PGW - PGG Wrightson

[winner69]

So $62m- $68m operating earnings F17 - F16 was $70.2m

Let's hope his guess on light side

Always something difficult to manage their way through - but that's just normal in agri business and should be expected

Lets of negative words (difficult, weaker, lower etc) but they remain optimistic and well positioned - so all honky dory

Buzzed that announcement as well - very high % of buzz words - but then gives us the warm fuzzies

[trader_jackson]

Always something difficult to manage their way through - but that's just normal in agri business and should be expected

Sure is... one of the key reasons many have brought (at least recently) is for the fully grossed up large dividend... lets hope they can maintain this (in my view, it was not a flash annoucement at all this morning)

[Beagle]

Sure is... one of the key reasons many have brought (at least recently) is for the fully grossed up large dividend... lets hope they can maintain this (in my view, it was not a flash annoucement at all this morning)

+1, that's how I see it too. Mid point of forecast is EBITDA of $65m. Net profit after tax was artificially high last year due to a much lower tax rate so we could see a material fall in FY17 EPS taking into account lower EBITDA and a normalised tax rate...and then there's my mate Winner's concerns regarding substantial funding requirements of the old superannuation scheme.

Enough concerns there in tandem with a very soft market for me sit on the sidelines with this one for a while.

[winner69]

Even though guidance is less than last years $70.2m it's not really a downgrade per se as no guidance had really been given

Previous guidance / expectations for F17 were 'Repeating this Operating EBITDA result next year will again be a stretch target given current market conditions, but we will give it our best shot.'

So no worries - but still giving it their best shot I hope

[Beagle]

I think previous language gave the clear impression that matching profit was going to be a tough ask and this basically confirms that.
http://www.sharechat.co.nz/article/f...ty-prices.html Given FY16 tax level was very low the potential is definitely there for a meaningful decrease in EPS. Hard to see why they're still over 50 cents in this very weak market with NZX50 down 7% in the last month.

[winner69]

Roger - he said 'At a net profit after tax level it is expected that performance will be broadly in line with the 2016 financial year.'

So EPS will broadly remain unchanged this year

Your divie safe as - no worries

Marked price sensitive as well

[Beagle]

I think we can agree the overall tone of what was said is for earnings to be slightly softer and there is obviously considerable uncertainty at this very early stage in the year. They're possibly fair value at the current level but some stocks are getting hammered and are to be fair, fair value doesn't cut the mustard for me right at the minute.

Very soft market so my inclination is to shoot first on the sell button and asks questions later. Plenty of opportunities to bag bargains in the future is my sense of where things are at.

As I said privately to you and Couta1 last week, I get the sense the market is looking for any excuse to have a good old fashioned correction of 10-15%. At this stage my gut instinct is the correction is only half done. They need to find a lot of cash to fund that superannuation programme this year, was it $9.5m from memory ? Doesn't matter how you account for it they still have to find the cash and that will suck a bit of wind out of their sails.

[Beagle]

I think previous language gave the clear impression that matching profit was going to be a tough ask and this basically confirms that.
http://www.sharechat.co.nz/article/f...ty-prices.html Given FY16 tax level was very low the potential is definitely there for a meaningful decrease in EPS. Hard to see why they're still over 50 cents in this very weak market with NZX50 down 7% in the last month.

As expected. One week on and we're seeing a new reality starting to bite. Back to the mid 40's or possibly even early 40's in due course I reckon.

[see weed]

As expected. One week on and we're seeing a new reality starting to bite. Back to the mid 40's or possibly even early 40's in due course I reckon.

Was lucky to sell my remaining holding on open on 18/10/16 for 53c to someone who had a buy order to buy 100,000, will get in again at a later date, all wrapped up with AIR at the moment.

[Beagle]

So they built a good base at around 40 cents based on 2015's level of profit and then the SP went north when they said we're looking at 20% profit growth for 2016.

It wasn't lost on me that basically all this profit growth was from the lower tax rate and earnings before tax showed little growth at all.

Tax must normalise over time so the question I have been mulling over given that they have this continuing problem with significant funding of their legacy superannuation liability is are the shares really worth any more than 40 cents now ?

Extrapolating this super problem out, if they couldn't get good returns last year when the markets were doing well, then that problem will only get exacerbated in this sort of market so the size of that problem won't diminish anytime soon notwithstanding they are committed to a whopping $9m plus contribution this year.

If we get normalised tax and slightly lower earnings than Fy16 I struggle to make the case for the shares being worth more than 40 cps again. Disc: I'm staying out and letting this correct back down.

Anyone care to share their thoughts on this one ?