Tegel IPO

[JeremyALD]

This thread has seen the prospectus about 100 times, a flat first half was expected - we got a minor underperformance.

Domestic market performed well, we can see where this result fell short, let us imagine export revenues were flat - we would have seen 2-4% EBITDA growth.

But for the export performance this was actually alright.. they say this was "as expected" not so sure about that.

It was priced at $1.55 based on prospectus guidance which is at least 20% below. So we'll see how the market reacts today, but with little growth, the risk of Affinity selling out and a PE of 14 its hardly looking attractive.

[hardt]

It was priced at $1.55 based on prospectus guidance which is at least 20% below. So we'll see how the market reacts today, but with little growth, the risk of Affinity selling out and a PE of 14 its hardly looking attractive.

No doubt it is heading south today...

[winner69]

This thread has seen the prospectus about 100 times, a flat first half was expected - we got a minor underperformance.

Domestic market performed well, we can see where this result fell short, let us imagine export revenues were flat - we would have seen 2-4% EBITDA growth.

But for the export performance this was actually alright.. they say this was "as expected" not so sure about that though.

"higher costs have been incurred due to additional investment to drive growth, particularly in Australia as we expanded the export sales team, incurred higher distribution costs and established new product lines in new channels" - hmm

Is this flat first half expectations your expectations ....or the markets

All the company was saying FY18 ebitda more than F17

[hardt]

Is this flat first half expectations your expectations ....or the markets

All the company was saying FY18 ebitda more than F17

TGH remains solid and they have continued to show dominance in the NZ market...
I thought exports would remain stable, so in that regard it underperformed.
I am sure plenty of people shared my same thoughts, has me contemplating taking my profits and buying back later.

At the end of the day brokers will likely continue to support and funnel clients into TGH.

OUT AT 135

[JeremyALD]

TGH remains solid and they have continued to show dominance in the NZ market...
I thought exports would remain stable, so in that regard it underperformed.
I am sure plenty of people shared my same thoughts, has me contemplating taking my profits and buying back later.

At the end of the day brokers will likely continue to support and funnel clients into TGH.

OUT AT 135

Down 10% in early trading

[winner69]

TGH remains solid and they have continued to show dominance in the NZ market...
I thought exports would remain stable, so in that regard it underperformed.
I am sure plenty of people shared my same thoughts, has me contemplating taking my profits and buying back later.

At the end of the day brokers will likely continue to support and funnel clients into TGH.

OUT AT 135

Yes a solid company. Will continue to make decent profits.

Punters get carried away about all this talk about investing in their brand, innovation, new products and investing to improve efficiencies etc and assume that all those things will boost profits (markedly?)

In reality those things are the cost of staying in the game (don’t do them and you gradually die) and really only maintain profitability. After all no matter how much they talk about premium products aren’t they still dealing with a commodity product. That’s why they continually ‘have ongoing challenges around pricing’

Current performance plus or minus a bit is about as good as its going to get I reckon.

same comments apply to Metro Glass

[Beagle]

As mentioned yesterday distribution costs up by millions compared to the pcp. Worth noting that the current diesel price is quite dramatically higher than what was prevailing on average throughout the pcp last year and higher than the most recent half year too. I think there's plenty of potential for the full year profit to be yet another disappointment and be less than FY17.

Food for thought for holders while eating their chicken club sandwich for lunch. EPS last year was 9.52 cps. I think its clear now you've been sold a pup and all that talk of growth is nothing but that, "talk".

Even if current period distribution expenses don't jump millions more compared to pcp where's the growth ? Legendary investor Benjamin Graham reckoned a fair PE for a no growth company is 8.5. On that basis 8.5 x 9.52 gives fair value for Tegal of just 81 cents.

On that basis the dividend yield would be roughly the same as that other recent float that talked a lot about growth and has also delivered none, MPG.
By my reckoning both companies deserve to trade around 80 cps, maybe 90 cps if we're being kind and attributing a PE of 9.5 due to the current very low interest rates.

[winner69]

As mentioned yesterday distribution costs up by millions compared to the pcp. Worth noting that the current diesel price is quite dramatically higher than what was prevailing on average throughout the pcp last year and higher than the most recent half year too. I think there's plenty of potential for the full year profit to be yet another disappointment and be less than FY17.

Food for thought for holders while eating their chicken club sandwich for lunch. EPS last year was 9.52 cps. I think its clear now you've been sold a pup and all that talk of growth is nothing but that, "talk".

Even if current period distribution expenses don't jump millions more compared to pcp where's the growth ? Legendary investor Benjamin Graham reckoned a fair PE for a no growth company is 8.5. On that basis 8.5 x 9.52 gives fair value for Tegal of just 81 cents.

On that basis the dividend yield would be roughly the same as that other recent float that talked a lot about growth and has also delivered none, MPG.
By my reckoning both companies deserve to trade around 80 cps, maybe 90 cps if we're being kind and attributing a PE of 9.5 due to the current very low interest rates.

C’mon beagle you know Ben’s formula was relevant decades ago but not that relevant today.

And surely a ‘solid’ profit making company investing to stay in the game (investing to survive is how some describe it) will achieve some modest growth into the future. That growth probably coming from punters eating more chicken if nothing else.

A DDM calc using say 2% and 3% growth gives a value of 94 cents and $1.07 respectively

That’s how I see it

[Beagle]

Yes, No, Maybe. 2% growth in top line sales in line with inflation..so no real inflation adjusted growth. Yes the prevailing risk free interest rate in Ben Grahame's day was 4%, a bit lower now so maybe we stretch to a no real growth PE of 10 which on 9.5 cps means fair value is 95 cps, see we're not that far apart
Is it really that 'solid'...just keeps disappointing the market time after time...
P.S. Even though Tegal rhymes with Beagle this hound is not having a bar of investing in it...happy for Mrs Beagle to invest in it at the supermarket though !

[moka]

So paltry growth really although the dividend isn’t chicken feed or paltry.

Poultry volume growth
48.7k tonnes
UP 1% YEAR ON YEAR