Oops my mistake..... as always DYOR!
Printable View
Interesting that A2M has held up on open given its lost 12% in value in its stake in SML.
Indeed, todays SML result and the evident 'hard bargaining' by ATM management over margins is a credit to ATM's management team, their 'diary disrupter' model and an endorsement of their 'capital light' v SML's 'capital intensive' model.
Remember Beagle's thread on which would be the best long term investment, SML or ATM? Maybe today's result gives us a message.
(Disc holding ATM not SML ....DYOR)
how screwing up SML would add any value to ATM?
SML should help Nestlé A2 to enter China if ATM is playing around the margin. the key part of SAMR registration is the source of your material.
Without knowing the details, and please feel free to correct me, my assumption is that A2 are now paying a fair margin to synlait. They may have been paying a higher price before, partially due to smaller volumes and partly to compensate for synlait working so hard to keep up with their volume needs. The fact that margins have reduced does not mean that they are now lower than they should be.
Yeap. The lack of transparency in terms of Synlait not telling the market about the terms of this new contract has blindsided minority SML shareholders and explains why a major gap has opened up between the relative share prices of these two companies in recent months. Some major shareholders were obviously "in the know"
John Penno was a great CEO but as with ATM we now get an unknown quantity with a whole lot to prove... but we do get lovely pink colours and heaps of slides and details about diversity programs...its just absolutely marvellous, that's exactly what I have been hankering for all these years (sarcasm intended).
I think both ATM and SML are very fully priced and an awful lot of future growth is already priced in but in all sincerity I wish the best of luck to shareholders of both companies.
Actually - they announced the milk price agreement betwen these two companies in early July 2018. At this stage it was still John Penno running Synlait - and Jane started from memory only after this announcement as well her new job (but yes, in July as well).
Blame the old management ...
After watching the webcast of Synlait's presentation by CEO and CFO y'day, there are lot subtle hints that were a giveaway which point to a boomer of SH 2019 for A2, both on better margins which we all know by now and expected increase in canned IF sales.
In other words, its an indirect trading upgrade for A2.