
Main Board over the 10 business days ended 13 September 2021 (all fractions
of Seeka Shares are to be rounded up to the nearest whole number).

The amalgamation consideration values Orangewood net assets at $4.71m. Seeka
will assume approximately $1.84m of debt as part of the acquisition bringing
the total transaction value to $6.55m.

The amalgamation proposal released with this announcement summarises certain
key terms and conditions of the acquisition by amalgamation, including that
the offer is conditional on 75% or more of Orangewood shareholders voting in
favour of the amalgamation at a meeting of Orangewood shareholders intended
to be held on Friday 1 October 2021.

If the Amalgamation becomes effective, up to 639,302 new Seeka shares,
representing approximately 1.6214% of the total number of shares currently on
issue, will be issued on the effective date described in the amalgamation
proposal. No recipient of new Seeka shares is a Director of Seeka or an
Associated Person (as that term is defined in the NZX Listing Rules) of Seeka
or a Director of Seeka.

Orangewood Chair Brad Davies says:
"The amalgamation of Orangewood, which needs capital investment, with Seeka
which has invested in Northland, has available processing capacity and a
proven track record of delivering competitive returns to its growers and
stakeholders, makes sense from every perspective and we recommend it to
Orangewood stakeholders."

Seeka Chair Fred Hutchings says:
"This amalgamation is consistent with Seeka's heartland growth strategy,
further expanding our service delivery in the key Northland region. Seeka
expects the amalgamation will be accretive to shareholders upon full
integration, with the bigger business generating material efficiencies,
synergies and cost savings that will benefit all stakeholders."

The Boards of Seeka and Orangewood unanimously recommended the amalgamation.

franks said they were a growth stock so its good to see they are living up to what he says. probably plenty more to come

[Getty]

tu te fruity...

[Muzz1234]

Good to see them growing hopefully a good little merger may have to google them see what I can find out about orangewood

[bull....]

Good to see them growing hopefully a good little merger may have to google them see what I can find out about orangewood

https://orangewood.co.nz/

see on there latest news page they have 3 big orchard developments going on

The attached photos show one of these developments which will be one of New Zealand’s biggest gold kiwifruit orchards - once completed the orchard will span approximately 75 hectares in total and will be completed over 3 phases. Phase 1, which is currently under construction is 28 hectares.

https://orangewood.co.nz/news/6/41/New-Developments

so seeka brought a company which was in a growth phase itself. cool win win more earnings to factor in once these developments come on

[bull....]

ex div this friday , not to late to get your 13cps dividend be quick 2.4% return better than the bank

[peat]

confess I reduced into this rally, as it was over 20% of my portfolio.

I gotta be slightly conservative esp with horticulture.

(but I have a history of selling way too soon! )

[bull....]

ceo buying shares on market at 5.15 , always a good sign

https://www.nzx.com/announcements/380051

[Biscuit]

Someone sold a big volume at a bit of a discount today. Market sentiment a bit weak at the moment.

[iceman]

Someone sold a big volume at a bit of a discount today. Market sentiment a bit weak at the moment.

Great. I picked up a few of them 😉

[BlackPeter]

Great. I picked up a few of them ��

Welcome on board!

I am pretty confident they will do well over the next years to come - they are currently implementing a quite impressive and sensible growth strategy ... and even if everything might break down in the years to come, people always will need and want fresh food and fruit.

[iceman]

Welcome on board!

I am pretty confident they will do well over the next years to come - they are currently implementing a quite impressive and sensible growth strategy ... and even if everything might break down in the years to come, people always will need and want fresh food and fruit.

Been onboard again since March. Slowly adding a few more. I like what I’m seeing.

[Rawz]

I bought in on Friday. First time holder, long time follower. SP seemed quite attractive- below what the CEO recently paid and before that below what the recent amalgamation shares were priced at.

Sek have a good growth feel about it. I am looking to slightly reduce retail stocks and move some money into comvita and sek. Probably good to be in food when inflation is about.

[nztx]

Been onboard again since March. Slowly adding a few more. I like what I’m seeing.

same here too

[Southern Lad]

The Orangewood amalgamation looks to be a sensible approach to continuing the SEK growth story and also cosying up to some additional growers. I suspect that in the short term post the amalgamation becoming effective, there will be some Orangewood former shareholders who will take advantage on the liquidity they now have through having shares in a NZX listed entity to sell some of their shares. I suspect this will suppress the SEK share price in the short term and if you believe in the SEK long term story might provide a good buying opportunity.

[Teatree]

So do you think the potental banning of the "Hi cane" spray will have any impact. Almost got on board until this came up in the last week or so.

