NZL - NZ Rural Land Co IPO

[CJ]

Ridiculous, cynical, useless comment.
It’s the first carefully considered step in fulfilling their long term strategy. Are you jealous of something?

Agree - No Dairy sale is going to settle until Gypsy day anyway so they are still working to timetable.

The question that this raises for me is why would Fortuna sign up to a lease at 4.97% when they could be borrowing in the low 2% range. Fortuna probably should have just done a cap raise themselves to give them the equity to do this themselves.

[Lola]

Agree - No Dairy sale is going to settle until Gypsy day anyway so they are still working to timetable.

The question that this raises for me is why would Fortuna sign up to a lease at 4.97% when they could be borrowing in the low 2% range. Fortuna probably should have just done a cap raise themselves to give them the equity to do this themselves.

Good question. I have no idea but Fortuna will have their reasons.....I guess its a waste of time asking NZTX...?

[nztx]

Here's an exit facility for punters - courtesy of the new Board Import's desk:

https://www.nzx.com/announcements/369173

[nztx]

Good question. I have no idea but Fortuna will have their reasons.....I guess its a waste of time asking NZTX...?

CJ has a good point there IMO .. no answers or further suggestions - Lola ?

[nztx]

Ridiculous, cynical, useless comment.
It’s the first carefully considered step in fulfilling their long term strategy. Are you jealous of something?

no no no .. out of this duo for good & smiling -- far better faster moving fish elsewhere .. already well off the starting blocks & flying

[nztx]

* Double posting removed *


can't have folks wondering if their glasses are malfunctionng seeing double - can we ..

[Ferg]

Here's an exit facility for punters - courtesy of the new Board Import's desk:

https://www.nzx.com/announcements/369173

Thanks for sharing. The Directors previously stated they want this business to be valued on an NTA basis, so I guess this is where they get to make that happen by acting like a market maker. Is this the best use of funds? Also, qui bono?

[CJ]

So they listed a cashbox and will use that cash to buy their own shares? Seems a bit premature.

Here's an exit facility for punters - courtesy of the new Board Import's desk:

https://www.nzx.com/announcements/369173

[CJ]

So they listed a cashbox and will use that cash to buy their own shares? Seems a bit premature.

Here's an exit facility for punters - courtesy of the new Board Import's desk:

https://www.nzx.com/announcements/369173

[Ferg]

I have been looking into the impact of NZL buying back shares on the market. It appears we currently have a floor price in the market of around $1.13 and a (relatively) large volume went through on March 30th at somewhere around that price (any traders may know the actual prices?). For the purposes of this analysis I'm assuming NZL have set the market maker at $1.13 and they are paying maybe 0.8% brokerage (a guess) which puts the cost per share at $1.139 each.

They can buy back up to 10% of issued shares (60.46m), which is a maximum of 6,046,000 shares. If they manage to buy all 6m shares at $1.13 this impacts the P&L and NTA given they have stated the shares will be cancelled and not held as treasury stock. I'm not an expert on this so this is my best guess - if the accounting treatment is not correct please let me know.

Assuming all 6m are purchased at a cost of $1.139 then cash expended will be $6,886k, capital cancelled will be $7,324k* giving a nett gain of $438k which I imagine will form part of comprehensive income. This lifts NTA from $1.208 per share per the interim report to $1.216 assuming there are no other transactions. Make of that what you will but there are performance incentives based around NTA. Buying and cancelling shares increases NTA where shares are purchased on market for less than $1.21.

*Capital cancelled includes cancelling not just the shares and their par value, but also the issue costs associated with those shares. The capital per share is $1.211 per the interim report (total $73,241,792 / 60,460,000).

And in other news I see NZL have announced their Southland farm acquisition is now unconditional. Hopefully that is the first of many successful acquisitions. https://www.nzx.com/announcements/369598

Disclosure: curious and interested observer, not a holder (at the current price).




FYI Workings follow:

	Opening	Buy back	Closing
Summary:
Shares on issue	60,460,000	-6,046,000	54,414,000
Capital $	$73,241,792		$65,917,613
NTA	$73,033,149		$66,146,755
Capital/share	$1.211		$1.211
NTA/share	$1.208		$1.216
Balance Sheet:
Cash	$72,842,848	-$6,886,394	$65,956,454
+Others	$371,195		$371,195
=Total Assets	$73,214,043	-$6,886,394	$66,327,649
- Liabilities	$180,894		$180,894
Capital	$73,241,792	-$7,324,179	$65,917,613
+Retained Earnings	-$208,643	$437,785	$229,142
=Equity	$73,033,149	-$6,886,394	$66,146,755
Price / share		$1.130
+Brokerage 0.8%		$0.009
= Cost / share		$1.139