# CZZ - Capilano Honey



## System (9 July 2012)

Capilano Honey Limited (CZZ) is the largest packer and marketer of honey in Australia. Over its near 60 year history, Capilano has grown from its co-operative roots, distributing product to grocery stores around Brisbane, to become a widely recognised brand in Australia. Capilano has a market share of over 40% in retail honey sales in Australia's supermarkets and an international presence through its honey exports.

http://www.capilano.com.au/investors


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## So_Cynical (10 July 2012)

Sweet a Honey stock 

Capilano was owned by The Guinness peat group (GPG) i think (or at-least part owned), GPG are selling everything and thus the ASX has its first Honey stock though i think they were listed on one of the smaller exchanges.

Anyway a good industry to be in i would think, clean, healthy, in demand, very exportable....with the downsides being weather, viruses and predators...i will follow with some interest.


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## McLovin (10 July 2012)

So_Cynical said:


> Sweet a Honey stock
> 
> Capilano was owned by The Guinness peat group (GPG) i think (or at-least part owned), GPG are selling everything and thus the ASX has its first Honey stock though i think they were listed on one of the smaller exchanges.
> 
> Anyway a good industry to be in i would think, clean, healthy, in demand, very exportable....with the downsides being weather, viruses and predators...i will follow with some interest.




Mariner has been trying to buy these guys when they were on the Bendigo exchange. I actually looked into them to try and get a few shares, with the belief that once they relisted on the ASX they'd get more attention and a higher price but there was no volume.


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## springhill (10 July 2012)

So_Cynical said:


> Sweet a Honey stock
> 
> Capilano was owned by The Guinness peat group (GPG) i think (or at-least part owned), GPG are selling everything and thus the ASX has its first Honey stock though i think they were listed on one of the smaller exchanges.
> 
> Anyway a good industry to be in i would think, clean, healthy, in demand, very exportable....with the downsides being weather, viruses and predators...i will follow with some interest.




Viruses one of the biggest hazards with bees.
Australia is one of the only countries which is still free of the varroa mite.
Varroa mite rapidly accelerates the spread of Deformed Wing Disease.
I think it nearly wiped out the entire population of honey bees on Hawaii when it hit.

I have noticed a reduction in the number of bees in our orchard over the last 20 years.


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## burglar (10 July 2012)

springhill said:


> ...
> I have noticed a reduction in the number of bees in our orchard over the last 20 years.




You should make an alliance with a beekeeper!
But then, this idea can't be new to you.

Sorry. As you were!!


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## johenmo (10 July 2012)

springhill said:


> Viruses one of the biggest hazards with bees.
> Australia is one of the only countries which is still free of the varroa mite.
> Varroa mite rapidly accelerates the spread of Deformed Wing Disease.
> I think it nearly wiped out the entire population of honey bees on Hawaii when it hit.
> ...




Add to that chemical usage, foulbrood (a bacterium whose spores last decades).  The loss in pollination would be terrible. I worked for a bee-keeper when I was a teen.  Was interesting.  This stick will be interesting to watch.


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## ParleVouFrancois (10 July 2012)

Interesting to see a few people already interested in this stock like I am! If only it had more liquidity! Cashflows were very healthy in prior years before the recent production interruption regarding an increase in overall capacity, so would be a good bargain buy if one was able to sit around for a few weeks waiting for a non-crazy seller!


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## burglar (10 July 2012)

ParleVouFrancois said:


> .... If only it had more liquidity! ...




Runny honey, ... now that is funny!


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## springhill (19 July 2012)

Broker presentation out for this one.
http://www.asx.com.au/asxpdf/20120718/pdf/427gkx6v4zz4s0.pdf


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## Value Collector (13 January 2014)

Capilano is a honey packer, It buys bulk barrels of honey from bee keepers and then decants it into handy packs to be sold mainly through coles and woolworths, So It does not face the risks from virus and other things mentioned above as a single bee keeper would.

It has its main packing shed in Brisbane and a smaller packing shed WA, and it takes delivery of honey from beekeepers from right around Australia and can import honey if it needs to. 

I actually like this business, I built up a position about 12 months ago and it has done really well for me, I still think it is a little undervalued, I think the full fair value would be around $5.25 per share, based on earnings.

I am happy to hold this little gem in my portfolio.


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## springhill (14 January 2014)

As some one in the horticultural industry, there is an anomoly here that needs to be raised which could have detrimental effects on the business activities of CZZ.

Currently, Australia is just about the only country left in the world that does not have Varroa Mite, this parasitic pest has caused losses of billions of dollars worth of honey bee hives, worldwide.
http://en.wikipedia.org/wiki/Varroa_destructor

It is possibly only a matter of time before it establishes a population in our country, one of the most likely sources of entry is through the importation of foreign produce.

I hope that this never happens in Australia, but the secondary effects of free trade are felt far and wide in terms of the spreading of pest and disease. No quarantine measure is perfect when there is an element of human activity involved.

The chemical group of neonicotinoids should also be looked at when thoughts of honey bee population demise are discussed.


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## Value Collector (14 January 2014)

springhill said:


> As some one in the horticultural industry, there is an anomoly here that needs to be raised which could have detrimental effects on the business activities of CZZ.
> 
> Currently, Australia is just about the only country left in the world that does not have Varroa Mite, this parasitic pest has caused losses of billions of dollars worth of honey bee hives, worldwide.
> http://en.wikipedia.org/wiki/Varroa_destructor
> ...




Yeah, I have a very good understanding of the issues, but as I said in the post above I don't believe CZZ faces large risk from this. The main reason is that CZZ does not own any bee hives. CZZ are honey Packers. The bee keepers are the ones that own and operate and hives, CZZ just purchases Barrels of honey at the end of the season.

CZZ purchase honey from right across Australia, from North Queensland to Victoria and across to WA, then they just pack it. If an area had lower production, they would just buy more from another area, they also have the option to import honey also.


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## burglar (14 January 2014)

Value Collector said:


> Yeah, I have a very good understanding of the issues, but as I said in the post above I don't believe CZZ faces large risk from this. The main reason is that CZZ does not own any bee hives. CZZ are honey Packers. The bee keepers are the ones that own and operate and hives, CZZ just purchases Barrels of honey at the end of the season.
> 
> CZZ purchase honey from right across Australia, from North Queensland to Victoria and across to WA, then they just pack it. If an area had lower production, they would just buy more from another area, they also have the option to import honey also.




This so reminds me of a bad old joke:

Two old ladies meet.
"Aren't you worried about the Varroa Mite?" says one.
"No. I get my honey from the Supermarket!" responds the other.


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## Value Collector (14 January 2014)

burglar said:


> This so reminds me of a bad old joke:
> 
> Two old ladies meet.
> "Aren't you worried about the Varroa Mite?" says one.
> "No. I get my honey from the Supermarket!" responds the other.




Can you not see a difference in risk profile between a Bee keeper who relies on the 200 hives he managers and a honey packer who just buys barrels of honey on the open market?

The Bee keeper would take a huge hit if he lost 50% of his hives, However the honey packer who buys honey from all over Australia faces no such risk. As I said if there was a supply shortage on the east coast they would just bring in more from the west coast, where there is a chronic over supply and is part of the reason Capilano have bought a packing shed and label over there, or as I said they can import honey from over seas.


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## burglar (14 January 2014)

Value Collector said:


> Can you not see a difference in risk profile ...




I see both sides of this! Do you?

One Extreme:
a-world-without-honeybees


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## Value Collector (14 January 2014)

burglar said:


> I see both sides of this! Do you?
> 
> One Extreme:
> a-world-without-honeybees




And what do you think the likely hood of both the Australian and overseas commercial honey bee colonies collapsing to the point there is no honey available for capilano to buy and pack.

I mean you can take extreme risk views of any business, But you have to make assessments of what the likely real world outcomes are and how the businesses are likely to perform. 

Even in countries that have the mites there are still strong honey packing industries, 

What your basically saying is that investing in patties (makers of meat pies), put you at big risk of mad cow disease, Is the risk of mad cow disease real for cattle producers, yes, Is it a risk for patties, not really, they will just source their meat from other areas.

And mad cow disease is so much worse than the mite, Even a Beekeeper who loses production because of the mite will still probably have honey to sell, it doesn't shut him down.


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## So_Cynical (14 January 2014)

Value Collector said:


> What your basically saying is that investing in patties (makers of meat pies), put you at big risk of mad cow disease, Is the risk of mad cow disease real for cattle producers, yes, Is it a risk for patties, not really, they will just source their meat from other areas.




Any mad cow outbreak in Aust would see the PFL Share price halve over night...due to the Aussie/Meat/Pie connection...even if the disease was found in one cow in Darwin and PFL sourced all there Meat from Melbourne abattoirs.


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## Value Collector (14 January 2014)

So_Cynical said:


> Any mad cow outbreak in Aust would see the PFL Share price halve over night...due to the Aussie/Meat/Pie connection...even if the disease was found in one cow in Darwin and PFL sourced all there Meat from Melbourne abattoirs.




So, would the risk of that happening be a factor in purchasing PFL today? Given that there is no mad cow in Australia currently, But it is possible that one day, somewhere in Australia there might be a break out, is that something that should factor heavily in todays analysis?

And, would it affect patties long term outlook? I mean I have no doubt such news would cause volatility for a while, but what would be the long term impact?


But, remember as I said Mad cow is much worst than the mite, A bee keeper that has mites in some of his hives can still sell the honey, He will just have lower production due to the affected hives, but he will still get a harvest.

The point I am trying to make is that the comments that the mites (which are not even in Australia yet) should be some sort of determining factor in an investment decision in capilano is false.

Capilano don't own bee hives, They own Zero bees, They buy barrels of honey and pack them into handy packs for resale, there is no chance that an appearance of mites in Australia would cause such a drop in production that capilano would not be able to source enough honey to keep their packing sheds running.


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## qldfrog (14 January 2014)

Value Collector said:


> So, would the risk of that happening be a factor in purchasing PFL today? Given that there is no mad cow in Australia currently, But it is possible that one day, somewhere in Australia there might be a break out, is that something that should factor heavily in todays analysis?
> 
> And, would it affect patties long term outlook? I mean I have no doubt such news would cause volatility for a while, but what would be the long term impact?
> 
> ...



but they need some bees...and by the way the world stock goes, this is not a given.
worldwide, australia is the place providing new colonies.
So what is the business of CZZ if there are no bees/no honey
native bees production is a fraction of the european bees one
I believe that is where the issue could be
Crossing finger it never happen here but I would factor that risk if I were to invest,
i agree CZZ could try to sell corn sirop instead but this is not exactly the same business..


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## Value Collector (14 January 2014)

qldfrog said:


> but they need some bees...and by the way the world stock goes, this is not a given.
> worldwide, australia is the place providing new colonies.
> So what is the business of CZZ if there are no bees/no honey
> native bees production is a fraction of the european bees one
> ...




there are a million what if's you can say about any industry, It's a matter of looking at the facts rather than hyped up dooms day predictions.


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## burglar (14 January 2014)

Impressive!


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## springhill (15 January 2014)

Value Collector said:


> Can you not see a difference in risk profile between a Bee keeper who relies on the 200 hives he managers and a honey packer who just buys barrels of honey on the open market?
> 
> The Bee keeper would take a huge hit if he lost 50% of his hives, However the honey packer who buys honey from all over Australia faces no such risk. As I said if there was a supply shortage on the east coast they would just bring in more from the west coast, where there is a chronic over supply and is part of the reason Capilano have bought a packing shed and label over there, or as I said they can import honey from over seas.




This is an overly simplistic view.

If Varroa mite has no trouble infecting countries across oceanic borders, what hope do you think that state borders would have?
There would have to be some serious quarantine protocols put in place and then there are no guarantees.

To say this is a 'doomsday scenario' is ignoring the clear risk.

This pest has made its way across all borders to effect the world's bee populations.

You mention thriving honey production businesses overseas, this is in large part due to Australia being a mammoth exporter of healthy thriving bees to countries whose populations have been decimated.

You are the one hedging your bets and making assumptions on Varroa NOT making it to Australia, when all evidence points to the fact that it WILL.

Markets are forward looking and any mention of Varroa establishing a foothold in Australia will create uncertainty and uncertainty generally leads to SP price falls, not price rises.

CZZ is entirely reliant on the production of external sources, production falls - CZZ will suffer.

To say you can simply 'import it' puts CZZ at the mercy of world markets, inferior product, plus the fact that CZZ exports to over 50 countries worldwide - you are talking a major fall in export income if Australian supply falters.
Around 90% of CZZ's product is said to be exported, so whilst domestic supply would probably be guaranteed, at a price premium for the consumer, the export market would suffer.
Domestically, consumables are very price sensitive so any price premium would invariably see demand fall as honey could transition from affordable commodity to a luxury product.

There are some serious issues here that you need to consider in a clearer light, to write Varroa off as a worst case scenario is naive, it should be considered an unavoidable reality as the agenda is for free trade to take precedence over all other matters, including quarantine.

Australia's quarantine policy now reflects risk minimisation rather than risk protection.


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## So_Cynical (15 January 2014)

Value Collector said:


> *So, would the risk of that happening be a factor in purchasing PFL today? Given that there is no mad cow in Australia currently*, But it is possible that one day, somewhere in Australia there might be a break out, is that something that should factor heavily in todays analysis?
> 
> And, would it affect patties long term outlook? I mean I have no doubt such news would cause volatility for a while, but what would be the long term impact?.




Yes absolutely, and is factored in the current SP.



Value Collector said:


> The point I am trying to make is that the comments that the mites (which are not even in Australia yet) should be some sort of determining factor in an investment decision in capilano is false.
> 
> Capilano don't own bee hives, They own Zero bees, They buy barrels of honey and pack them into handy packs for resale.




The point im trying to make is that the impact of ANY outbreak of any negative event will impact the SP..simple.


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## Value Collector (15 January 2014)

So_Cynical said:


> Yes absolutely, and is factored in the current SP.
> 
> 
> 
> The point im trying to make is that the impact of ANY outbreak of any negative event will impact the SP..simple.




Ok, that might be the key difference in our opinions here, I am factoring in the risk from the perspective of what impact it would have on the companies operations, over time.

Where as your key issue seems to be the risk of short term fluctuations of the SP, To me that is hard to predict, because you can find long shot odds of disasters that can affect any industry, and cause massive share price movements as the herd gets spooked.


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## Valued (15 January 2014)

This stock has a large spread. It's not illiquid but if you wanted to sell quickly you have to take a hefty loss on the spread. It's clearly for the long term. You have to be pretty into honey.


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## Value Collector (15 January 2014)

Valued said:


> This stock has a large spread. It's not illiquid but if you wanted to sell quickly you have to take a hefty loss on the spread. It's clearly for the long term. You have to be pretty into honey.




It is a very small company, You will find most small companies are like that. It has a pretty stable share register. It took me a few months to build up my position without causing the price to rise to quickly, I had to wait for it to drop a few times, I got in at between $2.20 and $2.60 with a total of 9 trades.

I am currently in the 20 largest shareholders list, and I consider it a very long term hold, I am not "Pretty into honey" as you put it, I am into any business that my little monkey brain can understand that has a good future and I can get for a lot less than what it is worth.

As I stated, based on my valuation, it could be worth over $5 a share, so buying in at $2.20 - $2.60 was a no brainer for me, so far so good.


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## Ves (15 January 2014)

I'm curious.   For a company with such a strong market share, why has return on invested capital never really exceeded their cost of capital by any great margin in the past?   For instance, ROIC in 2012 and 2013 was around 12.5%. I briefly looked at the annual reports for the years prior to their ASX listing and it appears much the same.  My knowledge of the honey industry (in particular the packing and marketing segment) is fairly vague, but it would appear that this is a capital intensive business with no competitive advantage.

Value Collector, my main interest is how you arrived at a valuation of over $5.00 (which seems to be a fairly high premium to book value)?  Any growth in this business would not appear to have been profitable growth in the past (ie.  there has been no profitability increase above the cost of capital).   Why do you think this has been the case in the past and what do you think will change in this business for such a premium to book value to be justified?

I’m finding it hard to come up with a many reasons.  A brief look at their presentations would seem to indicate that they have plenty of on-going supply and demand pressures to deal with, which is a steep curve for any business, let alone one without a sustainable competitive advantage. 

Thanks for your posts so far.  Very thoughtful.


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## Value Collector (15 January 2014)

Ves said:


> I'm curious.   For a company with such a strong market share, why has return on invested capital never really exceeded their cost of capital by any great margin in the past?   For instance, ROIC in 2012 and 2013 was around 12.5%. I briefly looked at the annual reports for the years prior to their ASX listing and it appears much the same.  My knowledge of the honey industry (in particular the packing and marketing segment) is fairly vague, but it would appear that this is a capital intensive business with no competitive advantage.
> 
> Value Collector, my main interest is how you arrived at a valuation of over $5.00 (which seems to be a fairly high premium to book value)?  Any growth in this business would not appear to have been profitable growth in the past (ie.  there has been no profitability increase above the cost of capital).   Why do you think this has been the case in the past and what do you think will change in this business for such a premium to book value to be justified?
> 
> ...




Well they had return on equity of 14.6% for the 2013, that's not bad for that style of business. 

Their capital is split between their property and plant ( about $19,000,000 ) and their inventory ( about $18,000,000)

the property and plant includes,

- the main packing facility in Brisbane which includes a packing building and a warehouse sitting on a large block of industrial land which they freehold and all the associated packing equipment.

