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  1. #3141
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    Quote Originally Posted by Roger View Post
    I had a quick look at the balance sheet yesterday and it looks in good shape to me.
    I have looking at the PGW balance sheet and thinking, how could I hide some debt in there, natural cynic that I am?

    One way to hide your debt is to not pay your bills. Of course I don't mean "don't pay any bills" as all your suppliers would stop doing business with you if you adopted that policy. But what about if you were just a bit slower in paying your bills?

    Have a look at the "accounts payable and accruals" section of the balance sheet, under LIABILITIES, current. The accounts payable have gone up by $17.404m over the calendar year. If those 'extra bills' were suddenly paid, PGW would have to borrow the money to do so, putting an extra $17.404m on the company debt pile. What say you Roger, is there some 'financial engineering' going on here?

    Now go up the balance sheet to the ASSETs, current and look at 'Trade and Other Receivables'. There you will find $18.908m more worth of 'Trade and Receivables' on the books compared to last year. If PGW collected that extra money, that would be cash that they could put towards reducing their borrowings. That would be a good thing, even if it is a bad thing that in reality they did not collect that money by balance sheet time.

    So does not collecting their extra dues, balance out the fact that PGW are a bit slow paying their suppliers at the other end? Or does all this mean the company is just getting lazier?

    SNOOPY
    Last edited by Snoopy; 17-08-2014 at 02:57 PM.
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  2. #3142
    percy
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    Quote Originally Posted by winner69 View Post
    Oh percy - I did say Mark had inherited the champion dog - Best in Show this year

    Just didn't want to mention Sir John and George again ... think of the future
    Winner69 I am sorry I misread your post.

  3. #3143
    percy
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    Quote Originally Posted by Snoopy View Post
    I have looking at the PGW balance sheet and thinking, how could I hide some debt in there, natural cynic that I am?

    One way to hide your debt is to not pay your bills. Of course I don't mean "don't pay any bills" as all your suppliers would stop doing business with you if you adopted that policy. But what about if you were just a bit slower in paying your bills?

    Have a look at the "accounts payable and accruals" section of the balance sheet, under LIABILITIES, current. The accounts payable have gone up by $17.404m over the calendar year. If those 'extra bills' were suddenly paid, PGW would have to borrow the money to do so, putting an extra $17.404m on the company debt pile. What say you Roger, is there some 'financial engineering' going on here?

    Now go up the balance sheet to the ASSETs, current and look at 'Trade and Other Receivables'. There you will find $18.908m more worth of 'Trade and Receivables' on the books compared to last year. If PGW collected that extra money, that would be cash that they could put towards reducing their borrowings. That would be a good thing, even if it is a bad thing that in reality they did not collect that money by balance sheet time.

    So does not collecting their extra dues, balance out the fact that PGW are a bit slow paying their suppliers at the other end? Or does all this mean the company is just getting lazier?

    SNOOPY
    Most probably the Water Dynamics acquisition.This would add to both current assets and current liabilities.

  4. #3144
    ShareTrader Legend Beagle's Avatar
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    Snoopy, It just means everyone in business is taking a little longer to pay their bills. Some on here are over-thinking this. Maybe Sunday is a good day to groom and walk their own dog(s)

  5. #3145
    Speedy Az winner69's Avatar
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    Snoops me old mate

    PGW Beneish M Score is -2.69 / -2.54 using the 8 variable model

    if M > -2.22, the firm is likely to be a manipulator

  6. #3146
    ShareTrader Legend Beagle's Avatar
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    Announcement this morning - CEO bought 50,000 more shares last week at 42.5 cents. Looks like I was in very good company last week doing the same thing

    What a lot of people don't realise is that Beef farmers have had a HUGE YEAR and there's no sign of it letting up anytime soon.
    Last edited by Beagle; 18-08-2014 at 09:47 AM.

  7. #3147
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    Default The short story of 4Seasons Feeds Limited

    4Seasons feed limited was a joint venture in the supplementary liquid animal feed market, set up on 1st August 2012. Joint venture partners were PGW (50%) and International Nutritionals Limited (50%). International Nutritionals is in turn owned jointly by RD1 and the Australian company Wilmar Gavilion. On 31st May 2014, PGW sold out to its joint venture partners.

    According to this article

    https://agrihq.co.nz/article/pgg-wri...ns-feeds?p=214

    the ultimate divestment of 4Seasons Feeds was part of PGWs grand plan.

    The 2014 cashflow statement shows that proceeds from the sale of investments net of cash totalled $21.1m during the year. Those proceeds included 50% of Gramins PTY Limited and Australian company that was deregistered (assume zero cash inflow for that) and 20% of "Di Santi y Romualdo LTDA", a dairy farm auction and liquidation business partly owned in Uruguay. In FY2013 "Di Santi y Romualdo LTDA" PGWs share of that business contributed a loss of $0.427m to the bottom line.

    Assuming all of the sale of investment cash inflow was for 4Seasons Feeds (that assumption should overestimate the value of 4Seasons Feeds if anything) , that means the total 4Seasons Feeds business was valued at $42.2m as at 31st May 2014. Profits earned for an 11 month period were $4.048m. So the sale was on a PE of:

    $42.2m/ [$4.084m x (12/11)] = 9.5

    The margin of this business was: $4.048m/$55.192m = 7.3%

    Compare that to PGWs own margin of under 3%.

    My question is this. Why did PGW agree to sell a relatively high margin core business at what seems to be a bargain price? Because of this their profit will be hit by over $2m a year going forwards. Yet the profit on the sale was a measly $4.848m (note 10). Next year the total declared profit at PGW will take a hit of over $6.8m because of this sale. Why did PGW agree to sell their investment in this company, when on the face of it, it seems to be exactly the sort of company they should be buying?

    SNOOPY
    Last edited by Snoopy; 18-08-2014 at 01:59 PM.
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  8. #3148
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    Default Water Dynamics Acquisition

    Quote Originally Posted by percy View Post
    Most probably the Water Dynamics acquisition.This would add to both current assets and current liabilities.
    Percy, Note 23 contains all the information Mark did not release during the year when he purchased Water Dymanics. The fair value of Assets and Liabilities was $7.62m. Yet Mark only paid $6.38m. So we shareholders booked a 'profit' on this purchase of $1.24m Woo Hoo! Or is it too good to be true?

    We learn that:
    "If the significant acquisition of Water Dynamics and Aquaspec had occurred on 1 July 2013, the estimated Group revenue would have been $6.12 million higher and profit would have been $0.17 million higher for the year to 30 June 2014."

    The margin on this new business is:

    $0.17m / $6.12m = 2.8%

    Makes interesting reading comparing that with the 4Seasons Feeds business we just got rid of doesn't it?

    SNOOPY
    Last edited by Snoopy; 19-08-2014 at 01:24 PM. Reason: correct denominator
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  9. #3149
    Speedy Az winner69's Avatar
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    What you think of that M-score Snoopy

  10. #3150
    Speedy Az winner69's Avatar
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    Snoopy - do you ever look at the bottom half of the Statement of Comprehensive Income.

    The bit that reduces the $42m profit to $38m (Comprehensive Income)

    Some interesting big numbers in that bit

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