Will stick by my pre IPO posts. 58 and 60. Still to many unanswered questions.
Barge pole material IMHO.
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My sentiments exactly. He is a director of other companies as well, so has a reputation to uphold. Mind you the current shareprice after a year, is not all that good, and doesn't seem to be able to improve in the short term. Still this sort of news always oversells the SP, and must be worth buying soon just on SP alone. Looking at $1-06, as my entry point again to get my money back on the others I am holding. Lucky I didnt get in big time.
Looks like 17 million wiped off market cap today. They should have bought him out at say 5 mill to stay put, shut up and become a puppet of the promoters who started off the IPO.
You can't discount the distinct possibility of a fresh downgrade followed in due course by an even lower result. Any IPO promotors can forecast anything they like and in my opinion its more likely than not that the most recent official downgrade a while back was only a moderate one to try and ameliorate the possibility of litigation against the promotors. The real truth will come out in due course after their annual result. I wouldn't consider investing at any price until the real truth regarding profitability is known. Mr Ogden resigned from a very well paid position so you can almost guarantee one thing, its going to get messy !
To be a little contrarian it might be good news....The Warehouse has only deteriorated in the 5+ years he's been a Director.
However, I agree the statement put out is short and sharp and suggests FY18 outlook might be as soggy as FY17 has been. Still feel there is value here for patient investors but await FY17 results for some further insight....
So much for continued disclosure rules. Immediate resignation, shareholders lose nearly 20 million in a day, and the company is quiet. Yes, I would be happy if Ogden resigned from the Warehouse as well. A company with $300 mill market cap and he does this without an explanation. Just goes to show, responsibility to shareholders is sometimes not always in the forefront of Directors agenda's.
With an ROE of 5% " expected " to rise to 8% over a couple of years ???.
Disc. Never a holder.
Never a good sign when Chairman leaves the company suddenly and no substantial reason given. Smells foul!
Until today's announcement I did see 'long term' value here and was prepared to hold. This resignation though and the lack of published reason for it smells pretty bad.
What really concerns me is that he will presumably have been briefed in the last couple of days on the shape of FY17 results at the end of April.
What a shambles this has been. Their communication's have been shocking since the IPO. How embarrassing that it could go sub $1 after listing at the lowest end of guidance.
“Obviously there has been some fallout between the largest shareholder and the board. I would say it was not an amicable split.”
However, the trading desk of one big broking firm concluded there were no implications for Tegel’s performance.
“We have done some checking and it appears to be nothing to do with TGH per se, rather it is reflective of James’ workload etc. He has seen the business through the [prospectus forecast] period and decided to move on, don’t read anything into it re business performance from what we understand.”
Analyst meeting
Amid the surprise over Mr Ogden’s exit there is talk around the market of his one-on-one meeting with Forsyth Barr analyst James Bascand some weeks ago.
NBR understands the two met for coffee one morning and Mr Bascand subsequently referred to the meeting in information shared with institutional equities teams and fund managers.
It is not unusual for analysts to meet with company directors and there is no suggestion Mr Ogden disclosed material non-public information to Mr Bascand.
Forsyth Barr’s most recent research note on Tegel on April 9 upgraded the company to “outperform.”
So shareholders have apparently lost 30 mill market cap in a day, over a secret fall out. They should come clean about differing opinions and quickly disclose exactly what has happened in full detail. Otherwise it stinks. Mind you if the SP goes down to $1.06 and back up to $1.17, I will be pleased as punch.
The Board needs to explain the reasons for the Chairman's departure – there are few things worse for investor confidence than uncertainty. With no explanation, people will assume the worst (and will sometimes be right to do so).
FWIW, I took a long look at TGH when the share price dropped into the $1.30+ range and decided the uncertainties were too high. Specifically, I wasn't convinced that the company would generate enough free cash flow at prevailing prices for their products. It has now dropped to a level where I will have another look at it. I suppose the three obvious questions are (i) when/if the pricing for Tegal branded chicken will improve (ii) whether there is room to boost margin by cutting costs and (iii) whether TGH can increase exports enough to make a difference.
The man who was here from the beginning, probably couldn't handle the disappointing run... Couldn't be happier to see him go quite honestly.
I picked up a small parcel at 110, TGH is at a lofty discount to its future cash flows and enterprise value, it is a great opportunity for long term investors.
My holding is small enough for me to keep a dry forehead if a profit downgrade [ markets chinese whisper ] comes to fruition, speculating never did anyone any good.
price to book is around 0.85 currently, P/E of 11-13 and growth on the horizon [through the woods] It ticks a few boxes for me personally...
