SML - Synlait Milk Ltd

[kiwi_crusader]

Sounds 'material' to me. The good news just keeps on coming with SML.

Now Dairy Works have to buy their bulk cheese from Fontera or Open Country, less profit for them.

[BlackPeter]

Sounds 'material' to me. The good news just keeps on coming with SML.

It certainly would be material for Talbot cheese. It is just - from memory (I can't find them in the annual report - they are probably too small ) their revenue represents less than 1% of SML's revenue (and a still smaller proportion of their earnings), i.e. no need for SML to announce these things.

And yes, Thank you kiwi-crusader. Useful info.

[Baa_Baa]

It certainly would be material for Talbot cheese. It is just - from memory (I can't find them in the annual report - they are probably too small ) their revenue represents less than 1% of SML's revenue (and a still smaller proportion of their earnings), i.e. no need for SML to announce these things.

And yes, Thank you kiwi-crusader. Useful info.

True for Talbot, but seems just another thing SML keep to themselves and shareholders find out in the media or through other connections. Why wouldn't they let shareholders know they've shut the plant down for 6 months! (to give benefit of the doubt, maybe they are planning on an announcement to market soon?).

2/8/2019 - Synlait completes Talbot Forest Cheese Acquisition

[abridged] "“The acquisition enables us to manufacture a variety of cheese products. It also helps us optimise our manufacturing assets (especially during peak seasonal flows), access new profit pools, and align with our approach to run a high-quality, flexible dairy manufacturing plant that enables us to tailor product to meet customer needs.”

Mr Bull says Synlait plans to produce around 5,000 tonnes of cheese during the 2019/2020 season.

“Our highly automated plant is capable of manufacturing both dry and brine salted products, including parmesan, cheddar, gouda and mozzarella for both retail and foodservice customers. In addition, we have retained the ability to make open vat cheeses such as haloumi and feta, which are extremely popular.”


That was then. What about now?

[RTM]

That was then. What about now?

Agree. They have not communicated several important items to shareholders.
That was a LARGE part of the reason I exited at $10.
In particular from memory it was lack of communication around registration of product with China.

[winner69]

Book value about $3.40

Not likely to be earning enough to cover its cost of capital (ie value destroying) for many years so no reason it should trade above book value ...unless one is full of optimism and convinced that SML will one day be great.

Said this when share price was $10 ...then again when it was $12 ..and again at $8 and again at $6 ......and one day I might say it’s about fair value when share price is about $3.40

Think I’ll reduce that target to 300 or lower

[Baa_Baa]

Think I’ll reduce that target to 300 or lower

You said on 10/2 book value $3.40. There's no technical support there, next below is $3.7 then .. gulp $2.90. This is one seriously screwed share price with no upside in sight and no shining light on the horizon to give any sense of hope it might all come right. Hard to believe is was over $13.50 late 2018 and a disaster since.

[Beagle]

Good post Baa Baa. The truth is very ugly. Forecast is for 16.9 cps. Put a no growth, (which it is now), PE of 11 on that and you get $1.86.
With the current management and board I wouldn't even be interested at that price.

I'm sticking with $1.86. No reason to believe earnings will grow any year soon, in fact with ATM's very high current stock level and its outlook its possible Synlait may not make their forecast for FY21. Synlait an excellent example of what happens when all rationale about putting shareholders and earnings as the number one priority are thrown out the window and ESG considerations are elevated FAR beyond sensible level's. I wouldn't trust this lot to run a chook raffle.

[winner69]

You said on 10/2 book value $3.40. There's no technical support there, next below is $3.7 then .. gulp $2.90. This is one seriously screwed share price with no upside in sight and no shining light on the horizon to give any sense of hope it might all come right. Hard to believe is was over $13.50 late 2018 and a disaster since.

The elevated prices wasn’t Synlait’s making ....just punters / ‘investors’ seeing something that was never there and priced it accordingly. Many of these ‘investors’ were just momentum traders who got on the band wagon and proclaimed what a great company Synlait was.

Synlait was and still is essentially a capital intensive commodity producer ....nothing real special that would command a irrational / exuberant share price

Synlait as a company is a pretty solid one - has a long term strategy and is allowing that strategy to play out. Much to be admired about how they are positioning themselves for the future.

Sadly, as is the case of many companies, Synlait the company is judged by its share price - which unfortunately they have no control over or the irrationality or exuberance of the punters / investors’ that set the share price.

[BlackPeter]

You said on 10/2 book value $3.40. There's no technical support there, next below is $3.7 then .. gulp $2.90. This is one seriously screwed share price with no upside in sight and no shining light on the horizon to give any sense of hope it might all come right. Hard to believe is was over $13.50 late 2018 and a disaster since.

Well, Leon did an amazing job, didn't he? One can clearly see that he learned his trade at Fonterror:

Synlaittrend.JPG

Leon started at Synlait in August 2018 (this was basically the all time high of the share price).

https://www.synlait.com/news/leon-cl...milks-new-ceo/

that's how Leon appraised his new company in 2018:

“The business is in fantastic shape and we will continue to target sustainable growth by leveraging the potential within our organisation, as well as the potential in the markets and customers we partner with,” adds Mr Clement.

Oh Leon, what happened with the $1.8b of shareholder value destroyed since you made this statement? This is two thirds of the companies value ...

Time to go - or are you not yet finished with your job?

[BlackPeter]

The elevated prices wasn’t Synlait’s making ....just punters / ‘investors’ seeing something that was never there and priced it accordingly. Many of these ‘investors’ were just momentum traders who got on the band wagon and proclaimed what a great company Synlait was.

Synlait was and still is essentially a capital intensive commodity producer ....nothing real special that would command a irrational / exuberant share price

Synlait as a company is a pretty solid one - has a long term strategy and is allowing that strategy to play out. Much to be admired about how they are positioning themselves for the future.

Sadly, as is the case of many companies, Synlait the company is judged by its share price - which unfortunately they have no control over or the irrationality or exuberance of the punters / investors’ that set the share price.

Yes - and no. Pokeno trouble has been home made - had nothing to do with market exuberance. Huge dependency on ATM was clearly home made as well - they choose to put nearly all their margin eggs into one basket. Their management choose to go the fast and risky (little diversification) path, and failed.

However - market hyped them up as A2 milk proxy - and as long as ATM was driven by hype, SML was as well. Well, it looks like this problem solved itself :

And yes, you are right - it is a solid company and they no doubt will survive and hang around for a long time. Question is just - how much will they be worth? I remember them 5 years ago around $3 per share, and this still might be a fair price. Progress?