Anglo-eastern Plantations Share Discussion Threads

[skanjete2] 17/7/2023 10:44

These buy-outs are really important and create a lot of value.

Most of the cash is held at the subsidiary level. I think they never upstreamed it, because they wanted to deprive the minorities of important dividends so they would be motivated to sell, once the law allowed it.

So every time a minority shareholder sells, the cash at the subsidiary becomes free to upstream. Then they can allocate it to buy out other minorities, dividend it out, or buy back some (or all?) shares.
They have also more diversification possibilities for the cash. Now a lot is held in Indonesian Rupiah, so this would enable them to hold more US$.

Also important is the price they pay minorities for their stakes : the paid price is meaningfully higher than NAV in the accounts, while the share price is meaningfully lower than the share price.

The big one to take out is Tasik Raja, I guess.

The total cost of buying out all minorities could be 60-80 mUS$, so quite an important investment.

[skanjete2] 17/7/2023 10:04

A buy-out of us would be at a price of at least 16£, I think.

A very interesting use of cash. We know of this transaction because of the size.
There could be other, smaller transactions we don't know of. I'm longing to see the mid-year accounts.

Next :
- some more buy outs
- sale of Cenderung Malaysia
- acquisition of meaningful adjacent plantation?
- buy back of shares?

[tigerbythetail] 12/7/2023 16:22

I know! There really has been a change for the better here - meaningful dividends, disposal of unprofitable assets, buying out of the minority owners of profitable plantations...
What next?
Share buybacks to boost the SP? Increased dividends?
Or a buy-out of us, the minority shareholders in topco, financed using the company's own cash-pile?
As said, I'm not mad keen on the last option, but I'll take the money if the premium is reasonable.

[34adsaddsa] 12/7/2023 12:42

They're actually doing stuff with the cash!

[stemis] 12/7/2023 10:39

Purchase price of minorites was 3.8 x PBT. I suppose you can take that either way...

[melody9999] 12/7/2023 09:15

Nice couple of RNSs in last week that will enhance earnings.

[tigerbythetail] 12/7/2023 08:27

Ownership of two profitable estates consolidated in this morning's RNS.
I'm liking that they are disposing of unprofitable estates and buying out the minority stakes in profitable ones. But I do wonder if this won't end with a fairly lowball offer to buy out the minority shareholders (i.e. us) in the parent company. That would be far from a disaster - we'd all make money, of course - but it would be mildly disappointing.

[catsick] 06/7/2023 08:04

Yes it does look like a pretty poor set of plantations they got rid of, losing money even in good years and producing 6 ton per ha vs 22 ton in the better estates

[skanjete2] 06/7/2023 07:58

They have no debt, so +8,5m on the balance sheet.

The loss has been booked in the previous years, exept for 0,5m.

The reasons have been made clear when they booked the loss.

[catsick] 06/7/2023 02:20

The asset sale seems like a poorly worded rns, gross value 48.7m , sale price 8.5m does that mean that it was sold with a bunch of debt and the net cash number is now way higher by 48m or just 8m , gives the names of the buyers, are they related parties? How come they were losing so much money, if you are going to put out an rns at least make it clear.....

[tigerbythetail] 05/7/2023 09:24

El Niño weather pattern now confirming. So potential drought for the plantations and lower production. But as this affects almost the entire palm oil market, presumably prices will rise to compensate...
This seems incredibly cheap now. But I'll wait a bit longer before adding. Things can always get cheaper...

[melody9999] 05/7/2023 08:14

Malaysian palm oil futures trading near MYR 3,900 per tonne, staying close to the over-three-month high of MYR 3,985 touched on June 3rd.


Think they mean July 3 looking at the chart. Their explanation is confusing too but the price is moving up.

[34adsaddsa] 04/7/2023 15:59

I think people might be selling due to fears of El Nino.

[34adsaddsa] 04/7/2023 13:25

Now would be a good time for the mythical buyback.

[chillpill] 03/7/2023 09:04

Odey held 100k shares in both AEP and MPE. I expect it is them causing the price weakness in both.

I have decided to pick up a modest holding in both as I like buying deeply discounted assets.

[skanjete2] 17/6/2023 08:04

I don't think they could take it private at £10.
At least 30% of the shares wouldn't sell.
£16 would be about a minimum, I think.

About the dividend : it's 25cts now. From what I understood, another augmentation is quite possible.

Investments : especially the buying out of minorities at attractive prices is very promising. They're also looking at some adjacent plantations.

South sumatera will be sold, and then I think Malaysia could be sold since the trees are old and the plantation is not profitable.

[34adsaddsa] 16/6/2023 22:21

The CEO's £126,614.29 purchase is now a losing position.

[stemis] 16/6/2023 09:44

This is one of those companies where you wonder why it is listed. The majority 51% shareholder could probably take it private at £10 a share, which would cost £115m. That's would leave well over £100m in the company. The quote does nothing for the company and they clearly are not much interested in the other shareholders. It'll never be fully valued by the market.

[tigerbythetail] 16/6/2023 09:24

I'd agree that AEP have long been their own worst enemy.
I appreciate they've quintupled the dividend for two years in a row now, but the yield is still only around 2.5%. They could easily quintuple it again. And buy back some shares as well. I think that would cause the market cap to rerate to something more sensible.
Also, they could simply report in a more balanced manner, rather than going full-on Eyeore. For instance, they complain of a glut of sunflower oil currently. Why? Because Russia and Ukraine are liquidating their stocks as fast as they can . And looking forwards? Ukrainian production will slump (war! mined fields!), and Russian production will likely decline as sanctions slowly wither its industrial base.

[melody9999] 16/6/2023 09:22

thought todays rns just regurgitated what was said in the trading statement 3 weeks ago. why the reaction today?

[ntv] 16/6/2023 09:08

They have always been negative about things . The company has a long history of that.
I think this has held back investment in the business and the fascination of being a cash storage facility

[34adsaddsa] 16/6/2023 08:45

Their RNS would be exactly what I would want if it were a private company - pointing out downsides and negatives - but it's awful for sentiment in a public company.

[tigerbythetail] 16/6/2023 08:39

I managed to buy at 725p this morning.
That is mcap of £292m, for a company with $277m in cash and a tax refund of $30m due. So, counting in the refund, for an "adjusted" EV of £53m.
For 68,000ha of planted palm oil. Compare to valuation to direct peer competitor MPE - it's some kind of crazy bargain.
The price has bounced back a little since then, but not by much.
And, yes, I agree about the tone of the RNS. Who writes these things? Are AEP interested in a low share price, and if so, why?

[34adsaddsa] 16/6/2023 08:34

Braindead people on twitter taking the lower production, lower prices and predictions of prices going lower still and creating a narrative.

It is what it is. They don't seem to appreciate that agriculture is inherently volatile and AEP's valuation is absurdly low. Buying or selling based on production levels or predicted CPO prices is dim.