Lets revisit in November and see where we are!
I agree that Tegel could become an opportunity, but I reckon we've got at least one more leg down. Despite the private equity history and a bad early start there is a real business here. Tegel is not Dick Smiths. I suspect I'll be buying it in the 70-80 cent range late this year.
Our weakening dollar alongside global poultry prices that are set to well exceed the first half, looks like a very positive sign for Tegel.
Matrix/Chart below was taken from IMF website last month [ I have amended to NZD ]
Month Price Change Apr16 1.62 - May16 1.64 1.61% Jun16 1.59 -3.26% Jul16 1.57 -1.60% Aug16 1.54 -1.88% Sep16 1.51 -1.78% Oct16 1.54 1.98% Nov16 1.54 -0.08% Dec16 1.6 4.50% Jan17 1.61 0.59% Feb17 1.58 -1.87% Mar17 1.79 13.29%
Spike in march is mostly due to the Brazilian poultry woes of late... Poultry is looking like a good investment given the current climate.
https://www.bloomberg.com/news/artic...ry-for-chicken
http://www.telegraph.co.uk/news/2017...market-plants/ - Brazils poultry industry has been absolutely crushed and their reputation is gone.
Thanks M/winner ; 1 being extreme undervaluation ; 100 being over with TeGeL coming in at 19. Just need the low pricing in NZ to end ( red meat gone up a lot looking in supermkt lately)but the cheap feed cycle, over production comp with Inghams etc looks like it could be here a while with those re 700,000 sq km of extra feed being harvested globally. So is it all about getting the exports cranked up to salvage the s/p?
Wouldnt it be great to always get shares at a value you think is optimum. Never going to happen in today's low interest rate environment. Easier to say Im out of the smarket until some sort of logic applies to the risk being taken.
However lots of buyers and lots of sellers. I wonder just who knows what is going in at TGH.
Where there's smoke there's fire. Mr Odgen left for a compelling reason(s). Market now plumbing new lows and little apparent buying support. Test of $1.00 could be coming up soon. Keeping a watch on this one for the (in my opinion anyway), almost inevitable downgrade and then eventual further disappointment with the actual result in due course whereupon I expect even more capitulation. 70-80 cents definitely a possibility and possibly where the real value lies.
Interestingly even using a basic TA technique of selling when it declines down through the 100 day MA would have got people out at $1.68, people who with hindsight would be very happy to have stayed out throughout this decline down so far to $1.08, a whopping 60 cps capital saved ! Talk about saving IPO investors bacon !
100 day MA currently $1.29 and says stay out for now.
It sure was a tough week for SUM shareholders last week. Busy stitching up some patches of missing fur myself :eek2:
Animal farm anyone 2 legs good ,4 legs better;)
Tegel *invented* chicken bacon back in 2002!
http://www.scoop.co.nz/stories/BU021...to-fly-hig.htm
"I managed to find some turkey bacon in the United States and in the UK, but chicken didn’t feature in any of the major markets. While it may exist in some tiny market somewhere, we couldn’t find it so we believe it’s another world first for New Zealand.”
Having seen and tried it in Egypt somewhat before 2002, I'll take the comment from Category Manager Christine Taylor with a grain of salt.
Chicken bacon (and ham) certainly gets served in Muslim countries or in what are termed halal eating places where I have visited in Asia and the Middle East. They are not that popular however as they lack the flavor and crispyness of real bacon.
Tegel's problems have a lot to do with the ramped up production of poultry in Australasia. Demand has not kept pace and exports are not really ramping up fast enough to absorb the increased supply.
Tegel has actually been doing a good job of increasing exports. Whether the exports are as profitable as the domestic market is however difficult to assess as there is no breakdown of profitability between domestic sales vs exports.
Hard to see Tegel being able to compete very successfully with exports from the likes of Brazil (US$6.2 billion), US ($3.06b), Netherlands ($2.1b) and China ($1.03b)*
* Source - WTEx
Another downgrade is not coming... no news is actually good news - the market is just erratic and speculative.
Will wait for it to plateau a little, then I will accumulate a large portion before the results land on 27th of June.
BE SURE TO HOLD ME TO ACCOUNT COME THE RESULTS IN JUNE...
Not a bad call, definitely value at the current sp if npat guidance is achieved. Perhaps market sentiment will change on result day if TGH can show that they can hit their forecasts.
Edit: has there been a downgrade from the half year guidance? I can't seem to find anything
I'm thinking of going in around $1. I imagine the next dividend will be about 4 cents so a pretty good dividend yield. In saying that I have absolutely no confidence in the Tegel leadership team so I'll probably stay away. Interestingly Inghams seems to be doing OK since the IPO launch.
