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[blackcap]

I'm not sure I understand.

Shareholders of merged entity would surely be current shareholders in RBC. There is no one else.

What jurisdiction is RBC. There is your answer for the merged company jurisdiction - unless it is beneficial to have an alternative jurisdiction.

There wouldn't be one shareholder in a merged company listing on nasdax - there would be all the RBC shareholders. But they alone may not meet NASDAQ requirements.

I don't care about headaches. There are pills for those and director pay helps pay for those pills.. Take the line that offers best value to shareholders is a good pill.

(Thanks for the report back!)

Not 100% sure either what I was saying about the merged entity but that is what the directors were banging on about at the AGM. Tax implications were mentioned as well. I have tried to locate my notes but to no avail. Management did make a compelling enough case as to why a merger is not happening immediately. But they were looking to cut costs. Basically RBC is a holding company and does not require a CEO, CFO, and a bunch of other exec people.

Nasdaq requirements out of the question (too small etc) so that route cannot be taken.

[minimoke]

Basically RBC is a holding company .

That is the way i see it. Which is also why I see Arborogen as a stand alone as a good idea as it can be nicely packaged up and onsold. RBC can stay as a shell / investment company with proceeds from Aborogen being returned to RBC shareholders or there next business challenge.

[Biscuit]

B

IMO Note 15 is about Operating Revenue not EBITDA (but welcome others interpretation)

Operating Revenue of $6 mill for 15 months ended Sep 17, grew to $35 Mill for 6 months to Mar 18.

So can we expect revenue of around $70 Mill in FY 19?

I agree, patience needed for the next 6 months....but still a HOLD to me.

Back in the eighties I lost more than a few dollars on a couple of companies that had large and spectacularly growing profits and then went tits up without a dollar left for investors. EBITA and revenue growth are great but mean not a lot without positive operating cashflow. Growth and higher margins should lead eventually to positive operating cashflow but they are already selling a lot of trees and a lot of those trees are at higher margins so how much upside is there really?

[winner69]

RBC have Arborgen in their books at $124m. That Note 15 says if they updated a few things like tax etc and applied a more realistic discount rate it’s really worth $345m plus

Have faith in those calculations and RBC book value is about 70 cents

7

[ari]

RBC have Arborgen in their books at $124m. That Note 15 says if they updated a few things like tax etc and applied a more realistic discount rate it’s really worth $345m plus

Have faith in those calculations and RBC book value is about 70 cents

7

And I require every cent....first 4 parcels purchased 2004/05 @ an average price of .84c and I thought I was on to it!

[Biscuit]

RBC have Arborgen in their books at $124m. That Note 15 says if they updated a few things like tax etc and applied a more realistic discount rate it’s really worth $345m plus

Have faith in those calculations and RBC book value is about 70 cents

7

I have no faith. I particularly do not trust managers and executives. These days I think you can trust the numbers to some extent when they are presented clearly and simply. A good comparison would be the FPH books where the accounts are straightforward. Similar companies in some way, so very different in other ways.

[winner69]

Years ago around the turn of this century as part of an ‘innovation jaunt’ around the country we were shown the amazing innovative work that Arborgen we’re doing at the time.

Forestry was never going to be the same again with all these GE trees

It was more then science back then but at least it’s developed into an ‘industrial’ process of planting seedlings for sale.

Because of that exposure I’ve always followed Arborgen’s progress with interest but it seems good things take time ....an awful lot of time.

Makes you wonder if they will ever be commercially viable.

[t.rexjr]

Globally, loblolly and radiata advanced-genetics pine sales as a percentage of ArborGen’s total unit sales increased from 29% to 34%.

The key to commercial viability is increasing the advanced-genetics %. Total sales seem to be fairly constant. From my understanding of the whole planting process, a larger % of advanced-genetics in the industries total crop would see a decline in the total number of seedlings required in a like for like environment. This due to the advanced-genetics modus operandi of more mature trees from the same amount of seedlings and more often. A bit of a catch 22 conundrum there...

If you manage to track down a price list (The world wide web seems to have eaten the one I found a year or two ago) you will see that advanced-genetics seedlings carry a remarkably substantial premium. I assume being net earnings and operational cash positive (Forecast from now onward) that each % increase of advanced-genetics sales would translate very favourably with it's superior margin...

[blackcap]

That premium was mentioned at the AGM. From memory its 6 cents for a normal seedling, 25 cents for a Arborgen one.

[iceman]

That premium was mentioned at the AGM. From memory its 6 cents for a normal seedling, 25 cents for a Arborgen one.

That's a very substantial premium and the upside potential quite large when one is selling close to 400m seedlings pa. Do we know what percentage of seedlings sold today by ArborGen are advanced-genetics ?
And the other issue is, as t.rexjr points out above, is whether advanced-genetics seedlings will grow the overall market or just result in fewer and more efficient seedlings being sold. I'd expect the former.