PGW - PGG Wrightson

[Balance]

You need to check that abacus Balance. EBITDA of $43m is downgrade number three. So that is it. We have reached the bottom - phew! Our currency weakening off is the first green shoot that our farmers are turning the corner. Share price up this morning on this bad news, so it was already baked into the boiler. The PGW steam train boiler is indeed building up pressure and preparing to leave the station. See you on board. Don't miss the ride!

SNOOPY

Fair enough.

[Snoopy]

Interesting to plug this new EBITDA guidance into the 'Consolidated Statement of Profit and Loss for FY2023' and update the the associated cost structures.

Consolidated Statement of Profit and Loss

	FY2024 Forecast	FY2023 Actual
Operating EBITDA	$43.000m	$61.194m
less Depreciation and Amortisation Expense	$29.044m	$28.063m
equals EBIT	$13.956m	$33.509m
less Net Interest and Finance Costs	$9.440m	$9.573m
equals Profit Before Income tax	$4.516m	$23.936m
less Income Tax Expense (@ 28% for FY2024)	$1.264m	$6.418m
equals Profit Net of Income Tax	$3.252m	$17.518m

Calculation Notes

1/ Costs for FY2024 have been estimated by looking at the HY2024 figures and doubling them.

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It looks like NPAT is set to fall 81%. But we are still on for a positive result whereas I was expecting 'break even'. So as a shareholder, I am positively surprised by this update. Of course it is possible there will be some stock write down as well. If you are having a bad year, best to get all the bad news out there! So my expectation of breakeven for FY2024 may yet come true. But these write-downs will be 'non cash'. With no dividend, all of the $3.252m operating profit can be put back into reducing the full year working capital facilities drawn from $20m at EOFY2023 back towards $15m. That will help keep the banking syndicate happy. I am calling it. The recovery may not be vigorous. But the corner has been turned.

SNOOPY

[winner69]

Fascinated they talked about soil moisture deficit …’ Drought conditions with soil moisture deficits against historic averages across much of the East Coast, Tasman and Northland over the first quarter of 2024.”

In my other life I have a model I call the ‘3cs’ to see where economy is going …..3 C’s are climate (Soil Moisture Deficit SMD) currency and commodity prices and running a multiple regression analysis gives a good indication where the economy (GDP) is going. Rationale being when things are good on the farm the country is going well so how green the grass is and what prices they are getting is key……with a few quarters lag to allow the cash to flow into the towns.

Model forecasted things are a bit tough at the moment and Snoops too early to call currency a “green shoot” at the moment but who knows

Here’s latest Soil Moisture Map …this year and last year …yellow, oranges and reds not good …and light green a bit dodgy.

[Balance]

timber massive downgrade

Where is the timber?

[Snoopy]

PGW
13/02/2024 16:43
ADMIN
PRICE SENSITIVE
REL: 1643 HRS PGG Wrightson Limited

ADMIN: PGW: Shareholder Meeting Request

Shareholder Meeting Request

PGG Wrightson Limited (PGW) advises that late last week it received the
attached request from Agria (Singapore) Pte Ltd (Agria) requesting that a
special shareholders meeting be convened to consider the resolutions set out
in the notice seeking a number of board changes.

Following receipt of the notice on the afternoon of 8 February 2024 PGW
promptly sought to engage with Agria in relation to the matters outlined in
the notice and sought advice from its external lawyers, Chapman Tripp. The
PGW Board convened on 12 February and 13 February to discuss the notice and
has continued to liaise with Agria to explore whether Agria would withdraw
the request to enable a more constructive board transition to take place.

Following further dialogue today, Agria has this afternoon confirmed that it
will not withdraw the notice requesting that a special shareholders meeting
be convened and accordingly PGW is preparing for a shareholders meeting.

The PGW Board will issue a notice of meeting at the relevant time together
with appropriate information for shareholders about the matters to be
addressed at the meeting.

For media enquiries contact:
Julian Daly
General Manager Corporate Affairs / Company Secretary
PGG Wrightson Limited
Mobile: +64 27 553 3373
Email: companysecretary@pggwrightson.co.nz

Agria feud over? From the 1:45 mark in this report:
https://www.rnz.co.nz/audio/player?audio_id=2018934812

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The board is looking forward after fractions in the boardroom. In February, major shareholder Agria called for a special meeting, urging the company to dump three long serving local directors and replace them with four of its own. After board opposition it withdrew the request. But Agria Singapore remains a 44% shareholder in the company. (Chairman) Mr Moore is confident it won't happen again.

Garry Moore:
"There has been a lot learnt about the process and there has been an appreciation of how things work in New Zealand and with that of course the New Zealand Shareholders Association weighed in and gave their view on what was happening and we felt that if we could engage in constructive dialogue with them, sense would prevail and it did."

Question "Do you think having Agria as a shareholder has been in PGGs interest?"

Garry Moore
"Well I think we are aligned now. We are looking to support the company through what is turning out to be a reasonably tough year. But it comes hard after two excellent years. And in a cyclical business, you will always have something that is a bit tougher than at other times. I think the independent directors are very keen to make sure that he company performs for the benefit of all shareholders."

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SNOOPY

[kiora]

Given W69 moisture maps the check books have been slammed shut.You can't get blood out of a stone & PGG can't
get the $ out those cockies pockets?