FSF - Fonterra Shareholders Fund

[Left Field]

Nice upgrade today.....more good news to come...

https://api.nzx.com/public/announcement/478985/attachment/476027/478985-476027.pdf

[LoungeLizard]

Nice upgrade today.....more good news to come...

https://api.nzx.com/public/announcement/478985/attachment/476027/478985-476027.pdf

Yes, good start to the new look Fonterra. Looks like a healthy full year dividend coming...

[seaweed]

Nice upgrade today.....more good news to come...

https://api.nzx.com/public/announcement/478985/attachment/476027/478985-476027.pdf

Maybe another 35c div like last year   Thank you FSF for paying me all up div $2.75c since last Oct 2025 and another div coming soon.

[Left Field]

Maybe another 35c div like last year   Thank you FSF for paying me all up div $2.75c since last Oct 2025 and another div coming soon.

The one-off $2.00 divvy was a great excuse to add FSF to my portfolio (replacing A2)  and I'm now holding at 10% as a long term hold,  anticipating future dividends around 8% pa. (although a regular repeat of the  previous  37% divvy would be nice - 😊 )

[Tim nice but dim]

Yes, good start to the new look Fonterra. Looks like a healthy full year dividend coming...

Dividend prediction from FSF announcement & history.

Full year earnings 70c (they stated top of range)
Dividend policy 80% (this is from last 2 years)
Total div 56c
Remove interum 56 - 24 = 32 cents.

Considering this excludes all Mainland earnings for the year thats a great result for holders compared to the final div last year of 35 cents.

[Left Field]

Nice to see FSF on the leader board today up 4%. TA looking auspicious.

Onwards & upwards.

[Tim nice but dim]

Nice to see FSF on the leader board today up 4%. TA looking auspicious.

Onwards & upwards.

Miles said that EPS would return to pre Mainland Sale levels within 2 years. I must admit that I was very skeptical, however the last announcement from FSF shows they are already close to achieving this already (only 6 months in). Mr Market has now had 2 bites at digesting the last announcement, perhaps the third will follow when the final results are released in a couple of weeks.

[LoungeLizard]

FSF continuing their good run ahead of results next Thursday. Up to $8.16. Those who cashed the $2 divvy but stayed the course are literally laughing all the way to the bank. Should be a good divvy coming and the long term prospects of the new-look Fonterra appear to be strong. A keeper.

[Left Field]

FSF continuing their good run ahead of results next Thursday. Up to $8.16. Those who cashed the $2 divvy but stayed the course are literally laughing all the way to the bank. Should be a good divvy coming and the long term prospects of the new-look Fonterra appear to be strong. A keeper.

FSF has been a great addition to my now v well diversified portfolio and like you say - "a keeper."

Well done holders.

ps Friday Index rebalancing day...... lots of interesting  end of day trades.

[seaweed]

Anyone notice FSF hit $8.40 for a short time at 12.15pm today. SP has recovered quite well in last 5 months from the $2.40c div pay out     

[Left Field]

Wow, holders have done well....

https://api.nzx.com/public/announcement/480427/attachment/477680/480427-477680.pdf

• Total cash returns to shareholders1: $19.6 billion
• FY26 total cash dividends, fully imputed: 73 cents per share, up from 57 cents
• 2025/26 final Farmgate Milk Price: $9.69 per kgMS
• 2025/26 final Organic Milk Price: $14.13 per kgMS
• Total Group:
o Operating profit: $3.4 billion, up 97.6% on prior year, including a $1.2 billion Mainland
divestment benefit
o Profit after tax: $2.6 billion, up 142%
• Underlying business:
o Operating profit: $1.8 billion, up 23.6% on prior year
o Earnings of 71 cents per share, up 17 cents
o Return on capital: 14.2%, up from 11.7%
• FY27 forecast underlying earnings range: 65-85 cents per share

Onwards & upwards.

[LoungeLizard]

"One year ago, we set a target for earnings to return to FY25 levels within three years if the Consumer and associated businesses were divested," says Mr Allen.
 
 "I'm pleased to share that our team's focused execution of strategy in FY26 has got us to that target already, with underlying operating profit for our continuing business of $1.8 billion and profit after tax of $1.2 billion, equivalent to 71 cents per share."

Shareholders have certainly done well in staying the course. The $2 dividend was free money and now the business is back to where it was before the divestment. I can see FSF being $10 per share in the not to distant future.
 

[Tim nice but dim]

"One year ago, we set a target for earnings to return to FY25 levels within three years if the Consumer and associated businesses were divested," says Mr Allen.
 
 "I'm pleased to share that our team's focused execution of strategy in FY26 has got us to that target already, with underlying operating profit for our continuing business of $1.8 billion and profit after tax of $1.2 billion, equivalent to 71 cents per share."

Shareholders have certainly done well in staying the course. The $2 dividend was free money and now the business is back to where it was before the divestment. I can see FSF being $10 per share in the not to distant future.

LL lays down $10/share target price, I cant resist responding. A few points.

1) is the dividend increasing, hell yes!

  I have removed all capital returns & mainland special div from here.
  2021 20c unimputed
  2022 20c unimputed
  2023 50c unimputed
  2024 55c unimputed
  2025 57c fully tax paid
  2026 57c fully tax paid, this does not include the Mainland business earnings that
  we received a generous payout for ($2.16 in total). Mainland was approx 15% of EBIT.

  You see gross dividend increasing every year, let you decide how best to account for the 2026 result.

2) what's that dividend worth?

  A static dividend ie not growing (I have shown FSF is "currently" growing above) is in my opinion a good investment at 8% gross return. So my fair value share price is .....

(Div cents/tax adjustment @ 28%)/target gross yield
= (57c/0.72)/0.08 = 989c or $9.89 Target share price so well done LL & thanks for the prediction.

3) Dividend growth - is it sustainable?

  There has been a meteoric rise in dividend payouts over the last 6 years, however business conditions have not been constant. Sale of poorly performing overseas investments were concluded in 2023 so we should focus on last 3 years results. This would equate to the B2B current focus priority. When you take the tax advantages into account & however you want to factor in the Mainland divestment there is still a very significant dividend growth.

Prices for food protiens remain high globally and there are no headwinds in the forecast.

I expect share price to head upwards towards LL's target of $10.00 awaiting the next announcement in 6 months.


 

[LoungeLizard]

Thanks for doing the hard work there, Tim.

I wasn't, initially, a fan of the divestment - more from a NZ Inc perspective - but as a shareholder, a more streamlined and focussed Fonterra looks to be the better option. Hard to argue against a defensive stock, producing an essential product, that returns 8%!