Was hoping Rod Oram on National radio today could shed some light on why the chairman left; when he discussed Tegel but he hadn't heard anything ; nada.
CBA has been buying since IPO last year and steadily added on to its stake, even as the sp has been going down and down. But for their buying, sp will definitely be less than $1.00. So they better hope they are right as they have been wrong so far.
Meanwhile, can recall CEO of IQE suddenly resigning and likewise, Bryan Mogridge at PGC to name 2. No reasons given and the sp of both companies tell the story.
Then, there's Jenny Shipley of Mainzeal who resigned just before the company collapsed.
Cannot be a good thing for any company to have the Chairman suddenly resign without giving a reason.
To add to the gossip....
The previous CEO left rather quickly after having a disagreement in regards to 'direction' with the PE owners....
It looks we have found support.
Will definitely have another substantial shareholder announcement next week...
Attachment 8836
Looks like the ol' poop and scoop... might be time to accumulate alongside the instos.
Warning.
Standing in the path of a runaway freight train is dangerous..
Indeed W69.
Very very successful old timer who managed a charitable trust from home office and turned $450,000 into over $5m in 10 years had this advice for some of us rookies years ago :
"If it is good enough to buy at $2.00, it is good enough to buy at $2.05. You are not investing for 1 or 2 % return. Playing for nickel and dime never made any real returns."
So good enough to buy at $1.06, good enough to buy at $1.07.
TGH - strictly for the plucky birds though as far as this 'plucked' observer is concerned!
There's a queue of 100k at 106... so I bumped it to 107 [small order]
That queue at 1.06, can disappear immediately; Ive seen that happen many times before. Either a desperate selller, withdrawl or re queue at a lower price. I have dropped my purchase from $1-06 to $1-04. I dont really want to buy any more, as this is starting to look like a gamble. However if it gets to $1-04, I'll take them. I think that they will write off a large lump of Goodwill at the next result. Its funny when a company is doing well, they either bump up the goodwill or do not write off any because they think its justified. When results are poorer, the goodwill is certainly over stated, and they write off a lump. It really should be the other way around. When the times are good, start amortising the goodwill, it makes the net result look a little poorer, but more realistic. So my crystal ball says that the company will be making a much lower profit after extraordinary items. After all the market has written off a lot of goodwill over book value already. Just what it will do to the shareprice who knows, realistically it shouldnt affect it, but there will always be those that see a low profit and will demand SELL SELL SELL.
I'm with Percy on this one. Some of you good folks that have recently joined ST might benefit from having a good read of this thread.
http://www.sharetrader.co.nz/showthr...ries-and-exits
If there is no downgrade and the Chairman's exit is not related to company performance, current levels around 1.08 may turn out to be good value.......
Or if there is a downgrade and the exit is related to company performance, then 1-08 may be a little high. Gambling is not investing.
As poultry prices pick up again, assuming volume growth in the domestic/export market remain, a profit warning is not coming.
I believe they already factored in possible weakness when they left a huge 20% spread in their forecast[ NPAT 33M-41M ]
- Lowest end would give us earnings of 9-10cps [ p/e 10-12 ]
- Highest end would give us earnings of 11-12cps [ p/e 9-10 ]
- Profit falling 10% [ 28M-29M ] gives us 8-9cps [ p/e 12-13 ]
Whichever way I look at it, 107 is undervalued... unless the company falls apart, I am not worried about my 107 holding..
Totally agree its a solid long term investment. A profit downgrade is pure speculation at the moment, however, everyone here seems to be convinced that its a sure thing. Must be those (understandably so) still bitter from the IPO.
Disc: Not holding but watching for an opportunity.
I can understand the reservations some have, I don't understand claims being made purely on speculation rather than facts.
I tend to keep away from emotions and speculation - I have missed out on huge profits thanks to a few nightmarish scenarios playing out in my head.
There are known knowns
There are known unknowns
There are unknown unknowns
Like on H/C but less so i hope;there will be people on S/T aiming to buy (so trolling it down ,"sell this dog" and vice versa, pumping it up "all aboard toot toot" ( and selling out).
It is a gamble, buying in here, pure and simple. Buying any share that is in a sustained downtrend for whatever reason is a gamble. TGH is in a sustained downtrend.
Best maybe to patiently wait for a return to an uptrend, no one really knows how long this capital value carnage will go on for. It's folly to deny the market trend and equal folly to try and pick a bottom SP.
