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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Produce Invest | PIL | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
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|---|---|---|---|---|
| 0.00 | 0.00% | 186.50 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 186.50 | 186.50 |
| Top Posts |
|---|
Posted at 04/5/2017 18:28 by battlebus2 Chairman buys more stock |
Posted at 04/1/2017 17:09 by jon123 stole this from another boardBy Edmond Jackson | Tue, 3rd January 2017 - 10:20 Stockwatch: Buy this share on the dips Last December's £633 million takeover of Fyffes by Japan's Sumitomo Corporation was frustrating in that I had drawn attention to it some years before, arguing that fruit and bananas in particular were a long-term growth market, even if Fyffes' stock performance was quite irregular and off-radar for most investors. I then let it drop off the map, like most, but value was eventually affirmed by Sumitomo. So I wonder the extent of parallel with AIM-listed Produce Investments (PIL), a British potatoes and daffodils supplier, considering how the Jerry Zucker Revocable Trust (named after a late Israeli-American entrepreneur) held 11.8% in Fyffes, and last 7 December raised its stake in Produce Investments from 6.5 million shares to 6.9 million or 25.7% of the equity. Such extent of ownership of a £47 million company means this trust is locked in, taking a long-term view until a trade buyer makes a move. Either that or the fund manager has special confidence in Produce Investments, currently priced around 175p at the high end of a two-year range of 120p to 190p, albeit down on the 300-320p range the stock reached in 2013 and 2014. The volatility is explained mainly by variable cropping and a squeeze on supermarket pricing, but management says it has restructured to cope. I should also clarify, hedge fund Toscafund did reduce its stake from over 10% to 4.1% last October to November, but at the same time asset manager Ruffer went to over 5%. So Toscafund takes a more sceptical view or believes in a better switch. Double-digit profit surge Produce Investments is "vertically-integrat The group hasn't updated on trading since September, when results for the year to 25 June 2016 showed a 4% rise in revenue to £185.1 million and a 14% improvement in operating profit to £9.2 million, helped by more stable retail market conditions. Pre-tax profit dropped 41% to £3.3 million, however, due to the closure of a packaging site in Kent costing £4.6 million and metal contamination causing a product recall. The matter has been fully resolved and management has now created a supply chain model "more closely aligned" to current market conditions, which can also offset any fluctuations - the closure of a Kent packing facility has removed surplus capacity, for example. When the chairman of 10 years retired last October, he said: "The business model is more resilient, more diverse and well placed to handle any pressures that it might encounter." This coincides with supermarkets introducing fresh food price increases as competition eases from the discounters - as if Aldi and Lidl have borrowed from German government subsidies to expand, long enough. Unjustified valuation A forward price/earnings (PE) multiple of around 7 times is in line with the stock's annual average historic PE of recent years, although the rating should improve if management de-risks the business with more consistent results. The prospective dividend yield is nothing special at 4.5%, but forecast earnings cover this an ample three times. Yields in the region of 5% or more tend to be covered below two times, so this is yet another sign the stock is being priced cautiously in case of setbacks. The table also shows a strong cash flow profile, some years in excess of earnings, which bolsters security of the dividend. Capital expenditure is obviously grabbing a share of this and management is on the outlook for further acquisitions, despite a lowly cash position last June. But the overall profile hints more at upside rather than downside, further supported by a strong net tangible assets per share value and operating margin improvement from 3.9% to 6.3% in the last financial year. So, while Produce Investments isn't exactly an exciting new business and supermarket suppliers are usually a turn-off for investors, key financial metrics hint at a positive risk/reward profile at around 175p. Flexibility for M&A My chief concern is that management want to diversify into more food service providers and possibly venture into other markets through acquisitions; but the cash/debt position doesn't imply much flexibility. At the last balance sheet date of 25 June 2016, cash had run down from £2.8 million to £0.7 million; admittedly after repaying £7.0 million of longer-term debt during the year. Short-term debt rose from £16.5 million to £18.9 million. This leaves net gearing of 35.4% with intangibles representing 31.5% of net assets and net interest charges clipping 11.9% of interim operating profit in the last financial year. Fair enough, but the board needs to better clarify its funding facilities in annual results like this, especially when it entertains acquisitions as a key plank of development strategy. As things stand it will