SFF is my biggest holding by far and has kept my portfolio well afloat so far in this financial year. After a 60% SP gain and a 8% dividend in the last financial year, we are now, quarter through the current financial year, where we started with the SP. So 0% SP gain, but an 11.25% gross dividend.
The company is debt free, with a significant reserve cash position and still trading at a P/E of only 3.1 and a dividend yield of 11.2%.
People always concern themselves with the lack of liquidity on the USX, but I would suggest that it has been a blessing during the current market turmoil. My experience with the USX, is that investors on there are MUCH more long term investors and not short term traders. They let the operational results speak for themselves and ignore the noise on the main boards.
I like it !
For those that don't follow, this co-op is simply a holding company and owns 50% of Silver Fern Farms Ltd.
I hadn't realised it was a co-op
I need to get around organising a broker so I can dabble in some unlisted shares.
Quote from: Iceman on Jun 25, 2022, 12:36 PMSFF is my biggest holding by far and has kept my portfolio well afloat so far in this financial year. After a 60% SP gain and a 8% dividend in the last financial year, we are now, quarter through the current financial year, where we started with the SP. So 0% SP gain, but an 11.25% gross dividend.
The company is debt free, with a significant reserve cash position and still trading at a P/E of only 3.1 and a dividend yield of 11.2%.
People always concern themselves with the lack of liquidity on the USX, but I would suggest that it has been a blessing during the current market turmoil. My experience with the USX, is that investors on there are MUCH more long term investors and not short term traders. They let the operational results speak for themselves and ignore the noise on the main boards.
I like it !
For those that don't follow, this co-op is simply a holding company and owns 50% of Silver Fern Farms Ltd.
Sounds like you got yourself a bargain ;) ... though past performance (60% SP gain) is obviously not a guarantee for future gains.
Have not yet followed the unlisted ... how do you buy or sell them .... and are there any rules to make sure the market is informed?
go to usx.co.nz web site.
Plenty of information about their listings and brokers who deal with USX listed companies.
Even on Sharetrader there have been plenty of postings since 2010,on Unlisted section..
Excellent Companies include PAZ,SYFT,Silver Fern Farms CoOp,Rangatira,Terra Vitae Vineyards,Skyline Enterprizes,and Rural Equities.
Each company provides an Issuer profile,and you can see each company's announcements including annual reports.
I believe NZSA are now covering a lot of the USX companies.
My two largest shareholdings are USX listed companies.
Cheers. Was particularly interested in the market rules and found them on the website. Shall digest.
https://usx.co.nz/uploads/paperclip/documents/2606/original/USX_Quarterly_Report_30-06-22.pdf?1657690958
ps.
The correct number of shares on issue for SFF is 100,378,874
Unprecedented.....interim divvy announced.
https://www.usx.co.nz/uploads/paperclip/documents/2703/original/Silver_Fern_Farms_Co-operative_Media_Release_Interim_Dividend_Announced_281022.pdf?1666900539
31.9cps gross divvy in the last 12 months. Almost a 20% gross yield based on the last traded price......
Quote from: lorraina on Jul 13, 2022, 09:11 AMgo to usx.co.nz web site.
Plenty of information about their listings and brokers who deal with USX listed companies.
Even on Sharetrader there have been plenty of postings since 2010,on Unlisted section..
Excellent Companies include PAZ,SYFT,Silver Fern Farms CoOp,Rangatira,Terra Vitae Vineyards,Skyline Enterprizes,and Rural Equities.
Each company provides an Issuer profile,and you can see each company's announcements including annual reports.
I believe NZSA are now covering a lot of the USX companies.
My two largest shareholdings are USX listed companies.
You are correct in stating that the NZSA cover most of the USX now. The USX also has some very large companies for instance Skyline and Zespri. There are some companies that possibly should be on the NZX rather than the USX. The USX does provide trading opportunities for widely held companies. Do watch out though for the non-continuous disclosure. Some people find that aspect quite intimidating.
I just realised I am positing in the SFF forum. Just for disclosure, I sold over half my holding just recently at $1.50. See too many headwinds in the sector this year. Happy to have taken the dividend and large SP appreciation before then.