- A secondary packing facility in perth, which they own all the equipment but rent the building under a lease

- a mothballed backup packing facility in Melbourne which they freehold, 


the inventory include

- about 12months supply of bulk honey

- about 1 months supply of packed honey


There is currently about $4million dollars of excess Bulk honey inventory related to the purchase of the perth honey facility and brand "westco bee", Westco was a bee keepers co-op, and so bought more honey from the beekeepers than they could sell into the perth market, capillano will be able to move this easily so there will be a reduction in capital tied to this which will improve the figures from next year on.

They could get a higher return on assets if they sold the Brisbane packing shed and then rented it back on a long lease (like a lot of companies do) because real estate returns are lower than business returns in general, However I actually like the idea of having some of the capital exposed to industrial land and I think long term it will provide more stability.

they could also sell the mothballed Melbourne facility, they only kept it as a back up, but now the perth facility is running may end up being sold, this would reduce capital and increase the return on capital.

As far as historical returns, until about 2 years ago, capilano was a co-op, so it was more interested in buying as much honey as its members could produce and dumping it on the market rather than looking to produce high company profits, so the historical returns reflect that.

I see the competitive advantage being their brand and distribution channels, their low cost production and probably most importantly their relationship with the supplier bee keepers.

in regards to valuation, there are a few metrics that lead me to a valuation of a little over $5, as I said though my entry price was between $2.20 and $2.60 though because I like to have a decent margin of safety, the equity is currently $3.16 / share, so that provides a decent safety margin for me.


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## Value Collector (15 January 2014)

springhill said:


> Around 90% of CZZ's product is said to be exported, .




Where did you pull that number from

In regards to the rest of your statement, I think you are greatly over stating the risk, However only time will tell.

As I said,  

1, the mite is not currently here
2, It may one day be here, But it also may never get here
3, If it did get here, it is not the end of the world for capilano, there would still be honey production, it would just be reduced.


and lets say I am completely wrong, and honey production completely goes to zero within 5 years, capilano could just run till the inventories are gone, then sell of the land and buildings and then return the cash to shareholders, returning my original investment to me.


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## Ves (15 January 2014)

Thanks Value Collector,  another great summary.   You have got a great knowledge of this business if your posts are anything to go by,  and it's not one that I've really considered in any depth  (although... I briefly read the prospectus at listing).  I feel like I've learnt a few things in this thread.

It appears that the "capital invested" by just using the totals on the balance sheet is a little bloated if you do not take out some of the freehold land and the unused facility in Melbourne  (and probably adjust for some of the excess inventory).   That old chestnut of how to treat properties owned by the business - in which situations do you value the business & properties separately?    There is a brief discussion here in another thread on ASF.  It's a fairly grey area I've found and I haven't completely made up my own mind.

I will have a closer look at this business at some stage with a view to analysing the sustainability of the cash flow.  Will post if I come across anything interesting.

Thanks again


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## springhill (16 January 2014)

Value Collector said:


> Where did you pull that number from




In an article that I read, this could be rubbery or completely wrong.

If so, apologies - no harm was meant by it.



Value Collector said:


> In regards to the rest of your statement, I think you are greatly over stating the risk, However only time will tell.




If you do any research into Europe & the US you will se that I am not and that you are being somewhat naive.

Their crops are largely propped up by exported bees, many of them Australian.

My livelihood relies on bees to pollinate most of my crops, so it is in my interests to know this.

Varroa is a disaster waiting to happen, especially with the Libs aggressively pushing for FTA's.

Anyways, it is your investment - none of my beeswax.

Best of luck.


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## McLovin (10 February 2014)

If this latest report is anything to go by, this is quite a little honeypot. I remember having a look at it (and seriously considering buying it) back when it was still listed on the Bendigo exchange and Mariner was low balling shareholders.


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## skc (10 February 2014)

McLovin said:


> If this latest report is anything to go by, this is quite a little honeypot. I remember having a look at it (and seriously considering buying it) back when it was still listed on the Bendigo exchange and Mariner was low balling shareholders.




I read the announcement today and was thinking about our chat about this back then. I still didn't buy today although it is looking quite sweet. The spread is just too wide. It's semi bearable on entry, but if you needed to make an exit (esp if there's negative news you'd run into pretty serious slippage). And that means position would have to be kept pretty small... unfortunately.


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## McLovin (10 February 2014)

skc said:


> I read the announcement today and was thinking about our chat about this back then. I still didn't buy today although it is looking quite sweet. The spread is just too wide. It's semi bearable on entry, but if you needed to make an exit (esp if there's negative news you'd run into pretty serious slippage). And that means position would have to be kept pretty small... unfortunately.




If I bought it I'd have to be in there for the long, long run because given my average position size, there's no way I could get out of it in a hurry. In the end that's what put me off.

That conversation was longer ago than I thought. I just checked they listed on the ASX back in July 2012.

And just to keep the bee theme going, CZZ is certainly causing a buzz.


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## skc (10 February 2014)

McLovin said:


> If I bought it I'd have to be in there for the long, long run because given my average position size, there's no way I could get out of it in a hurry. In the end that's what put me off.
> 
> That conversation was longer ago than I thought. I just checked they listed on the ASX back in July 2012.
> 
> And just to keep the bee theme going, CZZ is certainly causing a buzz.




Yes... any position in honey would definitely have to be pretty _sticky_. However, as the _spread _is so wide it there's any adverse new you'd _toasted_.


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## burglar (10 February 2014)

skc said:


> Yes... any position in honey would definitely have to be pretty _sticky_. However, as the _spread _is so wide it there's any adverse new you'd _toasted_.




I read what you wrote, ...
And I knew what you meant!!


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## Value Collector (10 February 2014)

McLovin said:


> If this latest report is anything to go by, this is quite a little honeypot. I remember having a look at it (and seriously considering buying it) back when it was still listed on the Bendigo exchange and Mariner was low balling shareholders.






skc said:


> I read the announcement today and was thinking about our chat about this back then. I still didn't buy today although it is looking quite sweet. The spread is just too wide. It's semi bearable on entry, but if you needed to make an exit (esp if there's negative news you'd run into pretty serious slippage). And that means position would have to be kept pretty small... unfortunately.




Yes, today's report was quite a good one profit up 184%. I looked at it when it was on the Bendigo too, but I waited until it listed on the asx.

It is a micro cap, so you can expect the spread to be wide, But the price I was able to accumulate them for was just far to low to avoid them for that reason, I generally invest for the very long term any way, so spread doesn't both me.

I am happy to hold this company, I think their out look is pretty good, stable operating business generating cash and reducing debt and room to bolt on further acquisitions. Also the synergies from the WA acquisition still have a bit further to go.


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## Value Collector (3 March 2014)

Value Collector said:


> As I stated, based on my valuation, it could be worth over $5 a share, so buying in at $2.20 - $2.60 was a no brainer for me, so far so good.






Ves said:


> .
> 
> Value Collector, my main interest is how you arrived at a valuation of over $5.00 (which seems to be a fairly high premium to book value)?




CZZ have hit a record high today, they just hit $5.05

The 12months has been pretty good for them, profits are up and the have bedded in the WA acquisition of westco bee's honey packing assets.

It will be interesting to see the full year report.


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## Value Collector (4 July 2014)

Capilano honey have continued their impressive share price performance, they are currently trading at $6.12 / share.

Earnings have also been strong, and the directors have announced a special dividend, increasing total dividend this year to 20cents / share.

In other news, Kerry Stokes's  Seven group have become the biggest share holder, taking 12.5% stake.


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## burglar (4 July 2014)

Value Collector said:


> Capilano honey have continued their impressive share price performance, they are currently trading at $6.12 / share ...




Because I am a visual person:


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## Value Collector (25 July 2014)

Value Collector said:


> Capilano honey have continued their impressive share price performance, they are currently trading at $6.12 / share.




Capilano Honey, Annual report was released today, Earnings per share are up 34%, to 54cents per share. The share price has continued it's impressive run, Trading as high as $6.70, before finishing the day at $6.65.

Domestic sales increased 19.4%
Export Sales Increased 22% (sales to Asia doubled)
Health and wellness brands increased 69%


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## Value Collector (19 August 2014)

Value Collector said:


> Capilano is a honey packer, It buys bulk barrels of honey from bee keepers and then decants it into handy packs to be sold mainly through coles and woolworths, So It does not face the risks from virus and other things mentioned above as a single bee keeper would.
> 
> It has its main packing shed in Brisbane and a smaller packing shed WA, and it takes delivery of honey from beekeepers from right around Australia and can import honey if it needs to.
> 
> ...




This company has proved to be a little gem in my portfolio, It has broken through $8 today, I originally valued it at around $5.25 when it was trading at around $2.25, It's since increased it's profit substantially, So I believe that as long as it can maintain profits at this current level it may be worth up to $8.10, however any price above this may have a speculative component due to uncertainty on whether this profit level will be maintained over the next 12 months.

I am happy to hold for now.

Also, due to it's size, it is a take over target, so there is also a chance any take over offer may see a decent take over premium above my $8.10 valuation, this as well as possible future earnings growth add to my confidence in holding this gem.

Here is an interview with the CEO.

http://media.brisbanetimes.com.au/business/businessday/capilano-honey-seeks-new-growth-5666396.html 

[video]http://media.brisbanetimes.com.au/business/businessday/capilano-honey-seeks-new-growth-5666396.html[/video]


----------



## Value Collector (26 November 2014)


Revenue grew $13.8m (19.2%) in FY2014.
Results YTD October FY2015 shows the continuation of double digit revenue growth.
This year’s YTD October profit for FY2015 has surpassed last year’s half year result as at the end of December 2013.
A well managed supply chain has underpinned Capilano’s ability to meet sales demands, in an environment of escalating honey prices.
Our Retailer partners have been supportive and responsive to rising honey commodity costs

The out performance continues, Capilano Honey's Market share has grown from 55% of the Australian Market to 67%, as it has pushed it's premium branded honeys and many of it's smaller competitors are struggling to source honey because of the current shortage.

Capilano honey has proven it's resilience by growing profitably even in the face of the honey shortage, and I think it will continue to perform well as the honey supply normalises early next year.

I continue to hold.


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## McCoy Pauley (26 November 2014)

I suspect that CZZ is a company that many people who spruik the Warren Buffett way of investing would recommend taking an interest in, due to the fact that it's a fairly well-known brand and has a significant portion of the market.

I briefly looked at this company some time ago but with deep pockets and short arms, I unfortunately didn't jump in when it was much cheaper.


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## Value Collector (29 January 2015)

Capilano today announced that they are purchasing CHANDLERS HONEY.

They will use the packing equipment to get their mothballed packing facility in Victoria back up and running, this should bring about another 1000 tonnes of packing capacity online, if this goes ahead Capilano will have 3 packing plants, being the Main one in Richlands (Brisbane), another smaller one in WA, one in Vic.

They say reopening the packing plant in Vic will also help build relationships with beekeepers in Victoria, and should increase the honey supply Capilano have available to them.

It sounds like a pretty good plan, I only wish they were not using stock to complete the deal, they could have easily cash flowed this deal.


----------



## clowboy (29 January 2015)

Value Collector said:


> Capilano today announced that they are purchasing CHANDLERS HONEY.
> 
> They will use the packing equipment to get their mothballed packing facility in Victoria back up and running, this should bring about another 1000 tonnes of packing capacity online, if this goes ahead Capilano will have 3 packing plants, being the Main one in Richlands (Brisbane), another smaller one in WA, one in Vic.
> 
> ...




Hopefully there is a performance incentive attached to the shares?  Management staying on?

Given that there is a shortage of honey though where are they planing to get the extra 1000 Tonnes from?


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## burglar (29 January 2015)

clowboy said:


> Hopefully there is a performance incentive attached to the shares?  Management staying on?
> 
> Given that there is a shortage of honey though where are they planing to get the extra 1000 Tonnes from?




Busy bees, mate!!


----------



## Value Collector (29 January 2015)

clowboy said:


> Hopefully there is a performance incentive attached to the shares?  Management staying on?
> 
> Given that there is a shortage of honey though where are they planing to get the extra 1000 Tonnes from?




They are basically just buying the packing equipment, they will be moving it to their mothballed facility that they are going to be reopening, in Maryborough Victoria.

The worst of the shortage was last season, this season is shaping up to be a better season, the shortage is not a forever thing, also they are saying by having a presence in regional Victoria, it will give them access to a larger supply base. They also import honey when supplies are low and pack it as "smiths" or "Allowrie" brand.


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## Value Collector (9 February 2015)

Another fantastic report released today. Revenue up 34%, Normalized profit up 100%.



> half-year result being a net profit before tax (NPBT) of $5.12 million, which compares to $2.45 million for the same period last year, before the impact of the Richlands fire and insurance reimbursements. Revenue has increased 34% to $57.9 million due to growth in domestic and export markets.
> Net interest bearing debt has been reduced to $4.29 million, down from $7.59 million at the end of June 2014 and $9.75 million for the same period to December 2013.




As I post this the stock has hit an all time high of $8.30 / share. 

This little gem of a company has really shown it's resilience and brand power as it has increased profits in the face of a honey shortage.


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## clowboy (11 February 2015)

Value Collector said:


> Another fantastic report released today. Revenue up 34%, Normalized profit up 100%.
> 
> 
> 
> ...





How seasonal are their profits, due to various factors (for example I would assume Australians eat more honey in winter), how much does the weather impact on their supply / profit etc?

I read an article that said they where fully priced (at $9) but given the figures they are only on a PE of just over 10 assuming no variance in HY profits.


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## mahen142 (11 February 2015)

clowboy said:


> How seasonal are their profits, due to various factors (for example I would assume Australians eat more honey in winter), how much does the weather impact on their supply / profit etc?
> 
> I read an article that said they where fully priced (at $9) but given the figures they are only on a PE of just over 10 assuming no variance in HY profits.




I read about this stock in the Marcus Today newsletter yesterday, it was $8.70.  Profit rose 73% and stock is up almost 6% today at $9.30. Anyone else buying this stock?  Looks like it has doubled in the last year and might be a good investment.


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## Value Collector (11 February 2015)

mahen142 said:


> Anyone else buying this stock?  Looks like it has doubled in the last year and might be a good investment.




I have been in since it was around $2 a share, as you can see from my posts I think it's a great little company. If they can maintain profit levels like this, I can see it being worth well over $10/share, So I am continuing to hold.


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## Value Collector (11 February 2015)

clowboy said:


> How seasonal are their profits, due to various factors (for example I would assume Australians eat more honey in winter), how much does the weather impact on their supply / profit etc?
> 
> I read an article that said they where fully priced (at $9) but given the figures they are only on a PE of just over 10 assuming no variance in HY profits.




Profits are not overly seasonal, honey sells well all year round, however winter is a slightly bigger season. However the honey harvest is mostly at the end of spring and then another smaller harvest at the end of summer.

Weather is a big impact on supply, obviously trees produces less nector if they don't have moisture in the soil, supply over the last year or so has been the worst on record, however this season is shaping up a lot better. Profits have grown in the last 2 years though even in the face of the supply shortage, and capilano has taken some very good steps to secure more supply in the future, they bought a WA honey packer and recently another packer in VIC this will fortify supply in the future.

I originally valued they at around $5.00 when they were $2, however profits have really surged and the company has expanded since I bought in early 2013, So I think they could be worth closer to $13 now, but this is dependant on them maintaining profit levels around where they are now.

They have expanded market share to over 70% up from 50%, will this be maintained as the honey shortage fades, I don't know, but they have improved their offerings in the higher value honeys, so it's looking good.

Go into either woollies or Coles and look at the honey range, you will see the capilano brand in its various offerings dominates the shelf, also the other brands such as Wesco, smiths and Allowrie are owned by capilano.


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## clowboy (13 February 2015)

Value Collector said:


> Profits are not overly seasonal, honey sells well all year round, however winter is a slightly bigger season. However the honey harvest is mostly at the end of spring and then another smaller harvest at the end of summer.
> 
> Weather is a big impact on supply, obviously trees produces less nector if they don't have moisture in the soil, supply over the last year or so has been the worst on record, however this season is shaping up a lot better. Profits have grown in the last 2 years though even in the face of the supply shortage, and capilano has taken some very good steps to secure more supply in the future, they bought a WA honey packer and recently another packer in VIC this will fortify supply in the future.
> 
> ...





There is no doubt that they are the dominate brand in Australia, the concern is that they have grown market share to an unsustainable percentage on the back of serious supply constraints.

The concept of improving earnings by increasing the higher end product range (spruiking health benefits) is a good one but again I think there is only so far you can take this.

My interest lies more in their ability to sell to overseas markets on the basis of world class honey.  The potential price premiums to markets like China or Malaysia could be quite lucrative?

The recent profit upgrade certainly revalues the stock, if the second half only matches the first the stock is only on a PE 12, substaintially low for a stock increasing profit by 50+%


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## Value Collector (13 February 2015)

clowboy said:


> There is no doubt that they are the dominate brand in Australia, the concern is that they have grown market share to an unsustainable percentage on the back of serious supply constraints.




I reckon that they will be able to hold onto a decent chunk of that growth.


> The concept of improving earnings by increasing the higher end product range (spruiking health benefits) is a good one but again I think there is only so far you can take this.




