:DPhew!! Dipped my toe yesterday, only buyer! Biting my nails today until now!!! Aye! Aye!
Thanks Noodles and Percy again for reassurance.:t_up:
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:DPhew!! Dipped my toe yesterday, only buyer! Biting my nails today until now!!! Aye! Aye!
Thanks Noodles and Percy again for reassurance.:t_up:
I got in at $3.20 at wee while back. Hopefully their purchase, the lower dollar and the end of month result will see me in the black again very soon on this one. Even tempted to increase holdings a bit before the big boys kick in.
Gunny
Slowly moving up now woohoo!
Very slowly indeed, but on low volume and large spread. Hopefully we will get the HY results next week and I suspect things may change when the market realises that SEK is trading on a current year PE of 8-10 (my expectation) with a good and steadily increasing flow of dividends.
Agri sector seems stuck on circa PE of 10 Iceman - Other examples SCL and PGW. Disease, pestilence, extreme climatic conditions...you name it...it seems to me the market whether we want it too or not, (and I do as I hold PGW and SCL) seems mostly disinterested in the PE going much over 10. Bloody cyclical's eh...seems the same applies to AIR:ohmy:
I'd love them all to re-rate to a PE of 13, I dream about it some nights LOL
Very true. Nevertheless we're well-placed. Negatives already priced in limits downside; nice divies and EPS growth will give us decent upside even without PE re-rate :)
Yes I think you have a point Roger that the negativity about dairy in the media and political commentary (even the odd comment on ST) is affecting far more stocks than are being affected in reality. While dairy is currently going through a tough time, horticulture is booming. Silly to treat them both as "agri" stocks and lump them together.
I agree that good and reasonably valued stocks such as SCL and SEK may be stuck roundabout where they are now, while this sentiment continues.
However, I do not think the market has factored in a possible 60-70% EPS growth and a 20% dividend growth YoY for the current year, as I am doing for SEK. Add to that the new acquisition that is likely to add to EPS almost immediately and the upside from current SP is quite significant.
I think the whole point of us discussing shares on sharetrader is to help each other find anomalies,before the market wakes up to them.
Your research Iceman on SEK is a perfect case in point.
Share prices follow earnings....buy earnings growth [steve fleming]
Buying shares where the PE is less than half than eps growth rate is both very safe and extremely profitable.
So with possible 60% eps growth, SEK looks as though it will only be a matter of time before the market rerates it.But rerate it,it will.!!
I must admit I am "well positioned."
If you could only buy one today would it be SEK or Scales
Thanks for the research both iceman and Percy
Looking at EPS growth and PE you would go for SEK would you not and it look s to be more in an uptrend than SCL at present
I think they are both good companies and good investments, operating in a very similar field being horticulture and logistics. Not sure which is more juicy !
I know Percy and others happily hold both. I have done my homework on SEK and feel very comfortable with it so have accumulated a few over the last year or so. It is now my 2nd biggest holding.
Before I start...I hold both SCL and SEK and am considering buying a few more SEK. Accordingly I reviewed the SEEKA 2014 report yesterday. I was surprised how ignorant I was with respect to SEK. Below are a couple of questions that other investors may be able to help me with....as well as a few little facts I gleened.
1) SCL ($269Mil) is significantly bigger than SEK ($50Mil) Personally I would prefer the bigger company as it probably has more resilience.
2) SCL's owns a substantial portion of its orchards. SEK contracts growers. I like the concept of controlling the chain start to finish, although I am sure SEK has great relationships with its suppliers, many of whom are shareholders. Maybe this lack of landholding accounts for a lot of the difference in Market Cap ?
3)SEK has two major share holders, one Japanese (18%) and Te Awanui Huka Pak (16%). This seems OK. Great to see our local Maori folk with a substantial share holding in a developing NZ company. Nice to see some of that treaty money well invested. And the Japanese holder is linked to marketing the product in Japan...a good fit. Not sure re SCL
4)There is a scheme to incentivise suppliers to stay with SEEKA in the form of issuing shares.
In 2014 this diluted the share total by 4%
5) There is a scheme to incentivise employees.
In 2014 this diluted the share total by nearly 3%
So between 4) and 5) the value of my shares was diluted by ~7%
This doesn't seem great, I am not sure how this would compare with other companies.
