SML - Synlait

[Minimoke]

Market seems to like it. Up 1.6% to $1.29. On very small volume.

And on a pleasing note Chair dedicates 1/7th of his report to B Corp. That will help get them out of the muck

[Basil]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/418751/403611.pdf

[winner (n)]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/418751/403611.pdf

Suppose making it hard to read is done on purpose

Did see they aiming for a B Corp score of 105

[Minimoke]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/418751/403611.pdf

Thanks.
They have absolutely nothing to offer and have to scrape the bottom of the barrel for key highlight
- Jayhena 757MT sold for ($200,000) margin attainment
- SAMR - that was always on the cards
- Total Recordable Injury Frequency Rate >30% In a non-hazardous work environment.
- Executive Leadership Team renewal (does that mean clearing out the dead wood?)

These are essentially just business as usual achievements.

No mention of how much money the new electric boiler has saved.

[Minimoke]

Suppose making it hard to read is done on purpose

Did see they aiming for a B Corp score of 105

The ambitions for FY 2028 (on page 20) are just hopeless.

Nothing there about looking after shareholders. Synlait appears to be a vehicle for individuals to prove how virtuous they are on the latest social fad.

[winner (n)]

You've got to be impressed with the purpose though

DOING MILK DIFFERENTLY FOR A HEALTHIER WORLD

[Basil]

Page 16 - A lot of new Chinese and overseas banks in the syndicate.  http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SML/418751/403615.pdf 
Bet you the banks leaving the syndicate are very relieved to be out.

[Basil]

The ambitions for FY 2028 (on page 20) are just hopeless.

Nothing there about looking after shareholders. Synlait appears to be a vehicle for individuals to prove how virtuous they are on the latest social fad.

That's why its uninvestable.  Their whole focus is on the planet and people.  B corp really means B.S. corp.

[BlackPeter]

The ambitions for FY 2028 (on page 20) are just hopeless.

Nothing there about looking after shareholders. Synlait appears to be a vehicle for individuals to prove how virtuous they are on the latest social fad.

Why? They propose a 15% return on capital (that's the bottom middle pic). Given that they wasted so far only 49% of the capital they received in IPO and CR, this means they have another 36% of the shareholder capital to waste until they return their shareholders the remaining 15%.

Great invesstment - and I recon they might be right on track ;

[winner (n)]

I see Dairyworks made 5m profit while Synlait lost 15m

Wonder what they get for Dairyworks

[Basil]

Paywalled.  Synlait does not rule out another capital raise if it can't sell Dairyworks.
https://www.nzherald.co.nz/business/will-synlait-have-to-raise-fresh-capital-if-sale-of-dairyworks-falls-through/REMNT7EET5DZ3EEHRDYHXAHXDU/?lid=5uxeyk9dmueq&utm_source=newsletter&utm_medium=nzh_email&utm_campaign=News_Direct_Business_Headlines&uuid=ae2dd95d629344ca8119b12a0d7d7338
Contains interesting commentary from yesterday's analysts call.

[Minimoke]

I see Dairyworks made 5m profit while Synlait lost 15m

Wonder what they get for Dairyworks

They are expecting to get $177,881,000 for it.

They paid 7.5x EBITDA for it. Not sure how good this valuation is. But they need the cash by March next year as  a requirement of their banking covenants. Reading the Annual report suggests they have someone at least kicking the tyres - and it might be a bit further progressed than that.

[Minimoke]

Paywalled.  Synlait does not rule out another capital raise if it can't sell Dairyworks.
https://www.nzherald.co.nz/business/will-synlait-have-to-raise-fresh-capital-if-sale-of-dairyworks-falls-through/REMNT7EET5DZ3EEHRDYHXAHXDU/?lid=5uxeyk9dmueq&utm_source=newsletter&utm_medium=nzh_email&utm_campaign=News_Direct_Business_Headlines&uuid=ae2dd95d629344ca8119b12a0d7d7338
Contains interesting commentary from yesterday's analysts call.

Given A2M's recent torpedo across the bows I cant see them being too interested in throwing more cash in.

[Basil]

Given A2M's recent torpedo across the bows I cant see them being too interested in throwing more cash in.

What's the bet that Bright Dairy would be the underwriter if it comes to a capital raise.
In the call, when pressed by analysts they said there were multiple parties interested in Dairy works.  What they can get with the cost of capital so high at this point remains to be seen through and for all intents and purposes they are forced sellers or at best "very highly motivated" sellers and buyers will know that.

[Hectorplains]

What's the bet that Bright Dairy would be the underwriter if it comes to a capital raise.
In the call, when pressed by analysts they said there were multiple parties interested in Dairy works.  What they can get with the cost of capital so high at this point remains to be seen through and for all intents and purposes they are forced sellers or at best "very highly motivated" sellers and buyers will know that.

The Chinese owners are continuing to pour their money into Westland Dairy.  $70m investment to construct a new lactoferrin plant.