It's not just the health benefits, although manuka honey etc has done really well, but higher value honeys packed to capture that premium.

eg, Honey from certain flowers and regions is better in colour and flavour, look at the honey range next time your in coles, when they receive honey from a premium source, they now pack that showing what it is and where its was from, that appeals to certain people and they are willing to pay an extra $1 for it.



> My interest lies more in their ability to sell to overseas markets on the basis of world class honey.  The potential price premiums to markets like China or Malaysia could be quite lucrative?




Yes, in todays broker report export sales were said to be around 35% now, this is the highest I have seen it, and that's got to be good with the Aussie dollar where it is.



> The recent profit upgrade certainly revalues the stock, if the second half only matches the first the stock is only on a PE 12, substaintially low for a stock increasing profit by 50+%




yep, we will have to wait and see if profits can be maintained, but with the third packing plant opening on the 1st of July, I still think there is room for profit growth.

As you pointed out, based on current profit they are still undervalued, So there is a safety margin should we see profits fall a bit, However if profits increase again next year, which is possible, due to expansions that are already in the pipe, we should see double benefits of share price growth that factors in current earnings by moving it to a higher PE, combined with higher earnings.

I hate making short term predictions, but if profit holds I think it will be worth $13 or more.


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## Value Collector (19 June 2015)

Capilano Honey announced a 37.5 cent dividend today, up from 20 cents the prior year and 15 cents the year before.

The dividend is fully franked.

The increase in dividend comes on the back of fantastic revenue and profit growth over the past 2 years. 





Value Collector said:


> I hate making short term predictions, but if profit holds I think it will be worth $13 or more.




Well Since I made that comment they have traded as high as 12.85, as I type they are sitting 12.35.

I still feel confident that if the second half results are as strong as the first half, they will be worth at least $13.50, so I am looking forward to the end of year results, I think this strong increase in dividend is a sign that the end of year results should be good.


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## Value Collector (25 June 2015)

Value Collector said:


> I still feel confident that if the second half results are as strong as the first half, they will be worth at least $13.50, so I am looking forward to the end of year results, I think this strong increase in dividend is a sign that the end of year results should be good.




Well that escalated quickly, $13.65 as I type.


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## Value Collector (31 July 2015)

Capilano Honey has announce the acquisition of 100% of the share capital in KirksBees Honey Pty Ltd (ACN 120 374 683). This beekeeping enterprise is one of Australia’s largest active Manuka honey producers, which is located in Evans Head, New South Wales.

The acquisition includes the assets required to operate the business including bee hives, apiary sites, vehicles, related property, sheds and honey extraction equipment. The beekeeping enterprise produced over $2 million worth of bee products last financial year. The business was purchased for $5,250,000 and property and land was also purchased for $750,000.

I believe this is Capilano's first move into bee keeping and the ownership of hives, this part of their business will be subject risks that their packing business is less exposed to, but I trust CEO Ben McKee has his head around this as he comes from a bee keeping family, it actually has the potential to become a decent profit centre for the company.





Value Collector said:


> I still feel confident that if the second half results are as strong as the first half, they will be worth at least $13.50, so I am looking forward to the end of year results, I think this strong increase in dividend is a sign that the end of year results should be good.




The results haven't been announced yet but the market seems to like the acquisition, Capilano stocks are trading over $15 now, $15.12 as I type.


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## Value Collector (3 August 2015)

Is any one else following this company, I am surprised it doesn't have more of a following here. The share price has been going from strength to strength, Closed at $16.39 Today.


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## joeno (3 August 2015)

Value Collector said:


> Is any one else following this company, I am surprised it doesn't have more of a following here. The share price has been going from strength to strength, Closed at $16.39 Today.




Missed the bull run heh. Looks like it's in for a correct IMO.

Any ideas how this stock managed to grow so much the last few years? I'm guessing it's to do with the price of honey and good management.


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## ThingyMajiggy (3 August 2015)

Value Collector said:


> Is any one else following this company, I am surprised it doesn't have more of a following here. The share price has been going from strength to strength, Closed at $16.39 Today.




Doubled in less than 12 months, nice run up


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## Value Collector (3 August 2015)

joeno said:


> Missed the bull run heh. Looks like it's in for a correct IMO.
> 
> .




Well it's due to release its results, I guess it depends how strong these are. But I am thinking they will be good, they almost doubled the dividend, and just made a decent acquisition.

What the reason for the Pull back you predict? Is it just the fact it's gone up so much?



> Any ideas how this stock managed to grow so much the last few years? I'm guessing it's to do with the price of honey and good management




Profits have grown over the last three years for several reasons.

1, It has transitioned from being a bee keeper owned co-op, Operated with the intent of buying as much honey from bee keepers as possible for the highest price possible not really caring much about margin, to an investor owned business focusing on making a profit for share holders.

2, Increased profits from the change of stratergy above has allowed them to reduce debt saving interest, and also make some acquisitions, one of which was a WA Brand allows them to pack capilano brand honey in WA along side the purchased brand, rather than ship it from Queensland

3, Move into exporting high value honey eg manuka.

4, The honey shortage has stopped some of their competitors packing large volumes especially private label, Private label has been largely substituted by the Capilano owned Allowrie branded imports, its allowed them to raise market share from 50% - 70%.



ThingyMajiggy said:


> Doubled in less than 12 months, nice run up




Check out the 3 year chart, Even more impressive. up over 700%.


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## Value Collector (10 August 2015)

Value Collector said:


> I still feel confident that if the second half results are as strong as the first half, they will be worth at least $13.50, so I am looking forward to the end of year results, I think this strong increase in dividend is a sign that the end of year results should be good.




Ok so the results are in, and they look pretty good.

revenue up 40%

Profit up 70%

Earnings were 91cents per share for the full year, which means my earlier estimate of value of $13.50 per share should easily hold, they closed today at a bit over $16.50 per share. 

fundamentals remain strong, happy to hold at this stage.


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## Faramir (10 August 2015)

Hi ValueCollector

I looked at this stock last year and thought $7 was too much for honey. How dumb was I? Since last Jul (or Aug), I missed out on the rallies. Didn't really investigate this stock. (My stupidity!) I really want a food stock.

Honey is not just food. It can be put in soaps, shampoos, aroma products. The list goes on and on. Capilano has make some smart acquisitions like Manuku Honey. Its ability to source and pack honey, then export it to high demand markets like China.

I missed out again and I envy share holders who got in early. Congratulations.


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## Value Collector (11 August 2015)

Faramir said:


> Hi ValueCollector
> 
> I looked at this stock last year and thought $7 was too much for honey.




What were you basing that on? 

There is only something like 8.6 million shares on issue, so $7 per share only values the company at a little over $60 million.

$60 Million Doesn't seem too expensive for a company with such a dominant position, that earned $4.6 Million net profit after tax that year, or were you just basing it on the dollar figure of the share price, for example you think a $50 share is automatically more expensive than a $10 share regardless of the number of shares on issue?


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## Faramir (11 August 2015)

Hi ValueCollector

I was very much a beginner last year (still very much a beginner now.) I only took the dollar value of the share and did not understand things like number of shares available. This only confirms how little I knew back then and I guess how little I know now.

I just want to say Congratulations. I admire your knowledge and I have so much to learn.


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## Value Collector (12 August 2015)

Faramir said:


> I have so much to learn.




As do I, that's the great thing about investing, the learning process never ends, there is always some thing more to learn, as long as your learning the right things, you will get better and better.


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## Value Collector (14 August 2015)

Value Collector said:


> Earnings were 91cents per share for the full year, which means my earlier estimate of value of $13.50 per share should easily hold, they closed today at a bit over $16.50 per share.
> 
> .




Czz have been on a real rip this week, ending the week at $19.85.

I must admit, this company has exceeded my wildest expectations.


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## Ves (14 August 2015)

I agree,  absolutely extraordinary performance.   Both the brand (& it's potential profitability)  are miles ahead of where I initially assessed them. 

Well done on this one mate.


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## Value Collector (11 September 2015)

Value Collector said:


> Czz have been on a real rip this week, ending the week at $19.85.
> 
> I must admit, this company has exceeded my wildest expectations.




Capilano has continued to push higher, over $23 today.

it is currently sitting higher than my valuation, it has become some what of a mini market darling, with the shares being tightly held by investors even in the face of huge share price increases, and is experiencing a surge in investor interest as food stocks are becoming popular, with the so called "dining boom".

in my opinion this share price will need good underlying profit growth to be maintained, but with recent acquisitions and a move into high value exports of Manuka honey, combined with a lower Aussie dollar, we have a decent chance to see big profit growth in the coming years. So at this stage I am happy to hold.


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## skc (27 October 2015)

CZZ printed a low of $16.50 and finished on a high of $19.99 by the close. That's 21.2% rise from the bottom.

Very thin stock to trade at the best of times and the spread is often horrendous.

But that's a big range to get involved in today.

Hopefully it can develop a bit more buy/sell depth over time.


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## luutzu (9 November 2015)

Giving my two cents on CZZ...

First, a funny story as caveat... Was exchanging emails with a fellow investor earlier in the year and he asks my opinions on Capilano. Told him I don't know about it beside it's in the honey business. But then added that it's in the honey business man, why would you want to buy it? From my experience with Select Harvest these kind of business are cyclical and when I bought SHV it did pretty well for a while then sunk like a rock; I've held on to it for a few years and just sold out at $6.80 or so (to buy MND and as usual my brilliance meant SHV soon shoot to $12 or somehting and MND, well, ahem...).

Anyway, I went on saying that CZZ is small, in a honey business that's practically a commodity and it mainly sells to Woolies and Coles and those two guys don't play nice... but I don't know. So the guy thought about it and thought maybe I make some sense.

I haven't heard from him since, haha... Didn't think much about it because we rarely talk anyway... until VC - another smart fella, said he own it, a lot of it. So i look the share price up and it was around $13, then $18 etc.


With that out of the way, here are my two cents going for free 
---

*AIM*
To try and figure out how or why a company that was $6 to $7 a bit over a year ago then traded at $22, reaching $24 at one point and now going for $17-$18.

To then give my reasons as to why I think its fair value is around $10 a share, with $16 a share being reasonable but really pushing it. BUT at the same time believe that within 12 months (soon after release of Annual Report) the market could possibly priced it at $30 (you have got to cover both ends when making prediction )

Then will try to be real brave and pin point the time back then that an investor could safely have bought it (hindsight might be more difficult when you need to give reasons for it, trust me).

And for a bonus round, after the fun is all over will apply the same rationale and principles used for CZZ onto a current company and predict its future returns to investors.

*WHY?*

Got something to sell... that and while I could live with having no friends, debt collectors... well can live better without them too but they're not the forgiving type and learning to see if it's possible to pick a 3 or a 10 bagger might solve a few problems in life, and make a couple new friends with that kind of cash too.


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## Value Collector (24 November 2015)

luutzu said:


> Giving my two cents on CZZ...
> 
> First, a funny story as caveat... Was exchanging emails with a fellow investor earlier in the year and he asks my opinions on Capilano. Told him I don't know about it beside it's in the honey business. But then added that it's in the honey business man, why would you want to buy it? From my experience with Select Harvest these kind of business are cyclical and when I bought SHV it did pretty well for a while then sunk like a rock; I've held on to it for a few years and just sold out at $6.80 or so (to buy MND and as usual my brilliance meant SHV soon shoot to $12 or somehting and MND, well, ahem...).
> 
> ...




Hey Bud,

was this meant to be a two part post, or am I missing something?


----------



## luutzu (28 November 2015)

Value Collector said:


> Hey Bud,
> 
> was this meant to be a two part post, or am I missing something?




Oh yea, been busy putting lipstick on my little pig   That and discussing world affairs, alright bludging, on the forum 

I've completed the analysis at September so will have to go back to summarise and also update if there's any new development. But given that CZZ held high level of inventory last FY, the good sales vitamin and health food is experiencing with China, it stands a very good chance to continue doing very well this 2016 FY - the drought in Aus and California might actually help its margin this and possibly next 2017FY.

If these pans out, won't surprise anyone if its shares hit $30 and over if we use just moderate assumption of growth, say 7% p.a. over next few years.


But if we're to be conservative and assumes that the distant future won't be, on average, as bright as next year or two, CZZ's fair value shouldn't be more than $16 per share. And probably more sensible to buy if we can at this point at $10 or so.

Of course this does not take into consideration corporate plays and other lucky strikes - say world honey supply goes out the window. 


btw., in case you're not already onto MRM (MMA Offshore), it's worth a close looking into. It might prove to be better possibilities than CZZ was back in 2013.


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## Value Collector (30 November 2015)

luutzu said:


> But if we're to be conservative and assumes that the distant future won't be, on average, as bright as next year or two, CZZ's fair value shouldn't be more than $16 per share. And probably more sensible to buy if we can at this point at $10 or so.
> 
> 
> 
> ...




Seems a pretty low valuation, considering they will more than likely be earning well over $1 per share this year, and be debt free buy June, I have at $18.50 as the approx fair value, with a decent chance for growth.



> btw., in case you're not already onto MRM (MMA Offshore), it's worth a close looking into. It might prove to be better possibilities than CZZ was back in 2013




I took a look at MRM after I read your post late Saturday night, spent most of Sunday reading all their docs and learning about the industry in general, it's a business that I can understand, and I think they will be able to weather the down turn in good shape, so I bought 23,000 shares and may take a larger bite as more funds become available next month.


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## Value Collector (6 February 2016)

Value Collector said:


> Seems a pretty low valuation, considering they will more than likely be earning well over $1 per share this year, and be debt free buy June, I have at $18.50 as the approx fair value, with a decent chance for growth.




capilano released it's results after the closing bell yesterday, and it's another amazing result profits for the half year were up 51% to 64cents per share (up from 42cents in the corresponding half.)

Export sales grew 32% with exports to Asia up over 50%, honey inventories are up showing that we have had a good honey harvest this season, so sales growth is supported, and management seem pleased with the intergration of recent acquisitions.

I think there may be a decent share price gain on money in response to this news, I am very happy to hold this little gem.


----------



## luutzu (6 February 2016)

Value Collector said:


> Seems a pretty low valuation, considering they will more than likely be earning well over $1 per share this year, and be debt free buy June, I have at $18.50 as the approx fair value, with a decent chance for growth.




$16 was pretty close to your $18.50. Maybe due to me not knowing enough about it to project much more concrete growth.

But my $10 was priced for me buying so of course it's low. Me selling it would be $22, or $30, or anything higher 

But yea, was a great call getting into CZZ when you did. Hope my MRM pick does half as well next few years.




Value Collector said:


> I took a look at MRM after I read your post late Saturday night, spent most of Sunday reading all their docs and learning about the industry in general, it's a business that I can understand, and I think they will be able to weather the down turn in good shape, so I bought 23,000 shares and may take a larger bite as more funds become available next month.




Yea, bought a fair bit and so far average is breaking even or just slightly ahead. Though it look quite nice in one of my fund when bought for around 22cents.

Didn't load up anymore since that low as it's up while my other weed was way too cheap so pick on them instead.


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## luutzu (6 February 2016)

Value Collector said:


> capilano released it's results after the closing bell yesterday, and it's another amazing result profits for the half year were up 51% to 64cents per share (up from 42cents in the corresponding half.)
> 
> Export sales grew 32% with exports to Asia up over 50%, honey inventories are up showing that we have had a good honey harvest this season, so sales growth is supported, and management seem pleased with the intergration of recent acquisitions.
> 
> I think there may be a decent share price gain on money in response to this news, I am very happy to hold this little gem.




Kinda predicted that, serious. Share price might hit $30 after final report issued. After this year I think, guess it is true in all business, need very careful attention. I don't know nearly enough to even guess beyond one year but yea. Well done dude.

You know much about Select Harvest? Almond business. I bought, held on for some 5 years to only gain maybe 20% before getting out at around $6.80; it then shot up to something like $12 soon after but now it's back down to mid $5s. Is that because of SHV itself or the industry, and would it affect your CZZ?

btw, how does the researc about the negative affect of too much honey does for the business?


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## Value Collector (7 February 2016)

luutzu said:


> .
> 
> You know much about Select Harvest? Almond business. I bought, held on for some 5 years to only gain maybe 20% before getting out at around $6.80; it then shot up to something like $12 soon after but now it's back down to mid $5s. Is that because of SHV itself or the industry, and would it affect your CZZ?
> 
> btw, how does the researc about the negative affect of too much honey does for the business?




I researched select harvest and the almond industry a while back, at the time I really like select harvest, but thought it was too expensive, but yeah, I like food production companies especially ones taking stakes in farmland with water access, I might take another look.

What do you mean by the question about to much honey? Do you mean if there is to much honey supply because there was a really good production season? That would lead to discounting, and more bulk packs being sold and probably help competitors to put more stock on the shelves, however with the Aussie dollar low we can clear excess stocks through exports, it's not something I am concerned about at the moment, we are coming out of a severe honey shortage, it's good to have the warehouse full at the moment, especially with the Aussie dollar quite low.


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## Value Collector (7 February 2016)

luutzu said:


> But my $10 was priced for me buying so of course it's low. Me selling it would be $22, or $30, or anything higher
> 
> .




If the current level of earnings are maintained and we end up earning $1.30 or more for the full year, I think a price of $28 could be justified.

