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Thread: Seeka

  1. #311
    Dilettante
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    Quote Originally Posted by Lewylewylewy View Post
    The capital raise is an announcement of the start of a growth strategy being put in place
    The growth strategy is already well underway with the purchase of the Australian operation in 2015, KiwiCrush in 2016 and Turners & Growers Northland operation earlier this year, as well as packouse facility upgrades in this period as well. They intend to continue growing the business quite significantly in both NZ and Australia.
    This has lead to a fairly highly geared balance sheet which they are de-risking with the new capital and the continuation of a share scheme for suppliers. This is a sensible strategy.

    They now need significant focus on making Australia profitable and deal with the PSA issue there.
    Last edited by iceman; 13-11-2018 at 05:23 AM.

  2. #312
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    I've jump[ed onboard board today , in a small way bearing in mind the rights issue - looking for some diversity
    thanks for earlier comments by Iceman and BP.
    For clarity, nothing I say is advice....

  3. #313
    ShareTrader Legend bull....'s Avatar
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    money raised is for very high debt levels. s/h will be diluted next yr by grower share scheme and staff bonus scheme. what about the div on the doubling of the shares on issue will it remain the same?
    one step ahead of the herd

  4. #314
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by bull.... View Post
    money raised is for very high debt levels. s/h will be diluted next yr by grower share scheme and staff bonus scheme. what about the div on the doubling of the shares on issue will it remain the same?
    Hmm - bear, let us think.

    If they put all this additional capital under the boards pillows, than yes, we are likely to see a reduction in earnings per share. However - what would happen if they (shudder) use this money for a more useful purpose? Maybe they pay back their loans (and save interest) - or maybe they buy even earnings accreditve business ; Who knows?

    BTW - liabilities to assets was at last FY-report 55.6%. This is in the upper half of what I would consider sensible debts for a business like SEK (40 to 60% debt). But calling less than 56% "very high debt levels?". Probably just your bearish lingo going through with you ... ?
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  5. #315
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    They've already announced they're selling several of the orchards they got in the T&G purchase and will use the proceeds to reduce debt. I think management is well aware of the need to reduce debt. I can not see them being able to maintain DPS next year on the substantially higher number of shares.
    But I thik they are doing the right thing focusing on strengthening the balance sheet after a few years of expansion.
    My biggest concern at the moment is Australia. Until I see them turning it into a profitable operation, I'm likely to stay out.

  6. #316
    ShareTrader Legend bull....'s Avatar
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    Quote Originally Posted by iceman View Post
    They've already announced they're selling several of the orchards they got in the T&G purchase and will use the proceeds to reduce debt. I think management is well aware of the need to reduce debt. I can not see them being able to maintain DPS next year on the substantially higher number of shares.
    But I thik they are doing the right thing focusing on strengthening the balance sheet after a few years of expansion.
    My biggest concern at the moment is Australia. Until I see them turning it into a profitable operation, I'm likely to stay out.
    i agree the div payout on the increased shares would be roughly 5.8m + some more for growers issue and staff issue. they forecasting 6.5 - 7.2m npat so the payout ratio would be very high if they maintained the div.

    no room for growth then or a bad season.
    i think historically the div has been lumpy anyway ? if you take account of poor seasons
    one step ahead of the herd

  7. #317
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    Quote Originally Posted by BlackPeter View Post
    SP up from $5.70 to $5.83. Not that often that you see the SP rise after the announcement of a capital rise.

    Feels like punters value the rights to buy discounted SEK shares.
    Not so much value placed on the rights now with SP ~$4.85.
    Will be interesting to see where the SP is as we approach Dec 7. At the moment I am thinking I will probably take up the offer...however would like some indication re future dividend on the increased share count.
    Hoping there might be an indication in the offer documents.

  8. #318
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    Quote Originally Posted by RTM View Post
    Not so much value placed on the rights now with SP ~$4.85.
    Will be interesting to see where the SP is as we approach Dec 7. At the moment I am thinking I will probably take up the offer...however would like some indication re future dividend on the increased share count.
    Hoping there might be an indication in the offer documents.
    The only green in my portfolio today. I'm also considering taking up the offer depending on future dividend.

  9. #319
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    So received the documentation via email last night. As an investor who needs dividends to buy my Panhead & Kombucha I'm trying to determine if I will take up the offer. I would like to, as I am keen to hold a few more SEEKA shares. It's nice seeing their signs around where I live.


    In the document I see below as to how they will use the money:


    "Seeka will use proceeds of the Offer (following payment of Offer costs) to strengthen
    its balance sheet, repay bank debt and undertake planned capital expenditure."

    and with respect to the dividend....

    "Dividend Policy
    Seeka’s dividend policy is to declare dividends at a rate of
    up to 75% of net profit after tax in conjunction with the
    release of Seeka’s half year and full year results. Payment of
    dividends is proposed to be in March and September each
    year.
    Each dividend will be determined by the Board after due
    consideration of the capital requirements, operating
    performance, financial position, debt levels, and cash flows
    of the Group at the time.
    The Board reserves the right to amend the dividend policy at
    any time."


    and with respect to the number of shares issued...
    "Seeka presently has 17,590,482 Shares on issue"
    "The number of Shares on issue after the Offer will
    increase to 29,317,470 Shares "

    What concerns me is that I don't see in their intended use of the funds raised anything that will drive revenue up enough to maintain the dividend rate on the significantly increased share count. Is this to simplistic a way to look at this ? If so, what am I missing ? Will repaying bank debt provide significantly increased revenue per share ? Am I on the right track thinking about it on these terms ?
    Look forward to comments.

    Cheers
    RTM

  10. #320
    ShareTrader Legend bull....'s Avatar
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    17 - 18 cps ? div
    one step ahead of the herd

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