ALF.Allied Farmers Ltd

[lorraina]

https://www.nzx.com/announcements/405442
Looks as though they will never have to pay tax.
Incredible.
 

[Minimoke]

How is it possible that a company can generate tax losses of over $190,000,000! And still be around

Perhaps a take over target by a company that could utilize those losses?

[winner (n)]

How is it possible that a company can generate tax losses of over $190,000,000! And still be around

Perhaps a take over target by a company that could utilize those losses?

Think they go back to Hanover

PEB doing their best to do better

[lorraina]

How is it possible that a company can generate tax losses of over $190,000,000! And still be around

Perhaps a take over target by a company that could utilize those losses?

The ability to utilise the tax losses is dependent on continuing to meet shareholder continuity requirements of prevailing income tax legislation.

[Minimoke]

And ALF start the day with a market cap of $21.2m

[SCOTTY]

Would future dividends carry imputation credits?

[lorraina]

No.
ALF would be better to under take share buy backs.

[Hectorplains]

How is it possible that a company can generate tax losses of over $190,000,000! And still be around

Perhaps a take over target by a company that could utilize those losses?

The tax loss carry-forward ("TLCF") rules are restrictive in how losses could be utilised.  There are limitations that are outlined here: https://www.dlapiper.com/en/insights/publications/2021/08/new-zealand-introduces-new-tax-loss-carry-forward-rules.  Which would greatly narrow any list of potential suitors. 

[Left Field]

Pretty good result...... at least they aren't adding to the $187 million tax loss any more!!;

https://www.nzx.com/announcements/407545

The Directors of Allied Farmers Limited (ALF.NZX) report an unaudited consolidated net profit before tax (NPBT) of $2.097 million for the six months ended 31 December 2022. This is +46% percent higher than the NPBT of $1.438 million for the six months ended 31 December 2021.

This higher result reflects a record contribution from Farmers Meat Export Limited (FMEL).

Profit attributable to Allied Farmers's shareholders reflecting its 67% ownership of NZFL and 50% of NZRLM

The HY23 after tax profit attributable to Allied Farmers' shareholders was $1.585 million (HY22 $1.059 million). Earnings per share (EPS) for HY23 was $0.055 (HY22 $0.0368).

[lorraina]

https://www.nzx.com/announcements/408504
A good out come for ALF shareholders.
The NZRLM Consideration will be satisfied by payment of $6.55 million of cash, and the transfer of $1.75 million worth of NZ Rural Land Company Limited shares owned by Allied at their 20-day volume weighted average price prior to completion date. The cash component will be funded from a combination of cash reserves and debt facilities.
I read it no ALF shares will be issued,so there will still be only 28,806,634 ALF shares on issue,and ALF's massive tax losses will be able to be carried forward.

PS.ALF's borrowings will be tax deductible,while no tax will be paid on profits [because of carried forward tax losses].

[Mos]

Price creeping up but still on PE of around 7.2 with excellent future eps growth prospects driven by NZRLM.

[Ferg]

with excellent future eps growth prospects driven by NZRLM

Have you seen any forecasts for NZRLM?  I couldn't see any in here:
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ALF/408504/390862.pdf

My understanding is that in addition to getting 0.5% of the NAV, they also get 10% of the increase in NAV, $30k per new lease agreement and 1.25% of the value any new investment.

I'm not sure recent activity levels within NZL are sustainable given they are struggling to raise additional capital so the last 2 sources of revenue may dry up.  Plus I don't think we have seen a property devaluation yet from NZL despite discount rates increasing (someone please correct me if I am wrong) - so I can't see the 10% element being worth much.

It was a great deal initially for NZRLM, but is it sustainable?  And will it underpin EPS growth for ALF?  If I have got anything wrong here I would be interested to know.

[Mos]

Agree Ferg, short term not likely to contribute to growing eps much but should over the long term assuming nz dairy/horticulture has a prosperous future. My outlook on this is long term for NZRLM component with good earnings from the other division in the meantime.

[Red Baron]

https://www.nzx.com/announcements/405442
Looks as though they will never have to pay tax.
Incredible.
 

Vrong!

Pretty good result...... at least they aren't adding to the $187 million tax loss any more!!;

https://www.nzx.com/announcements/407545

The Directors of Allied Farmers Limited (ALF.NZX) report an unaudited consolidated net profit before tax (NPBT) of $2.097 million for the six months ended 31 December 2022. This is +46% percent higher than the NPBT of $1.438 million for the six months ended 31 December 2021.

This higher result reflects a record contribution from Farmers Meat Export Limited (FMEL).

Profit attributable to Allied Farmers's shareholders reflecting its 67% ownership of NZFL and 50% of NZRLM

The HY23 after tax profit attributable to Allied Farmers' shareholders was $1.585 million (HY22 $1.059 million). Earnings per share (EPS) for HY23 was $0.055 (HY22 $0.0368).

Annualised earnings $3.2m.   28% of zhat eez $0.9m.    Tax lozzez of $190m available.  Egzpected number of yearz to use up those tax lozzez:  $190m/$0.9m= 211.   Next year eez 2024.

Zo Allied Varmers zhould ztart paying tax again een:   2024 + 211 = 2235.

I vill organize a 'boat party' vor all descendents of current zhareholders on zhat date!   (Hmmm, theenking I might have to hire a 'cruise liner' for thees.)

RB

 

[lorraina]

ALF qualify as a long term investment.
Very long...lol