PGW - PGG Wrightson

[Crackity]

Lucky me picked up 15,000 @ .415c 4.58pm this arvo. Many more wanted thank you. I am looking forward to a takeover bid for PGW one day.

And till then you get a 13 per cent yield assuming the wheels don't fall off.....

[Beagle]

Lucky me picked up 15,000 @ .415c 4.58pm this arvo. Many more wanted thank you. I am looking forward to a takeover bid for PGW one day.

Yes lucky you indeed. I was right behind you in the queue...shame there wasn't some more kind donations from nervous nelly sellers that will enhance my retirement fund.

[Snoopy]

Lucky me picked up 15,000 @ .415c 4.58pm this arvo. Many more wanted thank you. I am looking forward to a takeover bid for PGW one day.

You will be waiting a long time see weed. 50.1% shareholder Agria can't afford a takeover. Nor can they afford to be bought out by anyone else as on paper they are well underwater on their PGW investment. So you are stuck, and your punishment is - a 13% gross yield - forever! Hah hah hah hah.

Can I suggest now that you are relieved of your A2 duties, that you instead go to Japan and drum up more support for the Konka shower clean business suit:

https://www.youtube.com/watch?v=9PUyCqiKKzk

Konka is the company that is using the PGW supplied Merino Wool. Not sure if that is in the suit you can shower in though!

Edit: Crikey, it is!

http://jqrmag.com/en/quality-review-...er-clean-suit/

New Zealand Wool Super 100’s Shower Clean Suit ￥45,000, (or about $NZ560)

I might just have to buy one of those! I wonder if they sell them in NZ? Why isn't PGW selling these? Farmers can get up early and milk the cows, then get a quick hose down and be all ready for church!

SNOOPY

[Snoopy]

Should cut that tax figure since earnings are lower. Also they paid a high % of tax in 2015, c 30% of NPBT.
I estimated 12.6m.

Quite right Banter. My quick and dirty 'take out last years EBITDA figure' and put in the forecast EBITDA figure while keeping all other figures the same was a bit crude. However, at least it was crude in a conservative sense!

I sold half yesterday - falling earnings (0.4cps), fine coming,

There is already a provision for the fine in last years accounts, granted it may not be enough.

raised chance of a significant drought.

The share price is already down 20% from its recent peak.

Div yield should fall to 'only' 11.5% if the company's mid point earnings forecast holds and their payout ratio is the same.

You are a hard punter to satisfy Banter!

SNOOPY

[banter]

You are a hard punter to satisfy Banter!
SNOOPY

Well I've been thinking about growth vs dividend lately, and looks like growth is worth more. PGW is exhibiting negative growth just now.

Yes the yield is fine, looks like a decent company, but even 13% div is only 9.4% net, and there are shares out there that seem to offer over twice that, div and growth combined, all going well.

And the 13% is not like money in the bank. If PGW has a bad year the market won't show much sympathy.

[Crackity]

Yes the yield is fine, looks like a decent company, but even 13% div is only 9.4% net, and there are shares out there that seem to offer over twice that, div and growth combined, all going well.

.

Im interested Banter - what shares are you referring to?

[Beagle]

Well I've been thinking about growth vs dividend lately, and looks like growth is worth more. PGW is exhibiting negative growth just now.

Yes the yield is fine, looks like a decent company, but even 13% div is only 9.4% net, and there are shares out there that seem to offer over twice that, div and growth combined, all going well.

And the 13% is not like money in the bank. If PGW has a bad year the market won't show much sympathy.

Seems to me its being priced like a no growth cyclical on a forward PE of 10. Seems fairly well diversified in the agri sector so seeing as some think this might be the bottom of the dairy cycle I see good value at the closing SP and would have been happy to buy if I could have got any. Any growth in future years will see a rebound in the SP so on a risk reward basis I'd suggest we're being paid handsomely to wait with the balance of risk possibly a little skewed to the upside. If the SP flatlines from here and shareholders simply enjoy a 13% gross divvy that's hardly a disappointment in a fully priced market is it

[winner69]

From his (rough) forecast looks like Snoopy I expecting falling revenues in FY16 (unless expecting a decent increase in margins)

Must have heard that Mark comment the other day 'we will get a fair share of all the business that's out there'. A candid and refreshingly honest remark (no hype) that suggests that the market (ie revenues) is going to be pretty tough this year.

Not surprising that share price down ~5% since the announcement

[Snoopy]

To be comparable 'year to year', I have removed all evidence of the now sold finance division from the results. This involved splitting the finance division off as if it was 'stand alone', then subtracting the finance division NPAT taking out from the total 'NPAT'. Please note these figures represent operational NPAT, discounting one off earnings effects.

Earnings Per Share here is defined as NPAT / No. shares on Issue at end of year

FY2011 (*): $5.9m/ 754.8m = 0.8c
FY2012 (*): $25.2m/ 754.8m = 3.3c
FY2013 (*): $24.3m/ 754.8m = 3.2c
FY2014 : $33.8m/ 754.8m = 4.5c
FY2015 : $34.8m/ 754.8m = 4.6c

(Asterisked figures have been adjusted to remove the former finance division NPAT profit or loss from that year)

Conclusion: Pass Test

SNOOPY

[Snoopy]

To be comparable 'year to year', I have removed all evidence of the now sold finance division from the results. This involved splitting the finance division off as if it was 'stand alone', and assigning the given shareholders equity between the finance division and all other divisions, then removing the finance division component from the total equity.


ROE here is defined as: NPAT / End of Year Shareholder Equity

FY2011 (*): $5.9m/ ($604.3m - 0.4171($766.814m)) = 2.13%
FY2012 (*): $25.2m/ ($577.7m - 0.5892($51.736m)) = 4.61%
FY2013 (*): $24.3m/($256.1m - 0.4134($19.155m)) = 9.79%
FY2014 : $33.8m/ $269.7m = 12.5%
FY2015 : $34.8m/ $267.4m = 13.0%

(Asterisked figures have been adjusted to remove the former finance division NPAT profit or loss from that year AND a portion of equity relating to the finance division of that year)

Conclusion: Fail test

SNOOPY