Sanford Earnings FC effected by FX changes

[mshierlaw]

If SAN copy anything Sealord does, I will quickly sell my shares. "The best deepwater fishing company in NZ" comment from the Chairman made me laugh !!

Sanford have just completed the purchase of FV Granit, currently in drydock in Norway, expected delivery in NZ is November 2016. No chance for a new factory trawler in the short term. So why the new vessels, exit of numerous FCV before the reflagging requirements kicked in.

[iceman]

Sanford have just completed the purchase of FV Granit, currently in drydock in Norway, expected delivery in NZ is November 2016. No chance for a new factory trawler in the short term. So why the new vessels, exit of numerous FCV before the reflagging requirements kicked in.

Yes they will be catching fish currently caught by foreign JVs that are unlikely to meet NZ flaggng requirements. Good riddance

[forest]

16 November 2016

Name of Listed Issuer: SANFORD LIMITED (SAN)
FINANCIAL RESULTS for the year ended 30 September 2016

Sanford reports 152% Improvement in Annual Net Profit With Increased Focus on Value Creation From Reduced Wildcatch

Highlights
1. Financials
• Significantly improved NPAT of 152% to $34.7m from $13.8m in F15. Operational performance improved by 85.5% with reported EBIT of $57.7m (2015: $31.1m)
• Reported EBIT, as a proportion of sales, grew from 6.9% to 12.4%, which reflects the focus on more value add, in particular fresh (non-frozen), products
2. Sales
• Revenue increased from $450.3m in 2015 to $463.5m, with sales volume down 11.1% compared to prior year. Volume was mainly impacted through discontinuation of skipjack tuna operations in the Central and Western Pacific region and limiting catches of pelagic species in line with demand
• Greater focus on domestic customer base and food service resulting in strong growth in the New Zealand market
• Product pricing was generally favourable, but mussels suffered from strong competition, underlining the focus for product diversification
3. Wild catch volume (Inshore and Deepwater)
• Lower catches in the pelagic sector (mackerels, tunas) and variable performance of the fishing fleet led to a 6.5% reduction in landings compared to prior year
• A focus on higher value species including toothfish and orange roughy and improved squid catch compensated for the reduced overall catch
4. Aquaculture (King salmon and Greenshell mussels)
• Strong domestic demand for fresh salmon enabled improved product cascade at greater operational efficiency
• Lower feedstock cost and better feed conversion rate also contributed to improved results.
• The positive salmon performance compensated the impact of El Niño producing less than desirable large mussels in the early part of the year, although mussel harvest volume increased 4.5% year on year

[percy]

Excellent result.
Outlook looks good too.
You look to be "well positioned".

[Joshuatree]

Yes thanks forest, you are the quiet value catcher here

[iceman]

A very good result Forest and nice to see the "value add" strategy starting lift-off. Looks like there is some pressure on mussel markets but salmon doing well domestically. They may even start selling more fish than ice soon to the restaurants across the road, like they told us
I believe we are well positioned with this one and a long but possibly fairly slow improvement ahead of us.

Agree with their decision to pay off more debt rather than increasing dividend. A good call

[iceman]

After attending the AGM recently and reading the very well presented Annual Report, I am very confident that the new CEO and management team is making big progress in completely changing the way Sanford operates. I believe we are seeing a major transformation from a simple primary industry harvesting company to a market and customer focused high quality food supplier and increasingly also into health products such as fish oil and pet food.

Their change of focus from frozen fish to fresh top quality direct to supermarkets, fish shops and restaurants is already jumping ahead going from 7% to 9% of their wild caught fish this year. The great thing is that almost all of that increase is more fresh high quality fish being sold in NZ where the market for high quality fish is growing very fast, thanks to better restaurant customer awareness and the large increase in the NZ Asian population.

Salmon is all being sold in NZ and they can not meet demand. Hopefully they will be granted some more water space for more farms at Stewart Island (Big Glory Bay) soon. This is a very important part of the business and would be great to see further growth in it.

This “Focus on Fresh” as well as other initiatives are seeing much smoother and more profitable operations. They have so far increased the return per kilogram of greenweight catch from $ 0.35 to $ 0.50 and are aiming to double that again. A lofty but in my view an achievable goal over the medium term.

I see no reason why SAN can not in the next 3-4 years double their profit or say 60 CPS or so. That would also give room for a large increase in dividends which I believe we will start seeing rise next year.

I really like what I am seeing from the “new Sanford” and am a happy holder.

[Mitch]

After attending the AGM recently and reading the very well presented Annual Report, I am very confident that the new CEO and management team is making big progress in completely changing the way Sanford operates. I believe we are seeing a major transformation from a simple primary industry harvesting company to a market and customer focused high quality food supplier and increasingly also into health products such as fish oil and pet food.

Their change of focus from frozen fish to fresh top quality direct to supermarkets, fish shops and restaurants is already jumping ahead going from 7% to 9% of their wild caught fish this year. The great thing is that almost all of that increase is more fresh high quality fish being sold in NZ where the market for high quality fish is growing very fast, thanks to better restaurant customer awareness and the large increase in the NZ Asian population.

Salmon is all being sold in NZ and they can not meet demand. Hopefully they will be granted some more water space for more farms at Stewart Island (Big Glory Bay) soon. This is a very important part of the business and would be great to see further growth in it.

This “Focus on Fresh” as well as other initiatives are seeing much smoother and more profitable operations. They have so far increased the return per kilogram of greenweight catch from $ 0.35 to $ 0.50 and are aiming to double that again. A lofty but in my view an achievable goal over the medium term.

I see no reason why SAN can not in the next 3-4 years double their profit or say 60 CPS or so. That would also give room for a large increase in dividends which I believe we will start seeing rise next year.

I really like what I am seeing from the “new Sanford” and am a happy holder.

Was it the new CEO that implemented the frozen to fresh fish focus?

[Mitch]

Any predictions for SAN's 6-Month and 12-Month share price value? am hoping it to increase as well as see an increase in dividends. Fingers crossed

[BlackPeter]

Any predictions for SAN's 6-Month and 12-Month share price value? am hoping it to increase as well as see an increase in dividends. Fingers crossed

Analyst consensus is $6.95. Actually - I think the higher dividends are already priced in (SAN was always at the dearer end) and if you look at it - a forward PE of 15 (with limited growth) does not make it really cheap either.

Obviously - markets pushed in the past lots of dear companies still higher (AIA anybody), but this time might be now over given that markets expect interest rates to rise.