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Armillary Private Capital
25-03-2013, 02:11 PM
Synlait Farms Limited joins Unlisted

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2183

Armillary Private Capital
27-03-2013, 01:16 PM
Synlait Farms Company Profile, 2012 Audited Annual Report and Constitution

https://www.unlisted.co.nz/Members/unlisted.mt_announcement.showannouncement?p_announ cement_id=2184

Armillary Private Capital
27-03-2013, 01:17 PM
Synlait Farms March 2013 Investor Presentation

https://www.unlisted.co.nz/Members/unlisted.mt_announcement.showannouncement?p_announ cement_id=2185

FarmerHamilton
02-04-2013, 03:19 PM
Synlait Farms Limited joins Unlisted

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2183



Looks like a market is slowly establishing in Synlait Farms. Opening offer was $1.15 with a bid appearing last Thursday at $0.65 . Today a fresh buy order has been placed for 10,000 shares at $0.75c. Bid / offer spread is still very wide but I suppose it is still early days.

With a NAV of $1.45 both buyers are obviously trying to buy $1's worth of assets for around $0.50c.

FarmerHamilton
02-04-2013, 08:29 PM
It will be interesting to see if the recent trend of higher dairy prices , especially WMP , will continue at tonights auction on the GDT Platform.

FarmerHamilton
03-04-2013, 08:34 AM
It will be interesting to see if the recent trend of higher dairy prices , especially WMP , will continue at tonights auction on the GDT Platform.


Amazing , up another double digit gain and prices in NZ$ terms now up 50% in 2013. Synlait Farms could make some serious dough in 2013/14 season with a payout back above $7.00 !! The buyers at 75c & 65c may need to pay up to get any. Interesting to see if the $1.15 seller moves there price up after yet another spectacular auction result.

CJ
03-04-2013, 08:52 AM
From their 2012 accounts, they had a NP of $3,126k and have shares on issue of 40,802,871 so earnings per share of 7.6c per share. Apply a P/E of 10 gives you 76c per share or 15 = 1.15.

So looks like buyers and sellers have a different view of what P/E should be applied - I have no idea what it should be either. Good to have it listed, even if it is on the "unlisted".

FarmerHamilton - I wild assumption I know but are you are farmer from Hamilton?? What is your view on the financials and a fair price for the shares. Looking at the NTA is misguided in my view as unless you are liquidating, the key metric is earnings/cashflow/dividends??? Cashflows from operations look to be strong at over $6m.

FarmerHamilton
03-04-2013, 09:36 AM
From their 2012 accounts, they had a NP of $3,126k and have shares on issue of 40,802,871 so earnings per share of 7.6c per share. Apply a P/E of 10 gives you 76c per share or 15 = 1.15.

So looks like buyers and sellers have a different view of what P/E should be applied - I have no idea what it should be either. Good to have it listed, even if it is on the "unlisted".

FarmerHamilton - I wild assumption I know but are you are farmer from Hamilton?? What is your view on the financials and a fair price for the shares. Looking at the NTA is misguided in my view as unless you are liquidating, the key metric is earnings/cashflow/dividends??? Cashflows from operations look to be strong at over $6m.


Like the listed property stocks I think NTA is important because it gives you a good starting point. Dairy farms have never yielded as much as commercial property but like owning a building in downtown Auckland with Synlait's 14,000 cows sending off their milk daily they get a monthly "rent cheque" from Synlait Milk. Each producing hectare has a value and each cow has a value. Added up at recent valuations and Synlait's are according to the presentation worth $1.45/share.

The company is a play on rising commodity ( protein ) demand and prices. At a $7.50 payout the company will earn probably twice as much as at a $6.50 payout so there is real leverage to rising commodity prices. These dairy auction results must be music to managements ears I would have thought.

Value ... I would have thought that with a fair chance of doubling of earnings in the next 12 months and at a 30c discount to NAV ( 20% ) $1.15 looks reasonable value. 75c I would say would be a fantastic buy.

FarmerHamilton
03-04-2013, 09:42 AM
My unlisted "quote sheet" page is blank , anyone else no what is going on over there today?

CJ
03-04-2013, 10:04 AM
Like the listed property stocks I think NTA is important because it gives you a good starting point. In part but listed property stocks are valued on their yield. Variations occur due to debt levels, quality of buildings/tenants etc. The two (NTA and yeild) maybe confused as the value of a building is linked directly to its rental yield - an increase in NTA will be due to an increase in rental yield.

So at earnings of 7.6c per share, and a dividend policy of say 90% and a target yeild of 8% gives you a SP of 85c. If their profit doubles as you suggest, the that price will also double.

Edit: I am not sure what their dividend policy or whether they plan to distribute or use excess funds to pay down debt or expand.

FarmerHamilton
03-04-2013, 11:08 AM
In part but listed property stocks are valued on their yield. Variations occur due to debt levels, quality of buildings/tenants etc. The two (NTA and yeild) maybe confused as the value of a building is linked directly to its rental yield - an increase in NTA will be due to an increase in rental yield.

So at earnings of 7.6c per share, and a dividend policy of say 90% and a target yeild of 8% gives you a SP of 85c. If their profit doubles as you suggest, the that price will also double.

Edit: I am not sure what their dividend policy or whether they plan to distribute or use excess funds to pay down debt or expand.


You'd never get 8% yield on any dairy farm in NZ ( maybe a $10 payout ). I would think with a bumper year anticipated next year they will re-invest in there re-grassing program , re-invest in stock ( more culls ) , and keep the bank happy by paying down a chunk of the new debt taken on to buy out Mitsui.

CJ
03-04-2013, 12:07 PM
You'd never get 8% yield on any dairy farm in NZ ( maybe a $10 payout ). I would think with a bumper year anticipated next year they will re-invest in there re-grassing program , re-invest in stock ( more culls ) , and keep the bank happy by paying down a chunk of the new debt taken on to buy out Mitsui.So why would I invest in a farm rather than a listed property trust? The end goal for the company cant be to sell the farm to an even bigger sucker?

Excuse me, I am a non farmer, probablly like the people offering 65c ;)

FarmerHamilton
03-04-2013, 01:00 PM
So why would I invest in a farm rather than a listed property trust? The end goal for the company cant be to sell the farm to an even bigger sucker?

Excuse me, I am a non farmer, probablly like the people offering 65c ;)



Listed Property trusts are a good investment at the right time in the cycle ... investing In ING Property Trust at $1.20 in 2005 and then selling at 57c in 2009 probably wasn't too clever , but I'm sure some people did it. Kiwi Income and Goodman both traded in the $1.60 range a few years ago , now $1 and change.

Westpac just upped the Fonterra payout forecast to $6.60 , if these prices hold until start of next season ( August for you townies ) and the Kiwi$ stays under 85c then next years payout will be $7 minimum , possibly $7.50 or even $8.

Synlait profits tied directly to payout , fixed cost around say $5.50 on 5.5m kgms , profit at $6.50 payout roughly $5.5m , at $7.50 roughly $11m ( approx 25c e.p.s. x P/E 7 = $1.75 ) The leverage to rising dairy prices is fantastic ( and awful when they fall ) . LPT profits are far less volatile theoretically , although those buyers in 05/06 may beg to differ if they sold 2/3 years later.

FarmerHamilton
12-04-2013, 10:01 AM
Listed Property trusts are a good investment at the right time in the cycle ... investing In ING Property Trust at $1.20 in 2005 and then selling at 57c in 2009 probably wasn't too clever , but I'm sure some people did it. Kiwi Income and Goodman both traded in the $1.60 range a few years ago , now $1 and change.

Westpac just upped the Fonterra payout forecast to $6.60 , if these prices hold until start of next season ( August for you townies ) and the Kiwi$ stays under 85c then next years payout will be $7 minimum , possibly $7.50 or even $8.

Synlait profits tied directly to payout , fixed cost around say $5.50 on 5.5m kgms , profit at $6.50 payout roughly $5.5m , at $7.50 roughly $11m ( approx 25c e.p.s. x P/E 7 = $1.75 ) The leverage to rising dairy prices is fantastic ( and awful when they fall ) . LPT profits are far less volatile theoretically , although those buyers in 05/06 may beg to differ if they sold 2/3 years later.


