ALF - Allied Farmers Limited

[mfd]

how's the rate of inflation going in comparison to returns from the Muddy Boots empire and captive satellite
or is it now running well ahead of ALF and NZL ?

42% increase in net profit is comfortably ahead of inflation. NZL claim to have CPI linked rents so should do alright although I wouldn't be surprised to see them squeezed a little between inflation and higher interest costs.

No existential threat though, so ALF will continue to take their cut. NZL have also announced today they will be chasing foreign funding through placements and will allow a higher gearing ratio, all meaning more acquisitions and therefore more money for ALF as the manager.

[nztx]

42% increase in net profit is comfortably ahead of inflation. NZL claim to have CPI linked rents so should do alright although I wouldn't be surprised to see them squeezed a little between inflation and higher interest costs.

No existential threat though, so ALF will continue to take their cut. NZL have also announced today they will be chasing foreign funding through placements and will allow a higher gearing ratio, all meaning more acquisitions and therefore more money for ALF as the manager.

How much of that is hoisted up on unrealised Associate Company property revaluations ?

Bear in mind that no dividend paid for last 12 month period

(undoubtedly a different story for the Board overseeing the job)

No sign of attaining the mythical $1.00 SP level yet either .. wonder why ?

[mfd]

How much of that is hoisted up on unrealised Associate Company property revaluations ?

Bear in mind that no dividend paid for last 12 month period

(undoubtedly a different story for the Board overseeing the job)

No sign of attaining the mythical $1.00 SP level yet either .. wonder why ?

Your guess is as good as mine. With a single digit PE, great growth record, and the opportunity to double their lucrative stake in a growing NZRLM I will certainly be keeping my shares, it's not my problem if the market isn't paying attention.

The thinking on dividends has been explained - they have a better use of the money in mind and better ways to return any excess. Like Percy I was surprised by mentioning dividends at all as they had been off the table previously.

[nztx]

https://www.nzx.com/announcements/402332

New Chairman needed as Mark Franklin has been summoned to go upstairs through the Pearly Gates

R I P Mark - the ALF ship has changed a bit in recent times

[mfd]

Looks like ALF will be buying the other half of the golden goose, presumably a little more expensive than the first half but no need for extra capital. Also confirming no dividends for the foreseeable future while they whittle away at the pile of tax loses. Possible buy backs in the coming years. Trucking along nicely.

https://www.nzx.com/announcements/402937

[percy]

Looks like ALF will be buying the other half of the golden goose, presumably a little more expensive than the first half but no need for extra capital. Also confirming no dividends for the foreseeable future while they whittle away at the pile of tax loses. Possible buy backs in the coming years. Trucking along nicely.

https://www.nzx.com/announcements/402937

Agree buy backs look the best way to go.

[golden city]

Significant tax loss how much are we talking about Any body knows?

[Muse]

Significant tax loss how much are we talking about Any body knows?

No idea re: ALF but you can always find them in the latest annual report. You can find both the on balance sheet tax losses & the off balance sheet tax losses, the later of which will be disclosed in the notes in the stat accounts. Off balance sheet losses are still available to be utilised regardless if they are on balance sheet or not, but subject to shareholder continuity rules in NZ and same business tests if they happen to be operating in australia.

[nztx]

Shareholder continuity rules being satisfied could be interesting

25 years losses ahead to offset or not quite ?

best hope that Robbo's & Orr-some's peculiar stamp on agriculture sector going forwards
with an ominous unhelpful green tint doesn't tip the ALF pack of cards upside down

Let's face it, there aint much that the current bunch of high level Beehive clowns haven't managed
to mangle or cripple in our local economic goldfish bowl across the past 6 or so years

[percy]

In this regard, the Independent Directors – Philip Luscombe and Shelley Ruha - have, with the assistance of an expert external
advisor in Northington Partners, determined that it is in Allied Farmers’ best interests to exercise its Call Option to acquire the 50%
of NZ Rural Land Management (NZRLM) it does not already own. This option becomes available for exercise from 18 December
2022, and is open for exercise for a period of one year.
By way of background, when Allied Farmers exercises its Call Option:
• The five individual sellers of NZ Rural Land Management shares – “Vendors” – on receipt of notice of exercise of the Call
Option, can ask for the purchase price to be either paid in cash, or in Allied Farmers shares at the 20-business day volume
weighted average price over the period immediately preceding a market announcement of the exercise (“VWAP”);
• Individual Vendors cannot ask for a mixture of cash and shares, but some Vendors may ask for all cash, and some may ask
for all Allied Farmers shares;
• Only if a Vendor asks to be paid in cash, Allied Farmers can opt instead to pay that Vendor in shares, but at a 10% discount
to the VWAP.
Allied Farmers at this stage does not anticipate a need to raise capital to fund this acquisition if it proceeds, albeit this is subject to
the final notification received from each of the Vendors as to their preferences. We will of course keep shareholders updated as
this matter progresses.

The above should make keeping shareholder continuity interesting.