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[SilverBack]

The lack of communication by this company to its shareholders condemns it. Lack of information concerning its strategy and absence of any response in share price following purchase of Tenon's NZ assets speak for themselves. One cannot help but think that management are acting for their own interests!
The Tenon price appreciated over the past two years plus payment of dividend while RBC steadily deteriorated even while Aborgen supposedly improved its position.
So is the Tenon asset so bad that the RBC price should subsequently decrease, or is it Aborgen's performance? Who would know (other than the directors of course) because there is never any market update. This company behaves like it is a private company and not a public one (apart from observing the NZX's minimum requirements).

[silverblizzard888]

I'm in it for the assets.

Capital returns (71 (first capital return) +43 (second capital return)+ 5 (yet to be paid) = 119 x 0.6) = $71.4 USD - 20USD debt repaid earlier. 51.4 USD left, equals 71.5 NZD in Rubicons bank account.

Clearwood valued at $55 US, 50% equal 27.5 USD or 38.25 NZD.

= Cash 71.5 + Clearwood 38.25 - $26 (50% kept interest) = 83 million or 20.5 cents per share, not even counting arborgen.

Conservative Arborgen value. I've looked at Sygenta, Monsanto and Dupont
They all seedlings producers (though do produce other stuff too) and all trade at least 3 times sales. Arborgen's current sales are 40 million USD, given RBC own a third it would be worth 40 million to them and is equal to 55million NZD. I think this valuation is conservative enough.

Add 55 to 83 and we have 138 million valueNo matter how you look at it RBC is undervalued.

[ari]

I'm in it for the assets.

Capital returns (71 (first capital return) +43 (second capital return)+ 5 (yet to be paid) = 119 x 0.6) = $71.4 USD - 20USD debt repaid earlier. 51.4 USD left, equals 71.5 NZD in Rubicons bank account.

Clearwood valued at $55 US, 50% equal 27.5 USD or 38.25 NZD.

= Cash 71.5 + Clearwood 38.25 = 109.5 or 26.76 cents per share, not even counting arborgen.

Conservative Arborgen value. I've looked at Sygenta, Monsanto and Dupont
They all seedlings producers (though do produce other stuff too) and all trade at least 3 times sales. Arborgen's current sales are 40 million USD, given RBC own a third it would be worth 40 million to them and is equal to 55million NZD. I think this valuation is conservative enough.

Add 55 to 109.5 and we have 164.5 million value or 40 cents per share.

No matter how you look at it RBC is undervalued.

Certainly way short of Edison's report some time ago ie. conservative value 64c and bullish value $1.06.

[silverblizzard888]

Certainly way short of Edison's report some time ago ie. conservative value 64c and bullish value $1.06.

The arborgen value I prescribed is just a conservative approach and I do believe it to be worth much more, though with barely any info to go on its hard to value them. The point of the exercise was to point out even with a management team thats not responsive to shareholders we can be assured that the company is safe in that its back by its assets.

[ari]

The arborgen value I prescribed is just a conservative approach and I do believe it to be worth much more, though with barely any info to go on its hard to value them. The point of the exercise was to point out even with a management team thats not responsive to shareholders we can be assured that the company is safe in that its back by its assets.

Point taken........do you see an IPO in the future as this appears to be only way true value can be realised.....

[Xerof]

SilverB, I think your starting cash is too high but I agree with your point. (did you deduct what R have to pay for the share of C? Somewhere I read the net effect is $10m, not $43)

This appears to be similarly run to the Perth mining lifestyle companies (directors lifestyle, not the shareholders)

[t.rexjr]

SilverB, I think your starting cash is too high but I agree with your point. (did you deduct what R have to pay for the share of C? Somewhere I read the net effect is $10m, not $43)

This appears to be similarly run to the Perth mining lifestyle companies (directors lifestyle, not the shareholders)

Yeah we're a bit off in those workings:

At 31 December the Group held cash of $24 million (Rubicon $22 million, Tenon $2 million), bank debt of $2 million (Tenon) and outstanding subordinated Notes of $7 million (Rubicon).

Clearwood sale was supposed to be a net profit of $10 million

This would mean current cash would be around $25 million
50% of Clearwood value ($55) $27.5 million
And whatever value you want to place on Arborgen…

[silverblizzard888]

SilverB, I think your starting cash is too high but I agree with your point. (did you deduct what R have to pay for the share of C? Somewhere I read the net effect is $10m, not $43)

This appears to be similarly run to the Perth mining lifestyle companies (directors lifestyle, not the shareholders)

The Clearwood settlement was that the consortium would purchase the whole business for $55 million as noted in the statement: "purchase price is US$55 million payable in cash", from that arrangement RBC will get 50% of the purchase and I assume an arrangement to pay the loan made to arrange the financing before they got the capital returned. The net effect would make them $10millon US.

Out of the purchase price Tenon debt was repaid and $48.8 million left, of that "capital return of US$43 million be made to shareholders on closing....... return of all residual surplus funds (currently estimated to be a further US$5.8 million approximately) to shareholders. " 60% of 48.8 is $29.28 million US, - minus 18.8 of interest kept and fees then yeah about $10 million better off.
https://www.nzx.com/companies/RBC/announcements/296743

[Leftfield]

IMHO patience is needed with this one. RBC has always said that it's goal is to, "determine (a) risk adjusted path likely to close the share price value gap." (financial gobbledygook seeming to say they agree with SBuzzard that RBC's SP is too low.)

The recent aligning of RBC's FY balance date with Arbogen is no doubt part of this process, and RBC for obvious reasons is carefully crossing t's and dotting i's before it makes any announcement to the market re what lies ahead for holders.

I'm hoping for an announcement by late July and some clarity after that.

All holders can say at the moment is that they are 'well positioned" .

I note there has been some life in the TEN SP and find this interesting......anyone have any views on what may happen here?

[silverblizzard888]

Yeah we're a bit off in those workings:

At 31 December the Group held cash of $24 million (Rubicon $22 million, Tenon $2 million), bank debt of $2 million (Tenon) and outstanding subordinated Notes of $7 million (Rubicon).

Clearwood sale was supposed to be a net profit of $10 million

This would mean current cash would be around $25 million
50% of Clearwood value ($55) $27.5 million
And whatever value you want to place on Arborgen…

Actually I've made a error around the clearwood part, need to deduct $18.8 million for clearwood interest they have kept. Apologies.

To clarify summary:
Dec 31st postion: $22 million
Net effect of Clearwood: $10 miilion
Clearwood: $27.5
= USD 59.5 ($82.57 NZD) still relatively near market cap currently, not factoring in Arborgen