PGW - PGG Wrightson

[Balance]

We looked forward to something like this happening.
Now that it is I find I have mixed feelings.
Thought I had found a solid company with the capacity to keep paying me great diviies.
If we do get taken over, I guess I will find somewhere else for the funds.
Should be plenty of bargains around in a few months.

Yes, heck of a pity in a way as PGW's dividend yield of over 10% should see the share price easily spike to $2.50 anyway when savers react to the unprecedented falls in interest rates (1 year government rate this morning is 0.19% !!!!) as term deposits mature.

http://nzx-prod-s7fsd7f98s.s3-websit...847/321004.pdf

I am going to be like the Cushings, who still hold 2m odd shares.

Keep a few if I can (as a majority shareholder) to enjoy the upside from PGW being used by BABL to introduce best farm servicing practices into China.

As we have seen from Synlait, the right China partner makes all the difference to tapping the real upside in China.

[Snoopy]

From AR2019 p7, we now have an indication of how the 'corporate structure review' will affect earnings going forwards.

"We expect to see the benefit of reduced costs flowing through progressively with savings in excess of $2.5m expected in FY2020"

With the seed business gone, expectations are reset. As an exercise I have gone through the last few years results and removed 'Seed & Grain' EBITDA from the Operating EBITDA. This time, I have added back in the recently announced 'corporate savings'.

Here is the multi-year earnings picture that results:

	Combined EBITDA	less Seed & Grain EBITDA	add Corporate Savings	equals PGWRR EBITDA
FY2014	$58.747m	$33.965m	$2.500m	$27.282m
FY2015	$69.631m	$40.506m	$2.500m	$31.675m
FY2016	$70.181m	$41.862m	$2.500m	$30.819m
FY2017	$64.499m	$37.045m	$2.500m	$39.974m
FY2018	$70.174m	$35.607m	$2.500m	$37.067m
FY2019			$2.500m	$26.925m
Average				$32.290m

1/ This period covers the 'modern' era where Mark Dewdney's 'One PGW' philosophy started to permeate the group.
2/ I have used only 'Operating EBITDA'. That metric Leaves out all 'Equity Accounted Investee Profit', and consequently removes the profit contribution from 'Agimol', representing the 50% interest in 'Agricentro' in Uruguay, an equity investment that was subsequently fully taken in house (FY2019) and latterly sold (EOFY2019). Equity accounted New Zealand based investments retained, being a 50% interest in 'Canterbury Saleyards' and a now 33% interest in 'Agri Optics New Zealand', I do not consider have contributed materially to EBITDA.

For FY2020 the EBITDA forecast for PGW is for $30m (26th March market Update). I heard that under lockdown, Farmlands Retail Division is down 10-15% on turnover. I would expect the profit reduction to be deeper than that, and expect PGW Retail to be showing a similar downturn. FY2020 does look to be a 'low point' in an historical context. So if a takeover bid eventuates, it could be seen as opportunistic.

Yes, heck of a pity in a way as PGW's dividend yield of over 10% should see the share price easily spike to $2.50 anyway when savers react to the unprecedented falls in interest rates (1 year government rate this morning is 0.19% !!!!) as term deposits mature.

Exactly. So why accept an opportunistic offer? You can say no.

I am going to be like the Cushings, who still hold 2m odd shares.

Keep a few if I can (as a majority shareholder) to enjoy the upside from PGW being used by BABL to introduce best farm servicing practices into China.

I think the Cushings are completely out (both H&G and Rural Equities). The Chinese have bought out the potential troublemakers. Next operation is to herd up the sheep shareholders.

SNOOPY

[percy]

Ditto. Exactly the same here and has become my 2nd biggest holding. I hope we don't lose it

Hello,hello,hello.???????????
My second largest shareholding too..!!!
Guess our largest is the same too.?...lol.

[Snow Leopard]

Hello,hello,hello.???????????
My second largest shareholding too..!!!
Guess our largest is the same too.?...lol.

At the end of today PGW is back as my biggest holding.

If your biggest is what I think it is then that is my 4th biggest,
but if it is not what I think then it is probably my 5th biggest.

Anyway I am treating myself by scraping out a jar of crunchy peanut butter with a small spoon, hours of pure joy!

[clearasmud]

What's your biggest holding Percy?
I need to know, you're my no 1 guru on this site.

[percy]

What's your biggest holding Percy?
I need to know, you're my no 1 guru on this site.

Sorry I was having fun guessing Iceman's largest holding was PAZ [Pharmazen]on NZ Unlisted market.
It is my largest holding,[then cash],and then PGW.

[clearasmud]

Sorry I was having fun guessing Iceman's largest holding was PAZ [Pharmazen]on NZ Unlisted market.
It is my largest holding,[then cash],and then PGW.

Oh OK, was hoping it was HGH or TRA.

[iceman]

Oh OK, was hoping it was HGH or TRA.

Percy is certainly a guru with his guesses. A man of many talents he is :-)

[sb9]

Article in NBR today titled..."Wrightson's reticence does shareholders no favors". Anyone kind enough to provide a little synopsis.

[kiwidollabill]

Article in NBR today titled..."Wrightson's reticence does shareholders no favors". Anyone kind enough to provide a little synopsis.

Lack of info (comments from Chair) around recent share trades between REL and China bring no confidence to other shareholders that the business is being used as a playing by overseas interests.