Stunning rise in skim milk powder prices, up +36% in NZ$ terms in two weeks; currency rose sharply overnight TWI = 79.3 Posted in Rural News (http://www.interest.co.nz/rural) April 12, 2013 - 08:31am, David Chaston (http://www.interest.co.nz/users/david-chaston)
http://www.interest.co.nz/sites/default/files/imagecache/inline_large/feature_images/smp-nzd-prices.gifSkim milk powder prices in NZ$




Skim milk powder prices have moved sharply higher in the latest USDA market survey.
They rose an average of 36% in US dollar terms from their previous report on March 28.
Actual price rises in this market survey ranged from +26% to +45% for skim milk powder sold by Oceania suppliers which includes Fonterra.
In NZ$ terms the average rise was just as impressive - up by an average of 35%.
Over the same period, the New Zealand currency has risen just 2.6%.


The average skim milk powder price is now US$5,563 per tonne and $6,640 per tonne. These are rises of US$1,475 and NZ$1,756 over that two week period.
From the beginning of the year, skim milk prices have risen US$2,163 and NZ$2,563 per tonne, rises of +63% in either currency.
The rise in wholemilk powder prices has been strong too. They are up +11% in the past two weeks.



Synlait Farms has still not traded yet ... surely 1 kiwi out of 4.2m might be interested in "jumping in" soon ?? ...

CJ
12-04-2013, 10:14 AM
Synlait Farms has still not traded yet ... surely 1 kiwi out of 4.2m might be interested in "jumping in" soon ?? ...Still no movement - spread is 75c and 115c.

FarmerHamilton
12-04-2013, 12:27 PM
Still no movement - spread is 75c and 115c.

Yes, NZ's biggest industry , the thing we absolutely , no question, lead the world in ... dairy farming / milk production and we get a new listing with 100% focus on that industry and not a single trade in 3/4 weeks.

NZ's capital markets are so thin ... very frustrating the lack of liquidity.

CJ
12-04-2013, 12:43 PM
Yes, NZ's biggest industry , the thing we absolutely , no question, lead the world in ... dairy farming / milk production and we get a new listing with 100% focus on that industry and not a single trade in 3/4 weeks.

NZ's capital markets are so thin ... very frustrating the lack of liquidity.Your not tempted to put in a low bid (but above 75) to see if you can flush out a seller?

I wonder if it would be different if it was listed on the NZAX or was it put on the Unlisted as they didn't expect/want it to be traded that much?

FarmerHamilton
12-04-2013, 02:23 PM
Your not tempted to put in a low bid (but above 75) to see if you can flush out a seller?

I wonder if it would be different if it was listed on the NZAX or was it put on the Unlisted as they didn't expect/want it to be traded that much?



I'm thinking it was probably put on the unlisted to keep down costs. I think they have about 100 shareholders so don't know if that meets the minimum requirement. A bit depressing when a company that sells greasy fried chicken , crap coffee , and naf pizza with their packaging littering the streets of NZ can trade in decent volume with a tight B/O spread on the NZX and yet a company producing a healthy quality product exported all over the world can't get any interest in it at all ....

CJ
12-04-2013, 02:31 PM
I'm thinking it was probably put on the unlisted to keep down costs. That is no doubt the reason and I think something NZX needs to address when they refresh the NZAX.

But likewise, if they wanted or expected it to be actively traded, they should have been tempted to put it on the NZAX.

percy
12-04-2013, 04:26 PM
That is no doubt the reason and I think something NZX needs to address when they refresh the NZAX.

But likewise, if they wanted or expected it to be actively traded, they should have been tempted to put it on the NZAX.

Companies are no longer allowed to operate a market in their own shares, so they are looking for a vehicle [market] for shareholders to buy/sell/trade their shares without the costs of being a listed company.

FarmerHamilton
15-04-2013, 10:00 AM
Companies are no longer allowed to operate a market in their own shares, so they are looking for a vehicle [market] for shareholders to buy/sell/trade their shares without the costs of being a listed company.


The NZX has stated publicly that they wish to increase the number of firms involved in the agricultural sector on the market. Synlait Farms with an asset base of circa $200m and turnover in the $30-$40m range must be the kind of company they have in mind and are looking for. I wonder if they "pitched" for the listing ?

GTM 3442
15-04-2013, 05:05 PM
Companies are no longer allowed to operate a market in their own shares, so they are looking for a vehicle [market] for shareholders to buy/sell/trade their shares without the costs of being a listed company.

Hi Percy - How does that sit with (say) estaronline ?

percy
15-04-2013, 05:30 PM
Hi Percy - How does that sit with (say) estaronline ?

I have recently brought 50,000 estaronline @ 8cents for the wife.I had to contact the seller.I then paid the seller.He sent me a signed transfer form,which the wife signed, and we sent onto the company.Share certificate was then sent to my wife.Very long and drawn out process.
It was estaronline who brought to my attention "companies are no longer allowed to operate a market in their own shares",after I had complained that they were no longer operating a market.The chairman did say they were looking at "the problem."I am waiting for estaronline to report,so hopefully they will find a solution.
Tru- Test at present continue to operate their own market.They recently had a successful rights issue.
At present time it seems Unlisted appeals to small companies [although they have large companies too].The NZAX appears to cost a lot,and some of these companies don't met NZAX guidelines,maybe through spread of shareholders and other compliance issues.
I own REL and PAZ on Unlisted market and it is easy to buy/sell through my broker Craigs.Liquidity is often an issue,so care needs to be taken,

percy
15-04-2013, 05:39 PM
Further to my post.; Synlait are also looking at a new platform.They have been traded through accounting firm BDO.
So we will end up with Synlait and what we have on this thread Synlait Farms.

janner
15-04-2013, 11:16 PM
Not helpful for " New Starts " is it ??

percy
16-04-2013, 06:10 AM
Not helpful for " New Starts " is it ??

I think you are "right on the money" [as per usual].I have held shares in estaronline and PAZ for a number of years.They really do their best for shareholders,usually money has at times been tight,so they are not keen to spend a lot on a listing,perfering to reinvest cash in the business or paying out a dividend.

FarmerHamilton
19-04-2013, 09:54 PM
I think you are "right on the money" [as per usual].I have held shares in estaronline and PAZ for a number of years.They really do their best for shareholders,usually money has at times been tight,so they are not keen to spend a lot on a listing,perfering to reinvest cash in the business or paying out a dividend.


Synlait Farms today advised the Unlisted market that due to recent strength in dairy prices it has upgraded its profit forcast for the current season by $2m ( approx 4.9cps ). Forcast for 2013/14 season also now higher due to higher projected payout.

Production also on budget for this season due to careful use of irrigation resources despite very dry summer. Big tick for the Canterbury vs Waikato debate !

All looks very positive.

Still no trade and I see the 2 buyers both pulled there bids on Tuesday morning after the Dow Jones index plunged 260pts. Obviously not really interested in the core underlying business rather the daily gyrations of global stock markets ... what about another positive GDT auction and the kiwi$ dn 2c over the week ?

Newman
22-04-2013, 07:48 PM
Synlait Farms today advised the Unlisted market that due to recent strength in dairy prices it has upgraded its profit forcast for the current season by $2m ( approx 4.9cps ). Forcast for 2013/14 season also now higher due to higher projected payout.

Production also on budget for this season due to careful use of irrigation resources despite very dry summer. Big tick for the Canterbury vs Waikato debate !

All looks very positive.



You would buy the shares if you are confident of your analysis. What about interest rate goes up 1 percentage point? With huge amount of debt, Synlait farms would be in similar position as Crafar farms if milk price drops and interest rate increases at the same time.

FarmerHamilton
23-04-2013, 12:28 PM
You would buy the shares if you are confident of your analysis. What about interest rate goes up 1 percentage point? With huge amount of debt, Synlait farms would be in similar position as Crafar farms if milk price drops and interest rate increases at the same time.


Crafar Farms were poor quality farms with poor quality stock in pretty average dairying districts. Synlait is far better performing on virtually every metric. I agree if the payout falls and IR rise dramatically Synlait will suffer, just like very other business in the world would suffer with rising costs and falling revenues. This is certainly not looking likely at present with the swap curve indicating gently rising rates for many years. Also if the global economy suddenly explodes to the upside and IR need to be raised by central banks then it is highly unlikely that commodity prices will have fallen, more likely they are climbing rapidly and inflation is causing banks to withdraw stimulus. Rising rates and falling milk prices is a highly unlikely combination in my opinion.

I see the spread is tightening on the bid/offer , decent volume as well on each side. My bet would be first trade @ $1 if world markets stay bullish over the next few days.

