Scales - SCL

[Biscuit]

Shortage of seasonal labour is a major problem for horticultural businesses. Most of the apples have probably been picked and sorted but doesn't SCL have other crops, eg kiwifruit?

Probably the main reason there are no restrictions on entry to NZ from pacific islands. SCL will find the the workers I expect. Supply and demand - offer enough money and people will step up.

[Sideshow Bob]

Probably the main reason there are no restrictions on entry to NZ from pacific islands. SCL will find the the workers I expect. Supply and demand - offer enough money and people will step up.

Not much use if got no coldstore to put them in or containers to ship them. As mentioned previously they have the advantage they have their own logistics business (so silly if they didn't prioritise themselves) but some serious constraints with storage and logistics.

[Ggcc]

Shortage of seasonal labour is a major problem for horticultural businesses. Most of the apples have probably been picked and sorted but doesn't SCL have other crops, eg kiwifruit?

They are into week 3 of picking only 5-8 more weeks of picking to go depending on varieties.

[Biscuit]

Not much use if got no coldstore to put them in or containers to ship them. As mentioned previously they have the advantage they have their own logistics business (so silly if they didn't prioritise themselves) but some serious constraints with storage and logistics.

I note CEO Scales Logistics just (16/3) bought 40,000 shares on market.

Discl: hold

[Pricey]

Very pleased to have re-entered this stock at 3.50. When searching through the sales on the NZX, It was easy to see that Scales is one of the safer bets:

- Posy apples have already been picked and shipped to China
- SCL is vertically integrated and has more control over its logistical requirements and is less reliant on third parties
- China is prioritising food deliveries at their ports
- Social distancing will cause people to buy more food at the grocer; healthy food will probably be in higher demand
- Has good commerce sales which will also be preferred over store visits
- Is considered an essential service, so the apple pickers can still work (SCL is involved in the supply, delivery, distribution and sale of food)
- Has released an un-alarming COVID update to the market
- CEO just bought $157k worth on the market at $3.65 on 17 March
- Has a strong management team with a proven track record

[Biscuit]

Very pleased to have re-entered this stock at 3.50. When searching through the sales on the NZX, It was easy to see that Scales is one of the safer bets:

- Posy apples have already been picked and shipped to China
- SCL is vertically integrated and has more control over its logistical requirements and is less reliant on third parties
- China is prioritising food deliveries at their ports
- Social distancing will cause people to buy more food at the grocer; healthy food will probably be in higher demand
- Has good commerce sales which will also be preferred over store visits
- Is considered an essential service, so the apple pickers can still work (SCL is involved in the supply, delivery, distribution and sale of food)
- Has released an un-alarming COVID update to the market
- CEO just bought $157k worth on the market at $3.65 on 17 March
- Has a strong management team with a proven track record

Well done, I reckon you got in at a good price! Agree with your assessment.

[axe]

Fruit index seems to be holding up comparatively well.

"Prices for NZ commodity exports are declining however this is being partiallyoffset by the sharp fall in the NZD"

https://treasury.govt.nz/sites/default/files/2020-04/covid-19-econ-dashboard-17apr2020.pdf

[kiora]

I wonder how the pack house costs of social distancing will affect Scales,anecdotally taking twice the time for the same output

[Pricey]

Yes, I agree - Covid is bound to affect the business somehow. I think $4.90 is too optimistic (8% off its high) and have sold some. Might get out completely to have some money on the side.

[BlackPeter]

I wonder how the pack house costs of social distancing will affect Scales,anecdotally taking twice the time for the same output

Seeka had the same problem and they managed to get with vertical distancing (basically erecting walls between the packing lines) back to 85% of their old output ...