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21-03-2019, 03:47 PM
#2151
Originally Posted by winner69
As a matter of interest what percentage of Synlait sales are to A2
Percentage of sales is immaterial - and I don't know.
However - (from memory) at last FY 80% of their revenue came from A2 infant formula, and this is obviously all going through A2.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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21-03-2019, 03:53 PM
#2152
Might also be worth noting that back in January SML dropped their milk forecast piece 50 cents to $6.25 a kg which was still on top of Fonterras range. But after recent increases in milk prices Fonterra could now be looking at a range from $6.30 - $6.60
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21-03-2019, 05:55 PM
#2153
Just touched $10 in ASX... looks oversold...
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21-03-2019, 06:24 PM
#2154
Originally Posted by BlackPeter
Percentage of sales is immaterial - and I don't know.
However - (from memory) at last FY 80% of their revenue came from A2 infant formula, and this is obviously all going through A2.
Maybe A2 as a customer not as material as made out. Hope everybody gas screwed Synlait on price.
From Interim -
Revenues of approximately 64% are derived from the top three external customers (31 January 2018: 68%, 31 July 2018: 69%
”When investors are euphoric, they are incapable of recognising euphoria itself “
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22-03-2019, 07:45 AM
#2155
Originally Posted by Beagle
Agreed. The substantial rise in Inventory at Synlait at a time when ATM has been going gangbusters suggests something is wrong here with sales and the extent of the loss of margin is even more shocking in my opinion. If ATM can "milk them" to that extent once you can bet your last dollar they'll come back to milk them again in the future.
Perhaps the stock is/was being held pending Chinese market registration of SML's own label which we understand has been delayed?
Beagle I gather you now out of SML? How did your investment work out?
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22-03-2019, 08:19 AM
#2156
Originally Posted by Left field
Perhaps the stock is/was being held pending Chinese market registration of SML's own label which we understand has been delayed?
Beagle I gather you now out of SML? How did your investment work out?
It is being held for forecast increased sales in H2 ("Finished goods inventories at $188.1m (44,344 MT) have increased significantly from comparative periods (January 2018:$142.7m,35,040 MT; July 2018: $122.6m, 26,726 MT). The increase is primarily due to increased volumes of canned infant formula forecast tobe sold in the second half of FY19, and a strong milk production season which has exceeded expectations."
While I understand this, I am uncomfortable with the holding. Essentially SML is carrying all the inventory risk. ATM (as an example of a customer) does not have to carry the risk of holding inventory which is a great move by ATM.
Also finished goods has a limited shelf life. The burden of a slower future market falls on SML. I would have been looking for more effort put into shifting inventory onto the distribution network.
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22-03-2019, 08:55 AM
#2157
Originally Posted by minimoke
.... Essentially SML is carrying all the inventory risk. ATM (as an example of a customer) does not have to carry the risk of holding inventory which is a great move by ATM.
Thanks MM. I Agree. A couple of years ago BAL-ASX shares plummeted from approx $A13.00 to $4.00 on China inventory concerns, ATM was relatively unscathed and I recall ATM saying they had negotiated a much better/different deal.
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22-03-2019, 11:38 AM
#2158
Originally Posted by Left field
Perhaps the stock is/was being held pending Chinese market registration of SML's own label which we understand has been delayed?
Beagle I gather you now out of SML? How did your investment work out?
Worked out okay mate but I want to shift gears towards stocks that will pay me a regular dividend. $37m is just plain ugly no matter how you slice and dice this and margin compression from the ATM contract they just told us about 8 months after the fact, (disingenuous concealment), will affect profitability going forward.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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22-03-2019, 11:41 AM
#2159
EBITDA F18 ~$138m and I reckon ~$280m in F21
Doubling EBITDA in next three years is tremendous stuff
Will see share price get to $15 to $20
”When investors are euphoric, they are incapable of recognising euphoria itself “
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22-03-2019, 11:55 AM
#2160
Originally Posted by Beagle
Worked out okay mate but I want to shift gears towards stocks that will pay me a regular dividend. $37m is just plain ugly no matter how you slice and dice this and margin compression from the ATM contract they just told us about 8 months after the fact, (disingenuous concealment), will affect profitability going forward.
yes these are the real concerns aren't they, as well there probably should've been an update prior to the actual announcement which kind of points to a lack of management trustworthiness
I'm pondering exiting...... would be good to break even (average price 10.67 though - will we get there? )
i was very late to this party
Last edited by peat; 22-03-2019 at 12:37 PM.
Reason: price moving fast so gave fixed reference point cf ref to current mkt price
For clarity, nothing I say is advice....
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