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  1. #521
    percy
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    As I said to SB more wise words.
    Thank you both.

  2. #522
    percy
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    Quote Originally Posted by iceman View Post
    All completely correct SB. It is very important to acknowledge that the company completely changed when the Chinese partners became shareholders and injected a lot of money into the business. They made sure that the money was used wisely to clean up the balance sheet, re-brand the business and set a clear focus on future strategy. It is clear that both the farmers in the Co-op and the Chinese partners, get on well and are focused on common goals. This strategic focus and directive from the Chinese partner has been a huge commercial success for the company.

    The branding of "sustainable" and "grass fed" has also been helped by a huge shift in consumer behaviour where a huge demographic of younger consumers have become much more aware of the origins of what they eat. That doesn't mean they are all going vegan or buying "beyond meat" products. There is already some indications that some of those that did, are moving back to meat products for health reasons. But they want to be sure that the animals are well looked after in their life and are fed with healthy natural feed. "grass fed" has become a big thing in the US, China and Europe.
    Silver Fern Farms has realised this early and is at the forefront of servicing this high demand ethically driven market with an above average exposable incomes. They are successfully doing this with both home cooking and restaurants, particularly in the USA.

    That's where I see a huge difference in this company from the years bygone that you mentioned. It is now a very focused operation with a strong balance sheet, driven by a consumer segment that is demanding but prepared to pay fairly for what they want, not to mention the much wider geographic market spread than we had years ago. The other important part is that the farmers seem to be generally happy with the change and have started to see the benefit from the new strategy.They realise the way for them to make money, is to deliver what the market wants in today's World.

    So yes I agree, we will have all the issues with weather, FX and other unforeseen events. But this company is nothing like what it was 10 years ago and we are just starting to see the benefit from it now.

    Lets remember that Silver Fern Farms produces 30% of all beef, lamb and venison in NZ. It has 16,000 farmer suppliers and 7,000 staff in peak season. Sales are around $ 2.5 Billion. We may be on the USX at the moment but this is a very serious business in NZ's biggest industry.
    A real turnaround story in lots of ways !
    https://sendy.tarawera.co.nz/l/J6oLV...Kdb4hPkjj5bHew
    Pleasing seeing a discussion on this subject.
    Losing food production land to Carbon Farming makes no sense to me.
    Carbon Farming does not produce food or valuable export earnings.
    Last edited by percy; 17-02-2022 at 07:48 AM.

  3. #523
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    Quote Originally Posted by iceman View Post
    All completely correct SB. It is very important to acknowledge that the company completely changed when the Chinese partners became shareholders and injected a lot of money into the business. They made sure that the money was used wisely to clean up the balance sheet, re-brand the business and set a clear focus on future strategy. It is clear that both the farmers in the Co-op and the Chinese partners, get on well and are focused on common goals. This strategic focus and directive from the Chinese partner has been a huge commercial success for the company.

    The branding of "sustainable" and "grass fed" has also been helped by a huge shift in consumer behaviour where a huge demographic of younger consumers have become much more aware of the origins of what they eat. That doesn't mean they are all going vegan or buying "beyond meat" products. There is already some indications that some of those that did, are moving back to meat products for health reasons. But they want to be sure that the animals are well looked after in their life and are fed with healthy natural feed. "grass fed" has become a big thing in the US, China and Europe.
    Silver Fern Farms has realised this early and is at the forefront of servicing this high demand ethically driven market with an above average exposable incomes. They are successfully doing this with both home cooking and restaurants, particularly in the USA.

    That's where I see a huge difference in this company from the years bygone that you mentioned. It is now a very focused operation with a strong balance sheet, driven by a consumer segment that is demanding but prepared to pay fairly for what they want, not to mention the much wider geographic market spread than we had years ago. The other important part is that the farmers seem to be generally happy with the change and have started to see the benefit from the new strategy.They realise the way for them to make money, is to deliver what the market wants in today's World.

    So yes I agree, we will have all the issues with weather, FX and other unforeseen events. But this company is nothing like what it was 10 years ago and we are just starting to see the benefit from it now.

    Lets remember that Silver Fern Farms produces 30% of all beef, lamb and venison in NZ. It has 16,000 farmer suppliers and 7,000 staff in peak season. Sales are around $ 2.5 Billion. We may be on the USX at the moment but this is a very serious business in NZ's biggest industry.
    A real turnaround story in lots of ways !
    Good points Iceman and agree.

    However to clarify, the re-brand to Silver Fern Farms wasn't a Chinese thing, but was some years prior - maybe about 2010 perhaps. Much of it was to move away from PPCS/Richmond situation at the time, and the past history/takeover and become more one company. Which has worked!!

    Markets have evolved in recent years and will continue to evolve - with environmental issues become more at the forefront, along with animal welfare considerations etc - in some, not all markets. While their retail offer has a reasonably high profile, this will be a small part of their total business. But some of the other programmes are key, particularly around foodservice and their beef business. Much of their product is still more a commodity and largely undifferentiated, and due to the nature of the product (plus rules/regs), always likely to be. For example, manufacturing beef, lamb flaps, offal etc.

    The focus has for past years as been on the meat. But expect a little more focus on other aspects in the future, like skins and rendering - where they've had JV's and some of these are coming to an end. I think some of this is coming back inhouse and no doubt there will be a margin/value associated with this.