Just wait, it's better to leave a few $ on the table and enter into an uptrend, than waste time and money on guessing where a SP will eventually bottom out at.
Jmho
BAA
There are some fantastic authentic posters on H/C. 5 or 6 of them i keep in regular email contact with and have had some great trades due to their nous. Others like the retired young portfolio investment manager who trashes brokers reccos ; is without peer in the premium stock sector; brilliant. Just like on here you have to sort out the genuine from the not and not be influenced.
Tegel SP was in a gully of support around 113-114 range, F/A was looking good then, sure as hell looks good now...
The closer we get to June without word from the company, the more likely we will see this current speculation subside and simple fundamentals taking over leading up to the report - no news is good news.
I think we will see that gap above 110-114 filled over the next couple of weeks [ if fundamentals remain ] - Poop and scoop will be apparent soon enough.
"US Chicken Spot Price is at a current level of 1.240, up from 1.144 last month and up from 1.116 one year ago. This is a change of 8.39% from last month and 11.11% from one year ago"
That's from the IMF's primary commodity prices report (April 17). How relevant it is to Aus/NZ I'm unsure but I've decided to continue to hold and may even increase my holding.
Having a look around SharedClarity lately, their analysis is so thorough and without rhetoric, found it quite refreshing from the rest.
Their Tegel model is a wee bit more optimistic than mine, Thought I would put them to the test here, lets see how close they come to the June result.
SUMMARY BALANCE SHEET (NZDm)
FY15A FY16A FY17F FY18F FY19F Cash & working capital 145.3 164.8 165.0 172.6 185.5 Fixed & intangible assets 507.3 518.3 527.5 536.1 554.9 Total assets 658.3 695.6 705.1 721.4 753.1 Debt 268.5 253.0 91.1 87.8 94.7 Creditors 76.9 103.7 95.6 101.7 111.8 Total liabilities 369.8 381.8 211.7 214.5 231.6 Shareholders' equity 288.5 313.9 493.4 506.9 521.4 ROCE 7.3% 9.6% 10.3% 10.7% 11.2% WC to revenue 10.0% 9.8% 10.6% 10.2% 10.5% Debt to capital 47.1% 44.2% 15.0% 14.2% 15.4% Interest cover 1.8x 2.7x 8.2x 24.1x 24.7x
SUMMARY INCOME STATEMENT (NZDm)
FY15A FY16A FY17F FY18F FY19F Revenue 562.7 582.9 618.6 654.6 703.3 Revenue growth 8.8% 3.6% 6.1% 5.8% 7.4% EBITDA 61.3 75.5 81.5 85.3 90.9 EBITDA margin 10.9% 12.9% 13.2% 13.0% 12.9% Normalised NPAT 5.5 23.7 37.8 44.9 48.5 EPS - 6.7c 10.6c 12.6c 13.6c NPAT 8.7 11.4 37.8 44.9 48.5
However great it would be, I am not so sure NPAT of 37.8 will be achieved - was thinking bottom end of guidance 33-35.
Seeing as I hold TGH - confirmation bias is a dangerous thing...
Looking forward to revisit come late June!
I'm still expecting a downgrade. Won't surprise me in the slightest if they struggle to make $30m.
Agree. But it's like looking in the rear view mirror as chicken pricing was at 10 year lows for the just completed year. What matters is how pricing behaves in the next few months and if management can re-establish their credibility and ideally provide an explanation for the Chairmans departure. It is very poor that the NZX allow such a departure without a clear explanation. Also poor on the ex-Chairmans behalf. He would no doubt say his actions did the talking but it could be a material profit downgrade / goodwill write off dispute or just a personality clash with the major shareholder etc. All that aside I think at this price there is a lot of negativity built in to the price and investing is all about the price paid.
Do they have to do a downgrade annoucement before the annual result, or could they put the downgrade in the result announcement? I'm not sure how the disclosure rules work. Let's say they make 30 million profit, would they need to disclose that prior to the annual result? Surely they know at this point if they aren't tracking to forcast.
As per the Market Listing Rules they have a duty to disclose information that could have a material effect on the share price. A change to a company's forecast is considered likely to be material. Therefore, they would have to disclose it if they "knew" that they were going to miss the forecast. Moreover, it is probable that management already know whether the wide guidance will be achieved or not. In my opinion if a downgrade is coming it will be sooner (before the end of may) rather than just before their results announcement date.
https://nzx.com/files/static/cms-doc...05%20clean.pdf
Usual case is when something is off by about 10% or more its considered material enough to make a disclosure immediately the minute they know of it. By not disclosing once known, then they are in breach of listing rules. Though it doesn't need to be 10%, but its a rough guideline, usually what a reasonable person would expect to know, it should be considered more than minor.