85c / $1.00 ( 30k / 60k volume )

FarmerHamilton
29-04-2013, 11:05 AM
Crafar Farms were poor quality farms with poor quality stock in pretty average dairying districts. Synlait is far better performing on virtually every metric. I agree if the payout falls and IR rise dramatically Synlait will suffer, just like very other business in the world would suffer with rising costs and falling revenues. This is certainly not looking likely at present with the swap curve indicating gently rising rates for many years. Also if the global economy suddenly explodes to the upside and IR need to be raised by central banks then it is highly unlikely that commodity prices will have fallen, more likely they are climbing rapidly and inflation is causing banks to withdraw stimulus. Rising rates and falling milk prices is a highly unlikely combination in my opinion.

I see the spread is tightening on the bid/offer , decent volume as well on each side. My bet would be first trade @ $1 if world markets stay bullish over the next few days.

85c / $1.00 ( 30k / 60k volume )






60,000 shares traded at $1 ....

CJ
29-04-2013, 11:26 AM
My bet would be first trade @ $1 if world markets stay bullish over the next few days.

85c / $1.00 ( 30k / 60k volume )Your bet or your bid? ;)


60,000 shares traded at $1 ....So we now have a starting point.

FarmerHamilton
29-04-2013, 11:40 AM
Yes, you'd think it would be a coincidence if the buyer wanted exactly 60,000 which was the size of the offer. I see there are 75,000 now on offer at $1.05. The buyer might take those as well pretty quickly and then that big 175,000 lot at $1.15 could be in there sights as well. GDT auction Wednesday morning .... global markets look pretty "bulled up" at present .... NZ economy on a roll

FarmerHamilton
29-04-2013, 04:08 PM
Yes, you'd think it would be a coincidence if the buyer wanted exactly 60,000 which was the size of the offer. I see there are 75,000 now on offer at $1.05. The buyer might take those as well pretty quickly and then that big 175,000 lot at $1.15 could be in there sights as well. GDT auction Wednesday morning .... global markets look pretty "bulled up" at present .... NZ economy on a roll


59,600 now offered at $1 and a fresh bid at $0.85c

Trading in SNLF is off and running !! ( be nice to see a 5c spread , or even 1c !! )

Newman
29-04-2013, 08:26 PM
59,600 now offered at $1 and a fresh bid at $0.85c

Trading in SNLF is off and running !! ( be nice to see a 5c spread , or even 1c !! )

Some are desperate about talking up the share price before the company has to raise more equity to pay down debts. Who would take part in rights issue if they can buy at the market at 70% of the so-called net asset per share?

FarmerHamilton
29-04-2013, 09:41 PM
Some are desperate about talking up the share price before the company has to raise more equity to pay down debts. Who would take part in rights issue if they can buy at the market at 70% of the so-called net asset per share?


Newman , what is your agenda ... you sound like you have a rather large chip on your shoulder.

CJ
30-04-2013, 07:03 AM
Newman , what is your agenda ... you sound like you have a rather large chip on your shoulder.Since you asked someone else, what's yours?

Are you involved with the company, currently an investor or just a keen farmer wondering if they should invest?

FarmerHamilton
30-04-2013, 08:38 AM
Since you asked someone else, what's yours?

Are you involved with the company, currently an investor or just a keen farmer wondering if they should invest?

1. Active investor in Global equities
2. Queen Street farmer : shareholder in various equity partnerships and following Synlait Farms closely as a possible model for our own businesses in North island - value of my holdings approx $1.6m
3. Very interested in investing in Synlait Milk if we ever got the chance.

Newman
30-04-2013, 11:00 AM
1. Active investor in Global equities
2. Queen Street farmer : shareholder in various equity partnerships and following Synlait Farms closely as a possible model for our own businesses in North island - value of my holdings approx $1.6m
3. Very interested in investing in Synlait Milk if we ever got the chance.

You must have researhed the company well. Could you provide some thoughts on my questions as follows?

1. What was the rationale for the separation of Synlait farms from Synlait Limited?

2. What kind of financial arrangements were made between Synlait Ltd and Synlait farms? For example, were the farms fairly valued compared to similar farms in Canterbury and farms in Waikato?

3. Whom Synlait Farms sell its milk to? Fonterra, Synlait Milk, or others? Does it get a fair price?

4. Where can I find a copy of the annual report of Synlait Limited and Synlait Farm? They are not on the website of Companies office.

5. Synlait Frams' investor presentation in March 2013 was not well prepared. Here are two examples: 1) on slide 15, the statement "water consents.. range in tenure from 10-35years". Its starting point is unclear. Is it from now or from the consents were given? 2) on slide 30, the equity should be 94 (194-100) millions not the 95 as stated. How reliable these guys are?

Thank you.

FarmerHamilton
30-04-2013, 11:55 AM
You must have researhed the company well. Could you provide some thoughts on my questions as follows?

1. What was the rationale for the separation of Synlait farms from Synlait Limited?

2. What kind of financial arrangements were made between Synlait Ltd and Synlait farms? For example, were the farms fairly valued compared to similar farms in Canterbury and farms in Waikato?

3. Whom Synlait Farms sell its milk to? Fonterra, Synlait Milk, or others? Does it get a fair price?

4. Where can I find a copy of the annual report of Synlait Limited and Synlait Farm? They are not on the website of Companies office.

5. Synlait Frams' investor presentation in March 2013 was not well prepared. Here are two examples: 1) on slide 15, the statement "water consents.. range in tenure from 10-35years". Its starting point is unclear. Is it from now or from the consents were given? 2) on slide 30, the equity should be 94 (194-100) millions not the 95 as stated. How reliable these guys are?

Thank you.


The rational was I think that they tried to raise capital while they were combined and the feedback was that a different set of investors wanted exposure to farms and others wanted exposure to the processing business. Putting the two together probably hurt the value of their 49% stake in Synlait Milk so it is now separate. Shareholders in the previous Synlait Limited now have shares in Synlait Farms which are obviously traded on the Unlisted market and also Synlait Limited which has as its only asset a 49% share in Synlait Milk ( Bright Dairy & Food of China own the other 51% )
It will be interesting to see how it pans out as the Synlait Milk business would be a "HOT" listing for the NZX at present if the two shareholders were looking to raise capital or both reduce their stakes to say 35/40%. Bright owning 51% obviously gives them the final say ...

Your Q2 is irrelevant as the same set of shareholders still own all the previous assets , it has just been split up into two entities.

Q3. Synlait Farms sells all its milk to Synlait Milk. It receives the same published price as the other 80 odd suppliers to SML. Totally transparent transaction. Something similar to Fonterra minus the benefit of not having to have capital tied up in supplier shares.

Q4. Not too sure, new report will be out in next few months ( financial Y/E 31 May )

Q5. Most consents would be for at least 10 years from now I would think, and highly likely to be renewed when they approach the end date. 95 instead of 94 is probably a rounding thing ... 94.52 has popped into the presentation as 95 , I don't know really.

92c bid now , $1 offered ... last $1 decent bids and offers. Hot sector : no denying that.

Newman
02-05-2013, 07:26 AM
Dairy prices fall 7.3%, milk powders down 10% in latest (May 1st) Fonterra auction.

This would make FarmerHamilton disappointed. Further, NBR (last week) mentioned the problem of milk contaminated with chemical DCD in Caterburry farms.

In the past decade, farmers get rich largely by capital gains, which is not certain in the future.

FarmerHamilton
02-05-2013, 08:42 AM
Dairy prices fall 7.3%, milk powders down 10% in latest (May 1st) Fonterra auction.

This would make FarmerHamilton disappointed. Further, NBR (last week) mentioned the problem of milk contaminated with chemical DCD in Caterburry farms.

In the past decade, farmers get rich largely by capital gains, which is not certain in the future.


Given the 50% increase since late 2012 ... a 7.3% pullback is not to suprising. I would have not been that suprised to see a 10% pullback , and the next auction may dip again as well. Next years payout still likely to be somewhere between 50c & $1 higher than this year ( still very early I realise ). That would add between 6c & 12c to Synlait Farms earnings ... at 7 P/E that is between 42c and 85c added "value" ... massive leverage going on here !!

DCD ... Synlait Milk produces some of the best quality Infant Formula in the world ... so not a huge issue I dont think.

bid / offer $.92 / $1.00 all trades so far at $1.00 . Total volume traded 65,000 shares

000831
06-05-2013, 02:28 PM
unlisted company shares should give significant discount in price due to the asset liquidition problem. When systemic risks comes, investos cannot get ride of the shares and convert into cash assets, simply not buyers in the market, or at very very low price, or limited volume from the buyers. Safety margin is key drive for those companies.

Additionally, the GDT milk price (TWI) seems to reach the peak and continues to drop. Look at the 2012 annual report, it is disgusting, cannot understand at least four things.

