ALF - Allied Farmers Limited

[Vaygor1]

Back in Auckland from an nice couple of days New Plymouth.
blackcap the AGM was positive and the points Vaygor mentioned on the 27th of Nov 16 was more or less the body of the presentation.
Vaygor has passion for ALF, he knows the fine detail and easily could have written the presentation. He even got a book about ALF's history covering the period from, the late 1800's.
Yes about 120 years of history on ALF so if interested in ALF reread his post of the 27th.

Thanks Forest.

The book is called 'Too old to be secrets now'. I am away from home at present so just googled it and found a copy currently for sale on TradeMe (Disc: I am not, and do not know, the seller). http://www.trademe.co.nz/books/rare-...1210316034.htm and apparently it is not too hard to find in the odd 2nd hand bookshop.

I first became aware of the book some years after I became a Shareholder, at the ALF AGM 2 years ago, when they gave away a number of copies at the meeting.

Although written by Russell A J Standing, the book is based upon the historical accounts from the now retired ex-Chairman and dedicated doyen of Allied Farmers, Brian Train.

I will provide a bit more detail over the next day or two regarding my view on ALF as a result of the AGM, suffice to say I agree with Forest; it was a positive meeting and the future most certainly does not look dim.

[Vaygor1]

I meant to post about a week or so ago my view of ALF's Annual Shareholder's meeting, held in Hawera on 29-Nov-2016, so here it is today...

Pretty much my take on the ALF's position prior to attending the meeting (posted on this thread on the 27th Nov 2016 here.. http://www.sharetrader.co.nz/showthr...l=1#post646228 ) appears to be accurate.

The most notable items requiring clarity (in my mind and in no particular order) being:
1, ALF's equity figure due to off-balance-sheet items
2. The likelihood and timing of a future dividend
3. Any future guidance.
4. MyLivestock Website/App advancement
5. Number of times the words 'well positioned' are mentioned during the course of the presentation.
6. Availability of chocolate biscuits at the post-meeting cuppa-tea-time.

So, in addressing each of these:

1. Equity within the parent company (according to my notes) is over $4.5 million. Dividing this figure by the 160,635,350 shares on issue, I get approx 3c/share. I am assuming this includes goodwill currently valued at zero. This is substantially more than the minimum figure of $700k (0.5c/share) that I posted on the 27th Nov.

2. I was surprised to learn that the board seriously deliberated over paying a modest dividend in July/Aug just gone. Since the meeting, my prediction is now the H1 result (out in Feb/Mar 2017) may signal the possibility of a dividend payable as early as the end of the current financial year ending 30-June-2017.

3. H1 result will see a profit, but likely to be down from H1 the previous year, mainly due to the NZD-USD exchange rate being less favourable than last year over the Sep/Oct/Nov bobby calf export period. Further to this, I anticipate that the 30-June-2017 full year profit will exceed last year's by a comfortable margin.

4. A new mobile App has been rolled out to assist buyers/sellers/agents and has many features and benefits. Refer http://mylivestock.co.nz/app/

5. 'Well positioned' mentioned a number of times.. at least 4 if I recall correctly.

6. Yes, a big jar of chocolate biscuits (nice ones too) to accompany the plain-biscuit jar. Definite room for improvement on the tea this year round though... really quite dreadful.

The meeting presentation slides are here: https://www.nzx.com/files/attachments/249029.pdf
Note the footnote regarding equity in the presentation slide containing the Group Balance Sheet.

[winner69]

Is this a bit of bugger announcement ....or just a hiccup on a long journey to riches

H1 profit 30% less than last year


https://www.nzx.com/companies/ALF/announcements/296486

[Vaygor1]

Is this a bit of bugger announcement ....or just a hiccup on a long journey to riches

H1 profit 30% less than last year


https://www.nzx.com/companies/ALF/announcements/296486

Hi Winner.

A totally expected result. Refer my last post here on 11-Dec-2016:

"H1 result will see a profit, but likely to be down from H1 the previous year, mainly due to the NZD-USD exchange rate being less favourable than last year over the Sep/Oct/Nov bobby calf export period. Further to this, I anticipate that the 30-June-2017 full year profit will exceed last year's by a comfortable margin".


I expect FY pre-tax profits will be up by 50% from last year's FY result but we will have to wait 6 more months to find out that one.