Quote from: blackcap on Dec 22, 2022, 07:56 AMYou are correct in stating that the NZSA cover most of the USX now. The USX also has some very large companies for instance Skyline and Zespri. There are some companies that possibly should be on the NZX rather than the USX. The USX does provide trading opportunities for widely held companies. Do watch out though for the non-continuous disclosure. Some people find that aspect quite intimidating.
I just realised I am positing in the SFF forum. Just for disclosure, I sold over half my holding just recently at $1.50. See too many headwinds in the sector this year. Happy to have taken the dividend and large SP appreciation before then.
In the wrong thread I know, but the NZSA was at the last PAZ AGM.
Revenue almost $3.3b.
Net Profit $189.3m
Total imputed dividends for the year $0.231. At $1.50 that's 15.4% yield after tax.....
Looking forward to a nice big divvy in less than 2 wks after buying in over the last few days, looking for another 20k shares at 1.601 if anyone on here wants to sell some( I'm looking at you blackcap)
You are the highest bidder.
Incredible yield in just under 2 weeks.
Helped you guys out today and had some SFF Venison medallion steaks for dinner.
I need to make sure more of the red meat I eat is really lean. Pan fried in olive oil, medium rare and lightly salted with Himalayan pink salt and ground pepper. Gosh it was really awesome, very tender, rich and tasty. No fat noticed whatsoever. 400 grams vacuum packed at New World for $17.99. Not cheap but definitely worth it!
Check out their slow cooker diced venison pack. 750 gm for around $16.00. I picked one up the other day for $14 on special. Expensive for me but OMG it was good! Made a slow cooker casserole and it was melt in your mouth tender and delicious. Added lots of veggies and got three meals out of it, so well worth it.
Quote from: Basil on Jun 24, 2023, 07:15 PMHelped you guys out today and had some SFF Venison medallion steaks for dinner.
I need to make sure more of the red meat I eat is really lean. Pan fried in olive oil, medium rare and lightly salted with Himalayan pink salt and ground pepper. Gosh it was really awesome, very tender, rich and tasty. No fat noticed whatsoever. 400 grams vacuum packed at New World for $17.99. Not cheap but definitely worth it!
Great tip, thanks. Sounds so good I want to come over for dinner at your place tomorrow. ;D
Ha ha ha! That would be one for the books wouldn't it ;) ;D
Quote from: Basil on Jun 24, 2023, 08:32 PMGreat tip, thanks. Sounds so good I want to come over for dinner at your place tomorrow. ;D
Quote from: lorraina on Apr 17, 2023, 03:06 PMYou are the highest bidder.
Incredible yield in just under 2 weeks.
Those were the days at $1.60, good chance its going under $1 pretty soon, another capital destruction company. Dont think the next divvy will be very impressive either.
Been a very profitable investment for me.
Had a "free" ride for sometime,as well as receiving huge dividends.
Be interesting seeing where they are in a couple of years time.
Quote from: lorraina on Mar 13, 2024, 05:58 PMBeen a very profitable investment for me.
Had a "free" ride for sometime,as well as receiving huge dividends.
Be interesting seeing where they are in a couple of years time.
Should cycle back up by then once the beef and lamb prices recover.
Agree.
There's been a lot of talk about the huge dividend yield for SFF both on this channel and the other which could easily trip up inexperienced investors into thinking it was a good place to invest. It may have happened, but I can't recall any of those same investors cautioning newbies that the meat industry has been notoriously cyclical for more than 100 years with huge troughs, (with no dividends) and peaks. I know this but many inexperienced investors don't.
I was the only one putting my hand up, unfortunately not on this thread, calling out the need to carefully look at the dividend history in making an assessment as to whether its sustainable or not going forward.
My view and cation for all newbies and for all shares, it's a good idea to look at the dividend history for the last 10 years when making an assessment as to the level of likely dividend going forward and its possible sustainability. This is very important for highly cyclical industries like meat companies and airlines. If you are close to retirement like me and investing for income, don't take chances with your hard-earned money based on one year's worth of data that makes the yield look attractive.
The other thing about the unlisted market is this, it's literally the wild west of investing. The rules around insider disclosure and interim reporting offer very poor protection for investors. I've spoken with Oliver Mander about this and there's very little they can do. The lax rules that cover the unlisted market are exactly that. Lax and loose. Very high risk and very, very poor liquidity. Caveat Emptor, let the buyer beware. Also with this being a Co-Op the situation about who gets what from returns (when there are returns to be distributed), frankly are really murky.
