SML - Synlait

BlackPeter · Sep 30, 2024, 10:31 AM

I guess page 27 of the presentations says it all: All financial indicators turning towards the lower right corner of the page with one notable exception - the debt ratio is rising!

https://api.nzx.com/public/announcement/439061/attachment/428363/439061-428363.pdf

No further info required to make an informed investment decision ...

On the other hand - good to see that the second language (xie-xie) they are now using in the report is much more relevant for the company! Much better to pet the dragon instead of alienating him by requiring him to learn not just English, but as well Te Reo.

Nice as well that the chair thanked Bright Dairy for taking over the company by skill fully avoiding any takeover regulations as well as thanking the retail shareholders for committing Hara-kiri (I know, this is not a Chinese word).

Sounds like everybody is happy now and the company can start to deliver ... though they go to lengths not telling us what they plan to deliver.

What an happy end!

Minimoke · Sep 30, 2024, 10:40 AM

This page tells a tale - in colour! The only thing meaningfully up is net debt. Interesting the way they make the up/down indicators so small you can hardly see them.

You cannot view this attachment.

Basil · Oct 01, 2024, 01:09 PM

Quote from: Minimoke on Sep 30, 2024, 10:40 AMInteresting the way they make the up/down indicators so small you can hardly see them.

I do believe they call that deliberate obfuscation, something that apart from their extreme all things ESG, Synlait are very good at.
Long road ahead for this company to ever be successful but no worries, it's something a couple more $200m capital raises will probably fix lol

Minimoke · Oct 01, 2024, 04:36 PM

Right oh. its official. Synlait now has 603,198,098 shares on issue. Shares are currently trading at $0.41 which gives a market cap of $247,311,220.

Or the market might want to readjust. Its current market cap is showing as $85,250,000 (obviously before the release of new shares.) So if this is what the market think Synlait is actually worth, shares will be trading at $0.1413

BlackPeter · Oct 01, 2024, 04:43 PM

Quote from: Minimoke on Oct 01, 2024, 04:36 PMRight oh. its official. Synlait now has 603,198,098 shares on issue. Shares are currently trading at $0.41 which gives a market cap of $247,311,220.

Or the market might want to readjust. Its current market cap is showing as $85,250,000 (obviously before the release of new shares.) So if this is what the market think Synlait is actually worth, shares will be trading at $0.1413

You might need to add the CR amount to the old market cap and only then divide by the number of total shares after CR.

Too lazy to do the numbers myself, but I am sure it will be more than the 14 cents per share you came up with.

Minimoke · Oct 01, 2024, 05:00 PM

Quote from: BlackPeter on Oct 01, 2024, 04:43 PMYou might need to add the CR amount to the old market cap and only then divide by the number of total shares after CR.

Too lazy to do the numbers myself, but I am sure it will be more than the 14 cents per share you came up with.

Share price is essentially the value the market places on a company. Just because a company adds $X amount of cash to its business does not mean its Share price will move accordingly.

A good chunk of the recent capital raise was to pay off unsecured creditors. So is simply a balance sheet adjustment. The money isn't earning accretive.

Then we need to adjust for yesterday's woeful year end announcement and then factor in SML having lots of announcements but zero plans for digging themselves out of the bog.

I have no idea how you actually value all that and come up with an adjusted figure. But knowing all that (and recognising the market tends to be forward looking) it is today saying SML is worth $85m

BlackPeter · Oct 01, 2024, 05:09 PM

Quote from: Minimoke on Oct 01, 2024, 05:00 PMShare pricer is essentially the value the market places on a compnay. Just becasue a compnay adds $X amount of cash to its business does not mean its Shareprice will move accordingly.

A good chunk of the recent capital raise was to pay off unsecured creditors. So is simply a balance sheet adjustment. The money isn't earning accretive.

Then we need to adjust for yesterdays woeful year end announcement and then factor in SML having lots of announcements but zero plans for digging themselves out of the bog.

I have no idea how you actually value all that and come up with an adjusted figure. But knowing all that (and recognising the market tends to be forward looking) it is today saying SML is worth $85m

Well, it sounds we both are not interested in investing in the current situation into SML, which makes this discussion pretty academical.

