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  1. #561
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    Quote Originally Posted by percy View Post
    At current prices if I did not own so many I would be a buyer.
    USX,, SFF issuer profile shows a PE of 5.038.....Rather modest considering eps has increased over 60% in the past year.
    Every season is different and brings different challenges, and this year they are battling Omicron in plants. While the animals are still there, it will be a longer season and some plants may not have had the efficiencies of the "peak" processing through late summer/autumn, with the higher costs of staffing and Covid.

    However, it is another year just gone of very good profits, and once again only a portion of that profit paid out. Another year of "runs on the board" that helps underpin its investment credentials, and can make profits in different circumstances - albeit with record high prices for many products, it does give a signifcant tail wind. This can change in an instance, especially with China, but the world seems to be a different place these days. Much better performance than Alliance (100% Coop) and also Anzco (Private), albeit with different FY timings.

    Great also for supplier shareholders, which just helps cement that supply a little more, and makes it more attractive for new suppliers. But those shareholders, getting 12.9+12.1 cps = 25 cps, then the share price almost doubling in the last 12 months (84c to $1.60). That is over $1 per share in the last 12 months!

    Much of the profit has been retained in the business (and Coop) which will see it well placed for the further. Another $60m in capital expendiure - and I am always interested in how much is for BAU or compliance, and how much is for further profits and returns. But in the meantime, just looking forward to the divvy.....
    Last edited by Sideshow Bob; 01-04-2022 at 12:41 PM.

  2. #562
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    Farmers Weekly article

    Farmers Weekly

  3. #563
    percy
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    From ANZ research.
    Demand from China for beef is not expected to let up anytime soon. A poor grain harvest means they will have less feed than ever for their own cattle, and the cost of producing beef within China will also rise.The high cost of grain in general will put upward pressure on the price of all grain-fed beef, whereas the cost of producing beef on pastures will be less affected. New Zealand is only a small player in terms of global beef production so the current environment is certainly working in our favour.The challenge we currently face is getting cattle processed and shipped to our global markets.

    NZ currently supplies similar volumes of beef to China and the US. Our market share in the imported beef market in each of these countries is less than 10%. So while these are both very important markets for NZ manufacturing beef, we are a relatively small player in each of these markets. The strong demand for beef from both US and China has really helped support farmgate prices in the past few years. This trend looks to continue, at least in the short-to-medium term.Normally by this time of the season we would see a sharp decline in schedule prices, particularly for manufacturing beef, as large number of cull cows come forward for processing. This prices have remained very robust despite the restricted processing capacity.



    A stand off between buyers at $1.60 and the seller at $2.20 today.Interesting.?
    Last edited by percy; 04-04-2022 at 08:25 PM.

  4. #564
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    Quote Originally Posted by percy View Post
    A stand off between buyers at $1.60 and the seller at $2.20 today.Interesting.?
    The joys of being so illiquid. Only average about 14,000 shares traded per day.

    Would be interesting if someone took their divvy now and put some on offer at $1.70 or $1.80. $2.20 a bit of a leap.

    Still, at $1.60, PE is only about 3.1. At $2.20 would be about 4.2.

    If went back to last couple of years profit, then at $1.60 it is a shade under 5 PE, and $2.20 would be completely outreagous 6.77!!

  5. #565
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    Bidder now at $1.65.

  6. #566
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    Very impressive result. I'd be interested to know how capital intensive the business has been on average and is likely to be in future, and how much capital investment is the price of staying competitive, vs generating increased profits. Would any of you who've looked into more deeply care to comment?

  7. #567
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    Quote Originally Posted by DarkHorse View Post
    Very impressive result. I'd be interested to know how capital intensive the business has been on average and is likely to be in future, and how much capital investment is the price of staying competitive, vs generating increased profits. Would any of you who've looked into more deeply care to comment?
    "Silver Fern Farms invested a record $60.5m in its business last year, most of which was spent on upgrading its 14 processing sites, some of which have a history stretching back more than 100 years."

    "The last year saw some significant milestones in the company’s industry-leading sustainability programmes. Investment in initiatives such as Net Carbon Zero beef and in infrastructure such as the Marshalling Floor at Pacific reflect the core of our market-led strategy."

    "The work we are doing to reduce the environmental impact of our processing operations is just one of the ways we’re making sure we do the right thing by our customers and the wider community, who increasingly want to know that their red meat is sustainably and ethically produced. Our investment in coal-out projects, such as at our Pareora site, demonstrate that we’re on target to end all coal use in our operations by 2030."

    "While we still have some way to go yet, we’re confident that the direction we are travelling in will translate into higher returns for what we produce and a more positive outlook on the sector for our farmer suppliers."
    Last edited by percy; 04-04-2022 at 08:27 PM.

  8. #568
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    Do you have some idea whether the upgraded plants will be much cheaper to run (like replacing my ancient Honda with a plug-in hybrid last year), or just necessary capex to replace machinery on its last legs?
    And if most the the processing sites are almost up to scratch now, or a lot of obsolete equipment remains in place?
    Last edited by DarkHorse; 04-04-2022 at 08:47 PM.

  9. #569
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    From memory $30mil then $50mil and $60 mil over the last three years has been spent.
    Yes a lot would be to replace equipment that was past its best used by date,but other capex such as the marshalling floor at Pacific ,have been done to increase productivity.
    The last year saw some significant milestones in the company’s industry-leading sustainability programmes. Investment in initiatives such as Net Carbon Zero beef and in infrastructure such as the Marshalling Floor at Pacific reflect the core of our market-led strategy.


    From my last post I repeat what their goal is.:
    "While we still have some way to go yet, we’re confident that the direction we are travelling in will translate into higher returns for what we produce and a more positive outlook on the sector for our farmer suppliers."

    I think 3 or 4 year's ago a lot of SFF's plants would have looked like your old Honda,however today they would be more like your plug in hybrid.
    Last edited by percy; 04-04-2022 at 09:02 PM.

  10. #570
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    From one of Simon Limmer's fortnighty updates.
    http://link.silverfernfarms.com/c/6/...okRvRxVv9B6GQw

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