We cannot only judge the share price by its net assets/ share, we also need to look at its current performance (PE) and growth prospectives (PEG), and company governce. A company with negative return could lead its net assets/share going down for the next financial year.

Not surprised if SNL price is always trading below 1.00,far away from NET ASSET/SHARE. Personally I do believe that the price should go down to 75c / share to reflect all the current trouble that it has.


However, for long term investors (over 5-10 years) those won't be issues.

FarmerHamilton
14-05-2013, 09:04 AM
unlisted company shares should give significant discount in price due to the asset liquidition problem. When systemic risks comes, investos cannot get ride of the shares and convert into cash assets, simply not buyers in the market, or at very very low price, or limited volume from the buyers. Safety margin is key drive for those companies.

Additionally, the GDT milk price (TWI) seems to reach the peak and continues to drop. Look at the 2012 annual report, it is disgusting, cannot understand at least four things.

We cannot only judge the share price by its net assets/ share, we also need to look at its current performance (PE) and growth prospectives (PEG), and company governce. A company with negative return could lead its net assets/share going down for the next financial year.

Not surprised if SNL price is always trading below 1.00,far away from NET ASSET/SHARE. Personally I do believe that the price should go down to 75c / share to reflect all the current trouble that it has.


However, for long term investors (over 5-10 years) those won't be issues.


Synlait Milk to list on NZX probably by August .... Bright to get diluted back under 50% ... all very interesting !!

Newman
14-05-2013, 09:07 AM
Synlait Milk Preparing for IPO in New Zealand

http://www.bloomberg.com/news/2013-05-13/bright-dairy-unit-synlait-milk-preparing-for-ipo-in-new-zealand.html

Would this IPO give shareholders in Synlait farms the cash to strengthen its balance sheet?

CJ
14-05-2013, 09:11 AM
Synlait Milk Preparing for IPO in New Zealand

http://www.bloomberg.com/news/2013-05-13/bright-dairy-unit-synlait-milk-preparing-for-ipo-in-new-zealand.html

Would this IPO give shareholders in Synlait farms the cash to strengthen its balance sheet?Aren't the two companies completely separate now? so the IPO of Milk will have no impact on Farms.

Newman
14-05-2013, 09:14 AM
Besides Chinese and Japanese investors a significant portion of shareholders in Synlait Milk are also shareholders in Synlait frams.

FarmerHamilton
14-05-2013, 09:28 AM
Besides Chinese and Japanese investors a significant portion of shareholders in Synlait Milk are also shareholders in Synlait frams.


Synlait Milk is currently 51%/49% owned by Bright Dairy and Synlait Limited. All Shareholders in Synlait Farms own all the shares in Synlait Limited apart from Mitsui & Co who cashed out of Synlait Farms recently in the move to the Unlisted but maintained their Synlait Limited shareholding.

It sounds like Synlait Limited will distribute all its Synlait Milk shares to its shareholders so all holders will then have shares in SNLF on the Unlisted exchange and SML shares on the NZX. A far better scenario than a few short weeks ago.

FarmerHamilton
14-05-2013, 09:44 AM
The timing of this is interesting ... Synlait Milk may have had an absolute ripper of a season as I imagine they are virtually all sold now of there 2012/13 production. They will have their margin in the bank on what they sold the milk for ( powder , infant formula , AMF ) and have a pretty good idea within 10c / kgMS of what they will pay for the milk. $6.3m last year ... the prospectus will be interesting reading. 31 July balance day so actual Y/E figures are months away still.

Newman
14-05-2013, 09:44 AM
Synlait Milk is currently 51%/49% owned by Bright Dairy and Synlait Limited. All Shareholders in Synlait Farms own all the shares in Synlait Limited apart from Mitsui & Co who cashed out of Synlait Farms recently in the move to the Unlisted but maintained their Synlait Limited shareholding.


Any details on the terms and conditions that Mitsui & Co exited Synlait farms?

FarmerHamilton
14-05-2013, 11:19 AM
Any details on the terms and conditions that Mitsui & Co exited Synlait farms?

I don't know the exact T&C's but SNLF did get bank funding to buy out Mitsui at a good price for all the remaining holders. All holders now own a 22.5% larger interest in the farms than they did prior to Mitsui departing and bank debt is up by I think about $8m

Mitsui could be an aggressive buyer of Synlait Milk shares in the open market as that was the asset they were most keen to get exposure to. Assuming they own 22.5% of Synlait Limited they have an effective interest of 11.025% in Synlait Milk .... if they wanted to push that up to say 19.9% it could be interesting.

000831
14-05-2013, 04:10 PM
Synlait Milk to list on NZX probably by August .... Bright to get diluted back under 50% ... all very interesting !!

That's milk factory part, not farm.

FarmerHamilton
14-05-2013, 04:26 PM
Yes ... but the shareholders are virtually identical save Mitsui & Bright in the two companies so it is very relevant. Post IPO there could be alot of switching from current holders between the two ... more "old school" farmers may exit processing and re-invest in cows & land , others may view the processing as the one they want exposure to. Prior to this you had to have exposure to both.

000831
14-05-2013, 07:05 PM
If Synlait Milk gets more bright prospectives, why farmers sell them?
I only see GDT Milk price down, OCR will lift up by the end of year. Not good for the farmers.

What's the real reason Synlait did seperate the firm into two parts? To protect the land to be controlled by the Chinese firm, debt heavily on Synlait farm, or EPS too low bad for NZX list as a whole?

If the farm part has potential, then the group should not seperate them at the beginnings. But they did. Why Why Why?

FarmerHamilton
14-05-2013, 08:13 PM
If Synlait Milk gets more bright prospectives, why farmers sell them?
I only see GDT Milk price down, OCR will lift up by the end of year. Not good for the farmers.

What's the real reason Synlait did seperate the firm into two parts? To protect the land to be controlled by the Chinese firm, debt heavily on Synlait farm, or EPS too low bad for NZX list as a whole?

If the farm part has potential, then the group should not seperate them at the beginnings. But they did. Why Why Why?


"I only see GDT milk price down" .... don't invest then ! Simple

FarmerHamilton
17-05-2013, 01:36 PM
"I only see GDT milk price down" .... don't invest then ! Simple


Trading in Synlait Farms is quiet this week , the announcement of a Synlait Milk float will hog the limelight over the next few months, trading in Farms may well be non-existent while people wait to see the IPO prospectus and weigh up the best way to gain exposure to the dairy supply chain. Raw milk or end products ?? Land or stainless steel ??

FarmerHamilton
29-05-2013, 11:59 AM
Fonterra forecast $7.00 payout for 13/14 season. SNLF P/E ratio on a payout at that level about 6

Newman
29-05-2013, 12:53 PM
Synlait Milk is currently 51%/49% owned by Bright Dairy and Synlait Limited. All Shareholders in Synlait Farms own all the shares in Synlait Limited apart from Mitsui & Co who cashed out of Synlait Farms recently in the move to the Unlisted but maintained their Synlait Limited shareholding.

It sounds like Synlait Limited will distribute all its Synlait Milk shares to its shareholders so all holders will then have shares in SNLF on the Unlisted exchange and SML shares on the NZX. A far better scenario than a few short weeks ago.

It is very interesting that you seems an expert on Synlait business but you got the basic fact wrong! If you buy Synlait Farms shares on Unlisted market you would not get any share in Synlait Milk. Synlait Farms and Synlait Limited have different sets of shareholders although some people have shares in both companies.

FarmerHamilton
29-05-2013, 03:42 PM
It is very interesting that you seems an expert on Synlait business but you got the basic fact wrong! If you buy Synlait Farms shares on Unlisted market you would not get any share in Synlait Milk. Synlait Farms and Synlait Limited have different sets of shareholders although some people have shares in both companies.

Newman , the day before Synlait Farms listed on the Unlisted the company was one company Synlait Limted ... shareholders in SL were given shares in Synlait Farms and kept there shares in Synlait Limited ( who's only asset was a 49% stake in Synlait Milk) So apart from Mitsui ALL shareholders in Synlait Farms also owned shares in Synlait Limited which on the IPO of Synlait Milk will then own Synlait Milk shares via a distribution from Synlait Limited and Synlait Limited will no longer effectvely exist.

The new buyers of SNLF since the Unlisted listing will not be shareholders in Synlait Milk as of right , yes you are correct. But EVERY single other Synlait Farms shareholder will be receiving Synlait Milk shares in the IPO in exchange for their Synlait Limited shares so the shareholder base of Synlait Farms and Synlait Milk today is virtually identical save Mitsui and Bright ( who both own no SNLF shares , and Bright never have )

Hope that helps ... $7.00 is just the start !!

