PGW - PGG Wrightson

[kiora]

But when will it get back to where it was?
https://www.marketscreener.com/quote...7113/finances/

[Snoopy]

But when will it get back to where it was?
https://www.marketscreener.com/quote...7113/finances/

Nice website graphics, although after I clicked around a bit trying to find out who was the 'one analyst' they took the view from to present their 'averaged results' (an average of one, lol!) it froze on me.

If you mean when will the share price get back above five bucks as it was in early 2022 when all of the commodity prices aligned, then I would say 'never'. But fortunately the share price does not have to get back there for shareholders buying in today to make a buck. Before the referenced website froze me out, I recall the forecast dividend returns for FY2025 and FY2026 were pretty miserable (5% or so). Now I am not saying whoever made those forecasts will definitely be wrong. But it would be interesting to know what the assumptions were behind those forecasts.

What I am sure about is that with Agria and Mr Lai as the largest PGW shareholder, he will not stand for such returns. Something will have to change. Will the finance portfolio, whoops sorry I mean 'GoLivestock' be sold off (again)? Will Fruitfed be sold off? Remember years ago, Friutfed was a separate very successful listed company. And Fruitfed is probably the business unit least integrated in terms of cross selling opportunities to other PGW business units?

What I do know is that agricultural commodities fluctuate in price and that those prices do not all stay down forever. As for when they will recover and to what extent I do not know. But I don't have to know that. I can simply buy PGW shares today and wait until they do. I have enough mostly fully imputed income from the other 11 shares in my NZX portfolio to 'wait it out', until those dividends start flowing from PGW again in some form.

SNOOPY

[blackcap]

Isn't this an Elders takeover target?

[kiora]

Try this
From Marketscreener

https://www.marketscreener.com/quote...7113/finances/

[Snoopy]

Isn't this an Elders takeover target?

Here is what Elders said about their intention for their PGW stake in December 2022.

There was a follow up to the announcement yesterday, at the Elders AGM today. From the Chairman's address:

"The business development pipeline for the coming year, is encouraging with numerous successful businesses expected to join Elders in the next 12 months and furthering our growth."

"As announced yesterday, to further our geographic diversification, we have also taken an 11.3% interest in PGG Wrightson Limited, the New Zealand based rural services business, which was acquired by private sale. Elders does not intend to initiate a proposal to acquire control of PGW, however it does support our diversification strategy as part of our pureplay agribusiness."

So 'no bid' is to be brought to the table for other PGW shareholders.

Of course you would say: 'They would say that.'

But if you take a look at the Elders FY2023 annual report, net debt is up significantly from $294.m to $463.3m. Debt ratio at Elders at EOFY2023 balance date was $A463.3m/$A1,315.2m=$35.2%. Current PGW market cap is $NZ175m. So I would say at a bare minimum $A200m would be needed to get the PGW board to even consider a takeover offer. That would take the Elders debt ratio to ($A463.3m+$A200m)/($A1,315.2m+$A200m)=$43.8%, even if the purchase was made at NTA. That looks high for a rural services business, and I think Elder's bankers would have something to say about such debt levels! Particularly when PGW are looking at profits possibly evaporating this financial year. That doesn't leave much incremental money to fund the interest component of any acquisition by Elders. And I suspect potential savings from trans-tasman synergies would be minimal.

Would Elders shareholders stomach a cash issue to acquire the remainder of PGW? From AR2023, Elders seem much more focussed on investing in their supply chain (by buying out their suppliers) and automating their wool handling services with Australia. I just can't see an appetite for Elders acquiring PGW at this time, and it would all be dependent on Alan Lai being a willing seller anyway. In this case, I tend to believe the released narrative: That a significant stake in PGW became available - courtesy of the Chinese government - and Elders decided to take it on to add to their geographic diversification.

SNOOPY

[Snoopy]

Try this
From Marketscreener

https://www.marketscreener.com/quote...7113/finances/

I think you misunderstand me. That link works, as it is the same one you gave me before. But after a certain time a screen comes up which says I have had my viewing trial and if I want to see more I have to join up by submitting my e-mail address.

