PGW - PGG Wrightson

[ak1261]

Thanks Sparky and Snoopy for the analysis, and as both of you suggest that the market is not very excited with the 2.2c div, and the rest.

[Snoopy]

First NZ have confirmed that pre-abnormal NPAT was $8.3m, which is halfway between Snoopy's pick of $8.1m and my lower band pick of $8.5m!

So, well done Snoopy and myself!

For the operating HY2013, I get:

$4.829m+ (1-0.28)[ $2.981m +0.577m ] = $7.391m

This removes the after tax effect of the non-operating earnings that are one off write downs (note 4) and the fair value adjustments (note 5) that are also distortionary. If I remove the 0.72 tax adjustment factor then I get $8.3m as First NZ have stated.

If my calculation is correct I will give myself a C- for accuracy of my first half prediction. I predicted $8m rather than $8.1m if you look back) I am afraid Sparky, that means you get a D on this one.

SNOOPY

[Snoopy]

Not sure I agree that PGW is "going backwards". It is all paid out of retained earnings (this and last year). However I agree this was a face-saving way for Agria to extract money. I anticipate future dividends will be less generous. Perhaps 1c for 2H2013.

They would only recommence a dividend if they were confident of future cashflows. That's exactly what they told me when I visited their HQ some months ago.

I note the 2.2c was declared today as a 'special dividend'. I take it from that that PGW have not resumed 'normal dividends' as yet.

SNOOPY

[Snoopy]

So in your book, the investment story has changed. You selling then?

I never expected a great year in FY2013 Sparky. So while the short term outlook may have weakened, I do not hold PGW for the short term. I want to see what PGW can do with Agritech, and how things go in South America. In the meantime I will wait for that PGW share price to gain a 3 in front of it (post divi) and look to pick up some more shares around NTA later in the year, if the opportunity arises.

SNOOPY

[Balance]

Operational result is not great.

Profit improvement all from lower interest cost.

Relax though guys.

Payment of dividend means company has well and truly walked through the valley of debt/death. Banks would not be happy to allow dividends if balance sheet is not in good shape.

Focus can now shift well and truly into operational efficiencies and improvements.

I always take a company resuming the payment of dividends as a 'buy' signal. Served me very well in the past.

[percy]

Operational result is not great.

Profit improvement all from lower interest cost.

Relax though guys.

Payment of dividend means company has well and truly walked through the valley of debt/death. Banks would not be happy to allow dividends if balance sheet is not in good shape.

Focus can now shift well and truly into operational efficiencies and improvements.

I always take a company resuming the payment of dividends as a 'buy' signal. Served me very well in the past.

Must agree and add that I think Sir John and George Gould have returned the business back to being a sound business in good shape with a bright future.

[wealthboost]

I note the 2.2c was declared today as a 'special dividend'. I take it from that that PGW have not resumed 'normal dividends' as yet.

SNOOPY

During the call this morning, George stated that "special dividend' in the report was a mistake and that it should have stated "interim dividend"

[percy]

Same statement (in bold) could have been made by RD1 ... And, as they're a co-op, they could have left out the remainder!

It is important to me as it shows PGW have regained the focus they lost in the Norgate years.

[Balance]

Yeah right! Remember who controls the company. They'll do whats in their best interests and not minority shareholders. Richina anyone?

More to the point, finance companies anyone?

Based upon Richina as an example, New Zealanders should now avoid any companies associated with all National Party politicians?

[percy]

Yeah right! Remember who controls the company. They'll do whats in their best interests and not minority shareholders. Richina anyone?

I think Sir John would walk,rather than "put the company at risk". A lot more morals than Jenny Shipley.