This is very thinly traded. Whoever has been selling down probably took a breather.
Printable View
This is very thinly traded. Whoever has been selling down probably took a breather.
Ouch! for PGG
"Farm sales have declined 43% over the last two years"
https://www.interest.co.nz/property/...y+29+June+2024
My feeling is that farming has its debt under control. Kiwifruit is doing its thing so I haven't heard people moaning too much. And the local Farmlands and Fruitfed carparks are starting to look more lively.
It's another story though in my other world (Auckland Remuera). The mums are starting to get a bit emotional over the financial stresses around mortgages and school fees etc. And hear about people losing their jobs.
The sp has been over sold, but that goes for many NZX companies.
Catching a bid
Far too much speculative selling and then buying going on in my view. While it is nice to be 'back in the black' on my overall investment position in PGW, headwinds remain:
a/ No dividend likely.
b/ Banking covenants remain busted, although I expect the banking syndicate to grant PGW a reprieve on these until late 2025. And if things have not stabalised by then, expect the pressure to come on.
c/ Live animal export ban from Australia, will see a massive upswing in the WA sheep kill and a new downward squeeze on Oceania sheep prices.
d/ The re-entry of Brazil into the global beef trade will see significant pressure on NZ's beef export markets going forwards.
Better times for fruit growers with the so called free trade deals with Europe coming into effect. But there will be no overall return to the 'golden times' of FY2021/FY2022. Best to wait until the FY2024 results are in and the FY2025 outlook is out IMO before adding. Yes you will 'miss the bottom' by doing that. But it is the trade off you make for more certainty of forward vision (the outside chance of a cash issue to shore up the balance sheet should not be entirely dismissed).
SNOOPY
With the release of the actual results being so close, I am not sure it is useful to speculate on that. As at the last balance date, pension plan assets were divided into equities 60%, fixed interest 27% and cash 13%. But there is no more detail than that. The bond market will have had a tough year, Equities in NZ have been fairly flat, although if some of that equity money has been invested in the USA it will have done better. Last year the funding deficit ( fund liabilities -fund assets ) was $1.076m or about 2% of the pension fund investment total. I guess the problem over FY2024 if there is one, is that there is no 'spare cash' from operations to top up the pension scheme this year. So any topping up will likely be by borrowing. The amount of new borrowing required (if any) should not affect the debt ceilings already agreed to. But these debt ceilings were agreed to as long as certain banking covenants are being concurrently maintained.
Cracks were appearing in both the Fixed Cost Coverage ratio and the Senior Debt Coverage ratio at the half year period
https://www.sharetrader.co.nz/showth...=1#post1045374
The covenant ratio issues are all related to the plunging EBITDA figures. a result of the farming downturn. I expect both FCCR and SDCR will be will and truly busted once the FY2024 results are revealed. So we will have to see what the banking syndicate will do about this. I expect that compliance with these banking covenants will be waived for a time, with PGW being forced to operate via their sick bed on an 'austerity drip' (which means no cash for shareholders).
SNOOPY
What has happened to the share price?? Up 56% in 3 weeks!