PGW - PGG Wrightson

[Snoopy]

That is a good point, the milder the winter and early spring is the more live lamb and calves there will be which then means more tickets for PGW to clip.
Unfortunately this will have no reflection on the latest results and as the price for dairy and meat has only recently been higher than last year this has also come to late to show in the latest results.
Not expecting any positive surprise's next week, but at 32cps I don't think Mr market has priced in any good news either.

OK, so the general consensus is that while a mild winter is good, another drought in the spring could still see those lambs and calves bundled off to the works at historically low weights. That in turn means while a promising start to the year is as good a start to the year as can be hoped for, an adverse spring can still undo things. However, maybe if there is sufficient unused forage from winter perhaps farmers can take a drier than normal spring and still come out OK?

SNOOPY

[Snoopy]

Very wary of major shareholders intention with PGW.
I believe it is in his best interest to use PGW as a cash cow.
What is best for minority shareholders is to pay off debt.
Unfortunately it is also in the majority shareholders interest to have share price decline ready for a full take over and I believe Mr Markets will not like divi payments instead of debt payment.

Will be watching this one carefully.

Only a couple of days to wait for the result now. Just to put things in context the declared results of PGW since it has been in its current form (FY2007) read like this:

$40.0m, $73.2m, -$66.4m, $23.3m, -$30.7m, $24.5m, FY2013?

It sums to a net $63.9 earned over the last six years. If the 2013 result is as bad as I am expecting, the FY2013 goodwill write-off will probably extinguish all profits that PGW has made since the start of FY2007. Of course a goodwill write off is historical and will not affect cashflows from here on in. Nevertheless if I am right, to not earn a single dollar since the modern PGW was formed is a damning indictment on the broken dreams of past management.

My main fear on Tuesday is that PGW will be once again in breach of their banking covenants. The banks could then force them to sell assets, possibly the seeds business, which has decades of intellectual capital tied up, for a bargain price. Perhaps they will get away with unloading only the Australian arm which is where the trouble of recent years has been brewing? But how much money will they get for a loss making business?

One thing I do know is whatever happens to the PGW share price, Agria will not be making a full takeover offer as they are fully occupied keeping the receivers away from their own door. They have already consolidated PGW into their accounts and have nothing to gain from holding more PGW shares, even if they could afford it.

SNOOPY

discl: holding PGW, but looking to the future, not the past!

[Snoopy]

My concern is that they payed a divi last time when it should have been used to pay down debt.

This divi was clearly declared for the benefit of the major share holder and not for the company as a whole.
You are right if this was to continue PGW will be forced by the banks to fire sale some assets.

This in turn will not be good for PGW share price but may make it more attractive for a full takeover. In my opinion this would take at least 2 years to happen and when the share price has fallen to 18 - 20 cps the majority shareholder will step in at 35 cps and the market place will react like he is a night in shining amour when the truth is he is one of the reason the company is going backwards because he has used PGW as a cash cow.

The problem is Snapiti, without the backing of New Hope or Ngai Tahu or both, Alan Lai simply cannot launch a takeover because I believe the Agria credit card is already maxed out (the Agria FY2013 accounts when published will prove or disprove my assertion). However, if New Hope (for example) does bring in more capital, that will reduce Agria's share of the PGW business below 50.01%. That in turn means that the PGW shares they do hold will have to be 'marked to market' down from 60c to 32c. IMO that would destroy what remains of the capital base of Agria and trigger a receivership of Agria. Alan Lai will do anything to prevent that happening. Hence my belief that neither New Hope nor Ngai Tahu will be called on for more capital, and a PGW full takeover is off the agenda.

SNOOPY

[Snoopy]

snoopy you need to move on from the supplement food issue, like I said most supplement feed is fed out over winter weather it is mild or not and just means your stock are in better condition.
So there will not be extra left over for another drought.

OK I accept your expert opinion Snapiti. The thing that made me ask the question was that I have seen a couple of fodder stashes in barns that looked untouched in my travels around rural Canterbury in the last couple of weeks.

SNOOPY

[winner69]

Good luck to holders tomorrow, hope expectations are met and there's good news ahead.

Disc: not holding, undecided on buying in for now, but a 28c buy price would probably kick star me into action.

PGW history of meeting expectations is pretty dismal

But this time WILL be different eh. ... I have faith in John and George ....good blokes

[Jim]

PGW history of meeting expectations is pretty dismal

But this time WILL be different eh. ... I have faith in John and George ....good blokes

Hopefully a big surprise and not a big disappointment

[Queenstfarmer]

Look on the bright side. ..we're all expecting bad news??

[winner69]

George isn't there any more. It's John and Mark. From the Beatles to the Bible.

Forbarr reckon that EBITDA should come in at $43m, which is slightly under the mid expectations of the $40-$48m EBITDA band given previously.

George was in charge during the time this great result covers

Supposedly doesn't actually leave until 31/8 though I presume he using up his annual leave or something ... or maybe teaching Mark a few tricks

$40m ebitda doesn't end up with much profit after tax

[winner69]

Same brand of calculator Balance and I use there Sparky? I reckin something $19.5-$20.0m

[Hoop]

Look on the bright side. ..we're all expecting bad news??

I'm depending on that sentiment .... smaller bad will be very good I hope...Unfortunately I ODed on the happy pills went insane and dabbled small time into some NZX stocks on friday..reason?.. to excite my boring life on the sidelines.... I have no idea why I picked PGW as one stock (32c) , it has tight bollinger bands on a flatline chart so the price is going to go either up or down...

My plan is,,,,,,,,,,,, sell if it goes up ...... sell if it goes down ........if the unexpected happens and it stays flatlined I'll have to take a day or two to think what to do next... (slow thinker)