Seeka

[percy]

I don't have an issue with liquidity.In fact it appears to have been good recently.
SEK, along with all people in the Kiwifruit industry are recovering very strongly from PSA.
31% increase in post harvest kiwifruit volumes confirms this.
Not too many companies I am invested in are expecting their NPAT to be up 30% to 40% on their 2014 result.
The strike price for the DRP is a good discount to the share price. Thank you SEK...
The Bunbartha acquisition has been well thought out, and offers excellent opportunities.
Bannana supplier Sumifru becoming the third largest shareholder is confirmation they are supportive of SEK's management. Positive. .

[BobbyMorocco]

The strike price for the DRP is a good discount to the share price. Thank you SEK...

How does one sign up for the Dividend Reinvestment Plan?

I went to the investor section of the Seeka website and clicked on what appeared to be the necessary links to sign up for participation and I got error messages, saying the page cannot be viewed due to system error. So I emailed Seeka as the message told me to do so and haven't heard anything back.

Anyone have any thoughts?

[percy]

I think you do it via the share registry.
In Seeka's case it is Link Market Services.Google them for contact details.
I am sorry I can't remember how I did it.

[iceman]

How does one sign up for the Dividend Reinvestment Plan?

I went to the investor section of the Seeka website and clicked on what appeared to be the necessary links to sign up for participation and I got error messages, saying the page cannot be viewed due to system error. So I emailed Seeka as the message told me to do so and haven't heard anything back.

Anyone have any thoughts?

As Percy said, you do it through Link Marketservices.
Here is a link https://investorcentre.linkmarketser...nz/Login/Login where you can set up an account (very simple) for all your Link registered holdings or view a single holding. This is the best option.

Alternatively here is a link http://www.linkmarketservices.co.nz/...ces/Forms.html to forms where you should be able to find a form for DRPs.

SEK´s DRP is quite well discounted so a very good option for holders in my opinion.

[iceman]

I went to the SEK stakeholderrs meeting a couple of weeks ago and also visited a couple of orchards the next day.
For those interested, below are a few notes that I made:

Financial forecasting is fraught due to the ongoing issues and fruit damage related to the fire at Oakside in March. They believe they have very good statistical evidence pointing at the wooden bins used as having been permanently affected with the fire, despite being cleaned to standards they believed were adequate. The fruit loss issue has been that the fruit stored in these bins ripened much faster than industry average. They responded by priority shipping this fruit but due to quantities this lead to delays and extra costs at other packhouses and coolstorages.

The new lower FY15 forecast due to fruit damage has lowered the bottom end of the forecast range which now sits at 10-40% on FY14. They believe that the lower end would cover a worst case scenario, meaning no or little insurance payout and all possible extra costs accounted for. They are not in a position to estimate insurance payouts but are claiming under 3 different policies (material damage, marine cargo, business interruption) and have been told by their insurance advisors that they have a robust case and they say they have “lots of confidence”. Outcome should be known by Christmas.

I also get a feeling there is a potential to receive a further insurance payment from the fire itself. The remaining rebuild at Oakfield is estimate to cost $1.0-1.5M, so possibility exists that insurance payout may exceed that.

The standout in this year’s harvest has been the large increase in yields of Haywards. Over last 5-7 years, yields have been plus minus 8000 trays per hectare. This year it was 11720. I spoke to a few farmers at the meeting and it appears nobody is really 100% sure why they got this great yield and if it will continue at these levels.

$17m approved in CAPEX to date for new cool storage, packaging facilities, new HQ and orchards. This is done in preparation for exceeding 30M trays of fruit in 2016-2017. Funded by bank debt.

Some of the goals outlined are:
# Any investment needs to earn cost of capital
# Continue to grow volumes of Gold. They packed 1.9M trays of Gold in 2014 but 4.4M in 2015, of which they harvested 1.3M from their own orchards. As G3 is limited to 4000 Hectares by Zespri, SEK need to get more G3 growers to supply them, if they want to increase G3 volumes.
# Extend geographical area and produce spread. Australia “first target”. Interesting comment.

They had quite extensive comments on the Bunbartha acquisition. SEK now has 224HA in production in Australia and 123HA more that can be developed. Have good water rights but are on the hunt for even more to counter the possible El Nino effects expected this summer.
As a result of this acquisition, Australian sales will rise from $20M to $40M. This merger sounds very complimentary as it will give SEK a wider range of fruit to supply to Coles and Woolworths all year round. Bunbartha expertise is mainly in pears, nashi and apricots where SEK can learn but on the other hand SEK can provide expertise on Kiwifruit.
An interesting recent addition to the Australian business is pollen exports to Japan. This is small but high margin business which will be interesting to see how devlops
They are expecting a breakeven for the Australian business this year but should start contributing at least $3.5 – 4.0 m next year.

TPPA is marginally positive but not a game changer for them.

The orchard manager that showed me around was very confident that they are in for another bumper season.
Despite the setback with the above average fruit damage, which hopefully will be well covered by insurance, I feel that SEK is a good growth and yield stock going forward.

[Jay]

Thanks Iceman for a very good summary. Appreciated

[Joshuatree]

Yes thanks Iceman. SEK still on my watch list (and a pick in the share trader comp for me). Are you a grower . supplier to SEK? If so a win /win i guess. Bunbartha an int acquisition reducing risk with diversity and crop region hopefully.

[iceman]

Yes thanks Iceman. SEK still on my watch list (and a pick in the share trader comp for me). Are you a grower . supplier to SEK? If so a win /win i guess. Bunbartha an int acquisition reducing risk with diversity and crop region hopefully.

No JT, just a heavily invested SH :-)

[bull....]

went to meeting as well, interested in there growth strategy so had a chat with CEO after meeting. Good plan going forward with Bunbartha can sell excess fruit back into NZ when they develop the additional hectares, looking to buy more land as well as water, can sell more fruit into Taiwan, europe with aus purchase as Bunbartha already supplies these.
my concerns were how long it going to take to do this? are you going to do a cash issue so you can speed all this up? lack of storage facilities? systems need improving, don't you want to investigate why the yield was so high?

overrule liked what I see have a small holding may get more depending on there progress so will watch with interest

[iceman]

Hi bull. Next time we should catch up :-) Good comments thank you.
I asked similar questions to you after the meeting. They have a BIG growth strategy that needs to be watched. CEO told me they already have a credit line of up to $120M. So they can tap the banks quickly for any acquisitions and I don't expect a cash call to SH.

I also had concerns about lack of storage facilities and asked questions about it after the meeting. My reading from it, and I may be completely wrong, is that they do not intend to grow much beyond 30M trays of fruit in NZ. Any growth beyond that will come outside of NZ with Australia being the first and obvious choice. Also, Australia is the only PSA free (long may it continue) Kiwifruit growing country in the World. This makes the pollen business exports really interesting and the potential opportunities quite big.

I think we will see Seeka growing very quickly in size in the next 2-3 years. I expect double market cap by end of 2018 and base my investment on that. We will also receive 18-20c of dividends per year as well in my view. I will be watching the execution of their strategy very carefully. But I regard SEK as both a growth and dividend investment.