Seeka

[Jaa]

I thinks it because Seeka has learned it's lesson with giving financial forecast updates too early in the season.

Seeka had a shocker with fruit coolstore issues a couple of seasons ago. Not all costs could be passed back to growers on repack etc because they would lose too many supplier growers. And they also have a component of income dependent on the sales price of fruit in the market due to the leased orchards and managed orchard contracts.

It's best to play it safe and keep the market informed like they have, and release financial information when there is more certainty over storage, fruit in market sale and fruit loss data.

Thanks for your thoughts Toddy.

Lots of risks in the business huh. Interesting they don't seem to have much pricing power over the growers. Not being able to pass on costs and needing to issue incentive shares, which growers then dump on the market when they need cash. Are Eastpack eating their fruit salad?

[Toddy]

Eastpack have a grower update in a week or so.

In the past the post harvest operators cut each other's throat to gain supply. But those days are ending as fruit volume grow and it's becoming more expensive to build the coolstorage.

Eastpack was full this year and had to get help from Seeka. Eastpack was more expensive to pack with as the growers were not looking around due to their good storage performance in recent years. The storage performance means that you receive more incentives from Zespri and you have less fruit loss.

Seeka is set up to succeed and the volume capacity in the coolstores will be taken in the short term. Once there is no space for growers to move around in the industry (first time this will have ever happened) then the Packing Companies have the pricing power.

Eastpack is still a Cooperative which is a case study in itself!. All as this realyy means is that growers have to cough up chunks of capital everytime they expand. And we have some pretty nasty debates. I would rather we give up some control and list or merge with Seeka.

In the meantime I think the Eastpack shareholders will be up for a good dividend this year.

That's a hint on what I think Frank's is trying to say about where Seeka ended up without exciting the market.

[bull....]

reckon seeka needs to reduce debt at least 60m to fall within convenants range

[iceman]

Eastpack have a grower update in a week or so.

In the past the post harvest operators cut each other's throat to gain supply. But those days are ending as fruit volume grow and it's becoming more expensive to build the coolstorage.

Eastpack was full this year and had to get help from Seeka. Eastpack was more expensive to pack with as the growers were not looking around due to their good storage performance in recent years. The storage performance means that you receive more incentives from Zespri and you have less fruit loss.

Seeka is set up to succeed and the volume capacity in the coolstores will be taken in the short term. Once there is no space for growers to move around in the industry (first time this will have ever happened) then the Packing Companies have the pricing power.

Eastpack is still a Cooperative which is a case study in itself!. All as this realyy means is that growers have to cough up chunks of capital everytime they expand. And we have some pretty nasty debates. I would rather we give up some control and list or merge with Seeka.

In the meantime I think the Eastpack shareholders will be up for a good dividend this year.

That's a hint on what I think Frank's is trying to say about where Seeka ended up without exciting the market.

Great post Toddy thank you.

[kiwikeith]

"Following the successful completion of the kiwifruit harvests in New Zealand and Australia Seeka Limited [NZX:SEK] advises that it has completed its financial forecasts for the year ending 31 December 2024 indicating an expected net profit before tax in the range of $15 million to $19 million. This compares to a net loss before tax of $21 million in the prior year.This financial guidance reflects the significant recovery of kiwifruit volumes and expected net earnings of all Seeka’s business in New Zealand and Australia. The company remains focussed on maximising operational net earnings and continuing to reduce debt.Seeka has worked proactively with its banking syndicate over the past two years and expects to be back within long-term banking covenants in the 2024 year. The Board may be able to consider dividends later in the year when the financial forecast is more certain.Seeka is a seasonal business and expects to record a greater proportion of the full year profit in the first six months ended 30 June 2024.The Company will release its 6 month results by 29 August 2024"


The PBT forecast for 2024 of $15m to $19m compares with the previous six years of 9m, 10m, 16m, 23m, 7m and minus 21m.

[Toddy]

Not many investors can win in this market. The recent announcements were reasonably positive in my mind. However, in today's environment it has just provided an opportunity for some shareholders exit.

[bull....]

Not many investors can win in this market. The recent announcements were reasonably positive in my mind. However, in today's environment it has just provided an opportunity for some shareholders exit.

debt is still far to high , they are not in a sound financial position to handle another bad yr yet .

[Toddy]

debt is still far to high , they are not in a sound financial position to handle another bad yr yet .

I forgot about those fixed packing price contracts that Seeka used to entice growers to stay with them after the disaster storage year they had.

They have another year to run, so they cannot price to market yet.

[bull....]

I forgot about those fixed packing price contracts that Seeka used to entice growers to stay with them after the disaster storage year they had.

They have another year to run, so they cannot price to market yet.

were these another incentive to lock growers in with seeka on top of the grower shares issued ?

[Toddy]

were these another incentive to lock growers in with seeka on top of the grower shares issued ?

These contracts were offered a while back because growers were leaving. I'm sure that they only have another year to run.

Im not with Seeka, but my friends, neighbours etc that are all took up the contract at the time.

The share deal was this year and was a surprise because from the outside Seeka growers were not expecting another carrot to stay.

With the availability of coolstorage space running low now across the Industry then one would think that any further incentives to growers is not necessary.

Zespri issued it's latest fruit sales forecast last evening. The green growers are heading for a RECORD payout.

All of this helps Seeka with profits from leased orchards.