SML - Synlait Milk Ltd

[Toddy]

Rob Stowell has been in CFO role for the entire time this business has suffered huge shareholder value losses and a fight with A2M- why they'd appoint him to oversees risk and compliance I cannot figure out. Surely he is part of their problem- debt laden, revolving door, ego led customer relationship and fight with vendors.

Exactly my thoughts.
Also, strategic review, whatever. The CFO already knows the numbers and what each asset is worth.

There would of been numerous meeting about strategy and asset valuations.

And all would be upto date as would be resubmitted to the banks when groveling over and over.

This new job title and scope just does not make sense.

[Newman]

Exactly my thoughts.
Also, strategic review, whatever. The CFO already knows the numbers and what each asset is worth.

There would of been numerous meeting about strategy and asset valuations.

And all would be upto date as would be resubmitted to the banks when groveling over and over.

This new job title and scope just does not make sense.

Can anyone give an example of sensible decisions that Synlait's Board and Executives made in the past 2 years?

[silverblizzard888]

They didn't have the foresight to do a strategic review until the debt was due? Sums up the forward thinking of the company at the moment.

[bull....]

Westland Delivers Strong Profit Result For 2023

Westland Milk Products has delivered a strong profit result for the second successive year.

https://www.scoop.co.nz/stories/BU24...t-for-2023.htm

[whatsup]

Fair enough,

Total market cap is currently ~140 million.
Property is ~1 billion, whatever 'other assets' are ~500 million maybe milk powder in the warehouse and utes?


If I figure they get 50c in the dollar on property, milk powder etc so $750 million dollars


Debt is ~560 million. So 750-560 = 190mil


So figure I am buying $190 million worth of milk factory for $140 million.


Or another way to put it would be Debt = Pokeno + Dairy works + whatever I put into the cap raise so I don't get diluted.


So for 140 million I bought Dunsandel, hell in 2020 Synlait bought 582 hectares of dairy for 25.7 million next to Dunsandel that's probably easy enough to sell.


Anyway I don't over science it to take a starting position. Def don't listen to management forecast profit. If the price is a bit lower than the assets and the business isn't in terminal decline then take a punt. Learn more as the position gets larger.

Waik..., Do they still own the land at Dunsandel ? if so whats the value of the land now that the bloom has disappeared off the dairy conversion ?

[Waikaka]

Waik..., Do they still own the land at Dunsandel ? if so whats the value of the land now that the bloom has disappeared off the dairy conversion ?

Who knows. I just wrote it down 50% with the rest of the property. Plenty of margin of safety being overly cautious. I suspect if dairy farms were worth less than 50% they were than 2 years ago I would have seen it in the news.

[Waikaka]

Can anyone give an example of sensible decisions that Synlait's Board and Executives made in the past 2 years?

God I hate ending up defending terrible companies. Its NZR all over again.

Things they did well:
They built Pokeno and liquid milk plant at Dunsandel on budget.
Diversified geography and product mix.
Renewed export license to China in 2023 from Dunsandel last to 2027 so good job.


Things they did poorly:
Spend too much on low margin dairy factories that are underutilised.
Have too much debt.
Not reduce debt when they had a chance.
Realise that Covid lockdowns might mean less babies in China. Meaning less demand
Annoy A2M and suppliers.
Focused on ESG rather than making milk powder efficiently

[billkiapi]

Business Desk asks if George Adams in Synlait's new chair. I'm sure he's smart enough to be aware of director litigation risk, esp after Manziel decision. Why he'd want to increase exposure in December is lost on me- unless he knows something we don't (which is a more serious problem for the Synlait board). I hope they all get sued for this value descrutction

[Grimy]

Chris Lee in his weekly newsletter today has a piece on Synlait.

[Sideshow Bob]

Chris Lee in his weekly newsletter today has a piece on Synlait.

Interesting read - thanks for highlighting.

Here is the link - https://www.chrislee.co.nz/taking-stock