# WCB - Warrnambool Cheese and Butter Factory Company Holdings



## GumbyLearner (29 January 2010)

Couldn't find a thread on this business. So I thought I'd start one.

Warrnambool Cheese & Butter 

This company produces dairy products and has had a couple of takeover offers recently. 

Currently siting on $3.32 a share.

Main competitors are Murray-Goulburn and NZ Giant Fonterra.

Did announce a JV to make Cracker-Barrel and other prominent labels in 2009?

WCB management rejected Murray-Goulburn offer today. Inadequate to summarize managements response.

DISC: I don't hold.

But told family members to invest last year at $1.90 per share. Based on honest opinion. Which they did!  

Any thoughts on the direction of this stock?


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## GumbyLearner (16 February 2010)

Despite a Strong Aussie $ WCB have released a positive half yearly.

EBITDA of $21M, up $10.9M or 107.9% on the first half of 09.

EBIT of  $14.7M, up $10.1M or 219% on the first half of 09.

NPAT of $8.9M, up $7.5M or 535.7% on the first half of 09.

No wonder, the takeover offers have come thick and fast for this baby.


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## McCoy Pauley (16 February 2010)

Have a mate whose from that area (Cobden, actually) who reckons that WCB is primarily owned by a collective of farmers based in the local area.  The stock had been a dog for a while but the undisclosed takeover offers started some action on the upside.  He reckons that the majority owners don't need and don't want to sell out to a predator.

I don't hold and the above post is pure speculation from a second-hand source so DYOR!


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## GumbyLearner (16 February 2010)

McCoy Pauley said:


> Have a mate whose from that area (Cobden, actually) who reckons that WCB is primarily owned by a collective of farmers based in the local area.  The stock had been a dog for a while but the undisclosed takeover offers started some action on the upside.  He reckons that the majority owners don't need and don't want to sell out to a predator.
> 
> I don't hold and the above post is pure speculation from a second-hand source so DYOR!




My mistake McCoy Pauley. I just pulled that info from today's half-yearly announcement. The full announcement can be found at www.asx.com.au. 
You are right it is a company primarily made up by a dairy co-op. However, with 
1. recently low dairy prices 
2. continuing melamine scares in China (of which a Chinese Fonterra partner was involved in 2008-09)
3. Accusations of tainted dairy production out of Tatura.
4. The increasing consumption of dairy as a calcium source in greater Asia

I thought the potential for upside in this one looked good last year. That was my amateur reasoning
behind looking at this stock in the first place.  JMO

DYOR   

Not a trader or speculator mate.


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## GumbyLearner (16 February 2010)

A recent article from agrimoney.com

http://www.agrimoney.com/news/china-milk-scandal-may-bolster-global-dairy-prices--1330.html

*China milk scandal may bolster global dairy prices*

China's latest milk tainting scandal may cut the risk of a slide in global dairy prices, by stimulating demand for imports at a time when other buyers are backing off, Rabobank has said.

The future of China's demand for foreign milk, whose rise last year fuelled a jump in world prices, is the "biggest uncertainty" to markets holding on to gains, the bank said.

China's imports of whole milk powder, which tripled in 2009 in the wake of the initial melamine scandal, have been expected by US Department of Agriculture staff to drop by 25% this year as consumer faith in domestic milk recovers.

However, China's appetite for imports "may be supported" by fresh discoveries of dairy contamination melamine, a toxic chemical used in making plastics, but which when added illegally to milk gives it a falsely high protein reading.

China on Wednesday launched a national food-safety campaign, at the end of a 10-day melamine clean-up drive which recalled 170 tonnes of milk powder, prompted three arrests and closed three ice cream factories.

As always do your own research


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## GumbyLearner (18 February 2010)

What do you say Asfer's and girls?

Does this stock have more upside? :karate::freak3:

Cheers plebs been waiting more than two weeks and no response but hey 
check out my chart~! :321:


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## briane (18 February 2010)

Interested in this thread both as a shareholder and supplier to this company. 

I believe at this stage Murray Goulburn have revised their offer and are awaiting the boards decision.  I think most suppliers are against selling, as they fear less competition for milk supply will equate to less being paid for milk - not that it could get much worse than what we are being paid at the moment - think its an average of 30c per litre!  We are currently being paid around 40% less than last year, so that no doubt contributes to the rise in profit.  I really believe that they will have to make a decision fairly soon - have heard a lot of suppliers who will move to MG if more step-ups aren't forthcoming, which will no doubt impact the price.


