Pharmazen

[winner (n)]

You're probably spot on there Basil with your summary

Maybe shares are worthless now ...a collectors item of what may have been.

Sometimes the 'owners eye' doesn't work eh

[Basil]

Yeap, sadly, sometimes directors and management cannot see the wood for the trees.  They often cited excess demand for their products as the reason they had to gear up so quickly for expansion.  Probably just another one of their regular "stories" but if it really was the case the cure for excess demand is simply putting your prices up a bit and making excess margin for a while which you then reinvest into the business in new plant and equipment and R&D.

It is sad to see a company which had genuine potential and was growing eps nicely at one point several years ago, being slowly destroyed by overly ambitious directors and management trying to grow too fast and with too much debt.  The wheels literally came off.  I suspect they never really had the marketing expertise to go with their technical know-how.  Nobody should be holding their breath that there will be anything left for shareholders after the receivers and liquidators have done their work.

[Minimoke]

Yeap, sadly, sometimes directors and management cannot see the wood for the trees.  They often cited excess demand for their products as the reason they had to gear up so quickly for expansion.  Probably just another one of their regular "stories" but if it really was the case the cure for excess demand is simply putting your prices up a bit and making excess margin for a while which you then reinvest into the business in new plant and equipment and R&D.

It is sad to see a company which had genuine potential and was growing eps nicely at one point several years ago, being slowly destroyed by overly ambitious directors and management trying to grow too fast and with too much debt.  The wheels literally came off.  I suspect they never really had the marketing expertise to go with their technical know-how.  Nobody should be holding their breath that there will be anything left for shareholders after the receivers and liquidators have done their work.

That "excess demand" is probably worth digging into and this was a constant story delivered by management and directors to the market. Seems they were misleading.

The departure of Jessie Chan in February was a clue. She had only been there a short time and I'm not sure what she added. That's the lesson on holding illiquid stocks - they are hard to shift when changes happen. They could really have done with a decent commercial director - who would have said using a retired pop singer as your marketing guru is probably not the best commercial decision. Nor is keeping shareholders in the dark. There are times when you need more than just customer goodwill.

I think we will also find that management / directors failed to properly manage supply chain. I suspect they ran out of raw materials. 

They have a lot of stainless steel to sell. Sadly there are lots of properties for sale out at Rolleston. And they aren't moving.

The bank will only be secure if these assets can actually be sold. Trading out of receivership might be a better strategy.

Its probably of only academic interest now, but I wonder how their sales were going. They had spent an awful lot on marketing.

[winner (n)]

Companies Office says Pharmazen only had 2 directors - surely not

[Minimoke]

Companies Office says Pharmazen only had 2 directors - surely not

Correct.

Short term director Jessie upped and left in February. Reasons unknown
Vincent pooch left in December. For health reason if I remember correctly

This left absentee director Wayne Burt (I've never seen him)

And Craig McIntosh who is also CEO

[winner (n)]

Correct.

Short term director Jessie upped and left in February. Reasons unknown
Vincent pooch left in December. For health reason if I remember correctly

This left absentee director Wayne Burt (I've never seen him)

And Craig McIntosh who is also CEO

Wayne Burt has an UK address ...maybe he directs remotely

[winner (n)]

Wayne Burt quoted in NBR saying this receivership is bad for NZ - they are a company that NZ needs as it processes a lot of local stuff and exports to the world

[Minimoke]

Wayne Burt quoted in NBR saying this receivership is bad for NZ - they are a company that NZ needs as it processes a lot of local stuff and exports to the world

It has already received some government tax payer funding.

[Monty]

Because all the imported  equipment is in place and with fresh capital it could be operating in a few months.
Capital is needed to pay down debt and for working capital.
What no one knows is just how much it would cost today to import all the plant and equipment.
At a guess I would say at least twice what PAZ spent..

When did they announce that all the equipment was in place?  There was a drier damaged in transit that there was no announcement about on its repair or replacement

[Basil]

https://www.nbr.co.nz/investment/pharmazen-receivers-hit-back-at-boards-misleading-statement/

[winner (n)]

https://www.nbr.co.nz/investment/pharmazen-receivers-hit-back-at-boards-misleading-statement/

That's a pretty damning article Basil

The arrogance of the Directors is amazing ....they obviously in denial of things going wrong

The new prospective investor (also a customer) probably happy they now in receivership ...dodging a bullet and maybe getting the whole lot cheaper ..who knows

Love watching train wrecks ...always something to learn

[winner (n)]

Hard to believe now that share price was $1 a few years ago ....that must have been exciting days

Hope you all locked in good profits on the way down ....for those who bought high and still holding commiserations 

[Sideshow Bob]

No announcement to replace the announcement they were forced to take down. 

[Basil]

That's a pretty damning article Basil

The arrogance of the Directors is amazing ....they obviously in denial of things going wrong

The new prospective investor (also a customer) probably happy they now in receivership ...dodging a bullet and maybe getting the whole lot cheaper ..who knows

Love watching train wrecks ...always something to learn

Agree 100%.  I've been an accountant for more than 40 years now and in my experience bankers only call in the receivers as a very last resort when the business is fundamentally stuffed, on the rocks and there's no other course of action that's commercially realistic.   

I can't help highlighting how PAZ's reporting, (which in recent years has been very late and tardy) for quite some time now has been centrally focused on EBITDA numbers, almost to the point where (reading between the lines on posts on both channels), many naive investors thought that was the profit of the company.  To be clear, after depreciation, amortization and interest costs, (excluded from EBITDA), they've been losing quite a lot of money for quite some time and probably ended up in a cash flow crisis after the directors couldn't / wouldn't inject further funds to support day to day operations and the BNZ refused to provide further funding. 

Who knows what the overseas investors proposal was, we'll never know, but I note they had many months to bring an offer to the table that was acceptable to the BNZ and shareholders.  The fact that the NBR is reporting that PAZ lost two of its biggest customers could have been the final nail in the coffin.  Why were those customers lost ?  The almost total lack of transparency by directors did not help.

[Doozer]

I suspect from the comings and goings of so many board members over the years that there's a lot of disharmony and this means normally one dominant leader who is responsible for the good and bad. Clearly the bad here is Rolleston, two failed factories which never started. Lots of 'nice shiny stainless steel' which has been spruked on this forum but in reality means nothing if it's not running, efficient and effective. The capital investment program has clearly been a disaster. I sense the business itself is a good one - and could be saved with a change of leadership and capital investment management.