The thing is if, as an analyst, you are doing a forecast, then you have to make assumptions about the future business environment and how the business you are doing your forecast on fits into that bigger picture. For PGW it might be:

1/ Sheep prices remain low for the next few financial years due to stock expansion in Australia, and the slaughter of the sheep milking stock in New Zealand.
2/ Beef prices rise by 10% as tourism recovers worldwide benefitting high end cuts and burgers become a larger part of the diet of the increasingly poor, time poor, working poor.
3/ Growers have adapted to El Niño and gold kiwifruit in particular are forecast to increase in size by 5% and in price by 5% per kilo leading to a 10% rise in fruit returns over two years.
4/ The NZD/USD exchange rate is predicted to be broadly stable over the next two years.
5/ In this market, PGW is predicted increase market share by a further 2%.

Now I have no inkling that any of the above will certainly come to pass. But if these are the assumptions behind a forecast model of my own, based on the above, then others can use their own experience to judge how likely my predictions are liable to come true, and therefore consider the likely accuracy of my forecasts. Whoever that analyst was in the marketscreener summary, I could find no information about what the thinking was behind hiser forecast. The 'over time view' suggested a temporal adjustment to future forecasts by simply following the share price up or down, after the event. I have little to no time for such forecasts, and no inclination to 'join up' to marketscreener, so I can view a 'with hindsight' pretty picture, that simply takes this years totals and adds 5% to those figures annually to present a picture of what will happen two years out.

The reason I prefer 'capitalised dividend' valuations is that the only assumption I am making is that the business performance will 'revert to the mean'. For PGW, a mature cyclical business, this assumption seems reasonable to me. I would love to know what assumptions that other analyst is using. But I guess I will never find out. As far as I am concerned that makes the marketscreener forecast useless, even if the uselessness is displayed in an attractive format.

SNOOPY


,

[Agrarinvestor]

Dear all,

My real name is Heiko Koenig. I am a German based investor of AGRIA since 2012. As you may known , Agria was delisted in 2016 because of the wrong doings of CEO Alan Lai.
Over the years i show patience and hoped that the company will find a solution for shareholders like me. I own 70.000 shares of AGRIA.
Alan, and some of his Agria friends want to become Members of the Board of PGW. I want to talk directly via email to the current Board Members.
Can anyone give me a hint,how to find these addresses? You can send it as a private message to sharetrader .nz, or to my email address heiko_koenig@freenet.de


regards Heiko

[iceman]

Dear all,

My real name is Heiko Koenig. I am a German based investor of AGRIA since 2012. As you may known , Agria was delisted in 2016 because of the wrong doings of CEO Alan Lai.
Over the years i show patience and hoped that the company will find a solution for shareholders like me. I own 70.000 shares of AGRIA.
Alan, and some of his Agria friends want to become Members of the Board of PGW. I want to talk directly via email to the current Board Members.
Can anyone give me a hint,how to find these addresses? You can send it as a private message to sharetrader .nz, or to my email address heiko_koenig@freenet.de


regards Heiko

https://app.companiesoffice.govt.nz/...2962/directors

[Oliver Mander]

Afternoon all,

Please note the announcement made by PGW this afternoon.
NZSA proposed resolutions for special meeting - NZX, New Zealand’s Exchange

NZSA is interested in ensuring a fair outcome for shareholders in PGW. Due to the size of the Agria shareholding, however, your vote as a shareholder - no matter how small - really matters.

You'll see that we are proposing some resolutions of our own, including due consideration of a minority inverests voting regime.

Feel free to get in touch with any questions or comments.
Oliver

[mshierlaw]

Afternoon all,

Please note the announcement made by PGW this afternoon.
NZSA proposed resolutions for special meeting - NZX, New Zealand’s Exchange

NZSA is interested in ensuring a fair outcome for shareholders in PGW. Due to the size of the Agria shareholding, however, your vote as a shareholder - no matter how small - really matters.

You'll see that we are proposing some resolutions of our own, including due consideration of a minority inverests voting regime.

Feel free to get in touch with any questions or comments.
Oliver

I am pleased you have taken this stand. My proxy has been signed sealed & delivered.