Good advice.
Yet.?
I can only speak for myself.
I have the capital I invested in the Unlisted market out.
Yet?
I am left with [a free ride] with significant holdings in PAZ,SFF and a very modest holding in SCIL.
Been and remains "of real interest" to me.
Possibly the right time for savvy investors to invest there.?
Quote from: Basil on Mar 17, 2024, 10:43 AMThere's been a lot of talk about the huge dividend yield for SFF both on this channel and the other which could easily trip up inexperienced investors into thinking it was a good place to invest. It may have happened, but I can't recall any of those same investors cautioning newbies that the meat industry has been notoriously cyclical for more than 100 years with huge troughs, (with no dividends) and peaks. I know this but many inexperienced investors don't.
I was the only one putting my hand up, unfortunately not on this thread, calling out the need to carefully look at the dividend history in making an assessment as to whether its sustainable or not going forward.
My view and cation for all newbies and for all shares, it's a good idea to look at the dividend history for the last 10 years when making an assessment as to the level of likely dividend going forward and its possible sustainability. This is very important for highly cyclical industries like meat companies and airlines. If you are close to retirement like me and investing for income, don't take chances with your hard-earned money based on one year's worth of data that makes the yield look attractive.
The other thing about the unlisted market is this, it's literally the wild west of investing. The rules around insider disclosure and interim reporting offer very poor protection for investors. I've spoken with Oliver Mander about this and there's very little they can do. The lax rules that cover the unlisted market are exactly that. Lax and loose. Very high risk and very, very poor liquidity. Caveat Emptor, let the buyer beware. Also with this being a Co-Op the situation about who gets what from returns (when there are returns to be distributed), frankly are really murky.
I think most will realise that the dividend isn't predictable/consistent, and that this year it is well known that it will be a completely different result to the previous - based on market conditions, farmer pricing, inventories, inflation etc.
I have said on the other channel that at recent lows that the PE is about 1. But this is a bit tongue-in-cheek to be honest.....and agree that it is highly cyclical or at least unpredictable. Followers of the thread will see the Alliance result, and they went from a large profit to a large loss from one season to the next. I've detailed why I think the SFF won't be anywhere near as bad - mainly timing of their FY, more beef/less lamb than Alliance and believe are better operators.
With SFF and their shares, there are a few unique aspects:
- You are buying shares in a Coop, which major asset is 50% of SFF Ltd.
- Traditionally the Coop is farmer-owned, ie supplying livestock to SFF. You use to have to be a shareholder to supply, but now you don't.
- Historically the Coop was $1 in, $1 out - so if you stopped farming 20 years later you didn't get the benefit of growth in value of the company. Hence the USX listing.
- Some of the profit is distributed by way of supplier rebates, based on what farmers supplied SFF through the year. In recent years if you were a supplier the returns were very, very good.
- "Dry" shareholders are allowed but unsure if they have a limit. It does encourage some activity/liquidity.(Especially at the moment when many famrers will make a cash loss this season, 1st time since the 80's - so not buying shares.....probably selling!)
- Limited financial information is available for SFF Ltd. Primarily a balance sheet, income statement and cashflow, but not a full annual financial report.
- Dividend policy is not clear. Although think probably SM are in need of some funds these days (might need to prop up some factory at Rakaia!). But generally balance sheet strong and retained probably $100m+ from last years profit in the company. So should have lower need to retain funds in the future.
- We all know about USX and (lack of) liquidity.
- Relatively thin margins. Last year was about 6% of turnover as net profit, and probably a record, but usually way less. But if they make 1% of turnover net, with 100m shares, it works out of eps of 16cps, PE over <7.
In terms of the USX, agree the rules are lax and updates/announcements are limited. My major axe to grind is that SFF will come out with the annual result shortly, but that is the one financial update for the year - no half-year, no trading up, no forecast, no guidance - nothing.
But it does vary by company on the USX. SFF turned over $3.2B in 2022 so serious operators and is no mum & dad outfit (or Chris Castle). So I have no major problem with governance, just the above financial info.
