SP manipulation has been going on a while. What to achieve?? Keep as low as possible to justify a low offer for the other 49% when the time finally comes around.
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I have been a PGW shareholder since 1995 Agrainvestor. At first in a very small way, and then I sharply increased my holding in the Criag Norgate era. I have seen PGW through many business cycles now. And I feel I am in a position to warn people about the management of this company through many faces and many eras.
Firstly PGW have a long history of overpromising and underdelivering. They also seem not to be able to stick to a strategy, changing direction for no good reason.
Take the finance division, now given away. It was easily the most profitable part of PGW. Six months before it was sold PGW management wrote how it had ridden out the finance company crash very well and was poised to become a marketing trump card that no other rural related company had. Six months later it was apparently worthless. Now every company makes mistakes. But PGW do not seem to have learned from their mistakes. A decade before they sold their previous finance division which proved disastrous for the company, and now they have done it again.
Now look at the expansion in to South America via NZ Farming Systems Uruguay (NZS). PGW structured the management contract to reward themselves in proportion to the amount of land managed, regardless of profit. As a result NZS bought far too much land and the company was starved of funds to develop that land. This was rational from a PGW perspective, but nearly a disaster for NZS. You could say PGW were only exploiting the rules, but PGW made the rules!
Now PGW have changed direction again and have greatly expanded their seed division. But while revenue has increased profits have all but disappeared. They blame bad weather in Australia. But other rural servicing companies operating in the Australian market have managed to weather the weather.
For a decade PGW have been building their expansion in South America and just when it is turning the corner they have switched their attention to China. Close to a million dollars was lost when PGW just walked away from their purchase contract of the previously planned model farm in Brazil.
I am sure China has potential, but what are the credentials of their partner Agria? Agria cannot make money out of their wholly own stand alone Chinese business. So what chance of any profits filtering through to their new partner PGW? It would not surprise me if after two more years PGW closes their Chinese office.
The greatest success of PGW has been to transfer funds from long suffering shareholders to arrogant management. The previous CEO Tim Miles, cleared out with $NZ4m plus for less than a years work and the board were adamant that he had just written a good contact with them which they had to honour. The question is why has the judgment of the board been so poor as to draw up this contact in the first place? Why do the board change strategy every time the wind blows? I could go on outlining other events but I do not wish to make myself any more upset.
So why after all that have I not just sold out of PGW, I hear you ask? Well I have the philosophy that there is no such thing as a bad investment. It is just a question of waiting for the right price to enter. So here I am patiently waiting for the share price to come back to a sensible level. 36c by any historical metric is slightly overvalued, although it must be said no more than most of the NZX. Sorry for the rant. But I feel better now!
SNOOPY
Yes a lot of wrong decisions at the right time,and a lot of right decisions at the wrong time.
With Sir John Anderson as chairman,and George Gould as MD,PGW have the leadership to get the best out of the business.From what I here Gould is making the right decisions.
Bought 16/06/10 @ .54.. Sold a few weeks later @ .54.. Cost me the brokerage.. Thank goodness I woke up in time !!..
Still watching ... Not impressed.. Agree with Snoopy.. They appear to change their direction more often than their knickers..
Wrong people at the right time running the business.Changes of direction,grand plans,came to nothing but huge problems.
With Sir John Anderson and George Gould you are seeing STABLE management,simple workable plans,great understanding of the business,and greater support from staff.
Perc.. The staff can make or break a company.. As we all know.. How many staff did their best for you in your Woolly Pully search ??..
Need a litle more confidence before parting with my money in that direction..
An article in the Sunday Star Times today by Tim Hunter implicitly agrees with much on this thread as to the financial pickle Agria is in, and points out that PGW shareholders have the opportunity at the AGM to ask questions about Agria in the context of its chairman Alan Lai being up for reelection to the PGW board.
@Under Surveilance,
can you be so kind and provide the URL to the article you mentioned. I could not find it. I only found this:
http://www.stuff.co.nz/business/farm...GW-stakeholder
and they don't talked about financial problems.
Another article i found:
http://www.stuff.co.nz/waikato-times...-be-cut-to-six
>>Forsyth Barr analyst John Cairns said the company signalled a while ago there were too many directors <<
cost saving is not bad, for PGW.
english grammar help is always welcome !
[QUOTE=Snoopy;383655]400,000 shares is less than 0.2% of the shares PGW on issue. It is insignificant. Stop looking for conspiracies when there are none there!
Wrong way of looking at the 400,000, Snoopy. Try what the 400,000 means as a way of placing a lid on the sp as an %tage of normal trades.
Just as you are assuming all along that Agria's stake in PGW is going to destabilize PGW's operations, others see it as the prelude to corporate activity.
There's New Hope, Ngai Tahu, Agrium etc waiting in the wings.