I think we will probably gap up to $22 or more on Monday, but yeah I won't consider selling for less than $30 at this stage, there is just to much going for the company right now, domestic capilano brand and the cheaper allowrie imports are going well, exports are growing at a good rate, and we have stock available to grow sales, and our Manuka production and packing business is winding up, this is a real value generator for the company.

So yeah I am super happy to hold at the moment.


----------



## qldfrog (7 February 2016)

I already discussed that, but just a small warning:
I am a bee keeper hobbyist  and beekeeping in Australia has a huge thread pending:
when will the varroa mite arrives in australia?
This disease has decimated apiaries O/S and is one of the reason CZZ is so successfull: we in Australia currently have a massive world advantage and can export  and be competitive against deceased affected countries (the rest of the worl) just expect a massive crash in honey production and increase in honey price when varroa arrives here: 
and it is not a matter of if but a matter of when.
just be aware and do not bank your house on how winds will flow in the torres strait  or what could hide in a tourist suitcase.
I still wish CZZ well and really hope we stay free of varrioa for as long as possible!!
for this stocvk, the black swan will not be a surprise.


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## Value Collector (7 February 2016)

qldfrog said:


> I already discussed that, but just a small warning:
> I am a bee keeper hobbyist  and beekeeping in Australia has a huge thread pending:
> when will the varroa mite arrives in australia?
> This disease has decimated apiaries O/S and is one of the reason CZZ is so successfull: we in Australia currently have a massive world advantage and can export  and be competitive against deceased affected countries (the rest of the worl) just expect a massive crash in honey production and increase in honey price when varroa arrives here:
> ...




I actually don't think Varroa Mite is as big a threat as what people make out, the biggest risk to our production levels is whether, we have just come through a big production shortage, and we made it through by importing honey from countries that have varroa mite.

it will increase the work the beekeepers have to do, and would lower productivity, but it wouldn't cause a collapse in honey production, you can see this as some of the worlds biggest honey exporters have it already.

But yes there would be an instant market over reaction to the news, and would probably be a good time to add stock cheap.

people, that think that varroa mite would cause an instant 50% drop in production and cause capilano to struggle are just wrong.


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## qldfrog (7 February 2016)

Value Collector said:


> people, that think that varroa mite would cause an instant 50% drop in production and cause capilano to struggle are just wrong.



Vc, do you have hives? 
Are you actually aware of what this would implies for the actual producers?Anyway.. time will tell  whether it is in a year or 5 and even as i wish 10y


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## Value Collector (7 February 2016)

qldfrog said:


> Vc, do you have hives?
> Are you actually aware of what this would implies for the actual producers?Anyway.. time will tell  whether it is in a year or 5 and even as i wish 10y




i don't have hives, but prior to buying into capilano I did a lot of research into bee keeping including Skype conversations with an American bee keeper I met online.

He talked me through the various additional bee husbandry methods he has to employ etc, but varroa mite is not colony collapse syndrome, varroa mite would add some work and cost to a bee keeper, but it won't wipe them out.

What % of our output do you think varroa mite would reduce our output by?

As I said we currently import honey during our shortages from countries that have varroa mite, these countries still have highly productive bee keeping industries, the main thing that will cause Australian out put to fluctuate is whether.

If you think varroa mite would instantly cut production by 50%, I think you are wrong, firstly it would still take along time to spread across Australia, and secondly once bee keepers start managing there hives for it, production would normalise, if anything it would suffer a small reduction in output.

Again though, it would cause an instant over reaction in the share price, but I don't judge my holdings by what their share price does, and I have extremely patient capital.


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## qldfrog (8 February 2016)

Value Collector said:


> i don't have hives, but prior to buying into capilano I did a lot of research into bee keeping including Skype conversations with an American bee keeper I met online.
> 
> He talked me through the various additional bee husbandry methods he has to employ etc, but varroa mite is not colony collapse syndrome, varroa mite would add some work and cost to a bee keeper, but it won't wipe them out.
> 
> ...



for a full study:http://www.aph.gov.au/DocumentStore.ashx?id=05ce7b23-2204-4dbd-aafe-8fea6dac9c0b&subId=206000. read what you want from that but I expect significant extra cost and so higher plrice and less competitivity for Australian honey; 
The worst cost overall will be the hidden one: the free pollinaisation service offered by feral bees which will be decimated and reduced yield in orchards, gardens fruit and vege bowls. But that is different from CZZ issues
Hope it helps


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## luutzu (8 February 2016)

Value Collector said:


> I researched select harvest and the almond industry a while back, at the time I really like select harvest, but thought it was too expensive, but yeah, I like food production companies especially ones taking stakes in farmland with water access, I might take another look.
> 
> What do you mean by the question about to much honey? Do you mean if there is to much honey supply because there was a really good production season? That would lead to discounting, and more bulk packs being sold and probably help competitors to put more stock on the shelves, however with the Aussie dollar low we can clear excess stocks through exports, it's not something I am concerned about at the moment, we are coming out of a severe honey shortage, it's good to have the warehouse full at the moment, especially with the Aussie dollar quite low.




Too much intake/consumption of honey. Refering to some study published in the SMH a month or so back, where CZZ came out with a news release responding to the paper's claim that consuming too much honey of a certain type could cause some disease etc.

I think CZZ was implying that you would need to consume a bucketload of it a day to reach that amount etc. Guess it doesn't affect its operations much.

With inventory... yea it was loading up its inventory at last year's report. For a business with the wind behind its back like CZZ certainly does, it will only do well for it in the coming year. That was the extend of my insight. Beyond that, no clue and its price at the moment doesn't give any incentive to look further to see what the medium term future holds.. .but hope it works out much better than it is now.

If it does, man... I mean the company is relatively small even after your ten bagger. So maybe could retire on this ey?


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## Value Collector (9 February 2016)

luutzu said:


> Too much intake/consumption of honey. Refering to some study published in the SMH a month or so back, where CZZ came out with a news release responding to the paper's claim that consuming too much honey of a certain type could cause some disease etc.
> 
> I think CZZ was implying that you would need to consume a bucketload of it a day to reach that amount etc. Guess it doesn't affect its operations much.
> 
> ...




inventories will always be largest at the December half year report, because that right at the end of the honey season, at that time they will be buying all they can buy, and using some debt to do it if there is large supplies a available, by the time the end of year report rolls round we will probably have eaten through atleast a half of the inventories, freeing up $15 million of cash and generating $6million of earnings. So there is a decent chance that the current $20million of debt will be pretty much cleared by the end of the year, unless they make another acquisition or investment.

Then, next December if there is a good supply of honey to purchase again, the debt level should tick up again


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## pixel (11 February 2016)

Sunday's Landline report debunked the scaring reports. It also cast some (scientific) light on the health benefits of Manuka honey and its medicinal, antibacterial efficacy.
After that, I was unsurprised when I saw the sp break out on Monday. Have been waiting for the gap to close and now I am accumulating in the low $19's.





A Close Below $19 would be a deal breaker.


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## skc (11 February 2016)

pixel said:


> Sunday's Landline report debunked the scaring reports. It also cast some (scientific) light on the health benefits of Manuka honey and its medicinal, antibacterial efficacy.
> After that, I was unsurprised when I saw the sp break out on Monday. Have been waiting for the gap to close and now I am accumulating in the low $19's.
> 
> A Close Below $19 would be a deal breaker.




It's a pretty bad trading stock with large spread and limited liquidity. 

It's also in a somewhat unloved sector at the moment.

On second thought... every sector is unloved except for gold at the moment.


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## Value Collector (11 February 2016)

pixel said:


> Have been waiting for the gap to close and now I am accumulating in the low $19's
> 
> A Close Below $19 would be a deal breaker.




What do you mean a close below $19 would be a deal breaker?


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## sinner (11 February 2016)

Value Collector said:


> What do you mean a close below $19 would be a deal breaker?




That's where his stops are


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## Value Collector (12 February 2016)

sinner said:


> That's where his stops are




Oh ok,

I am so confident about the longterm outlook for this company that almost boing could separate me from my holdings at the moment, especially not a tick below an arbitrary price point.


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## Triathlete (12 February 2016)

For those interested part of the strategic comment from Stock Doctor


CZZ is in a position of Marginal Financial Health following the recent half year result and therefore does not meet our Financial Health assessment (GR1). This was driven by a *negative operating cash flow mainly generated on the back of increased inventory levels during 1H16. In addition, the group's Financial Health was also impacted by increased debt levels over the period.* As such the company cannot be considered as a Star Growth or Star Income Stock. Investors should note the company is also a small cap with low liquidity and as such may be unsuitable for some investors given low daily trading volumes.The company only pays an annual dividend and at a grossed up yield that is below the broader market.


Current valuation $19.00
Consensus valuation $22.17


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## Value Collector (12 February 2016)

Triathlete said:


> For those interested part of the strategic comment from Stock Doctor
> 
> 
> CZZ is in a position of Marginal Financial Health following the recent half year result and therefore does not meet our Financial Health assessment (GR1). This was driven by a *negative operating cash flow mainly generated on the back of increased inventory levels during 1H16. In addition, the group's Financial Health was also impacted by increased debt levels over the period.* As such the company cannot be considered as a Star Growth or Star Income Stock. Investors should note the company is also a small cap with low liquidity and as such may be unsuitable for some investors given low daily trading volumes.The company only pays an annual dividend and at a grossed up yield that is below the broader market.
> ...




Hahaha sounds like it was written by some one with no understanding of the industry, honey is harvested in summer, so offcourse if there is a good crop inventories will rise soaking up cash flow in the December report, this is also the reason they have only ever paid an annual dividend, inventories rose in summer, and are drawn down and converted back to cash in winter, their debt is small and only equal to about 2/3 of inventory, by the annual report that debt will mostly be cleared perhaps 5 of the 20 million remaining.

Since when is an annual dividend a problem it's the total dividend that counts, dividing it in half and paying it 6 monthly would only benefit those that can't manage their money.


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## pixel (12 February 2016)

Let's compare apples and apples.

The analysis of the latest financial report looks to me pretty accurate. Some of the concerns did occur to me as well. It's not so much the tonnage of unsold produce, but its valuation. I'd apply a hefty discount to such numbers - especially if a "good harvest" may mean oversupply or at least imply increased sales effort: read "more Advertising Dollars and offtake discounts".

Therefore, I apply the tight stop at $19 (which I did apply, selling at average 19.06) to avoid becoming a long-term holder of a falling knife.

On the other hand, I also understand VC's reluctance to let go. If I had bought two years ago and held at a cost base of $6 or $7, I might care a lot less whether the daily trades hover around $20 or $18.

Having said that, however, I am predominantly a Trader; therefore I find it hard to justify hanging on to a share that I can sell today for $19 when the chart suggests I should be able to buy it for $17 in a matter of days. In Capilano's case, the uptrend was broken about a month ago, and I would've sold before it dropped through $20.


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## Value Collector (12 February 2016)

pixel said:


> Let's compare apples and apples.
> 
> The analysis of the latest financial report looks to me pretty accurate. Some of the concerns did occur to me as well. It's not so much the tonnage of unsold produce, but its valuation. I'd apply a hefty discount to such numbers - especially if a "good harvest" may mean oversupply or at least imply increased sales effort: read "more Advertising Dollars and offtake discounts".
> 
> ...




There isn't an over supply of honey, what you are seeing is a recovery from a shortage, if capilano stopped purchasing honey today, it would eat its inventory to zero in about 4 months, and honey doesn't spoil, it can litererally be stored forever, so there is no problem with loading up while it's available in good supply at the end of the Spring harvest season, there will be a smaller harvest at the end of summer, and some northern bee keepers might get some winter honey, but the end of spring is the biggest by far.

I actually got in at $2.25 per share, so yes not concerned, the business is operating wonderfully.

Sales have been increasing rapidly, moving honey is not a problem at the moment, they aren't even packing 1L in capilano brand at the moment, so there is no oversupply, they are actually importing to fill the gap in the lower price segment, eg their allowrie brand.


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## Triathlete (13 February 2016)

pixel said:


> Having said that, however, I am predominantly a Trader; therefore I find it hard to justify hanging on to a share that I can sell today for $19 when the chart suggests I should be able to buy it for $17 in a matter of days. In Capilano's case, the uptrend was broken about a month ago, and I would've sold before it dropped through $20.




I actually would not be surprised to see this stock come back all the way to the $14.90 level . It is at the 50% retracement level at the moment of the last range so at an important point right now, let us see if it will hold.

If we look at the last two ranges starting 18/09/2015 high and retracing to 3/7/2015 and the second retrace to 14/11/14 we can see price clustering at the 75% and 50% levels.

 That is what I am thinking at the moment since it has bee in a downtrend since September 2015...time will tell though.


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## pixel (4 March 2016)

Triathlete said:


> I actually would not be surprised to see this stock come back all the way to the $14.90 level . It is at the 50% retracement level at the moment of the last range so at an important point right now, let us see if it will hold.
> 
> If we look at the last two ranges starting 18/09/2015 high and retracing to 3/7/2015 and the second retrace to 14/11/14 we can see price clustering at the 75% and 50% levels.
> 
> That is what I am thinking at the moment since it has bee in a downtrend since September 2015...time will tell though.




After a Higher Low on Monday, the $20 level established a High High. At least short-term, I take that as a change of trend. Have started to re-enter and will accumulate as long as the rising trend is maintained.


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## Triathlete (4 March 2016)

pixel said:


> After a Higher Low on Monday, the $20 level established a High High. At least short-term, I take that as a change of trend. Have started to re-enter and will accumulate as long as the rising trend is maintained.




Seems to me that there is still a bit of indecision going on with this stock.


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## pixel (4 March 2016)

Triathlete said:


> Seems to me that there is still a bit of indecision going on with this stock.




It sure is, and I have noticed


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## pixel (11 March 2016)

On the 18th, CZZ will become a member of the All Ordinaries Index.

Quite a large number of changes have been announced today:
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01721408


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## pixel (4 April 2016)

slowly creeping up - sweet! 
I'm back on board: bought the break and intend to accumulate on dips.
First target $21.50; stop on Close Below $19.75 ($20 should hold support)


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## pixel (5 April 2016)

All the hoopla over Manuka Honey, great as it is for CZZ, has been negative for my local honey supply.
Customers - especially Chinese - have found out that the local Jarrah honey has the same qualities as Manuka. That is nothing new to me as I have been buying Jarrah honey for decades. Not only is it local, but also very limited supply, and you have to know your honest Apiarist. (Knowing the taste, which is very distinctive, helps too  )

However, as a result of media picking up on it, the 1kg pot that I could buy late last year for $30, has now gone up to $50. By comparison, the same apiarist sells Redgum, Banksia, even Coastal or Trifurcata varieties for $12/kg.
Not that I blame him. And I still go and get my honey from him.

As an aside: He told me he's planning to expand his business. In spite of having a sound customer base, great reputation and business fundamentals, the Bank keeps quoting ever increasing interest rates because they're carrying too much bad debt and property values in the Swan Valley have dropped.


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## pixel (14 April 2016)

... back to topic: This looks like a Cup & Handle to me.




If I'm right and it plays the break of $21.58 "by the book", the next leg could get close to $24.
I hold, waiting for the break as a trigger to add more.


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## Value Collector (14 April 2016)

pixel said:


> If I'm right and it plays the break of $21.58 "by the book", the next leg could get close to $24.
> I hold, waiting for the break as a trigger to add more.




I hold, I am looking forward to the full year numbers in a few months, if the last half results beat the first half, should see some good price action in this stock.

If they can match the first half results at 64cents eps, then full year earnings will be up over 30%.


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## pixel (21 April 2016)

Today could be "Der Tag" for the expected breakout.
Whether it's Cup & Handle or 4th Attempt, I don't care. As long as the uptrend continues 




During the last few days, as it crept up towards resistance, I have added to my position.


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## pixel (26 April 2016)

I found an interesting research paper comparing the medicinal benefits of various types of honey. The research has been conducted by Dr Charles Dragar of Novost Laboratories in Tasmania, initially focusing on Tasmanian Leatherwood honeys. Luckily, he included WA and Manuka honey in his research, with astounding results for the former. Excerpts have been published in -
http://www.darlingbeeproducts.com/index.php/jarrah-honey 
from where the following excerpts have been extracted.
Incidentally: Red Gum honey is still widely available. At the Apiary I mentioned earlier, Windarra, it retails for less than a quarter of Jarrah's price.






> *Jarrah honey is loaded with antioxidants*
> 
> Jarrah honey contains high levels of antioxidants that are very beneficial to health.
> Dr Dragar tested Jarrah Honey at the NOVOST Pty Ltd laboratories in Tasmania an around high levels of antioxidants in Jarrah honey, a Jarrah Blackbutt honey, and WA Bloodwood honey from the Kimberley.
> ...


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## pixel (29 April 2016)

I take this as a confirmed break of trend. 




Holding, accumulating. Target $24-ish? Stop $22 breakdown.


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## Porper (29 April 2016)

pixel said:


> ... back to topic: This looks like a Cup & Handle to me.
> 
> View attachment 66271
> 
> ...




Nice looking triangle breakout with measured target around $31.00.

Nice story too although I am no fundamentalist.

We hold CZZ.


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## pixel (3 May 2016)

Whatever the pattern is/was, $23 no longer looks like resistance. Those 6,000+ on offer were taken in a single swoop, suggesting more upside.




