PGW - PGG Wrightson

**Snoopy** · 28-10-2019, 10:08 AM

Originally Posted by Snoopy

Somehow millions of dollars worth of capital must have been leaking from PGW in recent years, out of the headline sight of shareholders, to bring them to the precarious capital position that PGW is in today. So how did it all unfold?

I am not quite sure why our savvy farmers are keen to outlay cash for goods or services that they have not received. But it looks like they have woken up as over the last two years these deposits are down. From the 'Trade and Other Payables' (Note 18 AR2019) sections of the respective annual reports.

	FY2017	FY2018	FY2019
Deposits Received in Advance	$3.589m	$3.196m	$1.042m

This drop off could be related to the sale of the seed division. It is possible that farmers would be OK with putting up money for seeds in advance, in return for a guarantee of supply on the dates they want. Or perhaps the other retailers of wholesale seeds were the ones putting up the cash in advance? This is just a theory of mine. Perhaps someone who is closer to the farm community on the ground could confirm or deny. Yet the figures in the accounts do not lie If deposits are down by:

$3.589m - $1.042m = $2.547m

and that capital is needed. Then it must be borrowed. A $2.547m reduction in deposits is another brick in the PGW debt wall.

SNOOPY

**BlackPeter** · 28-10-2019, 10:25 AM

Snoopy, very interesting bits and pieces you uncover from PGW's accounts ... thanks - feels more like watching an unfolding crime story rather than reading dry accounts!

I am just watching this company from the sidelines, but for shareholders I could imagine you might make some of them nervous (which is a good thing) ...

Just out of curiosity - you used to hold PGW, didn't you? Are you still holding?

**percy** · 28-10-2019, 02:26 PM

Originally Posted by percy

Year 2020 forecast equity ratio is 46%.Very sound.

No one can get nervous with that equity ratio.
And PGW will be paying increasing fully imputed divies with a gross yield of over 9%.

**winner69** · 28-10-2019, 02:51 PM

Originally Posted by percy

No one can get nervous with that equity ratio.
And PGW will be paying increasing fully imputed divies with a gross yield of over 9%.

Equity Ratio 40% but leverage about 20% so no worries re ‘lack of capital’

Numbers from. Pgw presto but no idea if latest,

**Snow Leopard** · 28-10-2019, 03:29 PM

Me thinks that Snoopy is delibrately down-ramping this so that he can fill his bowl up on the cheap.

PGW accounts have always been fun (and I use that word in a sarcastic way) to work through.
Add in the ever changing accounting standards and the recent drastic transformation into a smaller and hopefully leaner company and I expect extracting the true underlying performance will be as interesting (sarcasm again) in the future.

Maybe I should hope that someone buys the rest of the company off us and saves me a few hours ever year.

**percy** · 28-10-2019, 04:25 PM

Originally Posted by winner69

Equity Ratio 40% but leverage about 20% so no worries re ‘lack of capital’

Numbers from. Pgw presto but no idea if latest,

My figures are from a very reputable broker's research dated 24th October 2019.

**winner69** · 28-10-2019, 04:36 PM

Originally Posted by percy

My figures are from a very reputable broker's research dated 24th October 2019.

Same numbers - just a different way of expressing them

I think leverage more commonly used (and understood) for non-fianancuals - like debt is 20% of total debt + equity ..no worries there

**percy** · 28-10-2019, 05:24 PM

Originally Posted by winner69

Same numbers - just a different way of expressing them

I think leverage more commonly used (and understood) for non-fianancuals - like debt is 20% of total debt + equity ..no worries there

Agree.
Strong financials.