    I would argue that they are probably becoming less geographically spread in some ways - and both lamb especially, but also beef becoming much more reliant on China - particualry because of the value it can offer. That is part of the worrying issue currently - if any plants are delisted by the Chinese because of C19 then there is a very signifcant and quantifiable drop in revenue. Lamb plants for instance couldn't procure stock without exporting to China - the difference is $'s per Kg.

    Farmer support seems good - and without livestock supply, they are nothing. I would be really interested in a breakdown by species, as believe heavily led by beef. They seem to have arrested the slump in livestock supply from a number of years ago, and success and profitability helps engender more farmer support - so another good divvy and supply payment will further ingrain this. Performing better than their competiton also helps in farmers minds.

    They are clearly more focused than in the past - and focus I imagine would be on other aspects of the business rather than finances, debt and cashflow. I was looking at a AR from 6-7 years ago and did note the whole senior management team has changed since then.

    Definitely agree, a serious (and sizeable) business!!
    Last edited by Sideshow Bob; 17-02-2022 at 09:41 AM.

  4. #524
    percy
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    Quote Originally Posted by Sideshow Bob View Post
    Good points Iceman and agree.

    However to clarify, the re-brand to Silver Fern Farms wasn't a Chinese thing, but was some years prior - maybe about 2010 perhaps. Much of it was to move away from PPCS/Richmond situation at the time, and the past history/takeover and become more one company. Which has worked!!

    Markets have evolved in recent years and will continue to evolve - with environmental issues become more at the forefront, along with animal welfare considerations etc - in some, not all markets. While their retail offer has a reasonably high profile, this will be a small part of their total business. But some of the other programmes are key, particularly around foodservice and their beef business. Much of their product is still more a commodity and largely undifferentiated, and due to the nature of the product (plus rules/regs), always likely to be. For example, manufacturing beef, lamb flaps, offal etc.

    The focus has for past years as been on the meat. But expect a little more focus on other aspects in the future, like skins and rendering - where they've had JV's and some of these are coming to an end. I think some of this is coming back inhouse and no doubt there will be a margin/value associated with this.

    I would argue that they are probably becoming less geographically spread in some ways - and both lamb especially, but also beef becoming much more reliant on China - particualry because of the value it can offer. That is part of the worrying issue currently - if any plants are delisted by the Chinese because of C19 then there is a very signifcant and quantifiable drop in revenue. Lamb plants for instance couldn't procure stock without exporting to China - the difference is $'s per Kg.

    Farmer support seems good - and without livestock supply, they are nothing. I would be really interested in a breakdown by species, as believe heavily led by beef. They seem to have arrested the slump in livestock supply from a number of years ago, and success and profitability helps engender more farmer support - so another good divvy and supply payment will further ingrain this. Performing better than their competiton also helps in farmers minds.

    They are clearly more focused than in the past - and focus I imagine would be on other aspects of the business rather than finances, debt and cashflow. I was looking at a AR from 6-7 years ago and did note the whole senior management team has changed since then.

    Definitely agree, a serious (and sizeable) business!!
    Excellent leadership,
    Strategic Plan on course.
    Strong balance sheet.
    Heavy investment in plant.
    Increasing supplier shareholder support.
    Excellent fundamentals ie PE ratio and dividend yield.
    Together with your and Iceman's comments, means the market is waking up to SFF being a sound and very profitable investment.

  5. #525
    percy
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    Buyers at $1.40,$1.36 ad $1.30.
    I thought suppliers would have finished buying to get year rewards at the end of December,which is the year end for SFF.
    So am a little surprised to see the share price continue its upwards trajectory since them.
    Perhaps more investors are waking up to SFF's good fully imputed dividend, sound prospects, and modest ratios?

  6. #526
    Guru
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    Quote Originally Posted by percy View Post
    Buyers at $1.40,$1.36 ad $1.30.
    I thought suppliers would have finished buying to get year rewards at the end of December,which is the year end for SFF.
    So am a little surprised to see the share price continue its upwards trajectory since them.
    Perhaps more investors are waking up to SFF's good fully imputed dividend, sound prospects, and modest ratios?
    Modest ratio's - I like that.

    Interesting thing is no volume of the sell side, and no one taken the $1.40 (as yet)

  7. #527
    percy
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    Quote Originally Posted by Sideshow Bob View Post
    Modest ratio's - I like that.

    Interesting thing is no volume of the sell side, and no one taken the $1.40 (as yet)
    And no buyers game enough,whoops meant to say astute enough to buy the 10,000 for sale at $1.60..
    And no I am not the seller..lol
    Last edited by percy; 21-02-2022 at 12:08 PM.

  8. #528
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    Quote Originally Posted by percy View Post
    And no buyers game enough,whoops meant to say astute enough to buy the 10,000 for sale at $1.60..
    And no I am not the seller..lol
    I think having not long gone through $1.20 which was an ATH, then $1.60 is probably a bridge too far right now.

    Might change when their result comes out......??

  9. #529
    percy
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    Quote Originally Posted by Sideshow Bob View Post
    I think having not long gone through $1.20 which was an ATH, then $1.60 is probably a bridge too far right now.

    Might change when their result comes out......??
    I think you are right.
    I am pretty happy to see a buyer at $1.40.

  10. #530
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    About 29k through at $1.40.

    Another buyer lining up for $40k at $1.40.

    Could be the level for the timebeing.

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