I've stopped trading swingers and switched to accumulating/holding instead. Shall maintain that strategy as long as this trend of higher daily Closing prices lasts.
I hope you're right, Porper: $31, yeah, "I'd like to see that."


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## Porper (3 May 2016)

pixel said:


> Whatever the pattern is/was, $23 no longer looks like resistance. Those 6,000+ on offer were taken in a single swoop, suggesting more upside.
> 
> 
> I hope you're right, Porper: $31, yeah, "I'd like to see that."




Me too but at the end of the day we can only control how much we are prepared to lose/risk as you know pixel. I am always more concerned with reducing that risk, especially in this market where higher targets have been difficult to achieve. A few stocks are starting to trend nicely though


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## pixel (4 May 2016)

Porper said:


> Me too but at the end of the day we can only control how much we are prepared to lose/risk as you know pixel. I am always more concerned with reducing that risk, especially in this market where higher targets have been difficult to achieve. A few stocks are starting to trend nicely though




Same here, Porper.
Yesterday's Doji Cross below $23 changed the entire picture, and I've begun to reduce my exposure and capital at risk, locking in some healthy profit.


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## pixel (4 May 2016)

The one-minute chart suggests it could've been a Stop Raid after all.


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## pixel (6 May 2016)

... and this is how a Stop Raid looks as a daily candle.




I did sell a small number into the Open Auction @ $22.39, still realising a profit; but then missed the buy-back by 1c. Now holding fire till today's Close.


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## Porper (6 May 2016)

pixel said:


> ... and this is how a Stop Raid looks as a daily candle.
> 
> View attachment 66550
> 
> ...




Yes, it's amazing how many times this sort of thing happens. Same thing during breakouts as well. Price gets pushed up through a bullish trigger...then bang the big boys offload. Common theme at the moment. My stop is below today's low for this very reason. That is to avoid getting stopped out during "noise".


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## qldfrog (7 May 2016)

Porper, Pixel,
I understand you are trading CZZ on TA.
I just want you guys to be aware of this business on the "ethical" point of view.
I do not want to get Joe into trouble so use Google,real the label of CZZ products carefully, should not be too hard to find but if you care, you may not be that happy with sides of this business;
it is a shame in my opinion as nothing prevents this company to be both successfull and reasonably "ethical".
Anyway, i do beekeeping which alerted me on CZZ practices and changed my overall feeling on that company.
I also believe that matter is a risk for the shareholders.
I do not own and i do not short them, and still believe real honey is marvelous so enjoy australian pure honey and DYOR


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## Value Collector (7 May 2016)

qldfrog said:


> Porper, Pixel,
> I understand you are trading CZZ on TA.
> I just want you guys to be aware of this business on the "ethical" point of view.
> I do not want to get Joe into trouble so use Google,real the label of CZZ products carefully, should not be too hard to find but if you care, you may not be that happy with sides of this business;
> ...




I am guessing you are referring to the claims that the Capilano Honey Brand use imported honey in their products, If this is what you are talking about let me just say those claims are false and very misleading.

As far as I am aware Capilano is not involved in any business practices that are either illegal, unethical or in anyway immoral.

If you have any concerns, feel free to be open about them here because I would like to discuss them with you, I sense caution in the tone of your post, this might be because Capilano Honey is currently taking legal action against an individual who repeatedly made false claims on face book. Rest assured that the legal action was a Last resort, after he continued publishing false accusations on his page, and repeatedly blocked and deleted posts from anyone that tried to correct his claims, Capilano representatives, bee keepers and I tried to address his claims on his page but all their posts were immediately deleted and they were blocked, this meant they had no option but to take legal action.

-----------------------------------------------

The fact is Capilano Honey (the company), is Australia's largest Honey packer, Packing over 70% of the Honey in Australia, the company have Several Brands of honey that they pack and they also pack under contracts for other companies from time to time (eg Aldi, Coles, woolworths etc)

The various brands The company sell, are packaged to meet different price points, eg the original Capilano Brand is a High quality 100% Pure Australian Honey, and sells for about $14.10 per kilo, But they also Pack and Sell another Brand called Allowie (Totally different packaging, no capilano branding so it can't be confused) this contains some imported content, and is sold at a lower price point of $9.90/ kilo.

There is nothing unethical or immoral about a company packing and branding different products, in fact most companies do it in the food industry do it.

The false claims on face book arise from the fact that the guy kept making statements to mislead people into thinking that capilano branded product was imported, and being falsely labeled as Australian honey, this is not true at all. No imported honey goes into the Capilano Brand, it is only used in the cheaper brands which are labeled that they contain imported honey.

If he would have just had a discussion with capilano and allowed them to correct his false claims, no legal action would have happened.

____________________________

You have nothing to fear about discussing capilano provided you aren't going out of your way to spread lies, but feel free to PM me if you have any questions you don't want to bring up in the public forum.


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## galumay (7 May 2016)

Value Collector said:


> I am guessing you are referring to the claims that the Capilano Honey Brand use imported honey in their products, If this is what you are talking about let me just say those claims are false and very misleading.




I guess some confusion could arise in that Capiliano is the overall company, and they have various brands, including one carrying their company name. So its absolutely true to say Capiliano sell imported honey. The relevant distinction is that the honey labelled with the Capiliano brand apparently doesn't contain imported honey.

The new food labelling laws will help with this sort of confusion.

Certainly nothing unethical about selling imported honey either (not that I really think anyone was implying there was) - i have had some wonderful honeys produced overseas, its not as if bees flying round australia somehow make better honey than those flapping around in other countries. The memory of freshly home made thyme honey on Cyprus last year still lingers on my palate!


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## Value Collector (7 May 2016)

galumay said:


> I guess some confusion could arise in that Capiliano is the overall company, and they have various brands, including one carrying their company name. So its absolutely true to say Capiliano sell imported honey.




The Allowrie brand doesn't mention Capilano on the labeling at all, and the packaging looks totally different, so their is no risk the consumer will be confused when they pick up a bottle of Allowie and think they are buying Capilano.

The misleading and false statements are what's causing confusion, when a Face book page puts up a post that goes viral, that has capilano brand in the picture( not the allowrie brand) and then it goes on to say that capilano honey contains imported honey, it then goes on to make false claims the honey is poisonous.




> Certainly nothing unethical about selling imported honey either (not that I really think anyone was implying there was)




I totally agree, there is nothing wrong with it, they are filling a need in our supermarkets for a lower cost product.

I think the below statement was implying ethical issues, and the original face book post that started all this certainly did. Qldfrog hasn't actually mentioned what the exact issue is he is worried about, but if its the imported allowrie product he is worried about, I think he has probably been mislead also.



qldfrog said:


> I just want you guys to be aware of this business on the "ethical" point of view.




___________________________________________

I also just wanted to point out that companies packing different brands for different price points and quality levels is normal.

Take Patties for example, they pack their name sake patties pies brands, But they also pack "four n twenty brand", "Herbert Adams brand", "Coles Brand" and several other brands including bulk catering brands etc.

Now if they Sold the Patties branded product as 100% Aussie product, But used some New Zealand beef in the product they made under the coles generic brand, they aren't doing anything wrong or misleading anyone. If some one tried to make face book posts saying that patties secretly ripping off consumers by putting imported beef into their products, they are lying, especially if they try and cause hysteria by saying the imported beef is poison.


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## pixel (7 May 2016)

Thanks guys, for your contributions.

While it's true that my primary approach comes from T/A, I do care about fundamental business aspects as well. That includes a company's behaviour and reputation, albeit not quite to the extent that I include social media and gossip. Were I to apply the strictest ethical yardstick to stocks I own and/or trade, even Coles and Woollies were out of bounds.

As far as Capilano is concerned, my reaction to Allowrie having non-Australian content is simple: I don't buy that product. I don't buy imported "Barramundi" either. But I don't hold it against Kailis, our dominant local Fishing company, that they import prawns from China and elsewhere, then sell them for half the price of WA-caught product. Going by their reputation, I trust they label the origin honestly.


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## Porper (7 May 2016)

I have done some searching but the general consensus seems to be that CZZ is ethical "neutral". Anyway I can't find anything that causes me concern.

If there was something amiss I wouldn't want to be involved. I am mostly a technical trader but do have standards/ethics. Incidentally, we are just going through the process of having somebody place their own bee hives on our land...free honey for us is the deal. Should bee interesting


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## Value Collector (8 May 2016)

Porper said:


> I have done some searching but the general consensus seems to be that CZZ is ethical "neutral". Anyway I can't find anything that causes me concern.
> 
> If there was something amiss I wouldn't want to be involved. I am mostly a technical trader but do have standards/ethics. Incidentally, we are just going through the process of having somebody place their own bee hives on our land...free honey for us is the deal. Should bee interesting




If you guys missed this land line episode, here is a 14 min video about the Australian medical honey growth industry, there is some commentary from Capilano's Managing Director.

http://www.abc.net.au/landline/content/2015/s4401734.htm


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## pixel (8 May 2016)

Value Collector said:


> If you guys missed this land line episode, here is a 14 min video about the Australian medical honey growth industry, there is some commentary from Capilano's Managing Director.
> 
> http://www.abc.net.au/landline/content/2015/s4401734.htm




LOL VC,
That was the Landline episode that made me aware that CZZ was a listed company.
After watching it, I looked up the chart and began looking for an entry. See my initial post a page back.


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## qldfrog (8 May 2016)

To explain, in a nutshell:
CZZ sells most of the australian honey overseas where it gets a premium and import the cheapest O/S here to resell; yes it may not be under the Capilano brand (Allowie indeed and others; i would suspect homebrands, etc but I do not  know for sure);
that imported honey is often tainted by chemicals far more than the australian one, both due to local O/S environment and pest treatments used O/S including antibiotics, pesticides (mites), etc;
There is also now some "honey" being sold O/S which is not honey at all and has never seen a bee in its life, and there is a risk (note that i am careful there ) that this could find its way in Oz;
As for ethical, i invite you to read the label of Allowie honey for example where it says in a summary(I do not have a bottle here) australian honey and imported when australian honey is not available; 
as you understand it is a slight understatement and in my opinion fully misleading;
Have a quick look next time you are in a supermarket;
But this could indeed be fixed by the new labelling laws if used as they should

Anyway, I would not be surprised at all if this company gets bitten at its own game.It just need someone, a competitor maybe  to start testing shelf products and finding an unsavoury item for this company to take a serious hit.May the brand be Allowir or other
I will leave this thread alone.
I have actually nothing against CZZ: I do not buy their products, I do not sell my honey to them and I am afraid have been quite negative so far: 
once on the effect varoa would have here which i still see as major risk for CZZ (but CZZ is not to be blamed at all here),
 and then on the actual risks CZZ is putting itself with its import/resell scheme;
The fact is, the more i learn, the less i like and I wanted to share this on this thread;
CZZ could be a world class leader if managed properly and could ride the wave of healthy natural honey.
I hope it will,.


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## Value Collector (8 May 2016)

qldfrog said:


> To explain, in a nutshell:
> CZZ sells most of the australian honey overseas where it gets a premium and import the cheapest O/S here to resell; yes it may not be under the Capilano brand (Allowie indeed and others; i would suspect homebrands, etc but I do not  know for sure);
> that imported honey is often tainted by chemicals far more than the australian one, both due to local O/S environment and pest treatments used O/S including antibiotics, pesticides (mites), etc;
> There is also now some "honey" being sold O/S which is not honey at all and has never seen a bee in its life, and there is a risk (note that i am careful there ) that this could find its way in Oz;
> ...




Ok there are several things wrong with your post.

Firstly capilano does not sell "most" of its Australian honey overseas, it sells most of it in Australia, either as 100% Australian honey eg capilano brand or blended with imports in the allowrie brand.

yes, capilano exports Australian honey, it can get a higher price for it overseas than it could using the excess packing home brand to clear it, especially because of the exchange rate, but there is still plenty available for sale locally via the capilano brand, the shelves are always full, as much as the Australian market can absorb gets supplied.

The Allowrie brand exists as a lower cost option for consumers, not everyone wants to pay 50% more for Aussie honey, if they do the capilano brand is available, if they don't they can choose a lower cost import, so capilano is offering the best of both worlds, a premium Aussie product to the local and export markets that want to pay for it, and a cheaper alternative for those that can't or don't want to pay for it.

If capilano doesn't supply a low cost option, Coles and woollies will import one directly as they have in the past, the allowrie brand actually replaced a product that was sold at Coles and woollies that was Chinese and contained 50% sugar syrup.

-----------------------------

capilano goes to great lengths to ensure both the Aussie and imports are high quality honeys, claims that the imports contain poison or are fake are unfounded nonsense. To be honest, I would rather a product that has come through Capilano's supply chain than one organised directly by Coles or woollies.

-----------------------------

The labelling on allowrie says "made from local and imported ingredients" which is exactly what it is, and is inline with labelling on most other foods.

To say only Australia can produce quality honey is nonsense.


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## galumay (8 May 2016)

Value Collector said:


> To say only Australia can produce quality honey is nonsense.




This. Amazing honey is produced all over the world.

Also, his point about CZZ exporting some of their honey doesnt make it an unethical company. They could export 100% if they like and it wouldnt be unethical.

The only point worth consdering for mine is the labelling issue, and that is addressed by the new laws that will remove any confusion about content source - which I imagine is only an issue for a small minority of consumers in the case of honey.


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## Value Collector (8 May 2016)

galumay said:


> Also, his point about CZZ exporting some of their honey doesnt make it an unethical company. They could export 100% if they like and it wouldnt be unethical.
> 
> .




I agree.


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## qldfrog (9 May 2016)

Value Collector said:


> Ok there are several things wrong with your post.
> 
> Firstly capilano does not sell "most" of its Australian honey overseas, it sells most of it in Australia, either as 100% Australian honey eg capilano brand or blended with imports in the allowrie brand.
> 
> ...



Hi Vc, I never  claimed only Australia can produce quality honey and I neither claim that all imports contain poison or are fake.What i claim is that there is a major risk there and the odds are not that good .Anyway, I am out.
DYOR.


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## Value Collector (9 May 2016)

qldfrog said:


> Hi Vc, I never  claimed only Australia can produce quality honey and I neither claim that all imports contain poison or are fake.What i claim is that there is a major risk there and the odds are not that good .Anyway, I am out.
> DYOR.




So you are happy to admit that other countries can in fact produce quality honey.

So what percentage of the worlds honey supply do you think is fake and poison, I mean you must think it's pretty high if you class it as a "major risk"

Also, don't you think capilano would be taking steps to avoid suspect honey? You seem to think that a competitor could simply buy a bottle off the shelf and test it, yet capilano would be oblivious to what they are buying.

Any way I think you are under estimating capilanos expertise, and have been listening to conspiracy theorists with other motives.


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## Value Collector (16 May 2016)




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## pixel (17 May 2016)

Porper said:


> I have done some searching but the general consensus seems to be that CZZ is ethical "neutral". Anyway I can't find anything that causes me concern.
> 
> If there was something amiss I wouldn't want to be involved. I am mostly a technical trader but do have standards/ethics. Incidentally, *we are just going through the process of having somebody place their own bee hives on our land...free honey for us is the deal. Should bee interesting*




Sounds very interesting, Porper.
At the very least, you'll know exactly where your honey is coming from. Mind keeping us updated after your first taste test? :

I also like to support local business where possible. As evidenced by my comments about the Windara Apiary and their Redgum and Jarrah honeys.
Doesn't diminish my interest in Capilano though; there I am genuinely interested if anybody can offer a reason for the recent sell-down. I reduced my position considerably when the sp dropped through $22, but am today wondering whether it's time to reload. T/A suggests today *may* have found support. However, vwap still languishing at $20.90, a seller "in the know" could easily orchestrate such a deceptive temptation.


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## Porper (17 May 2016)

pixel said:


> Sounds very interesting, Porper.
> At the very least, you'll know exactly where your honey is coming from. Mind keeping us updated after your first taste test? :
> 
> I also like to support local business where possible. As evidenced by my comments about the Windara Apiary and their Redgum and Jarrah honeys.
> ...




Yes, looking forward to the honey...if it happens. We are currently in the U.K for 3 months but live in New Zealand.

Today was better although not a great break out of the triangle to say the least. My stop is set at $19.99 as a push beneath would be of concern technically to me. Let's see if buyer's today can follow through.


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## pixel (19 May 2016)

Porper said:


> Yes, looking forward to the honey...if it happens. We are currently in the U.K for 3 months but live in New Zealand.
> 
> Today was better although not a great break out of the triangle to say the least. My stop is set at $19.99 as a push beneath would be of concern technically to me. Let's see if buyer's today can follow through.



*CAPITAL RAISING!*

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01742029

So that's been behind the recent sell-off. Sadly, there is always a reason for the unexpected, but it only becomes obvious AFTERwards. Some people always know a few days early ... and "take measures" ...


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## Value Collector (19 May 2016)

pixel said:


> *CAPITAL RAISING!*
> 
> ...




Well that's annoying. 

I hope it's because they have some hugely value adding acquisition or expansion, because as they stand they don't need the capital, so if it's just because some investment banker got in managements ear and talked them into it I will be pissed off.

I hope this isn't setting the tone for the future either, they have a great cash generating business, I would much prefer they finance any expansion through cashflow and debt, even if it meant they had to skip a few dividends, rather than give away shares at less than they are worth.


