PGW - PGG Wrightson

[Shareguy]

Looks fundamentally like a solid company in an essential industry - and yes, oversold compared to fundamental value.

However - if you look at the ownership ... including the recent board spilling games - there clearly are risks. The largest (44.3%) shareholder (Agria) well might have a different agenda then the other retail shareholders and they have as well a long history of screwing their own share holders. Check Agrarinvestors posts in the other forum - a quite sad tale.

I think the current SP of PGW just reflects this in my view incalculable risk.


NZSA comments on Agria's latest attempt to take control:

https://www.nzshareholders.co.nz/scrip-article/is-this-a-managed-pr-retreat-for-agria-in-pgg-wrightson/

It went ok this time, but will it stand as well the next attack? ... and - how sure can we be that the Agria directors are focussing on PGW's benefits instead of on Agrias agenda?

Caveat emptor - Buyer beware!

Thanks BP. I have just been speaking to my broker who said the very same thing. He also said the downturn in farming and also better internet connectivity is resulting in more farmers shopping on line. Competition is tight. He said better opportunities with less risk elsewhere.

[Red Baron]

He said the downturn in farming and also better internet connectivity is resulting in more farmers shopping on line. Competition is tight. He said better opportunities with less risk elsewhere.

Vhat a pity your broker deed not know about PGW's extenseeve on line Ztore.
https://store.pggwrightson.co.nz/shop

Nor ze virtual zaleyard zhat PGW eez championing
https://www.pggwrightson.co.nz/our-services/livestock/buy-sell-livestock/bidr

Ah vell, I guess zome brokers know more zhan others, eh. 

RB

[Left Field]

Latest results..... a challenging year..... agriculture struggling.....no final dividend

https://www.nzx.com/announcements/436013

PGG Wrightson Limited1 (PGW) today announced its results for the financial year ended 30 June 2024.
 
 Key results for the year to 30 June 2024 include:
 - Operating EBITDA2 of $44.2 million (down $17.0 million on prior financial year)
 - Net profit after tax (NPAT) of $3.1 million (down $14.5 million on prior financial year)
 - Revenue of $915.9 million (down $59.7 million on prior financial year)
 - No FY24 final dividend declared

 "We often say that PGW prospers when our farmer and grower customers do well. Our customers have faced difficult conditions over the past year and consequently this has impacted our results."

[BlackPeter]

Latest results..... a challenging year..... agriculture struggling.....no final dividend

https://www.nzx.com/announcements/436013

PGG Wrightson Limited1 (PGW) today announced its results for the financial year ended 30 June 2024.
 
 Key results for the year to 30 June 2024 include:
 - Operating EBITDA2 of $44.2 million (down $17.0 million on prior financial year)
 - Net profit after tax (NPAT) of $3.1 million (down $14.5 million on prior financial year)
 - Revenue of $915.9 million (down $59.7 million on prior financial year)
 - No FY24 final dividend declared

 "We often say that PGW prospers when our farmer and grower customers do well. Our customers have faced difficult conditions over the past year and consequently this has impacted our results."

Actually - market does not appear that surprised, and EPS (4 cts/share) is even a bit better than what analysts still some weeks ago expected (1 ct/share), but yes - 1.9% RoE is still not flash.

Just a boring agricultural cyclical these days, but before I consider buying back in I would like to see something giving confidence that they manage to get their top shareholder (yes, the one with the less than clean vest) somehow under control.

[Left Field]

Not much detail on how this is funded..... but looks to be a smart move which should improve margins.

https://www.nzx.com/announcements/454660

[winner (n)]

I asked AI if this announcement was a bit over the top ...seem to be full of buzzwords

AI told me —

Yes, the announcement can be perceived as somewhat over the top due to its enthusiastic language and emphasis on the positive impact of the acquisition. Phrases like "strong and respected name," "commitment to innovation," and "champion local agribusiness" contribute to a highly optimistic tone.

[Cod]

If it breaks $2.34 it could run up to $4.00 mid AWVAP's, as it would crack the rising channel and post covid peak trend line -- we willl see whether the company can make good on the current uptick in Agri prices.
You cannot view this attachment.