My questions are....where do these shares come from ? Are they simply new shares created for this purpose ? On page 25 of the report....item c...there is a note with respect to the Employee Share Scheme...and above that a line in the table:
Held by SEEKA Employee Share Plan Trustees 693,442 (2014 shares) etc.
Does this line mean that the Employee Incentive Shares are already in the overall count...and are therefore not dilutive when issues to the employees ? However...give that they issued 429.6K, they would need to top this up again for the following year ? Can anyone help my understanding on this. As you can probably see...my career was not in finance !
Thanks in advance for any help.
RTM
Article about Seeka if anyones interested "Seeka hits target in Australia"
http://agrihq.co.nz/article/seeka-hi...-australia?p=1
Yes thanks sb.
I have a cousin living in Shepparton, he did mention a while ago that some or a lot (cannot quite remember now) of their orchards were starting to disappear or will be disappearing he thought - supplies the local SPC cannery.
So it look like some is has/ is being converted to Kiwifruit.
RTM re point 1 - hopefully they will grow to a bigger company so a little more riskier than Scales perhaps
Hi RTM,
I'll have a go at answering some of the issues you've raised.
Yes SEK is a much smaller market cap than SCL. But SEK intends to grow quite quickly. This is both an opportunity and a risk for us investors. My guess is we will see a SEK with 3-4x current cap value in 4-5 years time !!!!
The grower share scheme is a 3 year scheme, with 2016 being the last. My understanding is that it was implemented to rebuild long term relationships after the disastrous PSA hit.
I also believe SEK realises they need to increase volumes quickly to justify building more coldstorage facilities. This is one way of doing that and I suspect we will see that happening soon. After all, coldstorage, load out and general handling is where SEK make a large part of their money.
The share scheme is tax deductible from the post harvest EBIDTA but of course is a non cash deduction as its paid for in NEW shares.
I think this scheme is a win win for growers and SH alike.
SEK does have a mix of their own operated orchards (long term leased land though) and grower contractors.
It should be noted they just bought 505 Ha of land in Victoria of which 240 Ha are planted and with full water rights.
I will not attempt to answer re details of the employee scheme. Don' t remember the detail at the top of my head and am in very slow internet connection so can't look for it. But I am relaxed about that. SEK has been building its operational management systems ahead of the anticipated volume increases, that are happening already this year. Prudent stuff and we want good people in those positions, with a bit of skin in the game.
Thanks Iceman, pleased to hear that the Growers Scheme is just 3 years....as 7% total dilution of my shares seems pretty high.
Agree that employees need to be appropriately remunerated. Per the report they have 53 employees earning more than $100K. Not sure of total number of employees. On top of this there does seem to be a fairly generous share entitlement (3% of the total shares is not insignificant) So I hope they are all working at the top of their ability to enhance the value of "our" shares !
Note: I have not been able to benchmark this at all against what other companies are doing. It may be quite a normal number. It just "feels" generous !
Saw that ,biggest vol in a longlong time. S/P sceamed thru both M/As too like a cleaver thru a lambington..
Great to see Seeka's Banana supplier Sumifru take a SEK stake and become the 3rd biggest SH. A vote of confidence and supportive of SEK becoming a diversified produce supplier. Bring on the HY announcement next week and will be watching with interest whether we get any comments on profit projections for the FY. Normally they provide that in October but this year is probably outstanding so far so one is allowed some optimism !
Just the speak of currency helping exporters puts a bit of joy in your belly.
"It's wonderful news for exporters, particularly those selling wine, apples, kiwifruit, beef, lamb and holidays at still-high prices. These farmers and moteliers can thank their neighbours on dairy farms."
SEK, SCL and THL really gonna pocket the money this time round!
http://www.nzherald.co.nz/business/n...ectid=11497659
Who reckons we hit $5 a share? If NPAT is better than 5 million its quite possible on a PE 15, definitely crossing the fingers and waiting till next week for the surprise!
HY report out today! https://www.nzx.com/files/attachments/218819.pdf
First 6 months profit more than whole of last years already.
9 cent dividend too
Yes a good result although I see in their full year projections that full year Nprofit is around the 4.5mil which might subdue a few feelings regarding the future. Australian acquisition should help out a little but that's for the next 18-24 months...