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## Value Collector (19 May 2016)

Apparently a $24Million stake in Comvita was sold a few days ago, I am wondering whether Capilano has taken this stake, if so that would explain the capital raising, it would mean they are funding the purchase with $8Million of internal funds and $16Million from the capital raising.

I have no idea what comvita is worth, but if the capital raising is to fund an entry in it, and its a good entry price, it may turn out to be a good use of the funds.


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## pixel (23 May 2016)

40cFF dividend announced: http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01742746
better than RBA cash rate 

That cannot be the reason for the trading halt, and the next notice makes that clear: Trading Halt continues.
*It is reassuring* inasmuch as the expected capital raising will more likely be intended to finance an expansion/ acquisition, not to mitigate some financial trouble.

And there comes the main announcement: 







> *Capilano Honey Limited ACN 009 686 435 (Company) – 1 for 10 Fully Underwritten Non-Renounceable Pro Rata Rights Issue*
> The Company announced on 23 May 2016 a 1 for 10 fully underwritten non-renounceable pro rata rights issue at an issue price of $19.50 per new share (New Share) to raise approximately $16.8 million (before transaction costs) (Rights Issue).
> The Rights Issue is fully underwritten by Canaccord Genuity (Australia) Limited and Morgans Corporate Limited. Details of the potential effect of the underwriting arrangement on the Company, as well as the underwriting agreement itself, are set out in the offer document.



and


> Funds raised from the Entitlement Offer will be used to strengthen both the financial and competitive position of
> Capilano, by providing capital to:
> - Fund the acquisition of beekeeping enterprises
> - Strengthen the balance sheet by reducing debt and provide flexibility for further acquisitions
> ...


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## Value Collector (23 May 2016)

pixel said:


> 40cFF dividend announced: http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01742746
> better than RBA cash rate
> 
> That cannot be the reason for the trading halt, and the next notice makes that clear: Trading Halt continues.
> ...




Yep I am still reading through the docs, but it looks like the company's trading results have been very good, and the main reason for the Capital Raising is to fund the expansion of their manuka production Joint venture through organic growth and making further acquisitions of licences and bee keeping operations. 

While I would still have preferred management use retained earnings and long term debt to fund expansion, as long as the expansion is done wisely, I think we should be able to earn a decent return on the extra capital, so it should be ok.


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## luutzu (23 May 2016)

Value Collector said:


> Yep I am still reading through the docs, but it looks like the company's trading results have been very good, and the main reason for the Capital Raising is to fund the expansion of their manuka production Joint venture through organic growth and making further acquisitions of licences and bee keeping operations.
> 
> While I would still have preferred management use retained earnings and long term debt to fund expansion, as long as the expansion is done wisely, I think we should be able to earn a decent return on the extra capital, so it should be ok.




It is a worrying sign that a company need to issue shares for $16M.

Worrying because $16M is a puny number that most banks wouldn't have much problem lending it; Worry too in that with low, very low, interest rate, CZZ thought to not borrow but to print shares and dilute holders interests - raising more cash from existing one is the same anyway.

Also worrying is that they issue dividend, but then raise capital at the same time. This point to a "making the fund managers and the market happy" strategy rather than a more thoughtful use of capital.

But if we could forgive all the above, why not - all management have to please somebody - then it's a sign of the current price being pretty high that management thought to take advantage of it - and taking advantage of new shareholders.

You welcome


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## Value Collector (23 May 2016)

luutzu said:


> It is a worrying sign that a company need to issue shares for $16M.
> 
> Worrying because $16M is a puny number that most banks wouldn't have much problem lending it;




$16M is a bit over 40% of their current equity position, so I guess its not a puny number to a small company like Capilano.

(have you ever tried to borrow $16M from a bank, whether you borrow $100K or $100M, they will decide based on collateral)



> Worry too in that with low, very low, interest rate, CZZ thought to not borrow but to print shares and dilute holders interests - raising more cash from existing one is the same anyway.




Yep, I would have preferred them take on more debt, however with $10M long term debt and $10M short term I can see why taking on more equity was attractive.



> Also worrying is that they issue dividend, but then raise capital at the same time. This point to a "making the fund managers and the market happy" strategy rather than a more thoughtful use of capital.




Is much stock owned by fund managers? the top twenty list is full of long term share holders, I think the dividend is to assure shareholders that they still are committed to a dividend policy.



> But if we could forgive all the above, why not - all management have to please somebody - then it's a sign of the current price being pretty high that management thought to take advantage of it - and taking advantage of new shareholders.




I actually don't think the issue is that expensive, its only $19.10 when you subtract divvy, hence the reason I would have preferred a debt issue, its just not really practical unfortunately as it sounds like there is going through a big growth drive into manuka production.

I will be taking up as much of my allotment as I can, its poor timing for me because I am fully invested at the moment as I mentioned when we were discussing MRM, so I might not be able to take the full allotment unless I can juggle some stuff,


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## pixel (23 May 2016)

as an aside, it's worth noting that at present time schedule, the newly issued shares will be participating in the dividend because they'll be allotted BEFORE the ex-div date, June 29th. Accounting for Franking Credits, that would reduce the $19.50 exercise price to below $19.
The only way to deny that opportunity would be Management extending the deadline for any reason, which they could do up until June 15th. As the offer document makes specifically mention of new shares qualifying for the dividend, such an extension seems extremely unlikely.

For investors intending to build/ hold a long-term position, it looks like a decent proposal.
I intend to go for it and increase my holding by 10%.


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## pixel (25 May 2016)

Trading ex-Rights today, which accounts for the chart adjustment up until yesterday.
It also explains why all orders have been wiped off the board overnight.





I had doubled up the last couple of days.


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## poverty (26 May 2016)

pixel said:


> Trading ex-Rights today, which accounts for the chart adjustment up until yesterday.
> It also explains why all orders have been wiped off the board overnight.
> 
> View attachment 66821
> ...




I'm not much of a chartist, do those yellow blocks represent jars of honey?


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## pixel (26 May 2016)

poverty said:


> I'm not much of a chartist, do those yellow blocks represent jars of honey?




Looking good under that premise, don't they 

They are in fact "Darvas Boxes", created by the software I'm using (Pulse by Paritech) under the rules of Nicholas Darvas. You can view them as trading ranges between support and resistance. Extremely simplified, they suggest to buy when resistance is broken, i.e. price rises above the current yellow box, and sell when price closes below the support, with a little wriggle room in the red zone. 
I use them as visual pointers where we're currently trading.


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## pixel (1 July 2016)

Sweet start into the new year 
The capital raising went well and should enable us to expand the Manuka business as planned.
The dividend (ex on the 29th) left hardly a blip on the chart; long range days would have been caused by Brexit jitters more than anything else. That is now behind us, and buying continues at solid volumes.
Happy to hold.


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## pixel (5 August 2016)

Is it leading  ahead of the Annual Report?




We've already banked a 40cFF dividend; let's see if the stock resumes the uptrend.
I continue to hold.


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## qldfrog (5 August 2016)

will be interesting to see what will be the effect of the varroa entry detected in qld last month.
I do not want to even suggest anything as it seems some traders  here have better knowledge of bees than the humble beekeeper I am (see history of this thread)
Please refer to
https://www.business.qld.gov.au/industry/agriculture/species/declared-pests/animals/varroa-mites
The government is actually putting serious measures in place:
  hiring teams to track and destroy beehives around the infested area.Varroa destructor jumped from Asian to european honeybees and wiped out hives the world over.We were the last place on earth unaffected
As a bee keeper, this is a serious matter.


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## herzy (5 August 2016)

qldfrog said:


> will be interesting to see what will be the effect of the varroa entry detected in qld last month.
> I do not want to even suggest anything as it seems some traders  here have better knowledge of bees than the humble beekeeper I am (see history of this thread)
> Please refer to
> https://www.business.qld.gov.au/industry/agriculture/species/declared-pests/animals/varroa-mites
> ...




Thanks Qldfrog - I note that the mite that was discovered in Townsville was the Varroa jacobsoni, not the V. destructor. The V jacobsoni targets only Asian bees, while the V. destructor affects European bees. 

I imagine most of our agricultural bee populations are European bees?


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## qldfrog (6 August 2016)

herzy said:


> Thanks Qldfrog - I note that the mite that was discovered in Townsville was the Varroa jacobsoni, not the V. destructor. The V jacobsoni targets only Asian bees, while the V. destructor affects European bees.
> 
> I imagine most of our agricultural bee populations are European bees?



they are:

if you look in the varroa destructor, you will discover that it was, in its natural range, only affecting asian bees as well (as these are the bees there), and the asian bees are "used" to it; but when in contact with european bees, started its rampage uncontrolled on a bee population which is unprepared;
as we have very few asian bees in Australia [normally none but a few seem to have settled anyway in the last couple of years] the varroa will use what is available ->so the major effort to try to eradicate it before it spreads.

But yes the optimist view would be why bother it is not the nasty strain.
Yet when even the gov is in red alert, we must be more realistic and get ready.it is not the end of the bees but a very serious threat in my opinion.Anyway the charts are up I leave it to you guys, I shared the info now  DYOR


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## Value Collector (6 August 2016)

It seems that the Market (and half the people at hotcopper), struggle with reading and comprehension, they seem to have misinterpreted Capilano's announcement. Capilano have sold their manuka production assets into the JV with comvita as planned, but the market has reacted as if they have exited the manuka business.

I guess once this is realised, the stock will whip back.

Any way as far as the annual report goes, I am very happy, earnings pershare rose from $0.91 / share to $1.10 share.

Sales to china have continued to grow, up 56%.
Manuka JV progressing well.
New honey production JV started in the West.

Very, Very happy to hold at this stage.


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## luutzu (6 August 2016)

Value Collector said:


> It seems that the Market (and half the people at hotcopper), struggle with reading and comprehension, they seem to have misinterpreted Capilano's announcement. Capilano have sold their manuka production assets into the JV with comvita as planned, but the market has reacted as if they have exited the manuka business.
> 
> I guess once this is realised, the stock will whip back.
> 
> ...




Good on you VC. [and no sarcasm added or anything]

I've been looking at a business suffering from similar market dyslexia - the market seem to not really read the reports properly. That or they'll be laughing at me soon enough but yea, hope it'll drop more next couple weeks and loading up.


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## pixel (6 August 2016)

In this market, it is not unusual for a good result to lead to an "artificial" sell-off.
Yesterday's plunge immediately after the report being released appears to have been exactly that. All it takes is a bunch of short sellers in a private chat room, egging each other on and setting off a flogging. The intended depth cannot be known at this stage, unless one were privy to the instigators' plans. It is therefore the best idea not to panic, but to keep a close eye on the price development and catch the turnaround for a chance to add should one's capital allocation and/or diversification rules permit.

wrt mite threats, I wouldn't dismiss the danger from that angle either. However, it does seem too much of a coincidence that the Market should have discovered the notice at precisely the time when Capilano released their Report. The varroa mite alert on the QLD.gov website does not carry a date, but shows this note at the bottom of the page:







> Last updated
> 21 July 2016


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## qldfrog (6 August 2016)

pixel said:


> In this market, it is not unusual for a good result to lead to an "artificial" sell-off.
> Yesterday's plunge immediately after the report being released appears to have been exactly that. All it takes is a bunch of short sellers in a private chat room, egging each other on and setting off a flogging. The intended depth cannot be known at this stage, unless one were privy to the instigators' plans. It is therefore the best idea not to panic, but to keep a close eye on the price development and catch the turnaround for a chance to add should one's capital allocation and/or diversification rules permit.
> 
> wrt mite threats, I wouldn't dismiss the danger from that angle either. However, it does seem too much of a coincidence that the Market should have discovered the notice at precisely the time when Capilano released their Report. The varroa mite alert on the QLD.gov website does not carry a date, but shows this note at the bottom of the page:




The varroa was detected early July (6th for first announcement I believe:
I personally was initially aware around the 9th via bee keeper association
http://www.abc.net.au/news/2016-07-06/varroa-mites-found-in-townsville/7572540
From memory:
after initial search, threat was considered over  when no other asian hive was found...  
until end of the july when more infected hives were detected.So everyone bee related in qld  is currently in red alert mode.
I doubt any market fall is related at this stage
I do not hold


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## pixel (17 August 2016)

Here is a "professional" analysis, published by FNN's Stock Watch: *Capilano Honey hits the sweet spot*

http://finnewsnetwork.us1.list-mana...0b9377422183e60879&id=ac8f3e715e&e=1752c7f5e8

I still hold.


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## pixel (14 September 2016)

One observation puzzles me:
In Perth, a chain of "Farmers Markets" have been established, the owner going toe-to-toe with the (now defunct) Potato Marketing Board. In recent months, pallets of Capilano honey have appeared, including rather eclectic varieties like Grey Ironbark, and all at rock-bottom prices. 

Is there a glut in the Eastern States that they're desperate to get rid of stock at any cost?
If that were the case, we might have an explanation for the recent drop of CZZ's sp.




For the time being, I still hold...


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## Value Collector (14 September 2016)

pixel said:


> One observation puzzles me:
> In Perth, a chain of "Farmers Markets" have been established, the owner going toe-to-toe with the (now defunct) Potato Marketing Board. In recent months, pallets of Capilano honey have appeared, including rather eclectic varieties like Grey Ironbark, and all at rock-bottom prices.
> 
> Is there a glut in the Eastern States that they're desperate to get rid of stock at any cost?
> ...




There is no "glut", but the shortage we have had in the last few years has pretty much ended, so we have a lot more honey available to pack, which is a good thing, we have 3 packing plants (qld,vic and wa) and its in our interests to have these packing a full capacity. 

I have noticed that capilano has reentered the private label market and is currently packing the woolies and aldi brand, it had left the private label segment some time ago due to the shortage but looks like it is getting more involved now.

I am not sure our main competitor beechworth is a position to compete as effectively, the fact we have won private label from them seems to maybe show that they are not in such a good place with honey supply, I know they're a lot more limited in the area they source from, and with the recent reopening of the Victoria packing plant we are competeing for supply with them in their area, our new packing plant is only 312km from them, and right in the middle of the region where they source their honey.

We are certainly in a good place at the moment, the more honey available for packing the better, management have been focused on locking in supply and building supplier relationships opening the packing plant in vic was part of this, and this seems to be working we are sourcing and selling more honey than ever.


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## pixel (14 September 2016)

Value Collector said:


> There is no "glut", but the shortage we have had in the last few years has pretty much ended, so we have a lot more honey available to pack, which is a good thing, we have 3 packing plants (qld,vic and wa) and its in our interests to have these packing a full capacity.
> 
> I have noticed that capilano has reentered the private label market and is currently packing the woolies and aldi brand, it had left the private label segment some time ago due to the shortage but looks like it is getting more involved now.
> 
> ...




Thanks, VC
coming to think of it, it makes sense. Just reading the Update from AHF about the positive impact recent rains have had on Dairy farmers. Doesn't take much imagination to extrapolate the benefits to Apiarists.

Let's hope the trend continues ... and the Varroa threat can be contained as well.


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## sikboy (20 September 2016)

Article regarding Capilano 
https://kangaroocourtofaustralia.co...lling-toxic-and-poisonous-honey-to-consumers/


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## sikboy (20 September 2016)

Looks like a smear campaign


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## galumay (20 September 2016)

sikboy said:


> Looks like a smear campaign




mmm...just read the linked 'article' in detail, its the most terrible rubbish, full of heresay, fabrications, inferences and innuendo. Looks like the site is specifically designed for tin hat conspiracy theories and anti-business activists. 

I doubt we will ever hear any more about it.


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## pixel (20 September 2016)

galumay said:


> mmm...just read the linked 'article' in detail, its the most terrible rubbish, full of heresay, fabrications, inferences and innuendo. Looks like the site is specifically designed for tin hat conspiracy theories and anti-business activists.
> 
> I doubt we will ever hear any more about it.




On another forum, I've read that Capilano have now taken the smearers to the High Court.
http://www.afr.com/news/capilano-wants-gag...20160725-gqd9zs

That is the problem with Social Media. Any spurious claim can be put out there without a shred of proof, and companies have little chance of defending their reputation. What effect has Simon Mulvany's offer to take some of the posts down? The damage has been done, the claims are out there on every reader's iPhone.

If there was indeed any truth to the claims, don't you think the Chinese authorities would have rejected the imports? Just look what they did to AHF recently. And that related only to doubts over a "Best Before" date on UHT milk cartons. And if the produce sold in Australia were dangerous to eat, wouldn't our H&S watchdogs be barking the house down? 

Lobbying for even more comprehensive labeling is one thing. Spreading lies and innuendo is not on.


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## sikboy (21 September 2016)

I don't know but in today's age. I wouldn't be making any accusations against any big company unless I had hard evidence to back me up. Those companies will take you to the cleaners with big $$$$ backing them against your $100 thou annual wage.


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## sikboy (21 September 2016)

pixel said:


> And if the produce sold in Australia were dangerous to eat, wouldn't our H&S watchdogs be barking the house down?




I don't trust the authorities to tell me what's safe to eat and what isn't. Check out Monsantos soy beans, GMO foods etc. Even the stuff they put in our water is toxic.


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## herzy (22 September 2016)

sikboy said:


> I don't trust the authorities to tell me what's safe to eat and what isn't. Check out Monsantos soy beans, GMO foods etc. Even the stuff they put in our water is toxic.




Not wanting to derail the thread, but show me a single scientific study showing any downside to 'monsanto' (or any other) soy beans or GMO foods. 