FarmerHamilton
10-06-2013, 11:22 AM
No trade for over one month now . Disappointing given the Fonterra forecast of $7/kgMS for the 13/14 season and the fact that the NZ$ has dropped about 5% since early May.

FarmerHamilton
10-06-2013, 11:26 AM
Should have double checked ... 100,000 just traded

65,000 at 98c
35,000 at $1.00 ... no offer currently

FarmerHamilton
17-06-2013, 04:35 PM
Should have double checked ... 100,000 just traded

65,000 at 98c
35,000 at $1.00 ... no offer currently


$1.05 bid , albeit in tiny size.
$1.20 offer , decent size

1leon
17-06-2013, 07:14 PM
There really is a lot of nonsense going on here. A bid for 1000 @$1.05 and 1500 @1.00. Punters with $1005 and $1575 to spend! Not worth the brokerage. There really is no liquidity on Unlisted. I would have expected substantial investor interest in a dairy farm much more attainable than syndication.

FarmerHamilton
18-06-2013, 09:41 AM
There really is a lot of nonsense going on here. A bid for 1000 @$1.05 and 1500 @1.00. Punters with $1005 and $1575 to spend! Not worth the brokerage. There really is no liquidity on Unlisted. I would have expected substantial investor interest in a dairy farm much more attainable than syndication.

I work it out at $1050 and $1500 respectively but I get your point.

The volume traded since listing is over $200,000 worth , so not too disastrous. Synlait Milk listing in the next few weeks may spark some more interest in the dairy sector.

1leon
18-06-2013, 11:02 AM
I realised after I had used $1.05 for both "bids"--I really was flattering the second punters wealth! However you will persist in glossing the issue on trades. As recorded in the -Synlait to float-thread you have acknowledged the initial 60,000 trade was questionable (as indeed I suspect the current bids) so we would be lucky if there has been much over $150,000 in trades. With over 40m shares on issue the trades are less than 0.5%.I doubt that would be a flattering uptake or succesful float for investors in Synlait Milk!

CJ
18-06-2013, 11:35 AM
I realised after I had used $1.05 for both "bids"--I really was flattering the second punters wealth! However you will persist in glossing the issue on trades. As recorded in the -Synlait to float-thread you have acknowledged the initial 60,000 trade was questionable (as indeed I suspect the current bids) so we would be lucky if there has been much over $150,000 in trades. With over 40m shares on issue the trades are less than 0.5%.I doubt that would be a flattering uptake or succesful float for investors in Synlait Milk!Agree. No liquidity to get in and every worse, will there be any liquidity to get out.

In theory, this should be a well traded share giving us city slickers easy access to a farm investment without having to lock up $50k + in a syndicate.

If it did have good liquidity, there should be no reason why a few other groups of farms couldn't combine to list as well, giving the punters options.

FarmerHamilton
18-06-2013, 02:26 PM
Agree. No liquidity to get in and every worse, will there be any liquidity to get out.

In theory, this should be a well traded share giving us city slickers easy access to a farm investment without having to lock up $50k + in a syndicate.

If it did have good liquidity, there should be no reason why a few other groups of farms couldn't combine to list as well, giving the punters options.



So we know the problem , what's the solution ?? Xero seems to have captured the imagination and hardly a household name ...

1leon
18-06-2013, 02:49 PM
So we know the problem , what's the solution ?? Xero seems to have captured the imagination and hardly a household name ...
List! At Xero style p/s of 89.4 the shares will then be "worth" about $30 each!

FarmerHamilton
02-07-2013, 02:29 PM
List! At Xero style p/s of 89.4 the shares will then be "worth" about $30 each!

$1.05 bid in decent size .... interesting !!

FarmerHamilton
03-07-2013, 08:30 AM
Nice gentle rise in GDT Auction last night , NZD weak ... great combination for dairy industry.

FarmerHamilton
04-07-2013, 03:52 PM
Nice gentle rise in GDT Auction last night , NZD weak ... great combination for dairy industry.

And the market agrees !!

$1.15 - $1.25
Lots of bids in decent size behind the $1.15 too.
Offered in good size too - 40,000 shares

Synlait Milk pricing next week ... all GO Go GO in the dairy sector!

FarmerHamilton
08-07-2013, 12:12 PM
Just looking at the current "IPredict" market for the Fonterra payout for 13/14 and 14/15 seasons. Very interesting and pretty bullish !!

2013/14 - min $7.00 payout : 90%
2013/14 - more than $7.25 : 50%
2013/14 - more than $7.50 : 28.9%

2014/15 - min $7.00 payout : 64.6%
2014/15 - more than $7.50 : 47.5%
2014/15 - more than $8.00 : 14.8%

FarmerHamilton
10-07-2013, 10:14 AM
Just looking at the current "IPredict" market for the Fonterra payout for 13/14 and 14/15 seasons. Very interesting and pretty bullish !!

2013/14 - min $7.00 payout : 90%
2013/14 - more than $7.25 : 50%
2013/14 - more than $7.50 : 28.9%

2014/15 - min $7.00 payout : 64.6%
2014/15 - more than $7.50 : 47.5%
2014/15 - more than $8.00 : 14.8%


$1.15 trades .... Adds $6m to Synlait Farms market cap.

1leon
10-07-2013, 01:48 PM
$1.15 trades .... Adds $6m to Synlait Farms market cap.
Funny to think a trade worth $8625 has a $6m effect. Watch out Xero!

FarmerHamilton
11-07-2013, 08:51 AM
Funny to think a trade worth $8625 has a $6m effect. Watch out Xero!

$1.25 trades in decent size ... 40,000 shares

Synlait market cap up $10m in two days

Shares up 25% inside a week !!

Now trading at about 90% of NAV

1leon
11-07-2013, 08:59 AM
$1.25 trades in decent size ... 40,000 shares

Synlait market cap up $10m in two days

Shares up 25% inside a week !!

Now trading at about 90% of NAV
I ather thought it might take off if people found they were missing out on Synlait Milk--and it seems private investors may have been sidelined there. You must be very happy!

FarmerHamilton
11-07-2013, 09:13 AM
I ather thought it might take off if people found they were missing out on Synlait Milk--and it seems private investors may have been sidelined there. You must be very happy!

Yes ... from trading on a "spreadsheet" basis thru Polson Higgs and BDO Spicers a few months ago the value of my investment in Synlait is up $740,000 inside 4 months thanks to being traded in a more public forum and the company split.
Assumes $1.25 SNLF and $2.20 SML

CJ
11-07-2013, 09:17 AM
Yes ... from trading on a "spreadsheet" basis thru Polson Higgs and BDO Spicers a few months ago the value of my investment in Synlait is up $740,000 inside 4 months thanks to being traded in a more public forum and the company split.
Assumes $1.25 SNLF and $2.20 SMLI think you can assume SML will be worth more than $2.20 come the 23rd.

What is the market cap of SNLF? ~$50m? Liquidity still an issue. Would be good to see more farming shares on the main board.

FarmerHamilton
11-07-2013, 09:26 AM
I think you can assume SML will be worth more than $2.20 come the 23rd.

What is the market cap of SNLF? ~$50m? Liquidity still an issue. Would be good to see more farming shares on the main board.


Yes CJ ... seems like the first few hours of trading in Synlait Milk might be a bit of a "lolly-scramble" ... Hoogwegt will be the new cornerstone shareholder ..

FarmerHamilton
11-07-2013, 09:23 PM
Yes CJ ... seems like the first few hours of trading in Synlait Milk might be a bit of a "lolly-scramble" ... Hoogwegt will be the new cornerstone shareholder ..


Royal FreislandCampina is the new 7.5% shareholder in Synlait Milk ....

FarmerHamilton
15-07-2013, 10:00 AM
GDT Auction tomorrow night at GMT1200. Next one 2nd August ... then calving will begin and the 13/14 season will be off and away!

FarmerHamilton
17-07-2013, 08:09 AM
GDT Auction tomorrow night at GMT1200. Next one 2nd August ... then calving will begin and the 13/14 season will be off and away!

