ALF - Allied Farmers Limited

[BFG]

Thanks BFG,

What is driving the 50% eps growth? It that your forecast or the company?
What is the tax situation? They paid no tax last year. Will they need to start paying tax this year?
It looks like they have $5.6mil in debt. (pg.7 of AGM preso). Is that correct?

EPS growth is based on reducing corporate overheads and increasing revenue. This is a conservative estimate of revenue growth based on past 2 years EBT growth. I am banking on sales throughput for calves being higher in '15 due to high prices for beef. In addition, we should see a one-off positive impact to earnings through the 020 Bond issued for CAML debt:

https://www.anzsecurities.co.nz/Dire...spx?id=3717270

This is from the FY14 report:

Corporate interest costs reduced from $.08M to $0.3M as secured loans continued to be repaid. The balance of secured debt owed to thelender was $2.6M at June 2014, down from $5.1M inJune 2013.

The listed entity, Allied Farmers Ltd, has shareholders’funds of $3.1M. As in the last year’s accounts, the Group accounts still reflect negative equity as the consolidated result does not attribute the fullmarket value of the investment in the NZ Farmers Livestock subsidiary or thesaleyard properties held.

[noodles]

EPS growth is based on reducing corporate overheads and increasing revenue. This is a conservative estimate of revenue growth based on past 2 years EBT growth. I am banking on sales throughput for calves being higher in '15 due to high prices for beef. In addition, we should see a one-off positive impact to earnings through the 020 Bond issued for CAML debt:

https://www.anzsecurities.co.nz/Dire...spx?id=3717270

This is from the FY14 report:

Corporate interest costs reduced from $.08M to $0.3M as secured loans continued to be repaid. The balance of secured debt owed to thelender was $2.6M at June 2014, down from $5.1M inJune 2013.

The listed entity, Allied Farmers Ltd, has shareholders’funds of $3.1M. As in the last year’s accounts, the Group accounts still reflect negative equity as the consolidated result does not attribute the fullmarket value of the investment in the NZ Farmers Livestock subsidiary or thesaleyard properties held.

Ok, so your forecast includes the one-off positive impact?

[BFG]

Ok, so your forecast includes the one-off positive impact?

No, I am not taking that into account as it is a one-off. Just talking EPS from normalised activities.

[Vaygor1]

Thanks BFG,

What is driving the 50% eps growth? It that your forecast or the company?
What is the tax situation? They paid no tax last year. Will they need to start paying tax this year?
It looks like they have $5.6mil in debt. (pg.7 of AGM preso). Is that correct?

They can earn shed-loads of money effectively tax free. They have major tax credits relative to their current size.
They have hidden value in their 57% holding of NZFL which is still ringfenced from their other activities so therefore does not appear in their consolidated balance sheet and their statement of equity due to ALF's independant non-controlling status (of NZFL).

[BFG]

Others also doing well in this sector and posting turnarounds!

http://m.nzherald.co.nz/business/new...ectid=11278344

[couta1]

Half Year out, making steady progress on all fronts, tick. Disc-Bought recently

[blackcap]

Half Year out, making steady progress on all fronts, tick. Disc-Bought recently

Yeah I am starting to like this one. Profit of $.91m for the half... extrapolating that out makes a $1.8m FY and that is an EPS of 1.7 cents. 7 cents seems very very cheap. Once Speirs stops selling this one may find some wings.

[noodles]

Yeah I am starting to like this one. Profit of $.91m for the half... extrapolating that out makes a $1.8m FY and that is an EPS of 1.7 cents. 7 cents seems very very cheap. Once Speirs stops selling this one may find some wings.

The company states that diluted EPS= .65c. This equates to 1.3c for the full year.

I think the .91m you have quoted includes non-controlling interests? You should have used .708m?

[blackcap]

The company states that diluted EPS= .65c. This equates to 1.3c for the full year.

I think the .91m you have quoted includes non-controlling interests? You should have used .708m?

I stand corrected... but still a great result and the company also states that the second half is generally better than the first half:

Traditionally the Livestock Division makes most of its earnings in the second
six months and depending on the level of herd sale contracts this year we
would expect the second half profits for the Livestock Division to exceed the
first half.

[noodles]

I stand corrected... but still a great result and the company also states that the second half is generally better than the first half:

Traditionally the Livestock Division makes most of its earnings in the second
six months and depending on the level of herd sale contracts this year we
would expect the second half profits for the Livestock Division to exceed the
first half.

So they are still on target for BFG's 1.5c per share

This may be a stupid question, but is the company allowed to pay down their debt from the profits of the livestock division?

They did state that they had debt to pay down this half and they were looking at options. Does this mean a capital raise or a further selldown of their NZ Farmers Livestock?