[Southern Lad]

So do you think the potental banning of the "Hi cane" spray will have any impact.

I don’t totally understand the potential impact but from what I understand:



The EPA hasn’t reached a final decision, with submissions on the proposal to ban it still being received. However, given it has been banned in Europe and some other countries including the US have it under review, I assume it is more likely than not it will be banned in NZ.
The proposal is to phase out over five years, so all of the impact is not instant.
Hi-Cane has greater benefits in warmer climates, so presumably Northland Kiwifruit more impacted that BOP kiwifruit. BOP a far bigger part of SEK’s business than Northland.


Question is what would the consequences for SEK will be:



SEK operated orchards less profitable?
Reduced incentive to plant new Kiwifruit orchards if financial returns reduce?
Total crop reduces, potentially having some upwards pressure on market price of fruit?
Less capital investment required by SEK to expand packhouse facilities?
Pressure on chemical companies to develop a safer alternative more quickly than they would otherwise?

The EPA has been working on the matter for some time, so assume the announcement not a total surprise. SEK has still been actively growing its business and the CEO has been buying additional shares on market so I assume SEK directors and management have confidence in SEK’s future.

[iceman]

I bought in on Friday. First time holder, long time follower. SP seemed quite attractive- below what the CEO recently paid and before that below what the recent amalgamation shares were priced at.

Sek have a good growth feel about it. I am looking to slightly reduce retail stocks and move some money into comvita and sek. Probably good to be in food when inflation is about.

I hear you and agree. I am around 50% in food and supplements production on the NZX/USX with my portfolio and am likely to go even higher in the medium term future.

[Rabbi]

I recently bought in as they seem to know what they are doing and the dividend yield was another factor. Downside risk is things such as weather and disease,
but if these don't eventuate should be plenty of growth.

And of course if the share price stagnates for no good reason it becomes a takeover target.

[bull....]

seeka shareholder update to be held on zoom

Seeka Seeka Limited [NZX:SEK] advises that its stakeholder update for 2021 will be on Tuesday 26 October 2021 starting at 3pm.

https://www.nzx.com/announcements/380726

[turnip]

I bought more at 5.05 this week, Seeka is now 40% of my food theme, food is about 20% of my overall portfolio. I have diversified my horticultural holdings a bit though as I see risk being too concentrated in kiwifruit.

I like the straight-talking CEO, and it is good to see the company coping well with so many challenges and still making good progress on its growth plan. Likely more challenges ahead though.

I also like investing in companies whose products I buy myself, as a sort of practical hedge. Avocados are real cheap now, not good for growers, but I am eating more in a fortnight than I normally eat in a year. Mashed avocado, cider vinegar, salt, lots of black pepper, yum.

[Biscuit]

I bought more at 5.05 this week, Seeka is now 40% of my food theme, food is about 20% of my overall portfolio. I have diversified my horticultural holdings a bit though as I see risk being too concentrated in kiwifruit.

I like the straight-talking CEO, and it is good to see the company coping well with so many challenges and still making good progress on its growth plan. Likely more challenges ahead though.

I also like investing in companies whose products I buy myself, as a sort of practical hedge. Avocados are real cheap now, not good for growers, but I am eating more in a fortnight than I normally eat in a year. Mashed avocado, cider vinegar, salt, lots of black pepper, yum.

$5.05 was a good price. I'm a bit overweight SEK at the moment and decided to sell a few last week at $5.17. Still currently one of my bigger holdings as I think they have a good growth strategy and are fairly, if not under, priced. Not sure if they are a good natural hedge for the price of food though as if there is a bad harvest year, the price of food goes up and the price of the shares will come down?

[Muzz1234]

Seeka is my 2nd biggest holding after alibaba
Guess the main risk associated is China and gold kiwifruit situation there what may happen in future dent profits not sure. Or the affect possibility of banning of the certain spray will affect northland operations and orangewood acquisition and development. It is one of the few companies on nzx doesn't seem fully priced

[turnip]

$5.05 was a good price. I'm a bit overweight SEK at the moment and decided to sell a few last week at $5.17. Still currently one of my bigger holdings as I think they have a good growth strategy and are fairly, if not under, priced. Not sure if they are a good natural hedge for the price of food though as if there is a bad harvest year, the price of food goes up and the price of the shares will come down?

Good point, it only really works for prices lead by exports or over-production. For local under-production something else is needed. Investments in non-hydro electricity generation might help if drought is the cause of the bad harvest, but my ultimate hedge against high local food prices is my vegetable garden.

[Biscuit]

....... my ultimate hedge against high local food prices is my vegetable garden.