However - if we assume for a moment that the market does some data crunching when deciding about the market cap (I know, the market is only rational until it isn't), then it should make a difference for the market cap if they reduced their debts. Always remember that share holders are the last people at liquidation time who get the leftovers after all debts are paid - i.e. debts do matter for the market cap.

Minimoke · Oct 01, 2024, 05:45 PM

Quote from: BlackPeter on Oct 01, 2024, 05:09 PMWell, it sounds we both are not interested in investing in the current situation into SML, which makes this discussion pretty academical.

However - if we assume for a moment that the market does some data crunching when deciding about the market cap (I know, the market is only rational until it isn't), then it should make a difference for the market cap if they reduced their debts. Always remember that share holders are the last people at liquidation time who get the leftovers after all debts are paid - i.e. debts do matter for the market cap.

I agree - a purely academic exercice.

But if we look at money coming in and money going out what do we have. $218m of new cash coming in. And considering this triggers a bond event that could quickly be $180m plus interest going out. Which only leaves less than $38m in extra cash. Which is offset by the increase in bank financing. With no prospect on the table for selling Dairworks or Pokeno.

All I see happening is the immediate risk of liquidation has gone. But only temporarily. Nothing really has happened to improve the capital value of the company.

So I look forward to what a rational and now fully informed market does. Needless to say i shan't be part of it.

Minimoke · Oct 07, 2024, 10:04 AM

Quote from: Minimoke on Oct 01, 2024, 04:36 PMRight oh. its official. Synlait now has 603,198,098 shares on issue. Shares are currently trading at $0.41 which gives a market cap of $247,311,220.

Or the market might want to readjust. Its current market cap is showing as $85,250,000 (obviously before the release of new shares.) So if this is what the market think Synlait is actually worth, shares will be trading at $0.1413

Market opens today with share numbers adjusted. Market cap now showing as $202.86m (SP = $0.385)

Minimoke · Oct 16, 2024, 09:10 AM

Bond holders breathing a big sigh of relief. And showing their lack of faith in the future. even just a couple of months out

$169 million of the $180 million bonds elected to have their bonds redeemed early. Get out while the going is good. Very sensible

Breezy · Oct 16, 2024, 09:26 AM

Quote from: Minimoke on Oct 16, 2024, 09:10 AMBond holders breathing a big sigh of relief. And showing their lack of faith in the future. even just a couple of months out

$169 million of the $180 million bonds elected to have their bonds redeemed early. Get out while the going is good. Very sensible

I have no doubt that the future of SML will be Bright over the longer term.

Minimoke · Oct 21, 2024, 08:52 AM

I can only assume clearing out the dead wood ""Grant will take a well-deserved break before deciding his next career move."

Grants Watson CEO since jan 2022. Only 2 1/2 years in the job and resigning already.

Dairyworks (the part of Synlait they are keen to sell) CEO taking over in the interim. Effective today. Which I also assume means Grant isnt turning up to work today. So he's gone with no notice required to be worked out. Must be a decent payout!

winner (n) · Oct 21, 2024, 09:09 AM

Grant might head back to MacDonalds

Basil · Oct 21, 2024, 09:45 AM

Quote from: Minimoke on Oct 21, 2024, 08:52 AMI can only assume clearing out the dead wood ""Grant will take a well-deserved break before deciding his next career move."

Grants Watson CEO since jan 2022. Only 2 1/2 years in the job and resigning already.

Dairyworks (the part of Synlait they are keen to sell) CEO taking over in the interim. Effective today. Which I also assume means Grant isnt turning up to work today. So he's gone with no notice required to be worked out. Must be a decent payout!

Contrary to all the politically correct corporate speak, AKA B.S., emanating from Bright, he probably sees a very gloomy future for the company which is still riddled with far too much debt. Why be the captain of this sick ship and a puppet on a string for the CCP at the same time?

Minimoke · Oct 21, 2024, 10:21 AM

Quote from: Basil on Oct 21, 2024, 09:45 AMContrary to all the politically correct corporate speak, AKA B.S., emanating from Bright, he probably sees a very gloomy future for the company which is still riddled with far too much debt. Why be the captain of this sick ship and a puppet on a string for the CCP at the same time?

I'm always suspicious about the circumstances surrounding the departure of a person on no notice and no job to go to.

SML - Synlait

Breezy