Thanks guys makes sense. Given their forcast was so wide it would be really quite embarrassing if they didn't make it
https://www.imf.org/external/np/res/...ernal_Data.xls
I guess people didn't believe the board when they claimed poultry prices were in the dumpster during 2016FY...
Now coming into 2017, over 3 quarters in and poultry spot has risen from NZ153 - NZ190 = +25% :t_up:
PPOULT - US PPOULT - NZ USD/NZD FX RATE 2016Aug 111.04 153.16 1.3793 2016Sep 110.34 151.43 1.3724 2016Oct 110.15 154.03 1.3984 2016Nov 110.19 155.57 1.4118 2016Dec 113.01 162.67 1.4394 2017Jan 114.48 156.57 1.3677 2017Feb 114.36 158.96 1.3904 2017Mar 123.95 179.73 1.4271 2017Apr 130.70 190.31 1.4561
Should have clarified exclusive to export prices, there is no source [ that I know of ] that would indicate domestic prices here.
I would think for the most part, when the standard global spot price of a commodity goes up, possibly to a lesser extent AU/NZ would follow...
Good work, Hardt but I do not think that NZ poultry price trend reflects the US spot price trend.
According to Stats NZ, government food price data for March 2017 showed chicken prices fell 6.5 percent for the year.
US poultry price actually rose 8.39% over the same period - in NZ$, price was up 5.6% (NZ$ actually strengthened from .6730 in April 2016 to .7083 in March 2017).
As usual, demand and supply are the over-riding factors when it comes to setting domestic prices.
TGH's half year results acknowledged decline in margins and drop in prices.
"Expecting recovery in the second half however".
Personal observation says that chicken prices have not recovered - still plenty of discounting going on, especially for drumsticks and now, chicken nibbles.
Did i dream it or did i hear rumour they've selectively bred hens that have 3 or 4 drumsticks now; that would partially explain the glut?
Yeah and the first three legged hen they bred they named Jake The Peg diddleleg diddleleg
The chicken farmer who pioneered breeding 3 legged chickens was asked if the taste was any different from those with only 2 legs:
"I don't know, they run so bloody fast I've never been able to catch them"
Thought I'd try to check the short positions on Tegel but I can't find any reporting of shorts on the NZX However found reported shorts on Tegle on the ASX (tgh.asx) of 0.01% which is pretty low (Inghams at 3.4% for instance). Perhaps not significant except that at least no one's shorting the crap out of them (in Aussie anyway).
Decided I might as well hold fire on any purchase until either a: Next leg down or b: Decent results and moving up (or c: don't bother and buy a new car instead).
I shouldn't break the news, but it will be out shortly anyway. Tegel has announced it has pioneered the genetic mutation of an eight legged chicken, and it expects its profits will increase fourfold over the coming years. Director has resigned because he felt sorry for the poor chickens. I have just raised a mortgage on my house and will be going all in shortly. Could be true?
Attachment 8846
I hope you can access the photo, as otherwise this post just sounds stupid.
Haha - try chickens with 8 breasts, akin to sow with ten tits! Chicken breasts are the most valuable parts of a chicken, not drum sticks!
Looking forward to Tegel's innovative mutation program in action.
But again, that will spell the end of Tegel? Imagine Inghams advertising their wholesome 2 legged single breasts vs Tegel's 8 legged breasted chickens!
Even fake news seems to bounce the shareprice, a bit of a slight move, maybe it is true? A self fulfilling prophecy maybe. SP up 2 cents today.
I've been thinking a little more about this one. Surely Affinity won't be happy with this performance given they still hold 45%. I can't imagine them wanting to cut their losses and sell the rest at say $1 a share. I'll be very interested to see what they do after the annual results are announced! Also my predicted NPAT is 34 million so I think the share price is about fair. Will be interested to see what the final dividend payment is, perhaps another 4 cents?
About 100million+ shares in Escrow, no matter how solid the result in June is - they could spook the market with a few big sells.
Given Affinity paid $600M for Tegel in 2011, if the report and outlook is strong I do not see why they would dump at the lowest point of the company...
Was doing some shopping last nite at local Countdown, noticed plenty of Tegel products on sale. One that caught my eye was frozen chicken (think 10 size) for $5 each, also frozen nuggets, fresh chicken sausages and other frozen chicken cuts.
Did my bit by buying few of those to help the company out.
Not yet convinced to buy their shares though :p