benefit from a fresh long-term debt facility. Even the 2016 annual report doesn't clarify the group's funding flexibility under present arrangements. This is a side-step, but I recall Warren Buffett once disclosing how he'd taken out a low-cost debt facility in an annual report, because its terms were attractive and he wanted to demonstrate flexibility for acquisitions even though nothing attractive was in sight. Weather chief risk Management says it has upgraded its IT systems partly to cut the risk of failure - migrating to an external cloud-based provider from in-house servers - and doesn't envisage any major impact from Brexit in the short term, although immigrants represent a significant portion of the workforce - a risk if tougher controls ensue. Weather is the chief factor management can't control, however, and any investor would need to be convinced that climate change won't mean freak weather upsets at key times for the business. But, as the 25.7% shareholder appears to believe, any drop in share price is an opportunity to accumulate for the long-term prize. For more information, visit the website. Produce Investments - financial summary Consensus estimates year ended 25 June 2012 2013 2014 2015 2016 2017 2018 Turnover (£ million) 154 206 192 178 185 IFRS3 pre-tax profit (£m) 6 7.6 8.6 7.3 3.5 Normalised pre-tax profit (£m) 5.6 7.7 10.2 6.1 10.8 8.6 9.3 Operating margin (%) 4.4 3.7 5.8 3.9 6.3 IFRS3 earnings/share (p) 23.1 26.9 31.7 19.8 11.6 Normalised earnings/share (p) 20.4 27.3 38.1 15.6 36.7 24.3 26.4 Earnings per share growth (%) -0.2 33.7 39.7 -59.1 135 -33.8 8.8 Price/earnings multiple (x) 4.8 7.2 6.6 Annual average historic P/E (x) 7.5 7.4 7.9 7.2 6.8 Cash flow/share (p) 37 15.6 42.4 34.4 32.6 Capex/share (p) 12.5 12.5 29 13.6 14.3 Dividend per share (p) 5.5 3.6 5.9 6.9 7.2 7.6 8.3 Yield (%) 4.1 4.4 4.7 Covered by earnings (x) 4 7.8 7 2.3 5.2 3.2 3.2 Net tangible assets per share (p) 71.5 72.7 117 128 129 Source: Company REFS PIL 167.25p -7.75 (-4.42%) |
Posted at 03/1/2017 11:54 by greg the grinch I reckon there is a long term seller out there (Tosca?), if you look at the chart they wait for 175p-ish and then sell into that rise.I knew this when I bought in. My thoughts are that the sells will be absorbed over the next few weeks/months so expect a 'wiggle' and then up we go. I reckon buyers of this share are also investors and not the quick money brigade so hopefully not too much profit taking. My only red share.... :) |
Posted at 28/12/2016 21:48 by battlebus2 Thanks for the Investors Champion link GHF. Always a pleasure to be of service to the investment community ;)) |
Posted at 28/12/2016 20:36 by glasshalfull Forgot to post on this thread that I've been adding here.Tweeted about it though a few weeks back in response to battlebus flagging the investment opportunity ;-) @glasshalfull1 PIL (Produce Invetments PLC) owners of @JerseyRoyalCo - Agree, I've also been buying. PER only 6 & Div yield 4.7%. @Stockopedia Rank 98 !!! Investors Champion also have it on their radar. Despite staging a recovery in the last quarter of the year, the share price of Produce Investments (AIM: PIL), a leading operator in the fresh potato and daffodil sector, also remains well off historic highs. The Group is a vertically integrated potato and daffodil company encompassing one of the UK’s leading potato businesses in Greenvale AP Ltd as well as the Jersey Royal Company, the principal supplier of Jersey Royals, and Rowe Farming one of the UK’s leading producers of outdoor, handpicked daffodils. Customers include leading grocery retailers and food service companies including Tesco, Sainsbury, Asda, Waitrose and Marks & Spencer. Price wars between the leading retailers have triggered significant pricing pressure throughout the entire supply chain, resulting in value and volume decline over the year which coincided with an exceptional growing season in 2014. The Group also had to manage the fallout from a metal contamination issue at one of the businesses, which saw a product recall. Confidence in the future was illustrated by an increase in the final dividend to 4.775p resulting in a total dividend of 7.165p up approx. 5% on the prior year. Forecasts for the year ending June 2017 are for a full year dividend of 7.625p which equates to a yield of 4.7% at the current share price (160p). It may not be the most exciting business on AIM, and with business reliant on the large retail groups it’s a tough operating environment, but the shares could still offer decent value at current levels. --- Kind regards, GHF |
Posted at 06/10/2016 11:51 by spooky No boardroom woes, departures planned in advance, handover taking place over time as normal. New men were chosen/put in place by the people leaving.fivedays - I understand you don't like the sector. TOT among others suggests this isn't a deal breaker. Is there anything else that you wish to add, i am always interested in other investors views. |
Posted at 06/10/2016 10:11 by fivedays Spooky i'm far from a paid basher!I don't like to see blinkered investors with no rational for reality when the situation at Produce isn't what i'd call conducive to investing. Do we all see red this morning? Boardroom woes? Will the previous chairman sell his stake? What direction will Produce go in? All obvious questions that need answers. |