Not even going to bother with the toxic water.


----------



## pixel (22 September 2016)

herzy said:


> Not wanting to derail the thread, but show me a single scientific study showing any downside to 'monsanto' (or any other) soy beans or GMO foods.
> 
> Not even going to bother with the toxic water.




Scientific studies are for the right-hand side of the IQ Bell curve.
Social media blogs are spreading conspiracy theories to the other half.


----------



## Value Collector (22 September 2016)

pixel said:


> Scientific studies are for the right-hand side of the IQ Bell curve.
> Social media blogs are spreading conspiracy theories to the other half.




Yep, and very few people bother to actually go and check the facts, they just click like and share.

Simon is a serial pest, and he blocks anyone that tries to correct any of the misinformation he is spreading, I last two posts on his page before he deleted my posts and blocked me, that's why capilano had to go ahead with legal action.


----------



## Value Collector (26 September 2016)

New product on the shelf, apparently is a world first, capilano adding to their consumer honey market by adding higher value medicinal products to their range.

http://capilano.com.au/au/our-range/beeotic/40/a-world-first



> New Beeotic from Capilano is the world’s first clinically tested prebiotic honey. It helps boost your digestive health, is 100% natural Australian honey, and is now available in the honey section of leading supermarkets and pharmacies. *
> This premium quality honey provides a natural source of prebiotics with the same delicious Capilano taste. Beeotic has clinically shown to improve the good-to-bad bacteria ratio in your gut by:*
> Nourishing beneficial bacteria:*
> Increases the good Lactobacillus
> ...







Chemist warehouse have it in stock if you are interested.

http://www.chemistwarehouse.com.au/buy/80641/Capilano-Beeotic-Prebiotic-Honey-260ml


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## pixel (29 September 2016)

Value Collector said:


> New product on the shelf, apparently is a world first, capilano adding to their consumer honey market by adding higher value medicinal products to their range.
> 
> http://capilano.com.au/au/our-range/beeotic/40/a-world-first
> 
> ...





... which may well lend support to the sp, rising from a possible Double Bottom?




I've been buying.


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## Value Collector (29 September 2016)

pixel said:


> ...
> 
> I've been buying.




Here is the 7 news story incase anyone missed it.

https://au.news.yahoo.com/video/watch/32742375/sweet-health-capilano-develops-honey-with-prebiotics/#page1


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## joeno (29 September 2016)

Thanks VC. So is this essentially like adding a teaspoon of Yakult to the honey? Looks interesting... Not sure if it will significantly add to the revenue though


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## Value Collector (29 September 2016)

joeno said:


> Thanks VC. So is this essentially like adding a teaspoon of Yakult to the honey? Looks interesting... Not sure if it will significantly add to the revenue though




Yakult is a probiotic, this honey is a prebiotic.

Probiotic work by adding good bacteria into the gut, which may not have lasting effects if the gut is a hostile environment for the probiotic bacteria, the prebiotic works to boost good bacteria by making the gut a better environment for the good bacteria to begin with.

I think it will improve revenue and profit, I think this line will sell well, especially in the export market, and it won't subtract from the regular consumer lines.

Prebiotics natural exist in honey in varying amounts, what capilano has done here is firstly clinical prove the beneficial effects in humans, and secondly patent a test that allows the prebiotic level to the tested, so they can select the batches with high levels of prebiotic and pack it into a higher value product.

I also think that having some higher end medicinal honeys in the range will give the consumer product lines more "street cred" so to speak, so it's good for the brand in general.


----------



## qldfrog (30 September 2016)

joeno said:


> Thanks VC. So is this essentially like adding a teaspoon of Yakult to the honey? Looks interesting... Not sure if it will significantly add to the revenue though



Without the selling speech: more like adding a teaspoon of sugars so it will feed your pre existing gut flora.
The human body is an ecosystem, and CZZ tries to capture the trends attached to that understanding;
Will see what the commercial success is: trend is the word so if it catches, could be good for the SP.
Disclaimer:
I do not own nor work for CZZ


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## Value Collector (1 October 2016)

qldfrog said:


> Without the selling speech: more like adding a teaspoon of sugars so it will feed your pre existing gut flora.
> The human body is an ecosystem, and CZZ tries to capture the trends attached to that understanding;
> Will see what the commercial success is: trend is the word so if it catches, could be good for the SP.
> Disclaimer:
> I do not own nor work for CZZ




No qldfrog, a prebiotic is not simply sugar, it's a non digestible plant fibre that acts as food for good gut bacteria, not all honey has high levels of it.


----------



## qldfrog (2 October 2016)

Value Collector said:


> No qldfrog, a prebiotic is not simply sugar, it's a non digestible plant fibre that acts as food for good gut bacteria, not all honey has high levels of it.



VC, it is clear you are biased cf CZZ.
I do not know if you are a owner (and I do not mean shareholder here) or work for them;
A quick browse thru the history on this thread made this clear:
#156 for example. People can make their own mind.
In itself, it is actually good to have a direct line to a listed company to ask questions, etc and i would question you directly if I had any need.
But, even if some prebiotic may be "non digestible plant fibre " how would you find: "non digestible plant fibre" in purified and filtered honey?

I was not attacking CZZ here was I?They are trying to tap a market of supplements/natural product and good on them.
Honey has a mix of sugars and even treated filtered and sterilised, these remain and have different, mostly beneficial good properties: slower absorbtion, etc [CZZ or not], and that could help your body.
That is true, fair and proven.
If this thread is a ramp thread tell me, but the idea is to share objective ideally impartial information, not company marketing.If I want to subscribe to the Pravda, I can do it knowingly.
Sorry if this looks harsh but I am not happy with one liners like:"it's a non digestible plant fibre" which goes against all my knowledge of pollen purified honey: no fibre left as far as i know.
If i am wrong , feel free to point me to proper material on non digestible plant fibre in purified honey and i would be happy to know it, as you know, i produce honey on a hobby manner and am a keen supporter of honey so my interest in CZZ.


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## galumay (3 October 2016)

Honestly, it just looks like pure marketing spin - not a bad thing from a shareholders point of view, but nothing moe than spin.

The marketing has no links to any publishd and peer reviewed scientific papers, it hints at some research to support their contention that prebiotics may be contained its honey and that prebiotics may have benificial health effects.

The other concerning thing is that it means CZZ is not required to put the normal nutritional panel on the packaging, so it hides the fact that honey is basically pure sugar/carbohydrate. This has its own health implications which are probably greater than any potential benefits to your gut!


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## lindsayf (3 October 2016)

'Clinically shown'
'Based on scientific evidence'

On a product label seems to be the goto memes for marketers these days

VC. You are pretty rigourous backing up your cases against religious dogma.
A bit of that rigour is necessary to separate these ccz claims from The herd.


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## herzy (3 October 2016)

Active Ingredient: Australian Honey does look a little odd. Why not name the actual active ingredient, if the science is so sound?

I'm also not convinced (enough) that this would be a much more compelling purchase than regular honey. That's not to say others wouldn't buy it though.

Will read with interest.


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## Klogg (3 October 2016)

herzy said:


> I'm also not convinced (enough) that this would be a much more compelling purchase than regular honey. That's not to say others wouldn't buy it though.




It's probably not, but where's the science for organic fruit and veg? There may be parts that are worthwhile, but on the whole very little science involved


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## systematic (3 October 2016)

Value Collector said:


> No qldfrog, a prebiotic is not simply sugar, it's a non digestible plant fibre that acts as food for good gut bacteria, not all honey has high levels of it.






qldfrog said:


> But, even if some prebiotic may be "non digestible plant fibre " how would you find: "non digestible plant fibre" in purified and filtered honey?
> 
> Sorry if this looks harsh but I am not happy with one liners like:"it's a non digestible plant fibre" which goes against all my knowledge of pollen purified honey: no fibre left as far as i know.






Guys, there are different types of prebiotics.  Inulin, hi-maize, sago etc (FOS, or fructooligosaccharides) are what we often find as used as a commercial prebiotic.  Honey does contain uniqe oligosaccharides (as opposed to oligofructose) that are _not easily digested_ and meet the criteria of a prebiotic.  

This is well known and researched.  Honey is a wonderful food - come to think of it, I haven't actually had any for a long time (despite the fact that we are very lucky and receive local honey produced by my father-in-law).


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## Value Collector (5 October 2016)

qldfrog said:


> VC, it is clear you are biased cf CZZ.
> I do not know if you are a owner (and I do not mean shareholder here) or work for them;
> A quick browse thru the history on this thread made this clear:
> #156 for example. People can make their own mind.
> ...




Yes I am a shareholder, I have made that pretty clear throughout this thread.

No, I don't work for the company.

I have absolutely no reason to "Ramp" the stock, none of my shares are for sale or have ever been sold, so any "ramping" would be just making my own purchases more expensive.

In regards to the prebiotic, it is already a well known thing that honey contains prebiotic, however capilano has developed a process that allows them to test a honey and identify the actual amount in each batch, they have also conducted research proving the prebiotic does in fact increase the levels of probiotic in the gut, this was already suspected but had never been proven until now.

-----------------------------------------------

I can't see a problem with me pointing out a new product of a company in its thread, not sure why I should be accused of ramping for this.

I also can't see how any of my posts could be considered biased, I mean yes I have been posting about the positive out look for capilano for a long time, but this positive outlook has been shown to be justified by the performance of the company, I mean I remember copping flak in my early posts for suggesting  capilano was worth more than $5 pershare when it was in the $3's, was this biased ramping? I don't think so, I think it was just the facts.


----------



## Value Collector (5 October 2016)

From Jan 2014.



Value Collector said:


> Well they had return on equity of 14.6% for the 2013, that's not bad for that style of business.
> 
> Their capital is split between their property and plant ( about $19,000,000 ) and their inventory ( about $18,000,000)
> 
> ...




Here is one of my early posts, I can't see how it could be considered ramping? It seems to me like I was trying to give people a clear understanding of the companies position.

Since then most of my posts have been either some simple commentary of results as they have been announced, mentioning news of new products or acquisitions, or responding to other comments, again I can't see how any of it is ramping, and also if people had bought when I first posted, they would be up over 500% now, so maybe I should have been ramping harder, lol.


----------



## galumay (5 October 2016)

Value Collector said:


> , they have also conducted research proving the prebiotic does in fact increase the levels of probiotic in the gut, this was already suspected but had never been proven until now.




Really? Where is this research? Is it marketing research or a peer reviewed, scientific paper, published in a reputable journal?

Even if it were the case that prebiotics have been proven to be beneficial for probiotics, is there any real research showing that the amount in honey has any effect given the small quantities consumed? How does it balance against the health impacts of over consumption of sugars like honey?

I still think its just a marketing ploy, and more luck to them and shareholders like yourself! Just lets not confuse it with science!


----------



## qldfrog (5 October 2016)

galumay said:


> Really? Where is this research? Is it marketing research or a peer reviewed, scientific paper, published in a reputable journal?
> 
> Even if it were the case that prebiotics have been proven to be beneficial for probiotics, is there any real research showing that the amount in honey has any effect given the small quantities consumed? How does it balance against the health impacts of over consumption of sugars like honey?
> 
> I still think its just a marketing ploy, and more luck to them and shareholders like yourself! Just lets not confuse it with science!



My problem with VC is him taking any fact checking as an attack;
So I repeat:
"But, even if some prebiotic may be "non digestible plant fibre " how would you find: "non digestible plant fibre" in purified and filtered honey?"
so yes honey does have some different sugars with low/slow absorbtion but let's not regurgitate a marketing speech please; there is marketing and there is science.
For example, having a lot of prebiotics means you fuel your gut flora; it so has some side effect like transforming the body into a farting machine if these prebiotics are in significant quantity. 
Nothing bad in itself: Inulin for example can be found in good quantity in jerusalem artichokes or Peruvian ground apple/Yacon with the same effect; 
VC and I have had another brush before around the impact of varroa.If you deal with CZZ, you deal with nature, and a complex one.
In my opinion and if you are long term, you should seriously investigate the sciences behind and not only repeat whatever a company would release.
But good on CZZ: Blackmore did a brilliant job of exploiting [ let's be nice] people naive side.
If CZZ can repeat, good for VC share price and export figures.


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## Klogg (5 October 2016)

qldfrog said:


> But good on CZZ: Blackmore did a brilliant job of exploiting [ let's be nice] people naive side.
> If CZZ can repeat, good for VC share price and export figures.




Slightly off topic, but Blackmores took this even further by releasing a line of supplements for pets... Surely there's nowhere near enough information to determine what supplements my pets need. There's already enough confusion about humans!


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## Value Collector (5 October 2016)

galumay said:


> Really? Where is this research? Is it marketing research or a peer reviewed, scientific paper, published in a reputable journal?
> 
> Even if it were the case that prebiotics have been proven to be beneficial for probiotics, is there any real research showing that the amount in honey has any effect given the small quantities consumed? How does it balance against the health impacts of over consumption of sugars like honey?
> 
> I still think its just a marketing ploy, and more luck to them and shareholders like yourself! Just lets not confuse it with science!




Here is a link to some of the work that was done by the university of NSW, they have been researching the prebiotic effects of honey since 2009

http://www.unsworks.unsw.edu.au/primo_library/libweb/action/dlDisplay.do?vid=UNSWORKS&docId=unsworks_35916

Here is a bit from the summary



> In summary, the results from this investigation demonstrate that Australian honeys have considerable prebiotic capacity which was comparable to or better than inulin.




obviously different honeys have vastly different levels of the prebiotic, therefore Capilano have developed a test to identify the levels of prebiotic in honeys, which allows them to pack and label these as such, I can't see a problem with doing a lab test to identify which honeys have the higher levels of prebiotic and then label them and sell them, can you?



> How does it balance against the health impacts of over consumption of sugars like honey?




I don't think the 14ml that capilano recommend would be damaging in anyway if your diet is balanced, if you add a 6 pack of donuts and a 600ml iced coffee to your day then maybe you will have a sugar problem, but then I guess you should probably be looking at cutting down your less beneficial calories first.


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## Value Collector (5 October 2016)

qldfrog said:


> My problem with VC is him taking any fact checking as an attack;
> .




Such as?

can you give me an example of where I have been offended by simple fact checking?

I think you will find the only time I have come close to being offended was when you referenced the false and misleading stuff being spread by the serial pest/conspiracy theorist Mulvany, your post was suggesting that what he was saying was true, and you were questioning the character of the company based on his lies, so that did get my goat a bit.

in regards to varroa mite, I think you view is overly negative.


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## qldfrog (5 October 2016)

Value Collector said:


> Such as?
> 
> can you give me an example of where I have been offended by simple fact checking?
> 
> ...



To your surprise, I have not even read, ever. what " serial pest/conspiracy theorist Mulvany" wrote, ever and from memory Mulvany story was after the initial "clash";I do not doubt this guy is on a mission.
but science wise, I am still puzzled at where on earth you can find: your own words: "non digestible plant fibre" in purified and filtered honey sold by CZZ?
This simple assumption you made is I believe untrue, which prompted my email;
But genuinely interested to be proven wrong on that specific item

On the varroa issue, yes I agree I might be too pessimistic but when I see the ravages done by small hive beetles (SHB) which arrived in 2002 in Oz, and the need for chemical treatment required for varroa, i do have a pessimistic view of the future for beekeeping in Oz;
It will change fundamentally and bring the australian honey on par with O/S in term of chemical residues whereas the purity is what makes the difference right now.
I have no vendetta against you VC or CZZ, but I hate when science is falsified.


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## pixel (5 October 2016)

Value Collector said:


> Such as?
> 
> can you give me an example of where I have been offended by simple fact checking?
> 
> ...




Thanks, VC, for persisting.
It is clear to me that you have a good grasp of the matter and present the facts in ways that are easily understood. Surely, it is every company's job to present facts (and opinions derived from facts) in a manner that's beneficial from a marketing point of view. Without the Organic Lobby or Vegan Persuaders, there wouldn't be a market for free-range this and all-natural that. Same thing with our new "Beeotic". Incidentally, there are patents pending over the issue, so it would be counter-productive for them to be overly specific about the nature of those beneficial prebiotic compounds and how their process can identify and quantify them. Anybody really interested can always go and study the patent papers.

Recent trading in CZZ shares seems to indicate that the Market has gone past the jitters and the sell-off by waiters-and-seers. When enough mud is being flung around, some will always stick, even when it's fairly obvious sour grapes that caused it. As none of the accusations could be verified, we're getting back to business as usual, and the chart shows it.

One thing Capilano could do over the next few days/ weeks: Keep us informed about the court proceedings and, hopefully, report a win. I wonder if the Court would order a public retraction via Social Media in the same way the innuendo was spread. But I doubt it. People want to believe what they want to believe, and Social Media feeds the gullible.


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## Value Collector (5 October 2016)

qldfrog said:


> To your surprise, I have not even read, ever. what " serial pest/conspiracy theorist Mulvany" wrote, ever and from memory Mulvany story was after the initial "clash";I do not doubt this guy is on a mission.
> .




When you wrote post #116, it was just after legal action had begun against Simon Mulvany, the things you were saying you were upset about capilano about where pretty much the same false/misleading claims made by him, so if you weren't reading what he wrote via his website or face book page, you probably were listening to it second hand from some one else, and I believe you were aware of the litigation against him, that's why you were cautious in what you wanted to say in that post.