Yes, mine too. I also have a few paddocks of canterbury lamb and thirty chardonnay vines so I should be comfortable whatever happens to the price of food :).

[percy]

Yes, mine too. I also have a few paddocks of canterbury lamb and thirty chardonnay vines so I should be comfortable whatever happens to the price of food :).

Chardonnay with roast lamb.?

[Biscuit]

Chardonnay with roast lamb.?

Not the perfect combination, but don't listen to the food snobs, lamb tastes good with anything. Chardonnay can cope with cooler climes so I've started experimenting with that first (also chardonnay is very versatile for winemaking). Later on I would like to experiment with growing Merlot but I may have to do more for frost protection.

[percy]

Not the perfect combination, but don't listen to the food snobs, lamb tastes good with anything. Chardonnay can cope with cooler climes so I've started experimenting with that first (also chardonnay is very versatile for winemaking). Later on I would like to experiment with growing Merlot but I may have to do more for frost protection.

Just plant more Chardonnay.lol.
I agree lamb tastes good with anything.

[BlackPeter]

Not the perfect combination, but don't listen to the food snobs, lamb tastes good with anything. Chardonnay can cope with cooler climes so I've started experimenting with that first (also chardonnay is very versatile for winemaking). Later on I would like to experiment with growing Merlot but I may have to do more for frost protection.

I remember a handful of red German grapes which can cope quite well with frost - Trollinger and Lemberger spring to mind. Not sure, though I have ever seen them in NZ, but hey - this might be an opportunity!

[Muse]

Yes, mine too. I also have a few paddocks of canterbury lamb and thirty chardonnay vines so I should be comfortable whatever happens to the price of food :).

& you are set if civalisation ever happens...
I'm jealous. If I had a magic wand i'd have that set up too (but with pinot gris - my fav)

[Biscuit]

I remember a handful of red German grapes which can cope quite well with frost - Trollinger and Lemberger spring to mind. Not sure, though I have ever seen them in NZ, but hey - this might be an opportunity!

interesting

Modern genetic testing identifies historic grapevine in Central Otago - Bragato Research Institute (bri.co.nz) (https://bri.co.nz/2021/10/12/modern-genetic-testing-identifies-historic-grapevine-in-central-otago/)

[peat]

so how much wine do Seeka produce?

[BlackPeter]

interesting

Modern genetic testing identifies historic grapevine in Central Otago - Bragato Research Institute (bri.co.nz) (https://bri.co.nz/2021/10/12/modern-genetic-testing-identifies-historic-grapevine-in-central-otago/)

Cheers for that. First time I heard about Trollinger in NZ. I might check with them whether I can buy a few bottles to test whether it tastes like the wine I know from Wuerttemberg ... though it sounds I still need to wait a wee while - first commercial harvest in 2023!

[Onion]

so how much wine do Seeka produce?

Hopefully none (as I’m sure you know Peat :)).

Not that I’ve got anything against wine, but that’s not why I own SEK shares.

[peat]

Hopefully none (as I’m sure you know Peat :)).

Not that I’ve got anything against wine, but that’s not why I own SEK shares.

exactly Onion
I also drink wine occasionally - recently had a bit of a pinotage dive.
BUT wgaf

do we think T+G result affects Seeka's situation?

[Onion]

I’m hoping that SEK have already nailed the kiwifruit harvest and export for this season - and that Covid impacts are relatively small.

We’ll find out on 26/10.

[bull....]

Seeka is my 2nd biggest holding after alibaba
Guess the main risk associated is China and gold kiwifruit situation there what may happen in future dent profits not sure. Or the affect possibility of banning of the certain spray will affect northland operations and orangewood acquisition and development. It is one of the few companies on nzx doesn't seem fully priced

i believe its not fully priced. if the world goes stagflation staple stocks are a good hedge to have in a portfolio

[peetter]

Growers in BoP offering $25.5+ for kiwifruit bud thinning.

[Muzz1234]

Is that what they advertise as a set hourly rate or potential on piece rates reasonable money for unskilled labor

[peetter]

It's hourly. Not sure if it's including or excluding holiday pay. 6 years ago it was $15ph.

[nick222]

It's hourly. Not sure if it's including or excluding holiday pay. 6 years ago it was $15ph.

If it's quoted as an hourly rate for employees it legally has to be excluding holiday pay. This wouldn't be surprising as the going rate for an employee as it was the median hourly rate in previous years that Immigration was using for Essential Skills visas (went up to $27 this year). The overall shortage of labour at the moment has probably set this as a 'de facto' minimum wage in some industries.