Posted at 23/2/2016 18:26 by mach100 Oi Investor! Gem is a type of lettuce not a potato! Yer can't fool me. I know my onions. |
Posted at 09/1/2014 20:44 by cyfran101 IC Sector Review:Whatever side of the gatepost you're on, this debate is part of the much wider and critical issue of food security, and what is undeniable is that production must become more efficient if we are to meet rising demand for food from a rapidly multiplying global population. This is where investors stand to make appetising profits. Demand for cereal is set to rise by almost 50 per cent by 2050 to feed the extra three billion people on the planet. And as people in emerging markets become richer they are demanding more protein, usually in the form of meat, too. At the same time, food supply is becoming increasingly constrained because of limited land availability, lower water supplies, adverse climate conditions and an increasing use of arable fields for bio fuel and animal feed rather than crops for food. In fact, raising animals for food already uses a third of the earth's arable land mass, according to the United Nations, and producing meat is both inefficient and expensive. It takes three kilogrammes of grain to produce just one kilogramme of meat. So, with the proportion of cereal used as feed estimated to reach 45 to 50 per cent by 2050, not only must crop yields rise and costs fall, but alternatives to traditional feeds must be found. Fortunately, there's certainly scope for innovation here after three decades of chronic under-investment in agricultural research and development. Yields have stagnated for cereals, partly as a result of declining investment, while a lack of spending on food technology has wiped out productivity growth in the UK, too. Take dairy farming, where the top one-third of UK farmers are twice as efficient as the rest. Similarly, the cost of growing wheat for the top 20 per cent of wheat farmers is £100 a tonne, while for the bottom 20 per cent, it is £160 a tonne. Wheat yields, too, have the potential to increase by 30 per cent by some estimates. The companies that facilitate this, from the processors to the seed, feed and fertiliser manufacturers, will be well positioned to benefit. Phil Carroll, analyst at Shore Capital, calls this sweet spot the "value gap". While prices in the main commodities have retreated from their highs to a new price plateau, Mr Carroll says he's not interested in the commodities themselves, but the companies that add value to help meet demand, which is where the real opportunity lies. In the small UK-listed agri-food sector, Aim-listed Wynnstay Group(WYN) stands out. It has a 14 per cent share of the UK seed market and is steadily increasing revenue and profit, while expanding geographically and making acquisitions. It develops feed products and healthcare supplements for livestock, but is also involved in all the areas of crop production, supplying seed, fertilisers and crop protection products. Boss Ken Greetham predicts a massive market for agricultural products over the next 30 years. "We have limited land and water and can't do much about that, but we can do a lot with technology and that has been lacking in our industry," he says. Companies in the sector are finally redirecting investment towards research and development, he adds, while the outlook for UK agriculture and exports is at its strongest since the 1940s. NWF(NWF) is another domestic player. It now feeds one in seven dairy cows in Britain, investing in animal nutrition research projects to improve farmers' profitability. Meanwhile, Carr's Milling Industries (CRM) operates a diverse business model, manufacturing speciality feed and fertilisers as well as specialist machinery and fuel. For extra diversification, it processes and sells cereals to bakers, food manufacturers and retailers. Then there are a suite of global giants which dominate the business of feed ingredients and crop nutrients and protection such as Mosaic Company (NYSE: MOS), Nutreco(AM: NUO) and Agrium (TSX: AGU). US-based Archer Daniels(NYSE: ADM) is developing alternatives to traditional cereal-based feeds that can transform crop residue into a nutritious feed source, squeezing more value out of every acre. This is particularly important in bad crop years and expands capacity without requiring additional land. Indeed, crop protection, fertiliser, seed engineering and nutrition is now big business, but sustainability is becoming an equally important factor as farmers are increasingly demanding less environmentally harmful crop treatments. Chemical giant BASF(GER: BAS) recently paid $1bn (£651m) for Becker Underwood, which develops yield-improving biological products that stimulate plant growth with fewer chemicals. Bayer 's (GER: BAYN) CropScience business shelled out nearly $500m to acquire AgraQuest, which also offers the so-called 'green products'. Smaller companies such as UK-listed Plant Health Care (PHC) are also active in this space. In addition to organic fertiliser, it makes proteins that stimulate a plant's immune response, thereby increasing yields. The business strategy is to license this technology to bigger players. In 2008, it signed a deal with Monsanto (NYSE:MON) and a recent tie-up with Arysta LifeScience will see Plant Health's main product, Harpin, sold