On the flip side:
- No long term debt. Financially probably best placed of any of the major industry companies.
- Only sharemarket exposure to red meat industry - one of NZ's 3 largest export earners.
- Still priced VERY modestly, both on (potential) earnings, but also NAV is well over $3 per share.
- Potentially very good dividend (and share price growth).
My major concerns currently are:
- They kept most of last years profit within the business - are they spending as to keep BAU, to keep running, or spending that will generate more margin/profit?
- I hear HQ headcount has grown substantially? Maybe new CEO might change that?
- Also they are looking to implement an ERP system. Hugely worried when you hear of alot of the horror stories from Farmlands, Sanford, Synlait, Alliance etc on cost, timelines and disruption to the business.
No real concerns on markets, China, trade etc - just that internal stuff.
It is not the sort of share that will be 60% of your portfolio, but something niche, bought at the right price for the long term. When you look around the NZX, there isn't that much that is attractive at the moment.....
I bought in around the same time as Percy, mainly at mid-60c around June/July 2020 onwards (although unlike Percy I didn't get myself into the top 10 SHers!! ;D ). Even at todays (lower) price, have unrealised 50% capital gain and got over 42cps in dividends - so sitting on over 100% returns and comfortable to hold.
But fully not expecting a dividend this year.....
Good synopsis of the situation, thanks for taking the time to share your thoughts.
Silver Fern Farms Limited result for the 12-months to 31 December 2023:
Revenue $2,780.8m (FY2022: $3,277.8m)
Earnings before interest, tax, depreciation and amortisation (EBITDA) including share of associate earnings $16.4m (FY2022: $301.3m)
Net loss before tax $36.4m (FY2022: Net profit before tax $262.6m)
Net loss after tax $24.4m (FY2022: Net profit after tax $189.3m)
Capital expenditure $106.8m (FY2022: $96.0m)
No dividend paid (FY2022 $76.9m)
Silver Fern Farms Co-operative result for the 12-months to 31 December 2023:
Net loss after tax $10.7m (FY2022: Net profit after tax $94.1m)
No dividend to be received based on FY2023 (FY2022: $38.45m)
No debt. Cash and short-term deposits of $35.6m (FY2022: $34.6m)
Total Shareholder Equity of $406.8m (FY2022 $438.4m)
Co-operative declares no dividend and patronage reward for shareholders (FY2022 $33.5m)
Closing share price at 28 March 2024 - $1.04
Silver Fern Farms Annual Results 2023: Results reflect challenging market conditions
Note: the following information covers the results for two separate companies; Silver Fern Farms Co-operative Limited, and its investment, Silver Fern Farms Limited (the Operating Company). Silver Fern Farms Co-operative Limited and Shanghai Maling Aquarius Limited are the joint owners of Silver Fern Farms Limited.
Silver Fern Farms Co-operative and its investment, Silver Fern Farms Limited, have today released their Annual Results for the 2023 year.
Silver Fern Farms Limited has posted a $24.4 million loss after tax, with revenue decreasing $497 million on the previous year to $2.78 billion. Silver Fern Farms Co-operative has posted a $10.7 million loss after tax.
Silver Fern Farms Co-operative Chair, Rob Hewett says the financial results reflect a year of challenging market conditions which have impacted the whole supply chain.
"Depressed consumer confidence across our key markets has put pressure on our customers, the Operating Company, and ultimately, returns for our farmer suppliers," he says.
"We also felt the impact of one-off events throughout the year, such as Cyclone Gabrielle which caused damage and disrupted operations at the Dargaville and Pacific (Hawke's Bay) processing sites for a number of weeks.
"Like all our partners in the supply chain, and in particular our farmer suppliers, the Operating Company continues to carefully manage costs and reprioritise large elements of their proposed spend until there is greater confidence in the market's recovery," he says.
After several years of strong performance and record returns to shareholders, Hewett says it is disappointing to not be in a position to distribute any dividends but is confident in the Operating Company's ability to recover when market conditions become more favourable.
"The Board regularly reviews the strategy and is confident that Silver Fern Farms' strategy and direction of travel is the right one. However, it's critical the business continues to adjust to the market conditions we are currently facing," he says.