Unfortunately I sold out of this stock at 90 cents! Will get in again but I'm looking for the sp to depreciate a little
I have recently joined the register along with a company out of Singapore I see and expect big things going forward
Looks like theres barely any stock left on the buy side right now
Yeah, have been looking to buy nothing much to buy. Anyone selling from here!
Looks like we also get a presentation too
https://www.nzx.com/companies/SEK/announcements/268691
I don't understand how the forecast annual NPAT is only 4.5 M when they have already achieved 3.7M for the half year. They are predicting a very very uneventful second half
A few comments in no particular order, after the first glance at the announcements :
A large revenue increase and good growth across most sectors of the business. EPS in the 6 months already above FY14. But outlook indicates 2nd half will not be as outstanding and will not deliver half of annual profits like previous years. But indications are FY EPS of 30c or thereabouts. This is a good 30-40% increase, but less than I expected. Need to study report better to try to understand why but probably explainable by lots of the profit (unusually high share) so far being from post harvest operations that obviously don’t happen in the 2nd half.
An EBIDTA increase of 97% YoY. Spectacular.
Need to invest in coldstorage and not so hidden criticism of Zespri and the industry not collaborating on offshore arrangements, related to that. This is urgent as further growth will be restricted without it. The question will be whether SEK need to fund it or will we have landlords building facilities for us to lease. This issue could affect future dividends. I still expect a final divie of fully imputed 10c though, supported by great cashflow in the HY. But I would like management to attend to this with urgency and come to us for cash if need be.
SEK has run slim margins on coldstorage and loadouts, as well as the grower share scheme, to assist growers rebuilding after the PSA disaster. Long term, I think this will be of huge benefit to SEK and the growers
A gain from impairments and actual insurance payout from the Oakside fire, more than covering the grower scheme this period. More gain on insurance payout indicated for the 2nd half.
The Glassfields acquisition is not delivering to expectations these 6 months. That is disappointing. Bananas and avocado sales in NZ very competitive and pressure on prices. Reassuring that Philippines banana supplier Sumifru has taken a big holding in SEK and is a vote of confidence in the future of this business.
The fact that SEK has provided FY outlook now rather than the normal October announcement, tells me they are extremely confident of achieving what they are saying. As far as I am concerned, we only have upsides from her.
A very happy holder.
ill give some thoughts next week, bit busy with earnings season at da moment here and aus
Good result and congrats to holders and thanks to Iceman for his detailed comments on SEK.
I'm watching but I remain cautious.
I do the books for a small Kiwifruit operation and they had a ripper year with very strong profit growth.
Fact is it was a brilliant season for growing and prices were good but seasonal returns are variable and I remain comfortable using my long term average yardstick of a PE of 10 to value agri stocks for reasons of seasonal variability in crop size, pricing, disease, pestilence, drought e.t.c. e.t.c I have used this PE of 10 for years and swear by it as a general yardstick. Interesting to note both SCL and PGW are currently trading on a PE of very close to 10.
Anyway...not looking to rain on anyone's parade, just thought I'd share my 2 cents from the accountants coal face on what a private operator achieved for the year and my personal PE yardstick for agri stocks.
Disc: Hold PGW and SCL.
I like this stock for their growth and future earning potential.
However from a trading point of view liquidity is the biggest concern for me and I don't like illiquid stocks.
Good luck to those that are already in.
Disc: Do not hold.
Fair enough comments Roger. I certainly agree we need to be careful in this industry with companies such as SEK & SCL as they are always at great risk and reward from natural events. Just like all primary industries.
But I do not think it is correct to compare SEK to a smallish individual Kiwifruit orchardist. SEK are not a Kiwifruit grower except to a small degree. They got close to 70% of their EBIDTA this HY from post harvest operations. They make their money from infrastructure around the industry and marketing the produce (whats not done by Zespri).
SEK has also been at the forefront of maintaining pricing/profits for growers to help them recover from PSA.
I think it is great that despite that, both growers and SEK are having a good year.
