Camellia Share Discussion Threads

[crumppot] 07/6/2023 07:57

I am worried about what the directors are going to do with the majority of the proceeds. They will only spend a small amount on share buy backs. That leaves a lot of money to be spent on investments such as Bardsleys.

They should pay out a big dividend to the shareholders.

[eezymunny] 07/6/2023 07:55

More up to date:

31/12/22

Very tangible assets (pretty easy to value?)

Net Current Assets £109m
Inv properties £25m (fair value 35m)
Inv in associates (insurance etc) £73m (plus up to £20m uplift for BF&M sale)
Money Market +debt inv 8m
Equity inv £26m
Heritage assets £9m
LT receiv 3m

Total £253-283m


More debateable/less tangible/hard to value assets?

Bio assets £14m
Bearer plants £99m
Land+buildings £50m
Plant/machinery £30m

Total £213m


LT debt liabs

£4m , def tax £37m


The market cap is so utterly out of kilter with that balance sheet, they´d be off their rockers to do anything but buy back shares whilst silly old Mr Market is willing to sell them at such a daft discount. Even the pretty hard tangible stuff, less all liabilities looks to be well north of 200m vs 160m market. And all the tea plantations, buildings, agri assets etc in for free as well. Madness...

[russman] 07/6/2023 07:21

hive those bits off to KKimani.

[arthur_lame_stocks] 06/6/2023 22:19

I guess they might appeal to a local buyer with a philanthropic side?

[1tx] 06/6/2023 21:50

This is an incredibly complex business in particular the Indian/Bangladesh operations we employ around 100,000 people,own over 40,000 houses occupied by 250,000 people,run 250 nurseries & schools,50 Hospital etc etc covering hundreds of sq Miles...It is probably unsellable.Essentially Gordon Fox bought numerous British Owned Tea plantation companies & their managing agents that were set up in the 1860 to 1900 period.
Nothing is going to happen very quickly.......

[arthur_lame_stocks] 06/6/2023 20:04

Won't they need a waiver from the takeover bods before they can buy back shares or have they already got that?

[eezymunny] 06/6/2023 17:15

All very gloomy here. Yes, the apples malarkey was awful but you´d hope lessons learned etc. You all talk like a repeat is nailed on.

80.4m for BF&M (less 10 for taxes etc? we don´t know precise number) is 70m
Linton Park for sale at 30m

FRom 30/6/22

Net current assets 81m
Bio assets/bearer plants 113m
Land/Buildings 56m
Financial assets 33m
Heritage Assets 9m

All pretty clean assets, albeit some maybe hard to crystallise at book. But BF&M proceeds + Linton + NCA is bigger than market cap by the looks. What a nonsense..

TBV about 370m here? Market cap only 160m.

As I said I think they should, and probably will, buy back shares all the way up to 8 or 10 quid a share. Any sane company director would do that while this is so cheap, rather than splurge on other assets IMO.

[arthur_lame_stocks] 06/6/2023 16:46

Hi CJohn

I'd also be happier if they sold off the agri businesses. I do wonder though whether they'd have trouble repatriating the cash back to the UK given that they all seem to be in the developing world and I don't know what taxes or capital controls they may be subject to.

In all honesty I'm not sure why I ever bought these; I don't expect to lose money but I can sometimes be a bit too much of a sucker for a discount to TNAV. I could have probably got a bigger discount and a better yield investing in a number of other asset plays.

[cjohn] 06/6/2023 16:19

Hello Arthur and others,

Well, having sold BF & M, which has occasionally contributed handsomely to profitability, they are going to find it increasingly difficult to be profitable. A bunch of low margin agri companies is never going to be a huge profit generator.

Their understanding of risk is incorrect, to put it mildly. Yes, the results of certain sorts of insurance companies like BF and M are VOLATILE, but volatility isn't the same as RISK, particularly if you have a well-capitalised company like CAM that can survive across the insurance cycle.