"We still have a few macro levers working against us and it's prudent we adjust accordingly. However, this is also a moment in time that will pass, and we need to strike the right balance of managing costs but also retaining capability in the Operating Company so they can continue the momentum built over the last few years.
"The business has still been able to invest over the past year, and this investment will support the business through the challenging year we have ahead, and accelerate when more favourable conditions return.
"Ultimately, through the recapitisation of Silver Fern Farms in 2016 and recent years of favourable performance, the Operating Company is in a better position to manage through the cyclical downturns of the red meat industry than it has been in the past," he says.
-----------------
Silver Fern Farms Limited Chief Executive, Dan Boulton, says challenging market conditions were experienced across the course of the year and are expected to persist well into the current financial year.
"The fundamentals of the market conditions we are facing are well understood. Weakened market sentiment has been compounded by increased supply dynamics out of the likes of Australia and South America. This has added more volume to already high in-market inventory levels, and put downward pressure on pricing," he says.
"While we are expecting a recovery in beef pricing in the shorter term due to increased demand out of the US, we are expecting that sheepmeats will take longer to recover. Venison returns have been less impacted overall, thanks in part to increased investment in new market opportunities over the last few years," he says.
Boulton says that the change in market conditions has meant Silver Fern Farms has adjusted the pace of its planned investment and focused on reducing operating costs.
"We've made some difficult but necessary calls to slow the speed of our planned investment, and in particular, our technology and transformation investment. Some technology programmes that were in progress will be finished, however the timing of some larger projects has been deferred until our spending envelope increases," he says.
"There has also been an ongoing focus on cost management and optimising our day-to-day operations. Non-critical spend and investment have been deferred, and the business is focused on prioritising the core aspects of the business, from operations, through our supply chain, and into market.
"We see the current market conditions we are facing as a cyclical adjustment which will improve in the mid-term. The direction and our ambition for the business has not diminished, however we will continue to adjust the pace of our implementation to ensure that we are fit and appropriately resourced," he says.
Despite the broader challenges being experienced in the market, Boulton says the business remains committed to its market-led strategy.
"We continue to see evidence of our recent focus and investment playing out, and we haven't lost confidence in our longer-term direction of travel. While it's still a growing proportion of our business, we've seen that where we have invested in our brand, we have been able to retain value relative to decreasing commodity pricing," he says.
"At a time when markets are generally depressed, we are nevertheless seeing more higher value customers and consumers connect with the Silver Fern Farms brand and the product our farmers are producing.
"In particular, we continue to see strong interest and engagement from our key customers in our Nature Positive programme of work. Demonstrating progress towards sustainability metrics is becoming the reality of doing business, and we are increasingly seeing confirmation this is a key competitive opportunity for our company and suppliers," he says.
Boulton says despite the reduction in overall farmgate pricing relative to the previous year, Silver Fern Farms continues to layer more value above the weekly operating price by rewarding suppliers who are aligned with market signals.
"We've increased our programme premiums to farmers on beef and lamb supply, and created a new venison supply programme. Furthermore, suppliers are also benefitting from new value streams created through our Net Carbon Zero and NZ Farm Assurance Plus programmes," he says.
"Global demand for sustainable protein continues to grow, and we believe Silver Fern Farms is in the best position to capture this through our focus and investment. In the last year, we've achieved record farmer shareholding, and record staff and customer engagement. These metrics speak to the alignment right across the business," he says.
Boulton says the company has improved processing capacity after a few years of disruption, primarily due to labour shortages.
"We've improved our processing capacity for the current season thanks to recruitment and retention plans and around $70 million of investment into our site network which has improved reliability. This was particularly important leading into what many were forecasting to be a drier season impacted by El Niño," he says.
"However, the reality is that feed levels have been good across large parts of the country, and the industry is experiencing lower than expected livestock flows. This has presented challenges to our operating efficiency through the first quarter of this year, and we'll need to continue adjusting to meet what looks like another challenging year ahead," he says.
Basically a dead investment for a couple of years for some of us, lets see if PAZ can do better.
I suppose in a way this is good for SFF
https://www.nzherald.co.nz/business/timaru-meatworks-shutdown-alliance-proposes-smithfield-closure-by-years-end/R7VPPYY7JNHTFNMLDSGHWEMMEQ/