[Muzz1234]

Hopefully things have improved in the hort viticulture industries compared to the days when I managed contracting crews seemed to attract rather crooked owners

[nick222]

From what I hear they are still up there with Chorus in terms of questionable subcontracting practices. Potentially a few investment risks there both in terms of regulatory risk given the current government's signalling that it wants to move on the issue of contract workers, as well as labour shortages as well.

The RSE scheme with the seasonal workers from the islands has been a great model for both the producers and the workers coming here.

[Ricky-bobby]

I’m steering away from primary industry at this stage. I’m in the wine sector and we have just been coped with a 8% labour increase cost…The govt will give u something, but also penalise u for using it… kiwi fruit might have a bit more margin give, but others will be hurting.

[iceman]

I’m steering away from primary industry at this stage. I’m in the wine sector and we have just been coped with a 8% labour increase cost…The govt will give u something, but also penalise u for using it… kiwi fruit might have a bit more margin give, but others will be hurting.

Thanks for sharing what's happening in your sector. The meat industry increasing minimum wages by 10% as well, but I don't think these increases are limited to primary industries. This is going on throughout our adrenaline filled but stuttering economy (printed money, lack of suitable staff and never ending lockdowns).
I'm heavy into primary industries and believe they will continue to drive our economy out of our current precarious situation.

[bull....]

Seeka upgrades market guidance
https://www.nzx.com/announcements/381418


good stuff looking forward to more acquisitions

[Rawz]

Seeka upgrades market guidance


https://www.nzx.com/announcements/381418


good stuff looking forward to more acquisitions

Market expecting more i guess. Down on the news

[GTM 3442]

Seeka upgrades market guidance
https://www.nzx.com/announcements/381418


good stuff looking forward to more acquisitions

An interesting snippet on National Radio today about the challenges to the kiwifruit industry around orchard prices and bare kiwifruit-suitable bare land, about 3 minutes in.

https://www.rnz.co.nz/national/programmes/ruralnews/audio/2018817323/midday-rural-news-for-21-october-2021

[bull....]

Market expecting more i guess. Down on the news

just been someone selling last few weeks. patience and they will go just like flies do

[nztx]

possibly just part of a general downtrend .. maybe Covid & a bit of Northern sector gloom at play at the mo ? ;)

[percy]

just been someone selling last few weeks. patience and they will go just like flies do
'
I bought a few today @ $5.10.for the wife's portfolio.

[Onion]

'
I bought a few today @ $5.10.for the wife's portfolio.

Glad to see you offering support Percy.

I've got a low bid in the queue but have pitched a bit lower just in case some negative sentiment surfaces :cool:.

[Felonius]

AS a former OPAC shareholder I am speaking with first-hand knowledge.

Seeka and OPAC merged earlier this year.
Prior to that event OPAC shares had been illiquid for several years; ie. no sales went through.

In addition to their shares in the packhouse many OPAC shareholders owned large kiwifruit orchards.
This merger has given them an opportunity to take some money off the table.

I expect this process to continue for a year or so.

[percy]

Thank you for your post.

[Felonius]

I should add that in my view Michael Franks is an excellent CEO.
He has been there a long time.
Also, the board is well-versed in the industry with several of the directors having significant skin in the industry.

[Muzz1234]

Where do you think kiwifruit industry going to head from here felonius is it reaching its peak in your opinion or do you think returns will continue to be strong in the industry

[Felonius]

Where do you think kiwifruit industry going to head from here felonius is it reaching its peak in your opinion or do you think returns will continue to be strong in the industry

I don't know Muzz.
Offshore prices for the fruit seem to be holding up despite ever increasing exports from New Zealand.
I guess the middle classes in Asia are continuing to expand so that bodes well for the industry.

[bull....]

'
I bought a few today @ $5.10.for the wife's portfolio.

good to see you adding one of the few undervalued and not fully appreciated by the market stocks left on the market percy to your portfolio.

[bull....]

I should add that in my view Michael Franks is an excellent CEO.
He has been there a long time.
Also, the board is well-versed in the industry with several of the directors having significant skin in the industry.

i agree franks is doing a good job.
i did get a bit pissed with them last yr over there communication around the company prospects and div but communication around company and what franks wants to do to grow the company is way better this year. clear growth strategy and plan.
looking forward to a growing company with increasing dividends in the yrs ahead

[iceman]

AS a former OPAC shareholder I am speaking with first-hand knowledge.

Seeka and OPAC merged earlier this year.
Prior to that event OPAC shares had been illiquid for several years; ie. no sales went through.

In addition to their shares in the packhouse many OPAC shareholders owned large kiwifruit orchards.
This merger has given them an opportunity to take some money off the table.