Dairy payout lift tipped as world prices up 4.9pc (+graphic) By Jamie Gray (http://www.nzherald.co.nz/jamie-gray/news/headlines.cfm?a_id=744) 9:00 AM Wednesday Jul 17, 2013


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http://media.nzherald.co.nz/webcontent/image/jpg/201327/milking_shedbigMM_460x231.jpg A higher dairy payout is being tipped after a big increase in world dairy prices in the latest overnight auction. Photo / NZ Herald


Dairy farmers could be looking at another record year for profit in 2013-14 after a 4.9 per cent rise in GlobalDairyTrade prices was recorded at the overnight auction, banks said.
Prices for whole milk powder - the most important line for New Zealand producers - were up by 7.7 per cent from the last auction at US$5,058 a tonne.
ANZ Bank said prices gained as buyers scrambled to refill their inventory after last summer's drought and a seasonal low in New Zealand supply, which would put upward pressure on Fonterra's $7 per kg of milksolids milk price payout forecast for this season.
"The lower New Zealand dollar and higher-than-expected prices will raise the prospects of Fonterra lifting their initial May forecast of a $7 per kg milk price for 2013-14," ANZ said in a commentary.
Article continues below "If mother nature plays nicely and farmers remain disciplined with their expenditure, then this could deliver a new record for profit in 2013-14," the bank said.

The Bank of New Zealand said the auction was "a very positive result" given the already high level of prices. "Restricted offshore dairy supply remains a key driver," BNZ said in a commentary."The upshot is there is now clear upside risk on Fonterra's current season milk price payout," the bank said.See full results from the auction here. (http://www.globaldairytrade.info/Results.aspx)This morning's GDT dairy auction gave the New Zealand dollar a lift, with the currency last trading at US78.95c from US78.28c in late local trading on Tuesday.



Farmer Hamilton says "A fantastic auction to kick off the season with , great news for Synlait Farms investors and will boost sentiment on the first day of the Synlait Milk float next Tuesday".

But the Kiwi remains well down from this year's peak of US86.75c in April and its record post float high of US88.43c in August 2011.Rabobank, in its latest quarterly rural confidence survey released earlier this week, said the sharp drop in the value of the New Zealand dollar and a swift end to last summer's drought had significantly improved the outlook for farmers.


- APNZ (http://www.apnz.co.nz/)

FarmerHamilton
17-07-2013, 08:42 AM
Recent newsflow probably justifies the jump in shares of SNLF ... the large buyers back at $1.10 and $1.00 will probably need a combination of several distasterous auctions , a major weather event in Canterbury over the next few weeks , and a Kiwi $ off to the races again and into the mid 0.80's to induce sellers to come into the market and sell back down to $1.

Highly unlikely I would have thought ...

Disc: hold SNLF

FarmerHamilton
17-07-2013, 02:04 PM
Recent newsflow probably justifies the jump in shares of SNLF ... the large buyers back at $1.10 and $1.00 will probably need a combination of several distasterous auctions , a major weather event in Canterbury over the next few weeks , and a Kiwi $ off to the races again and into the mid 0.80's to induce sellers to come into the market and sell back down to $1.

Highly unlikely I would have thought ...

Disc: hold SNLF

Even more unlikely now ... Record high on Synlait Farms as $1.35 trades with stock up 35% in July !!

1leon
18-07-2013, 02:39 PM
Even more unlikely now ... Record high on Synlait Farms as $1.35 trades with stock up 35% in July !!
Have you ordered your Lamborghinis or do you have them already?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10899709
Discl hold Synlait Milk and PGW but no Lamborghini (yet).

1leon
18-07-2013, 02:42 PM
Have you ordered your Lamborghinis or do you have them already?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10899709
Discl hold Synlait Milk and PGW but no Lamborghini (yet).

Sorry mean't Synlait Farms and PGW-also REL.

CJ
18-07-2013, 03:06 PM
Have you ordered your Lamborghinis or do you have them already?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10899709
Discl hold Synlait Milk and PGW but no Lamborghini (yet).Mr Lamborghini was actually a tractor maker.

Lamborghini's wealth allowed him to cultivate a childhood interest in cars, owning a number of luxury automobiles including Alfa Romeos, Lancias, Maseratis, and a Mercedes-Benz.[20] He purchased his first Ferrari, a 250GT, in 1958, and went on to own several more. Lamborghini was fond of the Ferraris, but considered them too noisy and rough to be proper road cars, likening them to repurposed track cars.[20] When Lamborghini discovered that the clutch on his Ferrari was broken, and actually was the same clutch that he used on his tractors, Lamborghini went to Ferrari and asked for a better replacement. Ferrari responded, saying that he was just a tractor maker, and could not know anything about sports cars. (source - Wikipedia)
http://uncrate.com/p/2010/10/lamborghini-tractors-xl.jpg

FarmerHamilton
18-07-2013, 08:17 PM
Mr Lamborghini was actually a tractor maker.

Lamborghini's wealth allowed him to cultivate a childhood interest in cars, owning a number of luxury automobiles including Alfa Romeos, Lancias, Maseratis, and a Mercedes-Benz.[20] He purchased his first Ferrari, a 250GT, in 1958, and went on to own several more. Lamborghini was fond of the Ferraris, but considered them too noisy and rough to be proper road cars, likening them to repurposed track cars.[20] When Lamborghini discovered that the clutch on his Ferrari was broken, and actually was the same clutch that he used on his tractors, Lamborghini went to Ferrari and asked for a better replacement. Ferrari responded, saying that he was just a tractor maker, and could not know anything about sports cars. (source - Wikipedia)
http://uncrate.com/p/2010/10/lamborghini-tractors-xl.jpg


Happy with my 2006 diesel Range Rover Sport ... beautiful car !!

FarmerHamilton
13-08-2013, 12:11 PM
Results will be out soon , May31 balance date so we are 75 days past that. Expecting big uplift in NAV from talking to real estate brokers who specialize in dairy farms ... maybe 20/25c increase in NAV on land + reval on 15,000 cows ... could be huge !!

Disc: hold 155,000 SNLF

FarmerHamilton
25-08-2013, 09:15 AM
Results will be out soon , May31 balance date so we are 75 days past that. Expecting big uplift in NAV from talking to real estate brokers who specialize in dairy farms ... maybe 20/25c increase in NAV on land + reval on 15,000 cows ... could be huge !!

Disc: hold 155,000 SNLF

2013 annual review out ... Production flat , $600,000 loss .
Reval on assets takes NAV up a whopping 30% to almost $2/share
Spring weather has been kind and a forecast of $7.50 payout 2013/14 could be a record breaking year for the company.

Disc ; hold 155,000 SNLF

Armillary Private Capital
26-08-2013, 01:13 PM
Annual review here:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2260

FarmerHamilton
27-08-2013, 10:22 AM
Annual review here:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2260

$1.30 / $1.70 , where's my double-decker London bus !!

FarmerHamilton
30-08-2013, 10:47 AM
$1.30 / $1.70 , where's my double-decker London bus !!

$1.50 / $1.60 last at $1.50.

Stock up 50% since listing ...


Disc; hold 155,000 SNLF

Joshuatree
30-08-2013, 10:57 AM
Sold @$3.08 . Needed funds for a new opp.Good future for SYNLAIT methinks. Cheers for now

FarmerHamilton
30-08-2013, 11:02 AM
Your talking Synlait Milk ... nice profit , I keep selling dribs and drabs but my total holding in $$ keeps going up ! GREAT !!

FarmerHamilton
02-09-2013, 09:25 AM
$1.55 traded last week in 10,000 size. Stock up 55% since first trade back in May, quite a performance.

Back of the envelope stuff working out the P&L and eps from the new Fonterra $7.80 payout announced last week.

I know the season has started spectacularly , 65% of the cows were calved last weekend so i am assuming now they will be at 75-80% which means milk production will be way ahead of forecast for August and given where they will be today , September. The weather gods have been very very kind over recent weeks and pasture production is looking fantastic

Assume 5%-7% production growth for the season gives 5.6kgMS

Assume a margin of $2/kgMS ( giving a cost of production including interest and depreciation of $5.50 as SML payout is typically 30c less than Fonterra due to no shares needing to be held )

P&L of $11.2m ....

EPS of 27.5c ( 40.8m shares outstanding )

P/E of 8 = shareprice of $2.20

Current shareprice of $1.55 is a 2013/14 forecast P/E of 5.64 on my numbers ... v cheap !!

Disc: hold 155,000 SNLF

FarmerHamilton
03-09-2013, 12:02 PM
$1.55 traded last week in 10,000 size. Stock up 55% since first trade back in May, quite a performance.

Back of the envelope stuff working out the P&L and eps from the new Fonterra $7.80 payout announced last week.

