PGW - PGG Wrightson

[Snoopy]

Hey Snoops … FCF looks a bit sad eh and the trend over the last year or so not too healthy (my view)

Love companies thar borrow to keep the divies coming

With PGW, you have to remember that much of the borrowing will be going to support the 'GOlivestock 'let's not call it a finance company' business. So those increasing borrowed funds are being lent out at higher rates, and earning more profit for PGW.

"During the period GO-STOCK celebrated two significant milestones with two million lambs purchased. on GO-LAMB contracts, and three hundred thousand cattle procured through GO-BEEF since launch."

Note 3 in HYR2023 shows GOlivestock receivables up to $43.0m, up from $35.8m the previous corresponding period. So this 'livestock rental business', (which is not a finance business as Heartland bought 'PGW Finance' a few years back, so don't call it that) looks to be growing very well.

What heartens me is that all of the business elements that PGW can control (retail and water) seem to be doing well. We knew that real estate would be dire in a rising interest rate environment. So no surprise it has probably tipped into a loss making situation - for now. And wool is doing what wool has done for a while now unfortunately. Interim dividend is down a couple of cents, but the share is still trading at a healthy yield.

So I am actually quite heartened by this result, as I think the underlying result is better than the headline figures would have you believe.

SNOOPY

[winner69]

So FY23 ebitda likely to be $57m

Heck that's about the same as they achieved in FY21

What's going on down on the farm .... profits not increasing

Not good enough

[Snoopy]

So FY23 ebitda likely to be $57m

Heck that's about the same as they achieved in FY21

What's going on down on the farm .... profits not increasing

Not good enough

Blame all those Wellingtonians bidding up their own house prices. They are the ones pushing interest rates ever higher.

SNOOPY

[winner69]

Blame all those Wellingtonians bidding up their own house prices. They are the ones pushing interest rates ever higher.

SNOOPY

But Wellington house prices falling faster than sheep prices ……..have to blame something else for declining profits

I see they didn’t come out with and ‘inflation Adjusted EBIT’ number this time …….wouldn’t been a good story.

[nztx]

But Wellington house prices falling faster than sheep prices ……..have to blame something else for declining profits

I see they didn’t come out with and ‘inflation Adjusted EBIT’ number this time …….wouldn’t been a good story.

why inflate the rate of real decline after inflation is taken into account ?

The Wellington sheep might be moving towards looking for new day jobs soon

especially after Orr-Some has had a fiddle all of his own among the castles in the sandpit

[winner69]

Still trying to keep on liking PGW but finding it harder and harder to do so.

So this year ebitda going to be 57m ……H1 reported 47.8m and H2 forecast 9.2m

Last year H1 was 47.4m and H2 was 19.8m (FY 67.2m)

So next 6 months ebitda going to be down the 50% on pcp ….that’s huge …and trend may continue into F24

Ah, seasonality you say …just like the horrific first half FCF. Methinks you stretch the seasonality excuse so far

Looking for some good bits

[winner69]

Done some suns …PGW worth $2.90 to $3.20 at moment

[mike2020]

I prefer cyclical to seasonal. I also like my pgg earnings at least 10% plus before I add any. Prefer 12% just for the "seasonality"

Still trying to keep on liking PGW but finding it harder and harder to do so.

So this year ebitda going to be 57m ……H1 reported 47.8m and H2 forecast 9.2m

Last year H1 was 47.4m and H2 was 19.8m (FY 67.2m)

So next 6 months ebitda going to be down the 50% on pcp ….that’s huge …and trend may continue into F24

Ah, seasonality you say …just like the horrific first half FCF. Methinks you stretch the seasonality excuse so far

Looking for some good bits

[BlackPeter]

Still trying to keep on liking PGW but finding it harder and harder to do so.

So this year ebitda going to be 57m ……H1 reported 47.8m and H2 forecast 9.2m

Last year H1 was 47.4m and H2 was 19.8m (FY 67.2m)

So next 6 months ebitda going to be down the 50% on pcp ….that’s huge …and trend may continue into F24

Ah, seasonality you say …just like the horrific first half FCF. Methinks you stretch the seasonality excuse so far

Looking for some good bits

You might find it getting harder these days to like any company - if their growth rates are the only thing which determine how much you like them.

The days of cheap money seem to be over - its getting harder to make it ... and maybe at some stage we need to learn liking companies which just have a sustainable income - without trying to achieve endless and unsustainable growthrates.

[winner69]

SNOOPY

discl: Still holding, and thinking about what to do.

A few days ago

You still thinking about what to do