with branded fungicides in the US in 2014. Elsewhere, pork specialist Cranswick(CRW) is experiencing high demand for meat, both at home and abroad, helped by the lower cost of pork relative to other meats. Recent European Union rules forcing continental pig farmers to up their welfare standards has also levelled the playing field and given Cranswick a boost. In addition, it has just bought East Anglian Pigs, an outdoor pig farm, suggesting Cranswick sees significant scope for growth here. Indeed, the UK is only 50 per cent self-sufficient in pig meat, while UK and European herds are in decline. IC VIEW: In Britain, food self-sufficiency has declined over the past decade to 59 per cent and the weather has caused havoc for farmers - last year's washout means Britain is likely to be a net importer of wheat for the first time in a decade. Yet cash-strapped Brits still demand cheap food and prefer to buy British. And, with global consumption rising, high food prices and finite resources, innovative technology to drive efficiency and boost yields will be vital to prevent demand from outstripping supply, playing into the hands of companies that help farmers maximise productivity and process their goods. This is something bigger players are picking up on and vying to gain exposure to - Glencore's recent acquisition of Canadian grain handler Viterra is a case in point. True, many of these companies will suffer short-term bumps along the way, inevitable given the nature of agriculture, but the evidence suggests that, for those of you willing to take a long-term view, investment in this sector will pay off. FAVOURITES: Carr's Milling is one of our long-standing buy tips (875p, 3 May 2012). It has recently seen extra demand for specialist animal feed due to poor grazing conditions and, trading on 10 times forward earnings, is below the peer average of 13. We also like Swiss giant Syngenta (VTX: SYNN), a leader in crop protection and seed supplying. Its shares have risen 11 per cent on our buy tip (335CHF, 16 Aug 2012). Rising grain prices have helped and a forward PE ratio of 16 means it's cheaper than peers Monsanto and Bayer, too. Produce Investments (PIL) recently reported a half-year loss of £1.2m, but this was largely down to last year's unseasonably wet weather. The underlying business model is sound and the shares could be worth snapping up at an all-time low of 135p, rated on a cheap five times forward earnings. It's worth keeping an eye on Canada's Agrium, too. The vertically integrated company mines its own nutrients and offers growers across the Americas crop production services through its retail unit. Buying the bulk of Viterra's agri-products business from Glencore beefs up its retail presence in Canada and Australia. OUTSIDERS: Plant Health Care has some innovative ideas and is cash-rich, which should help fund further development of its promising third-generation plant treatment products. But it's still early days and the company is not yet profitable - last year it reported a loss of £4.2m and revenue has been falling since 2008. BROKER VIEW: Agriculture as an investment Year on year, harvests will vary, the rain will come and go, making the supply side of large elements of agriculture unpredictable and volatile. However, prices are a function of supply and demand and the latter has followed a new upward trajectory in recent years. While many in the West seek to reduce their calorie intake, there are many new tummies in the East seeking nutrition and not just rice-based diets. Such demand is driving up long-term agricultural prices and with it the cost of land, inputs and outputs. Investors have identified this equation with inflows to global agriculture and with most farm-related stocks enjoying a re-rating. On the agri-input side, Plant Healthcare is bringing improved productivity to crop yields in the Americas through its 'Harpin' innovation, while Wynnstay is adding value through seeds, feeds and fertilisers to British farmers. Produce Investments, a leader in the UK potato market, recently extended its geography for production to the south-west of England plus entry in the fresh flower market, with the prospect of more to come. The Real Good Food Co. has developed a strategically important low-cost supply of cane sugar from Omnicane in Mauritius. Further up the food chain, Cranswick started life as a Yorkshire farming enterprise and is now a fast-growing market-leading value-added food processor, now exporting to Australia, China and the US. Analysis from Sion Roberts, director of the European Farming and Food Partnerships, shows how 'value added' in agri-food has entered a new higher-value phase. Tim Smith, Tesco's technical director, has outlined its plans for a simpler supply chain, with fewer intermediaries and ultimately more product and value added for the UK farmers and growers. From the strong domestic scene to medium-term global context, the small but well-formed and growing UK-listed agri-food sector remains an attractive investment opportunity. Clive Black and Phil Carroll, analysts at Shore Capital |
Posted at 09/1/2014 20:15 by cyfran101 hxxps://www.produceiStarting Point for Investors: hxxp://www.gvaphost. Websites: hxxp://www.gvaphost. www.greenvale.co.uk |
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