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## McCoy Pauley (19 February 2010)

Murray Goulburn's revised bid rejected by WCB, saying that the offer price of $4.35/share does not offer enough value for shareholders.

http://www.theaustralian.com.au/bus...lburns-upped-bid/story-fn4xq4cj-1225832103942


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## McCoy Pauley (19 February 2010)

Bryan Frith has taken the WCB board to task over their seeming reluctance to make full disclosure to the market.

http://www.theaustralian.com.au/bus...o-a-trading-halt/story-e6frg9if-1225831976015


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## McCoy Pauley (23 February 2010)

Murray Goulburn apparently still interested in WCB but no outline of what Murray Goulburn will offer the shareholders next.

http://www.theaustralian.com.au/bus...rrnambool-cheese/story-fn4xq4cj-1225833527518

DYOR.


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## GumbyLearner (24 February 2010)

briane said:


> Interested in this thread both as a shareholder and supplier to this company.
> 
> I believe at this stage Murray Goulburn have revised their offer and are awaiting the boards decision.  I think most suppliers are against selling, as they fear less competition for milk supply will equate to less being paid for milk - not that it could get much worse than what we are being paid at the moment - think its an average of 30c per litre!  We are currently being paid around 40% less than last year, so that no doubt contributes to the rise in profit.  I really believe that they will have to make a decision fairly soon - have heard a lot of suppliers who will move to MG if more step-ups aren't forthcoming, which will no doubt impact the price.




Thanks for the info Briane. I hope there isn't even a semblance of the whole Parmalat dabacle for producers. I don't blame management for rejecting approaches so far. It only makes sense that the producers want a decent price for milk. 

We shall see what unfolds in the coming months.

I'm not a financial adviser just an interested lay observer/investor.
DYOR

Thanks again for your input

Cheers
Gumby


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## McCoy Pauley (25 February 2010)

The board of directors cops another whack from Bryan Frith in today's Oz:

http://www.theaustralian.com.au/bus...mpeting-cultures/story-e6frg9if-1225834068078


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## McCoy Pauley (26 February 2010)

MG pushes the share price to a new 52 week high with an aggressive raid on the share register of WCB.

http://www.theaustralian.com.au/bus...heese-and-butter/story-fn4xq4v1-1225834789943


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## GumbyLearner (20 March 2010)

Still plenty interested in this stock. Good luck to buyers, get them cheap while you can, because they are not going to start running at a loss for a long time!


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## GumbyLearner (23 March 2010)

Just noticed Murray-Goulburn increased their holding to 9.99% today?  Obviously still mad as a cut snake for the stock.

I'm thinking Murray-Goulburn would have to pay at least $5.50 for fair value at present. It would be great to know what they will pay in May 2011. 

Any thoughts?


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## GumbyLearner (23 March 2010)

Nice mention

http://www.adelaidenow.com.au/business/rural-stocks-to-rebound/story-e6frede3-1225837309270


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## TOBAB (8 April 2010)

Any news on these guys and Murray Goulbourn. Seems to have gone strangely quiet? Looking to enter into a suppliers contract and would be nice to know if still going to be there.


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## GumbyLearner (10 April 2010)

I wonder if Murray-Goulburn will try a hostile T/O on these guys.
It will take a lot if they really want it.


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## GumbyLearner (10 November 2010)

*Bega could take 15% stake in WCB.
*

Dairy processor Bega Cheese could take a 15 per cent stake in Warrnambool Cheese & Butter after the two companies negotiated a two-part capital raising worth up to $36.7 million, The Australian Financial Review reports.  

http://www.businessspectator.com.au...-report-pd20101109-B25GL?opendocument&src=rss

I wonder if Murray-Goulburn will still be interested come May next year?


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## GumbyLearner (10 November 2010)

WCB up 10% today.

*Frank Davis goes begging after rejecting Murray Goulburn's $4.50 bid *

By John Durie reporting for 
*The Australian
*November 10, 2010 1:14PM 

http://www.theaustralian.com.au/bus...oulburns-450-bid/story-e6frg9io-1225950973288

WARRNAMBOOL Cheese & Butter Factory shareholders have questions to ask chairman Frank Davis, given he is diluting their holding.

Davis is issuing 13.3 million shares at between $2.50 and $2.90 a share just months after rejecting a $4.50 a share bid from Murray Goulbourn.

On the face of it, the Warrnambool Cheese & Butter Factory board is digging itself into a deeper hole through the $37 million capital raising, including the placement to Bega Cheese, which acts as a potential blocking stake to MG’s 10 per cent stake in WCB.

Shares in WCB trade by appointment, but the stock was up some 13 per cent on the earnings dilution at $3.39 a share in early afternoon trade, in the hope of some further corporate action.

The stock price is also being boosted by the fact you have to be on the register in the next couple of days to have the chance to buy more stock at $2.50.