I expect this process to continue for a year or so.

Good post Felonius. I've been to a couple of Seeka AGMs and spoken to many growers/shareholders. I think it is a great benefit for ALL shareholders to be listed and give the growers an opportunity to freely and easily sell & buy shares at a fair market value. I like holding SEK (& SFF) for the very reason growers (farmers) are heavily involved and their interests are very important for the company. Long term that is good for all SH.

I agree with your comments on Michael Franks. He is very experienced in this industry, a smart guy and has a lot of skin in the game himself. SEK is a very well managed company in a great NZ industry and in my view a very solid investment.

[peat]

the presentation seems to be showing some great numbers.

H1
65 cents earnings per share 1− 57 cents in pcp – up 14%$5.92 net assets per share – up 9%

[iceman]

the presentation seems to be showing some great numbers.

H1
65 cents earnings per share 1− 57 cents in pcp – up 14%$5.92 net assets per share – up 9%

Yes very good numbers and a good informative webinar.

A few points from my scribbled notes, in no particular order:

# A slight upgrade in FY profit forecast from the forecast in August. FY21 NPAT now expected at $ 17-19m and should the High Court settlement distribution be decided prior to year end, expect another $7m

# For the HY21, revenue +26%. NPBT +77% and NPAT +12% (one off $9m from asset sales last year)
# Net debt at the end of period down $1.5m despite $21.9m debt added for OPAC purchase and confirmed debt down another $32 m by end of Sept, which is great
# CAGR last 3 years 22%
# Labour shortages a major and expensive issue that creates constant challenges
# Safety record good this year with no major harms
# OPAC business fully integrated and is responsible for the profit upgrade so that has gone very well and is now operating ahead of forecast
# Awaiting approval for Orangewood acquisition but if agreed, will take SEK operation in Northland to 100% capacity utilisation
# $20m to be spent on upgrades on packing lines and coolstores prior to 2022 harvest season
# Seeka Fresh (supermarket, avocados, kiwiberries) increasing revenue and is profitable
# Australia I still find a bit disappointing but is delivering small profits
# Avocado prices in Australia down 2/3 due to bumper crop
# OPAC & Orangewood (if finalised) expected to deliver a revenue increase for SEK of $54m in 2022
# Chairman confirmed unchanged dividend policy of up to 75% of NPAT
# No current plans to raise capital but always on the lookout for growth opportunities
# Zespri confident of ongoing Worldwide market growth, particularly with Gold

I have been a holder in SEK for the last 8-10 years (except a few months period from mid/late 2018- early 2021) and feel SEK is possibly in the strongest position it has ever been in, achieving obvious positive results from benefits of scale.
A very happy holder

[bull....]

good presentation alright.

plenty of opportunity in the aus operations for growth.
nthland will become a hub for the expanding horticulture up that way

[Onion]

# No current plans to raise capital but always on the lookout for growth opportunities

Growth and diversification were emphasised.

There was no indication of what diversification means for Seeka. New crops? New services? New locations?

[peat]

Growth and diversification were emphasised.

There was no indication of what diversification means for Seeka. New crops? New services? New locations?

Fruitometry is one example imo.

But there is increasing geographic diversification and, the post harvest operations processing is a different operation to simply growing. complimentary of course but adds an element of diversification. And only some of the orchards are owned, others are leased. So diversification is occurring in many ways. which is great because horticulture is risky. True that the type of crop is almost exclusively kiwifruit except australia where there are a moderate amount of pears and a few nashi .

[iceman]

Fruitometry is one example imo.

But there is increasing geographic diversification and, the post harvest operations processing is a different operation to simply growing. complimentary of course but adds an element of diversification. And only some of the orchards are owned, others are leased. So diversification is occurring in many ways. which is great because horticulture is risky. True that the type of crop is almost exclusively kiwifruit except australia where there are a moderate amount of pears and a few nashi .

That's what I was thinking as a good example of where they may try and increase business. With the size of the business now they may be well placed to develop technology for growers, harvesters and packers that could be sold industry wide.
Also possibly using strengthened relationships through Seeka Fresh with more direct sales to supermarkets and other distributors, for both fruit and Kiwi Crush ?

[bull....]

Growth and diversification were emphasised.

There was no indication of what diversification means for Seeka. New crops? New services? New locations?

taken with sustainable earnings mentioned on the same page maybe they looking for aquisition to smooth out the kiwifruit and avo business

[IAK]

$40m govt payout to the industry for the PSA debacle. https://www.rnz.co.nz/news/country/436347/kiwifruit-growers-psa-case-government-agrees-to-pay-sector-40-million

[Muzz1234]

Anyone know what percentage of the 40m seeka would get?