I know the season has started spectacularly , 65% of the cows were calved last weekend so i am assuming now they will be at 75-80% which means milk production will be way ahead of forecast for August and given where they will be today , September. The weather gods have been very very kind over recent weeks and pasture production is looking fantastic

Assume 5%-7% production growth for the season gives 5.6kgMS

Assume a margin of $2/kgMS ( giving a cost of production including interest and depreciation of $5.50 as SML payout is typically 30c less than Fonterra due to no shares needing to be held )

P&L of $11.2m ....

EPS of 27.5c ( 40.8m shares outstanding )

P/E of 8 = shareprice of $2.20

Current shareprice of $1.55 is a 2013/14 forecast P/E of 5.64 on my numbers ... v cheap !!

Disc: hold 155,000 SNLF




Synlait Milk just announced their forecast payout for 2013/14 season of ........... $8.00kgMS

My assumptions above might be way too conservative !!!

FarmerHamilton
03-09-2013, 02:56 PM
Synlait Milk just announced their forecast payout for 2013/14 season of ........... $8.00kgMS

My assumptions above might be way too conservative !!!


$1.60 trades ( 10k ) ... best offer now $1.85 for 30,000 shares

Armillary Private Capital
19-09-2013, 02:26 PM
New issuer profile up for SNLF:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2270

FarmerHamilton
25-09-2013, 10:45 AM
$8.30 payout forecast now from Fonterra ... Synlait Farms should have a very very good year. Lets hope no one from Team NZ works for them so they don't manage to lose $10m bucks somehow from a winning position !!!!

CAM
25-09-2013, 02:59 PM
Any of their farms impacted by the big blow that wiped out the irrigation?
If so they could be up for a few dollars in feed.....

Armillary Private Capital
08-10-2013, 07:31 AM
Synlait Farms now in a trading halt:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2282

FarmerHamilton
08-10-2013, 09:33 AM
Synlait Farms now in a trading halt:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2282

This is very interesting.

I am hoping for a capital raise from a new cornerstone shareholder at somewhere north of $1.80 for maybe a 20% stake.

Can't see it being a rights issue ... existing holders unlikely to pour further funds in at these prices ( certainly not me !! )

They may be entertaining a complete takeover of the company ....

They might be entering into a contract to purchase a bunch of other farms ( some of the Dairy Holdings portfolio possibly ) with associated capital raising.

Might be moving to the NZX with associated IPO capital raising ...

All will be revealed before the end of the week !!

CJ
08-10-2013, 10:24 AM
FH - do they need more capital or only if new farms are involved?

Given their isn't a liquid market to determine the true market value, any share placement or rights issue (unless deeply discounted) is problematic.

FarmerHamilton
08-10-2013, 10:40 AM
FH - do they need more capital or only if new farms are involved?

Given their isn't a liquid market to determine the true market value, any share placement or rights issue (unless deeply discounted) is problematic.

With an $8++ payout they will certainly generate plenty of cash over the next 12 months ... so a capital injection with the current asset base is not urgent but the gearing is certainly not sustainable should payouts drop below $6 for a sustained period.

Knowing the team like I do I would think a capital raising within 90-95% of NAV would be a minimum and with the unknown value of the water rights they have and the potential value to be unlocked there they may want over 100% ...

My $1.80 may be a bit light as with land values and cow prices at present and a BOOM year of potentially a $8.50 type payout it is certainly a sellers market ( for the first time in a long time !! )

CJ
08-10-2013, 10:52 AM
With an $8++ payout they will certainly generate plenty of cash over the next 12 months ... so a capital injection with the current asset base is not urgent but the gearing is certainly not sustainable should payouts drop below $6 for a sustained period.

Knowing the team like I do I would think a capital raising within 90-95% of NAV would be a minimum and with the unknown value of the water rights they have and the potential value to be unlocked there they may want over 100% ...

My $1.80 may be a bit light as with land values and cow prices at present and a BOOM year of potentially a $8.50 type payout it is certainly a sellers market ( for the first time in a long time !! )A pro-rate rights issues can still be done at a deep discount without disadvantaging shareholders since it is pro-rata (difficulty only if unable to take up and the rights are non-transferable).

FarmerHamilton
08-10-2013, 10:58 AM
I would be very very surprised if it is a rights issue ... you would see some selling pressure in Synlait Milk shares if that was the announcement as alot of the big holders in Farms would need to sell some Milk shares to take up their entitlements.

CJ
08-10-2013, 11:10 AM
I would be very very surprised if it is a rights issue ... you would see some selling pressure in Synlait Milk shares if that was the announcement as alot of the big holders in Farms would need to sell some Milk shares to take up their entitlements.Good point - technically completely separate companies now but inextricably linked.

FarmerHamilton
08-10-2013, 11:25 AM
Agreed , but the top 50 shareholders in each probably have at least 25 names in common ...

zigzag
09-10-2013, 09:30 AM
I think some of the current holders would struggle with a pro-rata rights issue, and there isn't a ready market to unload excess rights, not a liquid market anyway. More likely a cornerstone shareholder, or a placement, with maybe a smaller amount for current holders. I wouldn't mind picking up a few, just so that I could call myself a Queen Street Farmer.

FarmerHamilton
09-10-2013, 10:42 AM
I think some of the current holders would struggle with a pro-rata rights issue, and there isn't a ready market to unload excess rights, not a liquid market anyway. More likely a cornerstone shareholder, or a placement, with maybe a smaller amount for current holders. I wouldn't mind picking up a few, just so that I could call myself a Queen Street Farmer.


I agree , I think it will more likely be an exit mechanism for existing holders near N.A.V. rather than a request for more capital from them. Likelihood of a new cornerstone shareholder is pretty high , both have been high priority for the board for quite a while and especially now Synlait Milk is completely separate and trading so well.

Armillary Private Capital
14-10-2013, 07:39 AM
Trading halt to continue until 21 October:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2287

Armillary Private Capital
18-10-2013, 10:02 AM
Takeover offer announced:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2292

Armillary Private Capital
18-10-2013, 01:04 PM
Media release and takeover notice:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2293
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2294

CJ
18-10-2013, 01:21 PM
So the Chinese are buying - wonder if Winstone/Greens will get a hold of this one?

FarmerHamilton - 31% premium - are you happy or holding?

FarmerHamilton
18-10-2013, 03:39 PM
So the Chinese are buying - wonder if Winstone/Greens will get a hold of this one?

FarmerHamilton - 31% premium - are you happy or holding?

Very happy seller of my 128,000 @ 210c .... nice end to the week.

Joshuatree
21-10-2013, 08:11 AM
Farmer Hamilton, man are you:t_up: on a roll.Int in where you will invest from here; putting any into shares ? If so be int i your thoughts re what sectors and companies you are looking at outside of NZ. cheers JT

FarmerHamilton
21-10-2013, 09:27 AM
Hi JoshuaTree , I am not counting my chickens just yet as the OIO are still to approve but if Crafar Farms got thru then this one should be OK.

Yes , what to do with the money ... $268,800 ..

A portfolio of shares I am thinking ... 1/3 probably dividend paying multi-nationals
I already own and will add to ( KO:US, CL:US , UTX:US , JPM:US , SO:US , CVX: US , DIS:US )

1/3 non or low paying div growth stocks ( CELG:US , GOOG:US , APC:US , FB:US )

1/3 global property stocks ( 4:HK , 14:HK , 778:HK , SHB:UK , GPOR:UK , SLG:US , VNO:US , GPT:AU , DXS:AU , CFX:AU )

I will probably sell naked puts ( at strikes 5-10% below spot ) against many of these stocks rather than outright purchase of the shares as buying in near all-time highs is a little unwise. May go "all-in" on CELG:US however with a decent purchase of $50-75k worth

Joshuatree
21-10-2013, 10:01 AM
Thanks for sharing FH. Naked puts a bit beyond my experience and know how but sounds like a good downside protection.. Cheers

FarmerHamilton
21-10-2013, 11:34 AM
Thanks for sharing FH. Naked puts a bit beyond my experience and know how but sounds like a good downside protection.. Cheers

Selling a naked put on say Coca-Cola shares is promising to buy them at a certain price on a certain day.

Currently shares are about $38.50 so I will probably look to sell the $37.50 Jan 2014 puts for around 75c.

I am promising to buy the shares at $37.50 if they are below that level ( very happy to buy at 3% discount to current price ) and if the shares are above this level then I get to keep the 75c ... and then do it again on the March or April option series.

Upside : 75c / share premium in my account instantly I sell the option , and possibly buy Coke at decent discount ( when taking off the 75c premium I would effectively be long Coke at $36.75 in Jan ... $1.75 lower than current level.