[Basil]

I asked AI if this announcement was a bit over the top ...seem to be full of buzzwords

AI told me —

Yes, the announcement can be perceived as somewhat over the top due to its enthusiastic language and emphasis on the positive impact of the acquisition. Phrases like "strong and respected name," "commitment to innovation," and "champion local agribusiness" contribute to a highly optimistic tone.

The key term "EPS accretive" was missing.  That's good because whenever that's said, it almost invariably doesn't work out that way.

[Left Field]

Nice to see an upgrade today.....should help Cod's above chart prediction........ rising channel it seems is good news.
https://www.nzx.com/announcements/454890

PGG Wrightson Limited1 (PGW) has today updated Operating EBITDA2 guidance for the financial year ending 30 June 2025 to around $54 million (from $51 million). The revised guidance remains subject to audit with PGW scheduled to issue its full year results on 12 August.

( ps started collecting after post #34 above......now a cautious  2% of my portfolio and SP ahead by over 7%. Plan to slowly add over time for a dividend yield stock as long as Cod's "rising channel" continues.)

[Left Field]

From Snoopy on the other channel..... I like his thinking on PGW

"There has been quite a lot of positive posting on PGW lately. I have been a shareholder for a long time. Nevertheless with the slump in the share price over the last 18 months or so, I have been quietly accumulating more shares. I now have 45% shares more than I had at the start of my 'accumulation period', which is quite a lot more. Average price paid for my 'accumulated incremental shares' was $2.15. I am sure there are others with a better accumulation price than that. With hindsight I got in too early, as my first accumulation parcel was bought at $3. But with the shares up another 4.6% today, closing at $2.46, albeit on tiny volume, I can't complain.

$2.46 is the highest share price seen since the 'board spat' in March 2024. My gut feeling is that the share price has run too far too fast of late. I think we might be in for a 'consolidation day' tomorrow, once the FY2025 results are announced. Shareholders who follow the company will not be expecting a great headline number result for FY2025 at 8:30am tomorrow. With the VetMed acquisition further stretching the capitalisation base, I expect no more than a token 1cps dividend will be announced. That may disappoint some. But PGW still need to keep on the good side of their bankers you see!

Thankfully I expect a much more upbeat outlook, with the big internaI IT spend winding down, and most commodity prices for farmers remaining firm. Chair Gary Moore advised shareholders at last years AGM, not to expect dividends to be as high across the farm commodity price cycle as in previous years. I also believe there will be some 'rebuilding of the balance sheet' to do.

Nevertheless I believe in the short to medium term, we will see the PGW share price above $3 again. The question is, will it be PGW or Spark that will return to that $3 level first? Place your bet ladies and gentlemen! I already have, and I am betting on both"

[Left Field]

Well done PGW....... encouraging turnaround...... onwards and upwards.

https://www.nzx.com/announcements/456581

Key results for the year to 30 June 2025 include:
 • Operating Revenue of $975.3 million (up $59.4 million or 6 % on prior financial year)
 • Operating EBITDA2 of $56.1 million (up $12.0 million or 27 % on prior financial year)
 • Net profit after tax of $10.7 million (up $7.6 million or 248 % on prior financial year)
 • Fully imputed final dividend of 4 cents per share, (6.5 cents per share for full year)
 
 PGW Chair, Garry Moore said "We are pleased to report improved results on the prior year, as the agri-sector continued to recover. Operating Revenue was up $59.4 million and Operating EBITDA up $12.0 million on the prior year. We have seen a shift in key markets and have been able to respond positively to that turnaround.

[winner (n)]

Still heaps of activity ..like nearly $1 billion revenues ...but very little (if any) cash generation ...and they pay divies

CASH IS KING they sayYou cannot view this attachment.

[Left Field]

Helpful chart thanks Winner.

If your chart doesn't improve with the next update I might get concerned.

My SP today showing a 20% return within 1 month. Divvies to come. Off to a good start.

[Left Field]

Crikey......who would have thought.

https://www.farmersweekly.co.nz/markets/pgw-eyes-billion-dollar-year-ahead/#google_vignette

[winner (n)]

Crikey......who would have thought.

https://www.farmersweekly.co.nz/markets/pgw-eyes-billion-dollar-year-ahead/#google_vignette

Back to the future it seems ...they did $1.2 billion in 2018

And didn't make much dosh then