Seeka

[Southern Lad]

SEK management is very focused and doing very well in my view. I strongly feel SEK is undervalued at current SP.

Agree that SEK has a clear strategy that they are executing on which should drive future earnings growth. Even without growth, the current share price to underlying NTA and dividend yield are attractive relative to other opportunities on the NZX.

Some musings on SEK:

Published NTA is arguably understated. SEK policy is to revalue land and buildings on a three year rolling basis, meaning in times where values are increasing there is a time lag until these higher values are recognised in the financial statements. Adding weight is the transaction that T&G did late last year to sell and lease back a packhouse, cold store and storage property in Hawkes Bay to PFI at a yield of 4.4%. Admittedly a large site at 9.56 ha however the Dec 2020 financial statements indicate that SEK land and buildings are carried at capitalisation rates between 6.25 and 10.5%. Therefore, I suggest current market values will be somewhat higher than current carrying values.

There appears to be a large seller(s) of SEK shares at present, which is keeping a lid on share price growth. The shares issued as part of the two completed and one yet to complete amalgamation transactions probably means that there is a bit of an overhang that is likely to persist for a while yet - the NZ Fruits transaction will result in a further $10m of shares being issued, a chunk of which will no doubt find their way to market. For a longer term investor, this presents an ideal buying opportunity at present and over the coming couple of months.

The largest shareholder, Tomlinson Group Investments Limited, did increase their shareholding by 330,000 odd shares in October which is a positive sign.

There is only a small number of institutional shareholders on the register - it will be interesting to see whether this changes going forward. If there is a share overhang, maybe this provides the opportunity for greater institutional involvement as these shares find a new home.

[iceman]

Very good post Southern Lad which I totally agree with. The issuing of new SEK shares to the owners of the businesses they´ve taken over is likely to provide great buying opportunities for awhile yet.

[Mr Slothbear]

Both myself and my partner have bought some.

P/e of 10 and price/nta of 0.95 seems like good value for company that has doubled its eps in the last 5 years and has a good track record of increasing dividends and eps growth with good forward prospects

[Sideshow Bob]

Thanks for sharing your knowledge/info Icemand and Southern Lad.

Already a holder, but bought a handful more, and a few for might daughters Sharsies account.....

Seems like a good place to park some fuinds, and in the words of another holder, believe are "well positioned".

[iceman]

Once again the holders of the company being amalgamated into SEK vote overwhelmingly in favour of the takeover. This is a brilliant vote of confidence in Seeka's management and their strategy.

SEK
19/01/2022 09:16
TRANSACT
PRICE SENSITIVE
REL: 0916 HRS Seeka Limited

TRANSACT: SEK: Seeka NZ Fruits amalgamation unconditional

Seeka Limited [NZX:SEK] advises that the Shareholders of New Zealand Fruits
Limited (NZ Fruits) have voted overwhelmingly in favour of its acquisition by
amalgamation with Seeka.

Seeka Limited [NZX:SEK] advises that all conditions for the NZ Fruits
amalgamation have been met and the transaction is expected to be completed
early February 2022.

Release ends:

[Southern Lad]

Press release suggests the NZ Fruits shareholder vote wasn’t unanimous. If so, interesting as the Companies Office only details six shareholders.

From a Seeka perspective, good that the amalgamation will be effective ahead of the upcoming Kiwifruit harvest and therefore full earnings will be picked up in the Dec 22 year reported profit (contrasted with last years OPAC amalgamation with completed in early may which left some pre-acquisition profits going into the fair value on purchase calculation).

[Sideshow Bob]

Seeka announces dividend of 13 cents per share - NZX, New Zealand’s Exchange

Seeka Limited [NZX:SEK] advises that it has declared a Full Year dividend of $0.13 per share in relation to the financial year ended 31 December 2021.
The dividend will be fully imputed, and the Dividend Reinvestment Plan will apply.
The dividend record date is 28 January 2022 and the dividend will be paid on 23 February 2022.
In early February 2022 Seeka expects to complete the acquisition of New Zealand Fruits Limited by way of amalgamation which will include consideration of new Seeka shares and cash.
The Full Year dividend is normally paid in April each year. This year the Full Year dividend date has been varied due to the issue of new shares to be issued ex-div in February.

[iceman]

A little bonus from the NZ Fruit purchase, we get our divies early :-)

[Rabbi]

Yes SEK paying 13 cents a share fully imputed compared to SCL 9.5 cents fully imputed so pretty good yield and set to grow.

[percy]

As it has stopped raining ,I used some of the wife's rainy day funds to buy her more SEK this morning.