[Onion]

Anyone know what percentage of the 40m seeka would get?

Their announcement from 21/10/2021 says:


Further to the revised operational guidance at a profit before tax level,
Seeka expects a one-off extraordinary gain from the successful settlement of
the kiwifruit claim against the Crown.
The actual amount to be received is unknown with the distribution subject to
High Court approval with the timing expected before the end of 2021. Seeka is
estimating that its share of the distribution could lift the next profit
before tax for the 2021 year to between $22.0m and $24.0m.

So no explicit amount stated.

[percy]

"Upgraded operational full year net profit before tax range $15.0m to $17.0m
Additionally
Further to the revised operational guidance at a profit before tax level, Seeka expects a one-off
extraordinary gain from the successful settlement of the kiwifruit claim against the Crown. The
actual amount to be received is unknown with the distribution subject to High Court approval with
the timing expected before the end of 2021. Seeka is estimating that its share of the distribution
could lift the next profit before tax for the 2021 year to between $22.0m and $24.0m."

I take to mean approx $7mil.

[Southern Lad]

Maths looks straight forward to me - Seeka's share is expected to be $7m before tax.

Will Seeka use the $5m after tax to declare a special fully imputed cash dividend of 12.5 CPS or will they factor the cash into the year end dividend payment or will they use the cash to further reduce debt?

[Biscuit]

Maths looks straight forward to me - Seeka's share is expected to be $7m before tax.

Will Seeka use the $5m after tax .....

Interesting concept that they should have to pay tax back to the government on compensation money received from the government?

[Muzz1234]

Hopefully get reinvested back into business instead of dividend or a small investment in technology side of horticulture

[peat]

Interesting concept that they should have to pay tax back to the government on compensation money received from the government?

it would be compensation for lost profit I imagine. (dont know for sure)

[iceman]

My highlighting !

GENERAL: SEK: Seeka secures additional banking facilities

Seeka Limited [NZX:SEK] advises that it has successfully negotiated an
improved funding facility with a syndicate of banks to support Seeka's
continuing growth.

The syndicate led by Westpac includes ASB, Rabobank and BNZ and provides
facilities of NZD$190 million, up from the previous facility limits of
approximately NZD$152million.

Seeka advises that there was excellent demand from banks to provide debt
facilities to the company. Whilst borrowings will not increase immediately,
the increased facility will support the near term growth of the group
including capital expenditure to support anticipated volume increases and
potential acquisitions.

Seeka thanks the Westpac (Lead Arranger) and Harmos Horton Lusk (legal
adviser) and management for achieving a satisfactory refinancing outcome.

[bull....]

My highlighting !

GENERAL: SEK: Seeka secures additional banking facilities

Seeka Limited [NZX:SEK] advises that it has successfully negotiated an
improved funding facility with a syndicate of banks to support Seeka's
continuing growth.

The syndicate led by Westpac includes ASB, Rabobank and BNZ and provides
facilities of NZD$190 million, up from the previous facility limits of
approximately NZD$152million.

Seeka advises that there was excellent demand from banks to provide debt
facilities to the company. Whilst borrowings will not increase immediately,
the increased facility will support the near term growth of the group
including capital expenditure to support anticipated volume increases and
potential acquisitions.

Seeka thanks the Westpac (Lead Arranger) and Harmos Horton Lusk (legal
adviser) and management for achieving a satisfactory refinancing outcome.

probably lining up another acquisition i reckon if taken with there prior update

[iceman]

Good to see this has gone unconditional:

SEK
10/11/2021 13:44
TRANSACT
PRICE SENSITIVE
REL: 1344 HRS Seeka Limited

TRANSACT: SEK: Seeka Orangewood amalgamation unconditional

Seeka Limited [NZX:SEK] advises that all conditions for the Orangewood
amalgamation have been met and the transaction is expected to be completed on
22 November 2021.

Release ends:

[percy]

I love upper end of guidances..
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/383952/360829.pdf

[iceman]

I love upper end of guidances..
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/383952/360829.pdf

Then we'll eventually get the kiwifruit claim settlement money which they will hopefully use for debt reduction

[Sideshow Bob]

I love upper end of guidances..
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SEK/383952/360829.pdf


Luvley Jubbley!! :t_up:

[percy]

Further growth looks positive.
https://www.nzx.com/announcements/384520

[Rabbi]

Yes, they seem to be going along nicely and expanding the business with a few acquisitions and amalgamations.