And that I agree with. It is a company that is entering a profitable growth period, quite a substantial growth I believe. Liquidity of stock will be an issue. I would like them to think about funding new coldstorage by new share issues, not bank debt, to increase liquidity
Fair enough Iceman. To be fair mate all I was trying to say by posting that illustration is that his volumes were very, very good this year so that growth if indicative of other growers harvest, would have been very helpful to SEK's downstream operations. All good and I am sure holders will benefit from the tremendous growth that's forecast for this industry in the years ahead :)
The lack of liquidity is a concern for me so it doesn't really fit my personal investment profile.
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. .
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?
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.
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.
SEKīs DRP is quite well discounted so a very good option for holders in my opinion.
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.
Thanks Iceman for a very good summary. Appreciated
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.
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
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.
storage is a big issue for all local packhouses at the moment I believe, if im correct it could get worse as a lot of post psa harvest is coming on next few yrs so volumes will be well up.
agree aus offers huge potential if execution is well done although needs quite a bit of investment to bring up to scratch also would be hoping the extra hectares they have there are utilised quickly for future growth.
yes ceo say not really interested in cash issue so therefore they will need to grow the banburtha massively to meet there 200m market cap objective or perhaps look for more bolt on acquisitions in aus.
I also own costa group in aus a similar company but different products.
yes I will look you up next meeting
I have been expecting an announcement from SEK before Christmas to update us on the insurance claim negotiations for the fire related fruit loss this year. In the absence of such an announcement, one has to assume the negotiations are taking longer than expected and are probably quite complicated. I do hear though, that parts of it has been settled and growers taken care of. If true, that is good news.
But I do fear if delays continue or negative outcomes from the insurance negotiations are the result, that we may have significant negative effect on cashflow for 2015 and possibly final dividends due in March 2016 ?
But looking forward, it looks like the orchards are looking very good and we can expect another bumper season. We should also by now be seeing positive contributions from Australia.
So looking ahead I believe SEK is doing well and I expect a very good 2016.
Discl: Reduced my holding a little in the last couple of weeks due to insurance unknowns but still 2nd biggest in my NZX portfolio
So you'll be getting a few cases of KWF over the holidays to support any weakness iceman:) If they bring back the red variety I'll be in too. It only appears occasionally...must all be exported. My favourite variety. Vouchers for all shareholders should be high on the list for the next AGM.
In a mostly down day SEK up 20cents as at time of writing - make up for some "losses" on Air NZ!
You will be doing well there BB
As they say on TV....see..no mould...just spray ....and walk away...I walk away. Yes hold and forget 13% gross yield on my dividends now. Just wish I had more.... Doesn't take much to move SP though so 20cents has come and gone a few times. SP go up and down but dividends will pay for your retirement.
expecting a good result
I think they clearly had a good operational result but at the moment the settlement of the insurance claim on the large fruit loss will have quite a significant bearing on the results. So one hopes for a favourable outcome
https://www.nzx.com/companies/SEK/announcements/278444
Great result for Seeka:)
nice result
Yes it is a good result from an extremely challenging year for SEK management with the fire at Oakside and enormous effort spent on insurance claims.
With that now largely out of the way we can look forward to a more normal year ahead. 2016 should see a large growth in revenue and profit with Seeka Australia coming on line with estimated revenue of $17m and EBIDTA of $ 3.2 - 4.0M instead of the over $1m loss contributed in 2015 (due to timing of purchase).
This will easily offset the increase in interest expenses as a result of the new loans (only 3.95% interest rate) to fund the purchase of that business.
An interesting statement in the commentary is their clear aspiration to increase market cap to $200m, which is more than triple current market cap. A lofty goal which shows management's great optimism for the business.
I would not be surprised to see a doubling of EPS and a healthy increase in dividend in 2016, if we have a good crop and no unforeseen negative issues.
Happy holder
Thank you Noodles for your calculations,and projections,.
I thought the growth prospects were good when I read the report,but your projections have me really excited.
The eps growth from 46 cents per share, to 62 cents per share is a massive 34.78%.
The forward PE of 6 looks out of place with such a high growth rate.Most probably a PE of 12 would still be modest.[depending on outlook]
So eps of 62 cents x PE 12 and well will have a share price of $7.44,which would be a gain of 98.4% on today's sp of $3.75.
And in the meantime we get the huge dividend yield.!!
Thanks noodles for your great work and sharing.
