Originally Posted by
Snoopy
So you have given up on the imminent Chinese takeover and getting your cash out Balance? I knew you would come around to just appreciating PGW for what it was - eventually. I am very relieved to see the PGW balance sheet in such good shape. Because, to my way of thinking, building a low to no debt capital scenario in good times gives you the resilience to make it through the next farming cycle downturn which will inevitably come. The last few years has seen the debt position a bit tight, compounded by the decision not to relieve that tension - by prioritizing paying out capital to shareholders over paying down debt from the seed division sale. But that debt position also resulted in a laser focussed discipline on running the company better. Now for the first time in ages the board is starting to look outwards....
"Our strong balance sheet allows us to contemplate earnings accretive growth ambitions, both internal and external.”
On the prowl for acquisitions at the top of the business cycle? Their last big expansion doubling up -into water and irrigation- , when that market was looking all rosy, has not gone well. But that was under 'the Dewd'. And just enough time has elapsed and changes in leadership have come through for institutional memory to be diluted. I wonder what the next ill timed acquisition will be? I did shudder a little when I read the sentence I quoted above. Personally I would rather see PGW continuing to invest in their own people. I hope that is the way the growth goes. Otherwise Norwest may yet prove to be the smartest one here.
SNOOPY