What I am really interested in for Feb-2017 is:

Will they pay a modest dividend this H1?
I would have to put a $1 each way on that one.
If they do, the SP will take a leap.

If not, will they signal to the market this month, a likely dividend payment for the FY result out in Sept-2017?
As in the question posed above, the answer to this is a tough one to call.
A signal too will still cause a jump in SP I believe.

Whether they signal it or not, I expect a total dividend payment for this financial year to be somewhere between 0.5 and 1.5 cents per share.

I am guessing they will announce on 24-Feb. If so, we have a 15 day wait until we find out some more.

[percy]

Can't complain,as my bid for 200,000 at 0.069 was successful today.

[Vaygor1]

Can't complain,as my bid for 200,000 at 0.069 was successful today.

A good buy Percy imho.

If I am correct, and there is a dividend payment, say in September only, and at the low end of 0.5 cents per share then that equates to a div yield of 7.2% on your purchase, and received in only 8 months from now.

Might have trouble finding a bank account that can match that.

[percy]

A good buy Percy imho.

If I am correct, and there is a dividend payment, say in September only, and at the low end of 0.5 cents per share then that equates to a div yield of 7.2% on your purchase, and received in only 8 months from now.

Might have trouble finding a bank account that can match that.

Should that come about I will be over the moon.!!
Brought the wife 100,000 a few weeks ago,can't remember,but think I paid 0.068 for hers.
Building up our holdings slowly.

[noodles]

Whether they signal it or not, I expect a total dividend payment for this financial year to be somewhere between 0.5 and 1.5 cents per share.

I am guessing they will announce on 24-Feb. If so, we have a 15 day wait until we find out some more.

The way I read the announcement was that the full year earnings would come in simlar to last year (eps=0.47cps) based on the following statement " the directors expect that the first half impact will be recovered in the second half".


If this was the case, your 1.5c dividend estimation would be over 300% of earnings. Even 0.5c would be over 100% of earnings. What am I missing here?

[Vaygor1]

The way I read the announcement was that the full year earnings would come in simlar to last year (eps=0.47cps) based on the following statement " the directors expect that the first half impact will be recovered in the second half".


If this was the case, your 1.5c dividend estimation would be over 300% of earnings. Even 0.5c would be over 100% of earnings. What am I missing here?

Thanks for your post Noodles.
Appreciated as always.

The only thing missing is the statement's silence on how much the H2 earnings will surpass the H1 recovery. The way I read it, the recovery is already in the bag, based on forward contracts alone.. but I accept that these guidance type statements as for any company are always open to a bit of interpretation.

I certainly expect the Full Year earnings to substantially exceed last years for a number of reasons, but mainly:
* The number of forward contracts is looking very positive
* Last financial year initiatives with associated costs fully recovered and increased resulting returns this financial year. (Mobile App development, Small shareholder sale programme, winding down of ALF's Asset Management Division, buy-back of 9% of New Zealand Farmers Livestock)
* Ownership LI Redshaw doubled since last financial year (doubled on the 1st day of the current financial year)
* 1st full year with all on-demand debt (and associated interest costs) extinguished and debt restructure.

The free cash-flow generated this financial year means a dividend payout of 0.5 cents/share will be easily achievable in my view.

[Vaygor1]

Further to my recent posts below, I have reflected further.
My top-top end of my 0.5 to 1.5c dividend range for the full year ending 31-June-2017 is probably a bit overzealous.

My view is eps for the current FY is likely to exceed 0.75 cents per share, and if so, 'by how much?' has a more uncertain answer.
Discussions with the directors at the November AGM last year leads me to believe that most of the FY earnings in the next few years will likely be paid out in dividends.
The business case for future mergers, acquisitions, or any other ALF initiatives will need to stand on their own using borrowed funds to finance them. So their current thinking appears to reflect a position of not retaining large amounts of annual earnings.

At the end of the day though (in my opinion), the magnitude of the dividend (as a percentage of profit) will depend on the desires of the two biggest shareholders, both of whom have representation at board level, and additionally in the board members themselves who hold significant interests in the business.

Bear in mind the last dividend payout was in 2006.. so its been while to say the least. Leading up to that time, ALF had a policy of generally paying out 50% of their tax paid profit. The last dividend in 2006 represented 83% of their tax paid profits.
Currently ALF have significant tax credits.