[Sideshow Bob]

SEEKA CLEARS FIRST HURDLE IN NZ FRUITS AMALGAMATION - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/385000)

20/12/2021, 9:24 amTRANSACTSeeka Limited (“NZX:SEK”) advises that it has today completed its Due Diligence on New Zealand Fruits Limited (“NZ Fruits”), and the condition included in the Amalgamation Implementation Agreement announced on 10 December 2021 has been satisfied. The Seeka Board has considered the transaction further, and diligence reports, and has unanimously resolved to proceed with the proposed amalgamation.

The transaction still has conditions to be met, including the approval of 75% or more of NZ Fruits’ shareholders and to obtain any regulatory approvals (to the extent any are required).

Fred Hutchings, Seeka Chair, commented that the completion of due diligence and obtaining Seeka Board approval is a positive confirmation of confidence in the deal and the future of a combined business in the region. Seeka is looking forward to presenting Seeka and the offer to NZ Fruits shareholders.

Trevor Lupton, NZ Fruits Chair, stated that the amalgamation of NZ Fruits with Seeka is a positive move for the region given that Seeka has a proven track record in expanding its service offering and delivering competitive returns to its growers.

Release ends.

[turnip]

Does anyone have an idea roughly what proportion of the NZ Fruits business is kiwifruit vs. citrus and other fruits?

[BlackPeter]

Does anyone have an idea roughly what proportion of the NZ Fruits business is kiwifruit vs. citrus and other fruits?

Here we go (I trust you can do the percentages yourself :):

13370

(google: freshfacts-2020)

Not sure though, why would you want to know? I assume you realise that Seeka is processing more than kiwifruit ... and they are in Australia as well.

https://www.seeka.co.nz/produce

[turnip]

Sorry if not very clear, I meant the "NZ Fruits Ltd" aquisition specifically, I gather they pack kiwifruit, citrus, and some other fruit like persimmon, but have no idea of how much of the business is kiwifruit.

Edit: I am interested whether this acquisition is mainly to extend Seeka's kiwifruit catchment, or to diversify its offering in other categories.

[turnip]

I've tried to piece together bits I've found online, not entirely sure if all the bits relate to the same time periods, but I think NZ Fruits Ltd. currently packs about a third of the national citrus crop, they could be NZ's biggest citrus post-harvest operator.

In the statement from Seeka, NZ Friuts say they need capital to expand, but perhaps that means expanding the kiwifruit operations rather than citrus, as there seem to be quite a bit of new gold kiwifruit plantings going into the area.

[dibble]

The agm chap made a point of noting they are predominantly a kiwifruit firm. So maybe treat stuff on the periphery as experimental for now. I watched the agm munching seeka avocado on toast so was a little surprised at his clarity.

[Southern Lad]

Sorry if not very clear, I meant the "NZ Fruits Ltd" aquisition specifically, I gather they pack kiwifruit, citrus, and some other fruit like persimmon, but have no idea of how much of the business is kiwifruit.

Edit: I am interested whether this acquisition is mainly to extend Seeka's kiwifruit catchment, or to diversify its offering in other categories.

The NZX release on 10 December announcing the amalgamation with NZ Fruits was titled “Seeka announces new Kiwifruit acquisition by amalgamation”. Seeka also pointed out the deal would deliver material efficiencies, synergies and cost savings, so this suggests Seeka’s primary interest is expanding its Kiwifruit packing capacity in Gisborne rather than an expansion into citrus fruit packing.

[iceman]

Sorry if not very clear, I meant the "NZ Fruits Ltd" aquisition specifically, I gather they pack kiwifruit, citrus, and some other fruit like persimmon, but have no idea of how much of the business is kiwifruit.

Edit: I am interested whether this acquisition is mainly to extend Seeka's kiwifruit catchment, or to diversify its offering in other categories.

Interesting question turnip, or so I thought, so I did some digging.

NZ Fruits (NZF) handles 8.3 m.kgs of kiwfruit, 10.6 m.kgs of citrus and 2.1 m.kgs of persimmons.Historically and currently the citrus and persimmons are sold through First Fresh. Who knows what will happen in the future !

The good thing here is that the maturity of the kiwifruit from the Gisborne area is weeks earlier than other parts of NZ, so this fruit can be trucked to Opotiki to increase the output of the current infrastructure.
Also as part of the deal, Seeka has secured exclusive supply from NZF's biggest shareholder who supplied over half of NZF's production and in fact, NZF couldn't take all his production that then went to other operators. This will now go to SEK. He is planting more.

The deal, as well as the other 2 recent ones, are earnings positive.

