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  1. #4621
    Legend
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    Quote Originally Posted by Snoopy View Post
    I am very pleased to see in today's announcement that the deficit in the pension scheme has been acknowledged at long last!

    "In addition, lump sum funding payments of approximately $10.3 million were made to the group’s Defined Benefit Pension Scheme (Plan) to bring the Plan into actuarial equilibrium in June 2019.”

    EOFY2016 EOFY2017 EOFY2018 EOFY2019 13-08-2019
    Discount Rate (10yr govt bond rate) 2.34% 2.97% 2.85% 1.57% 1.10%
    Inflation 2.0% 2.0% 2.0% 2.0%
    Future Salary Increases 3.0% 3.0% 3.0% 3.0%
    Future Pension Increases 2.0% 2.0% 2.0% 2.0%

    However, has squaring the scheme up as at 30th June 2019 fixed the issue? Sadly no, as interest rates, and the critical ten year government bond rate, have continued to fall since balance date.

    $10m in. Another $10m to go? Perhaps the 'dividend haircut' will continue for a few more years?
    I am extremely disappointed to find that on inspecting Note 19 in the preliminary release of accounts, the pension scheme still had a hole of $5.883m at balance date. That is in direct contradiction to the statement put out by PGW Chief Executive Stephen Guerin on 13th August that:

    "In addition, lump sum funding payments of approximately $10.3 million were made to the group’s Defined Benefit Pension Scheme (Plan) to bring the Plan into actuarial equilibrium in June 2019.”

    A $5.883m hole does not equate to being 'in balance' in my book! What is more with the reduction of the 10 year government bond rate since balance date, I estimate the pension scheme deficit is now out to $10m again. Very disappointing not to be able to take the Chief Executive's word at face value. IMO If this deficit is ever going to be closed, dividends are going to have to be cut more for longer.

    SNOOPY
    To be free or not to be free. That is the cash-flow question....

  2. #4622
    percy
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    Ring or send him a "please explain."
    Last edited by percy; 23-08-2019 at 12:23 PM.

  3. #4623
    Membaa
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    @Snoopy, could it be that an actuarial valuation is quite different from having to fill a $5m+ "hole" or be "in balance" as you put it. The CEO's comments are probably factually correct, albeit without seeing the 'actuarial valuation'.

    Take Percy's advice and call the CEO.

  4. #4624
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    Quote Originally Posted by Baa_Baa View Post
    @Snoopy, could it be that an actuarial valuation is quite different from having to fill a $5m+ "hole" or be "in balance" as you put it. The CEO's comments are probably factually correct, albeit without seeing the 'actuarial valuation'.

    Take Percy's advice and call the CEO.
    Hmmm, I think I was a little hasty with my comment. I was firstly so pleased to hear that this troublesome superannuation scheme was announced to be in 'actuarial balance' and THEN so enraged to see that Stephen Joyce sized $5.883m 'hole' in the accounts, that I posted immediately. I should have read the explanatory text of note 19 below the figures.

    "During 2017, the Group made a commitment to provide certain contributions over a five year period in order to bring the underlying plan to an actuarial equilibrium position (calculated on a different basis to the IFRS amounts above). The plan reached actuarial equilibrium following the cash contributions made in the period to 30 June 2019. Accordingly, no provision for ESCT on committed contributions remain."

    Still, I think most people who have been following this issue over several years would have had the same expectation and impression that I did. I am disappointed that the IFRS standards have been dismissed so easily, once more. The IFRS standards were designed to produce credibility and I think the management line that 'we know better' and will follow our own standard is a dangerous precedent to set. I think I would agree with Stephen Joyce on this one.

    SNOOPY
    Last edited by Snoopy; 23-08-2019 at 02:19 PM.
    To be free or not to be free. That is the cash-flow question....

  5. #4625
    percy
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    Quote Originally Posted by percy View Post
    I think we will see both eps and dividend per share growth, with the dividend yield being over 9% gross yield ,and PGW having the capacity to pay fully imputed divies.
    The market seems to agree,as the share price has crept up to $2.39cd.

  6. #4626
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    Quote Originally Posted by percy View Post
    The market seems to agree,as the share price has crept up to $2.39cd.
    Recommendation from a couple of brokers to include in yield portfolio - Gross yield of >10% with drop in NZ$ favoring the rural sector.

  7. #4627
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    REL like it, now up to a 3.77% stake and still a pile of cash looking for a home. Results from their farming businesses not too flash this year, much better off buying chunks of PGW.

  8. #4628
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    Quote Originally Posted by mfd View Post
    REL like it, now up to a 3.77% stake and still a pile of cash looking for a home. Results from their farming businesses not too flash this year, much better off buying chunks of PGW.
    Build up a big enough stake and propose merger.

    Easy stock really, PGW, to invest in.

  9. #4629
    percy
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    The trust I help out on has had to increase the price we paid to fill our order.Started buying at $2.37 and filled the order today ,paying up to $2.42,after buying "at market."

  10. #4630
    Legend Balance's Avatar
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    Quote Originally Posted by percy View Post
    The trust I help out on has had to increase the price we paid to fill our order.Started buying at $2.37 and filled the order today ,paying up to $2.42,after buying "at market."
    That you paying $2.45 to finish your order, Percy?

    Updated EPS forecast from one broker :

    F20 20.1c
    F21 23.3c

    With bugger all debt and capacity to increase dividends to 100% of EPS, F20 and F21 could see gross yields of 11.4% and 13.2% respectively!

    Should get the yield seekers charge the stock to higher levels.

  11. #4631
    percy
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    Quote Originally Posted by Balance View Post
    That you paying $2.45 to finish your order, Percy?

    Updated EPS forecast from one broker :

    F20 20.1c
    F21 23.3c

    With bugger all debt and capacity to increase dividends to 100% of EPS, F20 and F21 could see gross yields of 11.4% and 13.2% respectively!

    Should get the yield seekers charge the stock to higher levels.
    No we finished this morning.Took a couple or three days.
    Also brought on Monday NZR and SKL.Approx same amounts in each three companies.
    PGW agreed on yield.I like Findlay and Cushing being directors, and having skin in the game.They know the sector.
    And there could be corporate fun.!..lol.
    I will list The Trust holdings.ATM,AIR,EBO,FPH,FRE,HGH,HLG,MCY,MEL,NZR,O CA,PGW,RBD,RYM,SKL,SPK,SUM,THL,TRA.
    Last edited by percy; 04-09-2019 at 05:26 PM.

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