From a shareholder-value perspective, the deal is an absolute disgrace, in the context of a denied takeover bid.
*******************************************************

Probably not as absolutely disgraceful as this though 

*Co-op boss with wife on books quits*
Colin Kruger reporting for the 
SMH
November 6, 2010

http://www.smh.com.au/business/coop-boss-with-wife-on-books-quits-20101105-17hfk.html

THE dairy co-operative Murray Goulburn said its managing director, Stephen O'Rourke, would step down in July after 23 years at the unlisted public company, which has found itself mired in controversy.

Mr O'Rourke and the rest of the Murray Goulburn board will face their dairy farmer shareholders on November 24 to explain how the co-op's financial statements ''inadvertently omitted'' to report that Mr O'Rourke's wife was one of its top paid employees - for providing support services to her husband.

The news was revealed in the co-op's latest accounts which showed *Ms O'Rourke earned $770,000 in the past two financial years and received nearly 420,000 shares during her employment that stretched back over the 12 years her husband had been managing director. *A company spokesman said Ms O'Rourke's employment had been terminated.

Also this week, Victoria Police said they were investigating millions of dollars in ''potentially irregular payments'' that were allegedly made to a senior Murray Goulburn employee in relation to Middle Eastern contracts. There is no suggestion Mr O'Rourke is in any way involved in that investigation.
**************************************************
I wonder if ASIC will investigate???


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## GumbyLearner (11 November 2010)

Wow. Up 20% in 2 days.

Not a stock that many broker analysts or trading desks cover. Cheers guys


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## McCoy Pauley (19 November 2010)

I think takeover speculation has re-started in the last few days, which might explain the price rise.

Murray-Goulburn's MD announced a fortnight ago that he would retire in July 2011 after the company disclosed $320,000 payments to a company owned by the wife of the MD (5/11/2010).

Murray-Goulburn's holding in WCB is diluted by the placement earlier this week (16/11/2010).

Then this article is released, indicating that Murray-Goulburn is still interested in WCB. http://www.investinaustralia.com/ne...rger-rival-warrnambool-cheese-and-butter-12i3


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## GumbyLearner (19 November 2010)

McCoy Pauley said:


> I think takeover speculation has re-started in the last few days, which might explain the price rise.
> 
> Murray-Goulburn's MD announced a fortnight ago that he would retire in July 2011 after the company disclosed $320,000 payments to a company owned by the wife of the MD (5/11/2010).
> 
> ...




You could be right McCoy Pauley.

Considering that a kilo of Bega Cheese retails in North Asia for roughly $40. I'm sure both Bega and WCB have market delivery synergies in mind. 

Good for the LT portfolio holders out there.


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## GumbyLearner (19 November 2010)

Dairy is a growing market in North Asia 

http://www.weeklytimesnow.com.au/article/2010/10/29/251551_business-news.html

FONTERRA'S recent expansion of its Chinese fresh-dairy product operations could help increase demand in the Asian nation.

That's according to United Dairyfarmers' of Victoria president Chris Griffin.

"I suppose the demand for milk in China far outweighs our ability to supply it and I don't know if (Fonterra's new farm) will have a huge impact on our imports to China," he said.

"It may well just give them a better sample of our product and increase demand even more."

The New Zealand dairy giant last week announced it would spend $32 million on a dairy farm that will be developed on 42ha in Yutian County, Tangshan City, which is halfway between Beijing and Fonterra's existing farm in Hangu.

Fonterra's pilot farm at Hangu was established in 2007 and produces about 25 million litres of milk each year from 6000 cows.

The new farm, which will take about a year to build, will initially house about 3000 cows - imported from NZ - and will employ about 100 people. Fonterra expects the new farm to produce 25 million litres within three years.

Fonterra chief executive Andrew Ferrier said China was an important market for Fonterra.

"The fast-growing demand for dairy in China will be met by locally produced milk and we want to be working alongside the local dairy industry to help meet this demand," Mr Ferrier said.

On a sadder note however, it is quite sad and immoral that this man has been sent to prison for simply raising awareness and standing up for consumers of dodgy business practices.

*China sentences milk-scandal activist to prison
*

http://www.monstersandcritics.com/n...ina-sentences-milk-scandal-activist-to-prison

Nov 10, 2010, 6:12 GMT

Beijing - A Chinese court on Wednesday sentenced an activist who represented parents of children made ill by tainted milk powder to two and half years in prison, supporters and rights groups said.


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## GumbyLearner (12 January 2011)

HUGE move today. Does anyone out there know why?

I wonder if Murray-Goulburn have bought more recently?


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## GumbyLearner (20 January 2011)

GumbyLearner said:


> HUGE move today. Does anyone out there know why?
> 
> I wonder if Murray-Goulburn have bought more recently?