My numbers are very similar to yours so I have little to add to them except to say that I prefer to use 10% increase in "all other operations", rather than your 5%. It doesn't make much difference to the results though.
SEK has been a very difficult one to value due to their extraordinary year in 2015 with the large building fire in packing season and the resulting fruit loss due to the contaminated bins.
The contamination issue has now been fixed with a huge investment in new generation plastic bins which will also see increased operational efficiencies.
Due to these fire related issues and insurance claims, the 2015 accounts do not really show what a good operational year it would have been without it.
SEK has invested significantly in increased handling and storage capabilities and intends to spend a further $13m this year. It is paramount that this spending will be quickly earnings positive as they have stated will be their aim.
The future volume growth will be coming largely from the Gold variety which is harvested right in the middle of the normal season so this is the reason for the need for increased capacity to deal with the pressures to pack all fruit classes at the same time.
Australia, as you pointed out, is forecast to contribute significantly in 2016 so we will need to watch for progress updates on the integration and operational efficiency improvements there. Half of the fruit in Australia is currently being sold direct to supermarkets with better net returns than other sales. I hope SEK can now use its leverage as the dominant Australasian Kiwifruit (and now more other fruit) ?grower/packer/marketer, to gain more direct supermarket access both in Australia and NZ for a wide variety of fruit.
I do not think we will see the huge increase in dividends you forecast. There is little doubt in my mind that the divie increase will be steady and significant but I would like to see them use a larger proportion of the forecasted profit to reduce debt quicker.
I also believe there is a high chance of SEK using some of that cash to make further strategic acquisitions.
It is also important to note that the grower loyalty program is now entering its final year. Assuming SEK can retain most of the growers (and now SH) in 2017 and beyond, the approx $2.5m annual cost of the grower scheme will be removed.
SEK has great growth potential and a great ability to pay out significant dividends.
Discl. SEK is my biggest holding
Yes, I think you are probably right about dividends. Here is their policy:
"Seeka’s intention is to declare dividends each financial year. The annual dividend paymentwill not exceed 75% of operating cashflow net of maintenance capital investment andcontracted debt reduction."
Given the extra capital spend, perhaps the dividend will only increase 10-20%.
I have updated the table in my original post to reflect dividend and a couple of minor mistakes. I've also added the FY15 actual column
http://www.sharetrader.co.nz/showthr...l=1#post609948
My own view is I don't mind accepting a small/modest dividend from a company, if they are putting the funds/capital to better use they I can.
High growth companies need capital.
SEK is a high growth company with plenty of growth avenues both here and Australia.
So their dividend policy makes good sense to me.
Thanks for the projections Noddles, much appreciated.
Not all claims have been finalized by year end - will there be any costs that would carry fwd to 2016 that we should consider?
Smaller divies in favor of acquisitions would be great but I think they might use it towards debt deduction IMO.
I don't think we will see any significant costs carried forward, other than no doubt some legal and consultancy costs. In fact SEK protected their growers in 2015 by paying them $4m which I note noodles has correctly accounted for in the valuation/estimation process. Should SEK receive further insurance payouts for the outstanding claims, my understanding is that the first $4.5m would go to SEK and the rest if any to the grower pool.
But of course there is also the possibility of no further insurance payouts !
I'm a happy holder and will look to accumulate given the SP weakness we've seen recently.
The only comment I have regarding your analysis is that SEK are more succeptable to 'acts of god' than some other stocks which will inevitably have some impact on SP.
From what i can see the acquisitions they've made to date have been pretty astute.
So true Fisherking about an "act of God"event. Any company operating in a primary industry (SEK, CVT, SCL, SAN, PGW for example) is very much reliant on Mother Nature being cooperative. But then again, so are our electricity generators with rain fall, tourism (THL,AIA,AIR) with no volcanoes blowing up, Air NZ with no volcanoes/viruses/terrorist attacks.
Most companies face their own risks, real or perceived.
One thing I do like about SEK, is that they worked their way very quickly and very successfully out of an "act of God" situation with the PSA. Been there, done that and hopefully have learned a lot and I think all their current business strategy/diversification shows they learnt from it.
Hopefully it gets sorted sooner rather than later. Isnt a large export for Sek but last thing they would want is fruit sitting around.
http://www.nzherald.co.nz/business/n...ectid=11603468
Will anyone on ST be attending the SEK meeting 27/04/2016?