Downside: Margin required to be held with broker. Max gain if Coke keeps rising is only 75c/sh , no dividends.

I love options !!!!

Longhaul
21-10-2013, 06:40 PM
Selling a naked put on say Coca-Cola shares is promising to buy them at a certain price on a certain day....
I love options !!!!

FH, what service/website do you use to buy and sell options? Thx

FarmerHamilton
22-10-2013, 01:07 PM
FH, what service/website do you use to buy and sell options? Thx

www.interactivebrokers.com

1leon
22-10-2013, 03:26 PM
Whilst I can appreciate Farmer Hamilton is happy to exit after a longer innings, as a holder for only 5 months I am disapponted that the only opportunity for a stand alone dairy farm interest looks likely to disappear under my nose with only the two principal directors hanging on to their interest in the new set up. It is the more disappointing that it is occurring as things look much better--Sylait Farms last accounts were on $5.8 a kg when the projected return for the current year is currently of the order of $8 kg. Fran O'Sullivan in NZ Herald took NZ investors to task for shunning Synlait in 2009 ignoring the fact that the offer was pulled and a totally different offer made to the overseas investors i.e. excluding the farms. Now we are again having overseas interests tying up Synlait Farms with no opportunity for local investors to show an interest. I find it extremely difficult to believe that there would not be substantial interest in a listed dairy farm operation. If there are other holders following this thread who would prefer to retain an interest I would be interested to hear.

GTM 3442
22-10-2013, 04:10 PM
Good morning Ileon.

No, you're not alone.

I too would have welcomed the chance to continue to hold SNLF.

I too would really like a way to access the NZ dairy industry.

I am disappointed that I will end up being compulsorily bought out at such a low price.

P*ssed off.

FarmerHamilton
23-10-2013, 10:37 AM
Good morning Ileon.

No, you're not alone.

I too would have welcomed the chance to continue to hold SNLF.

I too would really like a way to access the NZ dairy industry.

I am disappointed that I will end up being compulsorily bought out at such a low price.

P*ssed off.


$2.10 is not " a low price " based on current NTA. But I agree if you see many seasons where were have $8kgMS payouts then no doubt farm values will ratchet higher and the current NAV may seem cheap by say 2016/2017.

1leon
23-10-2013, 12:56 PM
1. We do not have the current nta--at best the valuation is at 31 May 2013. By the time the takover offer is made it will be 6 months out of date.In the same time Fonterra's forecasts have increased exponentially the most recent being $8.62 this month.Somehow I doubt any dairy farmer wishing to sell will feel constrained to wait sveral seasons to push up his asking price.
2. Synlait is also a business of scale rather than a collection of assets. It is interesting to compare Skyline also on Unlisted and with substantial property holdings particularly prime Queenstown but also elsewhere has just traded at $9.75 against its last asset backing of $6.33- a premium of 54%
3.With last years production of 5.31m kg the bottom line can improve $15m on forecast payout alone.
4.My quibble is less with price than inevitable sale-- even if the price were fair I would prefer to stay there and I would prefer to see NZ investors get first chance.

$2.10 is not " a low price " based on current NTA. But I agree if you see many seasons where were have $8kgMS payouts then no doubt farm values will ratchet higher and the current NAV may seem cheap by say 2016/2017.

Armillary Private Capital
24-10-2013, 01:39 PM
Trading halted until further notice:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2298

Armillary Private Capital
01-11-2013, 03:46 PM
Takeover offer documents posted:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2309

FarmerHamilton
01-11-2013, 07:02 PM
Takeover offer documents posted:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2309

Best estimate by Synlait Milk is now a ...................... $9.00 .............. payout for 2013/14

Hard to sell at $2.10 now !!

The $2.10 takeover is " fair value " if you assume average milk payout going forward is about $6.90 ... so not exactly generous

Might not accept offer now .... ????

Armillary Private Capital
12-11-2013, 01:16 PM
Shareholder presentation on the offer:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2312

1leon
14-11-2013, 10:07 AM
AGRIHQ.CO.NZ 14/11/13.
An irrigated 129ha North Canterbury farm has sold at auction for $6.7 million, or $52,300 a hectare, a record price for a North Canterbury dairy farm.
PGG Wrightson Christchurch agent Peter Crean said Gairloch, sold by his colleague Athol Earl, was converted to dairy in 1995 and has milked about 450 cows, with production peaking at 188,000kg milksolids last season.
“We have a strong board of motivated buyers at present with few local dairy properties of this calibre available, so it was no surprise that the sale achieved such a positive result,” Crean said.
Five bidders took part in the auction and the room was full of others including bankers, farm valuers and neighbours, he said.
“Bidding was spirited, with local farmers and syndicates from elsewhere in the country entering into keen competition.

Compared to this $52300 per hectare Grant Sammuel suggests it is appropriate to discount the Company's May 2013 nta of $44824 a hectare by 10% for delay in realisation and costs of sale. It seems the buyers are there and rather than discount the valuation needs to be updated and there would be a counter argument that any buyer wishing to acquire 13 farms would have considerable difficulty and delay i.e. he should pay a premium not discount.Applying the latest sale price would increase the total nta by $29,462,916.

1leon
14-11-2013, 02:52 PM
Best estimate by Synlait Milk is now a ...................... $9.00 .............. payout for 2013/14

Hard to sell at $2.10 now !!

The $2.10 takeover is " fair value " if you assume average milk payout going forward is about $6.90 ... so not exactly generous

Might not accept offer now .... ????


Offer of $2.10 which is asserted to be a premium to an assessed asset backing but without attempting a revised valuation on latest sales. Adopting latest sale the asset backing shifts to $2.78 and offer becomes a discount of almost 25%. Not a sell at all!!

FarmerHamilton
18-11-2013, 12:14 PM
Offer of $2.10 which is asserted to be a premium to an assessed asset backing but without attempting a revised valuation on latest sales. Adopting latest sale the asset backing shifts to $2.78 and offer becomes a discount of almost 25%. Not a sell at all!!

Agreed , not a tempting offer really. If you also assume the average payout going forward is going to be $7+ with regular spike to $8 then the shares are really worth closer to $3 than $2 ....

Armillary Private Capital
19-11-2013, 05:25 PM
Trading to recommence tomorrow:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2319

1leon
19-11-2013, 10:54 PM
It seems unbelievable that the Directors of Synlait could impose a trading halt lasting an unheard of 6 weeks and more incredible that this has enabled the bidder (SFLH [including two existing Synlait directors]) to advance the 50.18% held under lock up agreements to 66.78%. Apparently the trading halt has meant SFHL has been free to buy under its offer for the last 3 weeks but no one else has been permitted to trade. The trading halt is being lifted on the bidder securing two thirds of the company. It would be great to see a standoff by the remaining shareholders.

Armillary Private Capital
28-11-2013, 07:53 AM
90% acceptances reached:

http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2322

Harvey Specter
28-11-2013, 07:58 AM
So again we have no 'farms' listed on the sharemarket.

We need a partial privatisation of LandCorp.

zigzag
28-11-2013, 09:19 AM
So again we have no 'farms' listed on the sharemarket.

We need a partial privatisation of LandCorp.

Parts of LandCorp could be a good float, but can't see it happening. Try Rural Equities (REL) on Unlisted.

Harvey Specter
28-11-2013, 09:23 AM
Parts of LandCorp could be a good float, but can't see it happening. Try Rural Equities (REL) on Unlisted.politically unacceptable but they could limit it to NZ shareholders??

Will have a look - isn't that they one controlled by Cushing?

1leon
28-11-2013, 03:12 PM
politically unacceptable but they could limit it to NZ shareholders??

Will have a look - isn't that they one controlled by Cushing?
The media frequently and not incorrectly usually refers to Cushings' Rural Equities which is exactly the way they run it. Given this latest escapade on Unlisted where Synlait suspended trading for 6 weeks whilst the takeover progressed there is yet more reason to be wary of Unlisted companies particularly where there is a majority shareholder advancing its own interests.

Armillary Private Capital
24-12-2013, 11:01 AM
Notice of variation posted (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2350)(extension of offer and price appreciation).

Armillary Private Capital
03-02-2014, 10:03 AM
Synlait Farms have posted a third letter of update (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2353).

Armillary Private Capital
26-02-2014, 03:30 PM
There has been a further extension (http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2360)of the condition date.

Armillary Private Capital
05-03-2014, 01:30 PM
Takeover offer has gone unconditional (http://www.unlisted.co.nz/uPublic/docs/snlf/Synlait%20Farms%20Market%20Announcement%205.3.2014 .pdf).