Of course, tiredoldbroker, we all know that ANY significant asset sale at or above book value is (apparently) positive for shareholders, given the huge discount from TBV to market cap. I can't believe there is a single shareholder here who's bought the Company on the basis of its tight run profitable operations. We are all awaiting asset sales and BF & M's was well-signposted.

Likewise for opposite reasons, any asset purchase is a clear negative for CAM shareholders, unless at a huge discount to the acquired companies' asset value. This is compounded by the fact the management have demonstrated an outstanding inability at valuing potential acquisitions. The English apple company was a disaster waiting to happen.

That is why I say any asset sale is "apparently" positive for shareholders. It depends what they do with the 80m. It should be simply given back to shareholders as a return of capital.

Unfortunately, a significant part of it is likely to be wasted pursuing the high-risk, low return strategy of "diversifying" in the agricultural sector. This is not diversification; it's throwing good money after bad.

Forgive me being dyspeptic, given the decent price realised for BF & M. I'd be far happier if they'd flogged off some of the hopeless unprofitable agri companies.

[1tx] 06/6/2023 16:05

I do n't know what part if any Gordon Fox (whose former shares are the Swiss Charitable Trust ) will play in the reinvestment of capital.He is 93 now and of course put this company "together" over many years,hopefully he will be looking an investment that will provide a useful income for the charity.

The shares are still modestly priced albeit with good reason until we see progress.

[arthur_lame_stocks] 06/6/2023 15:50

If I try to look at this a bit more "glass half full" I suppose with over 50% of the shares very tightly held and unlikely to be sold back to the company a buyback may actually help shift the price up a bit. Although of course that would just strengthen the controlling shareholders hand.

On another note, I was looking at the headline figures for the last five years and it seems that profitability has dropped off a cliff in the last few years. Does anyone know the reason for this? I would have thought demand for agricultural produce would be fairly consistent from year to year.

I know there are all sorts of factors at play, the weather, blight, third world politics etc.

[piedro] 06/6/2023 15:12

tob,

What were your points?
Perhaps you could refresh our memories by reposting.

[tiredoldbroker] 06/6/2023 14:04

Well, I think the points I made on 1/2 Sept last year have been proven reasonably correct :)

[crumppot] 06/6/2023 12:20

Arthur AGREED!

[arthur_lame_stocks] 06/6/2023 11:57

The only problem is they're planning on investing most of the cash back into agriculture and if the purchase of Bardsley is anything to go by the cash should be given back to shareholders and the Board put out to pasture.

[value hound] 06/6/2023 11:37

Excellent news, v big in relation to mkt cap. As ever, worth a shedload more, but charitable trust presence always tempers judgement

[eezymunny] 06/6/2023 11:15

Good news.



Long live value investing and all who sail in her. A huge win coming methinks. They should have started a buyback a long time ago. Luckily they didn´t and I bought barrowloads at silly prices. Common sense finally prevails. I´d keep buying back shares until they are 80 quid a share.

[arthur_lame_stocks] 06/6/2023 11:14

I suppose I should be pleased but I expect they'll blow all the cash on lemons

[cjohn] 28/5/2023 19:47

crumppot16 May '23 - 10:45 - 444 of 445
Need to go the AGM to put our points across 8 June at the Goring Hotel London!


Yes, agreed.

If I can get over to England, I'll go.

I've already voted against Director re-elections and remuneration.

They need to understand that they have to start taking note of shareholders.

[piedro] 17/5/2023 14:36

Learning from Kakuzi perhaps

[crumppot] 16/5/2023 09:45

Need to go the AGM to put our points across 8 June at the Goring Hotel London!

[34adsaddsa] 15/5/2023 18:19

But they won't. They'll keep it for "general corporate purposes" or they'll buy another gem like Bardsley.

[crumppot] 15/5/2023 08:22

What happens when they sell the headquarters building? Surely they should pay a large dividend!

[cjohn] 15/5/2023 07:50

Bardsley: the management making idiotic acquisitions in low return, risky agriculture businesses.

It was never going to end well.

[crumppot] 13/5/2023 17:35

Definitely