SEK management is very focused and doing very well in my view. I strongly feel SEK is undervalued at current SP.

[Southern Lad]

SEK management is very focused and doing very well in my view. I strongly feel SEK is undervalued at current SP.

Agree that SEK has a clear strategy that they are executing on which should drive future earnings growth. Even without growth, the current share price to underlying NTA and dividend yield are attractive relative to other opportunities on the NZX.

Some musings on SEK:

Published NTA is arguably understated. SEK policy is to revalue land and buildings on a three year rolling basis, meaning in times where values are increasing there is a time lag until these higher values are recognised in the financial statements. Adding weight is the transaction that T&G did late last year to sell and lease back a packhouse, cold store and storage property in Hawkes Bay to PFI at a yield of 4.4%. Admittedly a large site at 9.56 ha however the Dec 2020 financial statements indicate that SEK land and buildings are carried at capitalisation rates between 6.25 and 10.5%. Therefore, I suggest current market values will be somewhat higher than current carrying values.

There appears to be a large seller(s) of SEK shares at present, which is keeping a lid on share price growth. The shares issued as part of the two completed and one yet to complete amalgamation transactions probably means that there is a bit of an overhang that is likely to persist for a while yet - the NZ Fruits transaction will result in a further $10m of shares being issued, a chunk of which will no doubt find their way to market. For a longer term investor, this presents an ideal buying opportunity at present and over the coming couple of months.

The largest shareholder, Tomlinson Group Investments Limited, did increase their shareholding by 330,000 odd shares in October which is a positive sign.

There is only a small number of institutional shareholders on the register - it will be interesting to see whether this changes going forward. If there is a share overhang, maybe this provides the opportunity for greater institutional involvement as these shares find a new home.

[iceman]

Very good post Southern Lad which I totally agree with. The issuing of new SEK shares to the owners of the businesses they´ve taken over is likely to provide great buying opportunities for awhile yet.

[Mr Slothbear]

Both myself and my partner have bought some.

P/e of 10 and price/nta of 0.95 seems like good value for company that has doubled its eps in the last 5 years and has a good track record of increasing dividends and eps growth with good forward prospects

[Sideshow Bob]

Thanks for sharing your knowledge/info Icemand and Southern Lad.

Already a holder, but bought a handful more, and a few for might daughters Sharsies account.....

Seems like a good place to park some fuinds, and in the words of another holder, believe are "well positioned". :t_up:

[iceman]

Once again the holders of the company being amalgamated into SEK vote overwhelmingly in favour of the takeover. This is a brilliant vote of confidence in Seeka's management and their strategy.

SEK
19/01/2022 09:16
TRANSACT
PRICE SENSITIVE
REL: 0916 HRS Seeka Limited

TRANSACT: SEK: Seeka NZ Fruits amalgamation unconditional

Seeka Limited [NZX:SEK] advises that the Shareholders of New Zealand Fruits
Limited (NZ Fruits) have voted overwhelmingly in favour of its acquisition by
amalgamation with Seeka.

Seeka Limited [NZX:SEK] advises that all conditions for the NZ Fruits
amalgamation have been met and the transaction is expected to be completed
early February 2022.

Release ends:

[Southern Lad]

Press release suggests the NZ Fruits shareholder vote wasn’t unanimous. If so, interesting as the Companies Office only details six shareholders.

From a Seeka perspective, good that the amalgamation will be effective ahead of the upcoming Kiwifruit harvest and therefore full earnings will be picked up in the Dec 22 year reported profit (contrasted with last years OPAC amalgamation with completed in early may which left some pre-acquisition profits going into the fair value on purchase calculation).

[Sideshow Bob]

Seeka announces dividend of 13 cents per share - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/386152)

Seeka Limited [NZX:SEK] advises that it has declared a Full Year dividend of $0.13 per share in relation to the financial year ended 31 December 2021.
The dividend will be fully imputed, and the Dividend Reinvestment Plan will apply.
The dividend record date is 28 January 2022 and the dividend will be paid on 23 February 2022.
In early February 2022 Seeka expects to complete the acquisition of New Zealand Fruits Limited by way of amalgamation which will include consideration of new Seeka shares and cash.
The Full Year dividend is normally paid in April each year. This year the Full Year dividend date has been varied due to the issue of new shares to be issued ex-div in February.

[iceman]

A little bonus from the NZ Fruit purchase, we get our divies early :-)

[Rabbi]

Yes SEK paying 13 cents a share fully imputed compared to SCL 9.5 cents fully imputed so pretty good yield and set to grow.

[percy]

As it has stopped raining ,I used some of the wife's rainy day funds to buy her more SEK this morning.