Looks like Seeka is on the same projection as Scales. Not much on the sell side.
Disc. Holding.
Article on the health benefits of kiwi fruit, the next Manuka honey?http://nzh.tw/11621934
I like SEK a lot. Like SCL, but the product is more prone to damage. Still, I think they have a better moat and NTA is higher, which is a big deal for me. SCL probably has more growth due to its lack of maturity on the NZX and liquidity + excitement.
I tried to buy in a while ago, but the deal never went through and I ended up buying something else.
Had a friend do some work for SEK, he thinks they're a smart bunch running a solid company.
If anyone on ST is heading to the meeting, can you please post any news that we may miss.
Thanks
I didn't get to the meeting, but the report is excellent reading
https://www.nzx.com/companies/SEK/announcements/281380
Was was great reading but wanted to know what questions/answers were asked at the meeting....
Not much on the buy side this pm after 10,000 shares went at $4.50.
And even less on the sell side !! Been like that more or less all year with very low liquidity but steady and good SP growth. Coming to the back end of harvesting season that appears to be reasonably good and no major upsets. No reason to think the SP will not continue a bit higher. I will be surprised if we don't get a 5 at the front before year end and a nice steady increase in divie this year.
Well we are now coming to the end of harvesting season. My info is that SEK will equal or exceed last year's record harvest/packing of 30M trays with all indications that prices are remaining firm. Seems to becoming clear that Zespri can not sell all the Hayward produced which makes their refusal to allow Seeka and the other applicant, to sell fruit directly into new overseas markets, look a bit stupid. That decision does not seem to be in the best interests of NZ growers.
Coldstores have been full for the back half of the harvesting season and will remain so.
No big unexpected issues in Australia although I believe there are some minor teething issues to integrate the new business into Seeka's processes. But improving and growing relationship with supermarket chains is a positive across the ditch. Expect good growth from Australia over coming years.
It will be interesting to see their update which normally comes end of July. I expect a good one, good enough to see a continued increase in dividends
As expected SEK has this morning confirmed record volumes of 30.8M trays but will have to dump 700k trays due to Zespri's failure to sell all the fruit grown this year and their ridiculous decision not to allow SEK to sell that fruit into Australia.
Looking forward to the 1H earnings to be reported late August
good result I should have stayed in, but cant complain costa is doing alright too
Was attending an industry conf today, Avocado crop is going to be a bumper one, will provide an upside, obviously smaller contribution to $$ though
http://www.nzherald.co.nz/business/n...ectid=11685748
Can't be good news for SEK or SCL...
Not good news, could this affect apple exports as well?
http://www.nzherald.co.nz/business/n...ectid=11687909
Very hard to say as noone seems to know exactly what the problem is. The fungus issue is well understood and is already in China, so it isnīt a biosecurity or health issue.
Is it China sending a warning about the rumoured inquiry into cheap steel from China ? Could it possibly be China showing us how much the dislike the monopoly that is Zespri ?
Too many unknowns to make an educated guess.
Seekaīs fruit and exports have so far not be affected by this issue.
SCL has in its favour the major shareholding of v. large China Resources. China will not want to bite its own nose off. I wonder if Seeka may end up with a similar major Chinese holder soon to smooth things over?
tough times coming for kiwifruit
http://www.stuff.co.nz/national/poli...-glance-a-blow
anyway the shipment delay means kiwifruit will go into storage means a oversupply of stock for next season if they cant sell it into other markets or a dumping of stock either way lower returns coming.
also zespri sell of more licences mean more supply also coming in a couple seasons but they havnt found new markets for all the extra volume so returns may be lower going forward
Not much mention in the media of the fact that Kiwifruit exports to China have started again. A lot more inspection required and a lot of repacking so more cost but fruit exports underway again, which is great to see
More repacking and some extra storage time may not necessarily be too bad financially for SEK !!
Think SEK will have a great result this year, we will know in a few days time. But maybe a few added cost for the next. I have sold some as I noticed the news with the fungus debacle liquidity was a bit of an issue for me and can only imagine what would happen in another PSA type issue. I hope SEK offers more shares to finance growth cos that would really help by having a few more investors on the register.