News on delay

http://www.businessspectator.com.au...eese-and-Butter-pd20110119-D8HSK?OpenDocument

By a staff reporter

Warrnambool Cheese and Butter Factory Company Holdings Ltd has flagged an upswing in profit for the first half of 2011 as a result of stronger international dairy commodity prices.

The company expects *a net profit after tax in the range of $35 million and $37 million for the six months to December 31, 2010, up from $8.9 million in the previous corresponding period.*

However, Warrnambool Cheese and Butter warned that results for the half year are not necessarily indicative of the company's full year results, as retrospective increases in milk prices from July 1 may hit full-year earnings.

In addition, seasonal milk flow variations and local floods may affect full-year earnings, the company said in a statement to the Australian Securities Exchange.


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## GumbyLearner (28 February 2011)

Isn't it funny how the stock ticker codes of the ASX can be similar to the alphabetical listings of the white pages? Sometimes you have to read to the end of the book to find the good businesses/services 

DYOR

Courtesy of The Standard
http://www.standard.net.au/news/local/news/general/wcb-profit-boost/2088997.aspx
WARRNAMBOOL Cheese and Butter has announced a half-year net operating after-tax profit of $36.4 million.

The result, announced to the Australian Securities Exchange today, is a $27.5 million improvement for the same period in the previous financial year.

The company said continued growth in global demand underpinned a 36.4 per cent increase in average dairy commodity prices over the equivalent period of the 2010 financial year.

The commodity price increases and effective foreign exchange hedging more than offset the appreciation in the Australian dollar.

Chairman Frank Davis said WCB had continued to take advantage of its market diversification, operational efficiencies and flexibility, and the improved international pricing.

"This compares very favourably against the $8.9 million net operating profit after tax for the corresponding period last year," Mr Davis said.
@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

Also note net debt gearing reduced from 49 to 19 percent. courtesy of the Bega deal. Good to see a doubling of interim dividend payments too.

Can't wait for the action in May.


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## GumbyLearner (9 April 2011)

*Protein lift boosts profit*

http://www.weeklytimesnow.com.au/article/2011/04/08/315341_dairy.html

by Simone Smith

A RISE in milk protein levels has equated to extra cash for a Western District milk processor and its suppliers.

Last week Warrnambool Cheese and Butter revealed the protein levels in its milk had increased 0.04 per cent during the past three years.

The milk WCB processes has an average of about 3.2 per cent protein.

It says this protein rise equated to about $400,000 in improved production efficiencies at the factory and up to $2.1 million for its 565 suppliers.

WCB suppliers have been paid between $7 a kilogram and $10.35/kg for protein this season.

The improvement has been put down to MilkPlus, a project aimed at increasing production of milk solids on farm.

WCB analyst and technical manager and project leader Adriana Robaina said farmers benefited from learning about better feed management, and the processor would be able to more accurately predict milk yield coming into the factory.

Dr Robaina said WCB had come up with a model with less than 2 per cent error when it came to predicting the percentage of milk based on history and seasonal patterns, and butterfat percentages based on history and rainfall.


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## Country Lad (12 September 2013)

A tale of 2 cheeses.  I sold out of BGA when it was obvious the price was going to fall and didn't consider WCB as its price was not looking flash at the time.

Only recently looked at both again and set buy points with the off chance that BGA would take over WCB as had been rumoured for years.

Well WCB certainly broke out today, up about 30% based on the long awaited takeover by BGA.  Too late.

Cheers
Country Lad


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## piggybank (22 January 2014)

*Saputo Confirms 52.7pc Stake In WCB*

Canadian dairy giant Saputo has confirmed to the market that it has won control of Warrnambool Cheese & Butter Factory, as earlier reported by Business Spectator's DataRoom. In a statement to the Australian Securities Exchange, Saputo said its voting power in WCB had reached 52.702 per cent, up from 47.85 per cent earlier. As Saputo has passed the 50 per cent threshold, its takeover offer will be extended for another two weeks and its consideration will increase from $9 per share to $9.20 per share, meaning the offer is currently valued at $514.9 million.....

If you want to read the complete article, then click on the link provided:- http://www.theaustralian.com.au/bus...7pc-stake-in-wcb/story-e6frg8zx-1226807468338


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## catchic8 (31 January 2014)

Saputo now have 78.1% as of this morning. http://www.asx.com.au/asxpdf/20140131/pdf/42mdzr33y0cnh0.pdf
A bit sad that another dairy processor is now out of Australia's hands.


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## System (13 March 2017)

On March 10th, 2017, Warrnambool Cheese and Butter Factory Company Holdings Limited (WCB) was removed from the ASX's official list in accordance with Listing Rule 17.4 following despatch of the Notice of compulsory acquisition by Saputo Dairy Australia Pty Ltd on 27 February 2017.


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