SML - Synlait

[Basil]

Oh my goodness !   

And then you have account payable sitting at $423m against receivables due of $140m and $12m cash on hand.
There will be a bit of a long line for any available cash if things turn pear shaped.

[Arbroath]

they certainly need to reduce their WC by unlocking a chunk of the cash stored in inventory

[Minimoke]

they certainly need to reduce their WC by unlocking a chunk of the cash stored in inventory

Increase in finished goods due to " The increase is due to higher holdings of ingredients inventories due to delayed shipments resulting from ERP implementation issues and a stock build of consumer-packaged infant formula in preparation for the 21 February 2023 expiry of the SAMR license

[BlackPeter]

Ex Fonterror. Hope she has done her due diligence.

You mean - like Leon did when he came from Fonterra?

But than - Leon had an amazing SP cushion to work with. Not sure, the company can survive another SP drop like that? But hey, its just the people and culture position, isn't it? Maybe she gets rid of this awful pink ...

[BlackPeter]

Just came across this pearl:

https://nz.finance.yahoo.com/news/investors-undervaluing-synlait-milk-limited-200037945.html

Key Insights:

Synlait Milk's estimated fair value is NZ$4.08 based on 2 Stage Free Cash Flow to Equity

Current share price of NZ$2.14 suggests Synlait Milk is potentially 48% undervalued

Our fair value estimate is 35% higher than Synlait Milk's analyst price target of NZ$3.03

No worries - it is clearly a deep value game ;

Discl: I find that hard to believe, but if its on the internet, it must be true, isn't it?

[Minimoke]

Just came across this pearl:

https://nz.finance.yahoo.com/news/investors-undervaluing-synlait-milk-limited-200037945.html

No worries - it is clearly a deep value game ;

Discl: I find that hard to believe, but if its on the internet, it must be true, isn't it?

not only is it on the internet but its written in a financial sheet. So absolutely bang on the truth

[Basil]

https://www.goodreturns.co.nz/article/976521637/sharemarket-starts-week-on-a-buoyant-note.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+24+Apr+2023

Interesting what Shane Solly had to say, bottom of article.

[Crackity]

https://www.goodreturns.co.nz/article/976521637/sharemarket-starts-week-on-a-buoyant-note.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+24+Apr+2023

Interesting what Shane Solly had to say, bottom of article.

NZK or SKT type cash issue I reckon - big, discounted and fat left over for the underwriters to move later. Not good for existing shareholders overall

Find out Wednesday

Then again maybe everything is fine 

[Basil]

NZK or SKT type cash issue I reckon - big, discounted and fat left over for the underwriters to move later. Not good for existing shareholders overall

Find out Wednesday

Then again maybe everything is fine 

We know they've been factoring their debtors, (lending of last resort).  We also know they have to get their main revolving credit facility at the bank down to $250m by 30 June.
My intuition tells me the bank have that credit facility on auto reduce every month and they have either run out of cash or are very close to doing so.
Will institutions step up and support them with a capital raise yet again ?
Surely, they need at least another $200m, (again), to steady the ship but is that throwing good money after bad ?
Does the market still have confidence in the board and senior management or are most investors already sick of all the endless ESG B.S. B. Corp nonsense and pathetic financial results. ?

[Ferg]

Another crazy element was having all of the debts maturing at the same time.....from a treasury policy perspective that seems naive.

[winner (n)]

When they said '. SAP significantly impacted Synlait's ability to release and ship products to customers in Q1 FY 23.' I thought jeez the computer is holding the company to ransom.

Seems the system said CANNOT RELEASE ORDER FOR DELIVERY so no sale made

What happened to the old fashioned approach in such circumstances .... Like Customer X wants a few tonnes of that stuff in our over fill warehouses so just deliver it now and worry about the paper work later

Bloody circus if you ask me.

[Basil]

You'd could be forgiven for wondering if this is being deliberately run into the ground so the major Chinese shareholder can buy the company for peanuts.

[Hectorplains]

You'd could be forgiven for wondering if this is being deliberately run into the ground so the major Chinese shareholder can buy the company for peanuts.

"Never attribute to malice that which is adequately explained by stupidity."

[Basil]

Sounds like a famous quote and most likely applicable in this case 

[Crackity]

Sounds like a famous quote and most likely applicable in this case 

Hanlon's razor - 



The razors....more or less fyi

Occam's razor: Entities should not be multiplied without necessity

Sagan standard: Extraordinary claims require extraordinary evidence

Hitchens razor: What can be asserted without evidence can be dismissed without evidence

Hume's razor: Causes must be sufficiently able to produce the effect assigned to them

Duck test: If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck

Popper's falsifiability principle: For a theory to be considered scientific, it must be possible to disprove or refute it

Newton's flaming laser sword: If something cannot be settled by experiment, it is not worth debating

Grice's razor: Address what the speaker actually meant, instead of addressing the literal meaning of what they actually said

Hanlon's razor: Never attribute to malice that which can be adequately explained by incompetence or stupidity