SML - Synlait Milk Ltd

[pg0220]

10% increase in profit, high gearing, lower margin on ATM contract which is the biggest source of income, uncertainty on the new factory, etc.....
20x PE ratio is still looking expensive.... glad that I am not holding this anymore!

[BlackPeter]

I might be wrong, my recollection is that Synlait had received a court decision on the covenant. It appeared to be safe to start site works etc. at that time. Is it reasonable to receive a court decision and not to proceed with developing a facility because you are waiting for a possible appeal? How long would you wait? I suspect that the covenant holder’s appeal would never have eventuated until Synlait commenced works. I don’t think Synlait are as silly as everyone thinks. They have an opponent who had the luxury of waiting for Synlait to act before appealing. If I was such an opponent, I would wait for Synlait to commit to the development before appealing a decision. I certainly would not have given any indication of what I was planning either. It certainily raises questions on the court's reasoning.

My understanding is that there is a quite limited time frame (something like 4 weeks) to appeal a court decision. This means SML knew pretty well that there is an appeal and they just assumed that they will win (which they didn't).

[Redmack]

I might be wrong, my recollection is that Synlait had received a court decision on the covenant. It appeared to be safe to start site works etc. at that time. Is it reasonable to receive a court decision and not to proceed with developing a facility because you are waiting for a possible appeal? How long would you wait? I suspect that the covenant holder’s appeal would never have eventuated until Synlait commenced works. I don’t think Synlait are as silly as everyone thinks. They have an opponent who had the luxury of waiting for Synlait to act before appealing. If I was such an opponent, I would wait for Synlait to commit to the development before appealing a decision. I certainly would not have given any indication of what I was planning either. It certainily raises questions on the court's reasoning.

[Redmack]

Depressingly lack of risk management, when the opponent has significant resources and everything to gain, in that case.

[Beagle]

Yeah they embarked and started building a $260m project entirely bank debt funded in the full knowledge that the matter was under appeal and I believe from memory they had what amounted to a cease and desist letter from the other party. Arrogance, gross recklessness or both ?
I think it ranks right up there with some of Fon-terror's "best" decisions. Almost makes you wonder if processing milk gives off strange mind numbing fumes lol

http://www.sharechat.co.nz/article/e...l-problemshtml

He doesn't know when to "zip it". I think if I was the aggrieved party that would read like "I dare you to file an injunction" and I would...

[Sideshow Bob]

No progress on other product registrations and no idea on timeframe either...oh dear... First page - cloudy / misty seems appropriate.
No guidance on product volume to ATM. Trust us, we know what we're doing lol

On the registrations, I don't think they can give any formal timelines. From my experience, any such registrations/listings etc are usually at the complete whim of the Chinese authorities, and often in relation to if/when they need the product. For instance, beef/lamb markets are on fire into China at the moment - and this week 25 Brazilian plants have been added to the list approved to export to China with immediate effect.

You'd think a company 39% owned by a Chinese State-Owned Enterprise would be able to get something through faster - seems not to make any difference. Same goes for a meat company 50% owned by the same parent company.

[BlackPeter]

Oops - just noticed they just crashed through the MA 400 (which is not a good thing ); SP 80 cents down since opening. Market appears to be disappointed ...

[Beagle]

On the registrations, I don't think they can give any formal timelines. From my experience, any such registrations/listings etc are usually at the complete whim of the Chinese authorities, and often in relation to if/when they need the product. For instance, beef/lamb markets are on fire into China at the moment - and this week 25 Brazilian plants have been added to the list approved to export to China with immediate effect.

You'd think a company 39% owned by a Chinese State-Owned Enterprise would be able to get something through faster - seems not to make any difference. Same goes for a meat company 50% owned by the same parent company.

Go figure...

[LAC]

Just read the results, not really seeing anything exciting to be honest. Lots of plans for the future but SP is still quite dear for what you currently getting and the risks in getting it wrong. Debt is def getting on the high side. Better options elsewhere with safer track record imo.

[ratkin]

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