https://www.nzx.com/companies/SKL/announcements/281481
Not looking good.
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https://www.nzx.com/companies/SKL/announcements/281481
Not looking good.
Anything with meaningful exposure to dairy will face similar strong headwinds so this shouldn't be a surprise to anyone. Perhaps a warning for other companies exposed to the severe dairy downturn ?, banks and PGW spring readily to mind.
I didn't realise this not first profit down grade this financial year
When announcing FY15 profit $21.9m they said well placed to further grow profits
At ASM before excited shareholders on 29 Oct it was going to be $24m-$26m
H1 results nit looking too good and on Feb 18 still ahead of last and guided $23m
And now jeez $20m-$21m
So from $26m to $20m in a few months
Wonder what next announcement in July will be like
Skellerup - always gunna to do great things
I think you've summed this company up extremely well mate. I think shareholders have every right to expect better forecasting than they've received and the trend is definitely down so maybe as you suggest the actual result will be below even the most recent disappointing guidance, assuming there isn't yet another downgrade before then, which is by no means a safe assumption. The currency hasn't been helpful either in the last month or two tracking back up towards 70 cents U.S. Headwinds remain for the foreseeable future and with the currency above the 20 year average it doesn't have any appeal to me anymore even at $1.20.
I managed to salt away a few more of these at $1.28 today.
If profit for the year is only $20m, followimng recent downgrades, then based on the 192.8m shares on issue, I get eps of 10.4c. So it is probably too early to say that last years fully imputed total dividend of 8.5c is under threat. It will depend on the capital expenditure requirements and outlook. The brand new Wigram factory is almost ready, so hpefully most capex is done. Given a bottoming oulook for milk and iron ore, I am guessing the board will try and hold the dividend steady.
I don't need the current level of dividend to make my investment case stack up though.
My five year average dividend yield, I am forecasting to be 8.1c (down 0.4c from last years actual).
So at $1.28 SKL is on a 5 year modelled yield of:
8.1/ 128 = 6.3% net, or 8.75% gross
A very nice little dividend earner to put away. 'Worth it's salt' some might say :-) Roger unfortunately has recently scared himself off from this bargain!
SNOOPY
Funny thing is Snoopy me ol mate, whenever I would take my old beagle Kelly to the beach she always seemed to make better progress swimming with the tide than against it. This silly old dog took notes and has recently decided to follow suit :)
When you are in for the long haul Roger, it matters not one jot which way the tide is flowing, provided you are not at risk of drowning in the meantime! SKL has low debt, so I have no doubt that it will be around when the tide turns. And it is very likely that those who prefer to swim with the tide will be paying more than I am today. Of course SKL may get cheaper. But if that has happened around results time, I will buy more shares to take advantage of it.
Take advantage of the clouded outlook for dairy and iron ore (you didn't really expect that SKL would be unscathed did you?), take advantage of the profit downgrade that knocked 10c off the share price, take advantage of a less than successful dairy auction overnight and transfer some of by 2% call money to a "7.5% bond" (and counting) in the meantime.
Another 'risk' is SKL falling out of the NZX50, due to newcomers like Tegal. But that just provides an opportunity that has nothing to do with the operations of the company. Nuplex and Coates will shortly be departing the NZX50. So SKL should be safe inside the NZX50 for now.
SNOOPY
One needs to "weigh" up carefully who might get added to the NZX50 instead, (big hint there) and not discount the effect an exit or entry to the NZX50 has on a company's SP, good recent example the bounce in CVT.
Its management's inability to forecast with any degree of accuracy that surprises me the most mate. Surely they should have been the best placed to sniff the breeze earlier in the year ?
I guess like my late and much loved Beagle if I can't smell a feed coming in a reasonable time frame, I "weigh" up my options and go sniffing elsewhere :) Beagle's by their very nature usually have a poor attention span and lousy stamina when swimming, you must be the exception to the rule mate.
I see director Liz Coutts has bought 40,000 more shares from May 6th to May 10th. I am a little surprised, as surely these purchases are well outside the normal purchase window for director. Is not now between reporting periods? Not surprised at her support for the company though!
SNOOPY