> but science wise, I am still puzzled at where on earth you can find: your own words: "non digestible plant fibre" in purified and filtered honey sold by CZZ?
> This simple assumption you made is I believe untrue, which prompted my email;
> But genuinely interested to be proven wrong on that specific item




When I first researched what a prebiotic was, I came across information talking about them being "non digestable plant fibre" however after further reading I have realised they can also be "non digestable sugar molecules" and its tha type that are sugar molecules that are found in honey, so I admit its not the plant fibre type.

However either way, I think when you said "Without the selling speech: more like adding a teaspoon of sugar so it will feed your pre existing gut flora" you are not really doing it justice, and you are giving the impression that you can just eat table sugar and you get the prebiotics, which obviously isn't true.



> On the varroa issue, yes I agree I might be too pessimistic but when I see the ravages done by small hive beetles (SHB) which arrived in 2002 in Oz, and the need for chemical treatment required for varroa, i do have a pessimistic view of the future for beekeeping in Oz;
> It will change fundamentally and bring the australian honey on par with O/S in term of chemical residues whereas the purity is what makes the difference right now.




No doubt it will add a lot more bee husbandry work to bee keepers, but look at New Zealand, they have a great export honey business, and have had varroa since 2000.

Also Varroa management techniques are getting a lot better, so the threat to bee keepers is not dire, the threat to feral bee population however is a lot more. 




> I have no vendetta against you VC or CZZ, but I hate when science is falsified




Nor I to you, but who is falsifying science? Are you saying the university of NSW are wrong about prebiotics? or are you saying that CZZ can not test which honey has the higher levels?

I hate when good Aussie companies become the target of unfair and misleading claims (by mulvany not you) and and then the general public buy into the nonsense, which I think you did.

I am not saying you made up the claims, just that you seemed to believe them and then warn others before you found out if they were true.


----------



## herzy (5 October 2016)

I think some of the confusion is caused by the term 'fibre'. Plant fibre is cellulose, which is a string of glucose molecules stuck together. These strands are generally quite long and tough ('fibrous...') and would get filtered out. 

No reason a shorter string of sugar molecules would be filtered out. Non-digestible sugar molecules are the same as fibre. 

I think everyone here is looking for a scientific approach. Just hoping to clarify... 

I reiterate that it's a bit odd not to name an active ingredient beyond 'honey', especially given claims that they can test the levels of the active ingredient.... But I don't doubt some benefits of consuming honey in itself.


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## qldfrog (6 October 2016)

herzy said:


> I think some of the confusion is caused by the term 'fibre'. Plant fibre is cellulose, which is a string of glucose molecules stuck together. These strands are generally quite long and tough ('fibrous...') and would get filtered out.
> 
> No reason a shorter string of sugar molecules would be filtered out. Non-digestible sugar molecules are the same as fibre.
> 
> ...



VC cleared that issue to my satisfaction: it was a mistake/oversight from his part, and i appreciate he acknowledged this.
there are no non digestible plant fibre in the honey we are discussing here.
But
There are different sugars: true for all honeys, some will be more or less quickly absorbed and CZZ sells a selected range with claims of a high/higher levels of slow absorbtion sugars;
that is my understanding which makes sense and these slow absorbtion sugars can feed your guts flora.
%, actual sugars involved etc are left unknown
I would probably not bother buying that specific honey when your local beekeeper can provide you unfiltered untreated honey, but as a corporation, CZZ can not afford the risk of pollen left in honey and potential allergic reactions so I can not blame them for that;
I believe this is mostly a hype/trend/fashion exercice: marketing which is used by all companies and in a world when people go on lemon diet one month and feed on whey powder, why not.As long as they do not claim BS, I am happy with that;


----------



## qldfrog (6 October 2016)

Value Collector said:


> I am not saying you made up the claims, just that you seemed to believe them and then warn others before you found out if they were true.



I was influenced, sure, mostly at the time by what i read about US honey sellers, the provision of fake honey there and discovering that there is a huge worldwide market of "fake" honey, that there is twice as much Manuka honey sold than produced, and the fact that when i took a pot at woolies of some Capilano owned BUT NOT CAPILANO BRANDED (it was their cheap brands), there was a huge bull**** about "australian and imported honey" telling the customer that "in time of shortage, they were using imported honey;".
There is plenty of good honey available in Oz, the import is just justified by cost, and indeed glucose/corn syrup will always be cheaper than real honey.You can get amazing amount of "honey" if you feed sugar syrup to bees and it is very hard near impossible to know what is actually in the cheap imported honey

I would prefer CZZ to be known as a company fighting to increase imports scrutiny in term of composition/chemical residue and play the line of clean organic honey  at a premium, EVEN FOR THE LOCAL MARKET.In my opinion, that would make more commercial sense than trying to fight with cheaper inferior products and be at the risk of a headline catching fraud if their import ever get tainted.
They would also be big enough to lobby law makers if they wanted to , as do many other industries.
Thanks VC for acknowledging the error cf fibers and keeping the discussing civil.


----------



## Value Collector (6 October 2016)

qldfrog said:


> I was influenced, sure, mostly at the time by what i read about US honey sellers, the provision of fake honey there and discovering that there is a huge worldwide market of "fake" honey, that there is twice as much Manuka honey sold than produced, and the fact that when i took a pot at woolies of some Capilano owned BUT NOT CAPILANO BRANDED (it was their cheap brands), there was a huge bull**** about "australian and imported honey" telling the customer that "in time of shortage, they were using imported honey;".
> There is plenty of good honey available in Oz, the import is just justified by cost, and indeed glucose/corn syrup will always be cheaper than real honey.You can get amazing amount of "honey" if you feed sugar syrup to bees and it is very hard near impossible to know what is actually in the cheap imported honey
> 
> I would prefer CZZ to be known as a company fighting to increase imports scrutiny in term of composition/chemical residue and play the line of clean organic honey  at a premium, EVEN FOR THE LOCAL MARKET.In my opinion, that would make more commercial sense than trying to fight with cheaper inferior products and be at the risk of a headline catching fraud if their import ever get tainted.
> ...




As I have previously stated, there is absolutely nothing wrong or immoral with importing honey to provide consumers with a cheaper alternative.

Claims that because a honey is imported it automatically follows that the honey must be lower quality or fake are just silly, and border on xenophobia (fear of foreign things).

Capilano's priority is always going to be packing Aussie honey and selling it as capilano branded honey, but there will always be a market for a lower cost honey, and woollies and Coles will be looking for a supplier to fill that gap, so it will either be filled by capilano using their spare packing capacity to locally pack a Aussie/ import blend, or woollies and Coles will import pre packed direct as they have done in the past.

In fact the allowrie brand replaced a honey woollies used to stock that was a 50% sugar blend from China.

Also not all honeys taste the same, some Aussie honeys (especially those off almond farms etc) do not meet the taste standards of most Aussie consumers, so they are blended with better quality imports to raise the taste profile.

The allowrie Brand is often just a blend of the Aussie honeys that don't meet the taste profiles needed for inclusion in the capilano brand, and higher quality imports that can raise this profile.


----------



## Value Collector (6 October 2016)

Value Collector said:


> so they are blended with better quality imports to raise the taste profile.
> 
> .




Here is a video of Capilano's WA packing plant, where we pack the westco bee brand and the capilano brand for sale into the western Australian market.

You will see they are talking about blending honey to meet colour and flavor standards and how the bee keepers that produce the lighter colour honeys get paid more, the flip side to this though means that there will always be darker honeys left over that need to be sold too, blending these with lighter imports and selling them as Allowrie means the consumer gets a better product than just selling them the dark bitter stuff straight, and they get a lower price too.

It's the consumers choice at the end of the day, no one is being tricked or sold "fake" stuff.


----------



## pixel (7 October 2016)

The 350ml jar of Beeotic is now available at Chemmart for $11.99. That's claimed to be $5 below the RRP, but still about twice the Supermarket price of regular Australian honey.
We bought a jar - purely for "Market Research" reasons, of course 

Can't find any objectionable claims on the label, and it tastes like honey should taste.
Nothing more, nothing less.

IMO, even if it were merely a Marketing ploy, I'd say Good on them! People will pay a premium.


----------



## pixel (24 October 2016)

Short-term trend is pointing upwards.





Higher Lows, Higher High. 
Will there be some news before the AGM, due on 18/11?

I hold.


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## Value Collector (2 November 2016)

Hey Guys,

As you are probably aware, Capilano has been the victim of misinformation being spread by certain attention seekers on social media, they have put up a video on their Facebook page to counter the claims, I would love it people could follow the link to face book and like and share the post, we need to get the truth out.

Thanks.
VC

https://www.facebook.com/capilanohoney/?hc_ref=PAGES_TIMELINE&fref=nf


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## luutzu (2 November 2016)

Value Collector said:


> Hey Guys,
> 
> As you are probably aware, Capilano has been the victim of misinformation being spread by certain attention seekers on social media, they have put up a video on their Facebook page to counter the claims, I would love it people could follow the link to face book and like and share the post, we need to get the truth out.
> 
> ...




You sure there's no fire to that smoke? 

btw, can you ask them to change the voice-over for that beeotic ad?

I saw a nice sexy tummy of an adult woman, so I know it's a healthy product I would enjoy    then a girl's v/o came on and that's very wrong man.

And it's no me having a sick mind, it's you guys either using sex to sell but totally missing the mark.


----------



## pixel (3 November 2016)

Value Collector said:


> Hey Guys,
> 
> As you are probably aware, Capilano has been the victim of misinformation being spread by certain attention seekers on social media, they have put up a video on their Facebook page to counter the claims, I would love it people could follow the link to face book and like and share the post, we need to get the truth out.
> 
> ...




Thanks VC,
I contacted the company in the context of the upcoming AGM, asking to provide some more details about the state of the Court case. I find it a little disconcerting that they haven't been more forthcoming with market information that can refute those slanderous blogs. There have appeared some new blogs, claiming that Capilano admitted to poisoning their product. You had to read through the rant to discover the hyperbole, where the failure to provide proof of NOT poisoning is claimed to amount to admission of guilt. 
Utter rubbish, but the illiterati twitterati (Social Media addicts) will lap it up and take it for Gospel.

And some holders may actually believe it - some mud will always stick - and sell their holdings, leading to the current dismal performance of CZZ shares.

PS: I checked the page you provided and tried to "Like" it, but in order to do so, one has to login with a facebook account. And I don't have one.


----------



## Value Collector (3 November 2016)

luutzu said:


> You sure there's no fire to that smoke?
> 
> .




Yep, it just an attention seeker with a smoke machine.


----------



## luutzu (11 November 2016)

Value Collector said:


> Yep, it just an attention seeker with a smoke machine.




So what are the guy's claims and why are they false?


----------



## Value Collector (11 November 2016)

luutzu said:


> So what are the guy's claims and why are they false?




There is lots of false claims and misleading claims

eg, 
capilano mixes imported honey into their capilano brand.
capilano adds sugar syrup to their honey, 
capilano honey is fake because it feeds bees chinese pollen, 
capliano paid choice magazine for positive reviews, 
capilano under pays it contract bee keepers (they are actually paying $1 more per kilo that the market rate)
capilano honey is toxic

Then when faced with the truth, he ignores it and continues saying the lies.


----------



## Triathlete (5 December 2016)

Triathlete said:


> I actually would not be surprised to see this stock* come back all the way to the $14.90 level *.




After being in a trading range for 14 months we might finally see the stock come back to this $14.90 level I mentioned a while ago.

Closed today at $16 after a near 6% fall today.

Monthly and weekly charts do not look good at the moment....any other views from those that hold??????


----------



## pixel (29 December 2016)

Triathlete said:


> After being in a trading range for 14 months we might finally see the stock come back to this $14.90 level I mentioned a while ago.
> 
> Closed today at $16 after a near 6% fall today.
> 
> Monthly and weekly charts do not look good at the moment....any other views from those that hold??????



The Daily looks stronger towards year's end. Volume is also good, especially for this time of year.







It could be "window dressing", but volume appears to be demand. I'm happy to hold at these levels.


----------



## Triathlete (29 December 2016)

pixel said:


> The Daily looks stronger towards year's end. Volume is also good, especially for this time of year.
> 
> View attachment 69264
> 
> ...



I would like to see the weekly swing turn up first for more confirmation that the low is in if I was trading on the daily chart.

There was some positive comments previously about this company and I was curious as to why there was a sell off...have the fundamentals changed...???

As of this moment I am still expecting it to go lower unless my chart tells me otherwise.


----------



## pixel (30 December 2016)

yesterday's rally may have been supported by a report in ABC News that repeated research results of a comparison between Australian and New Zealand Leptospermum honeys:
http://www.abc.net.au/news/2016-12-29/manuka-honey-antibacterial-australia-new-zealand/8151996

(The Kiwis try to register "Manuka" as a trademark. Does that mean The Canberra suburb of Manuka and the Manuka Footie Oval would have to change their names?  )


----------



## galumay (30 December 2016)

pixel said:


> (The Kiwis try to make "Manuka" into a trademark. Does that mean The Canberra suburb of Manuka and the Manuka Footie Oval would have to change their names?  )




I suspect they may be successful, they were certainly making and labelling honey from Manuka long before anyone in Australia copied them with the labelling. NZ also made the 70% minimum pollen content rule for labelling as Manuka. It would be consistent with a lot of rulings about food and drink names world wide.

I know that your comment was tongue in cheek, but of course that would have no relevance to the suburb or footy oval!


----------



## pixel (30 December 2016)

galumay said:


> I suspect they may be successful, they were certainly making and labelling honey from Manuka long before anyone in Australia copied them with the labelling. NZ also made the 70% minimum pollen content rule for labelling as Manuka. It would be consistent with a lot of rulings about food and drink names world wide.
> 
> I know that your comment was tongue in cheek, but of course that would have no relevance to the suburb or footy oval!



Agree on both counts, galumay 

In Australia, it's known as the Ti-Tree (or Tea-Tree) the oil of which has been known to have anti-bacterial and anti-fungal properties. "Leptospermum Honey" may not have the same ring as Manuka Honey, but the Ti-Tree image could be built up.

Incidentally, it may sound parochial, but Jarrah has been shown to have the same potency.


----------



## Triathlete (4 February 2017)

Triathlete said:


> *I actually would not be surprised to see this stock come back all the way to the $14.90 level *.
> 
> It is at the 50% retracement level at the moment of the last range so at an important point right now, let us see if it will hold.
> 
> ...




Well it took 16 months to hit  this $14.90 level and the day low of $14.56 but did eventually close at $15.77.

The question has to be now how much lower can it go..??

Price move somewhere between 10% and 13 % move in price yesterday depending how we calculate it.

Anyone who follows the stock have any information that would have caused this movement...does not look like it is finished just yet.


----------



## FivePercent (4 February 2017)

Triathlete said:


> Anyone who follows the stock have any information that would have caused this movement...does not look like it is finished just yet.




They released their HY results yesterday. 
http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01825496

Market's reaction was mixed to say the least.


----------



## Triathlete (4 February 2017)

FivePercent said:


> They released their HY results yesterday.
> http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01825496
> 
> Market's reaction was mixed to say the least.



Yep...that would move the price around.....


----------



## Value Collector (5 February 2017)

Triathlete said:


> Anyone who follows the stock have any information that would have caused this movement...does not look like it is finished just yet.




I think it is just the market misinterpreting what I think was actually a good HY report.

If you read some of the other forums out there people are freaking out over inventory, cash flow, accounts receivable, and a reduction in the low margin export etc, but it all looks good to me.

I sat down this morning and put together a spread sheet laying out the key financial information from 2011 till now, and it looks like a solid value generation story to me, when you look at the big picture you see steadily increasing return on equity, growth in revenue, cash generation that's been wisely reinvested in acquisitions, you see the inventory draw down and increased cashflow during the shortage and you see cash being used to rebuild inventory after the shortage.

It's a really good picture to me, the only fuzzy bits are the unknowns when it comes to the earning power of the companies investments into honey production and the return that will come from the $1.3 million investment in beeotic. 

Besides that, domestic sales were up 5%, retail exports grew, industrial exports shrank but that was an exit from low margin bulk sales.


----------



## Triathlete (5 February 2017)

Value Collector said:


> I think it is just the market misinterpreting what I think was actually a good HY report.
> 
> If you read some of the other forums out there people are freaking out over inventory, cash flow, accounts receivable, and a reduction in the low margin export etc, but it all looks good to me.
> 
> ...




Thanks for your assessment VC.....


----------



## Value Collector (6 February 2017)

A response to some of the claims made in another forum.

-----------------
I actually think its a pretty good result, I am pretty happy with company so far, there are a couple of factors causing the result to not appear as good on paper as it is, but I think by the full year report these will start to clear up and value generated will show up in the report.

Some posters here have made negative comments about certain things, which I think they have failed to fully understand, let me point out some of this below.

claim 1 - Inventories are to high, and this is a problem - False 

Inventories are not overly high, inventories are currently about 27.5% of expected annual sales this compares to 25.4% in 2013 before the shortage, so they have only just received to about where we want them, and its not a problem because as pointed out already we can run them down anytime we need to, here is a comparison of inventory to sales for the last 4.5 years.

2013 - 25.39%
2014 - 15.97% (shortage)
2015 - 19.31% (slight recovery)
2016 - 29.03% (full recovery)
2017 - 27.5 % (optimal)

claim 2 - Decline in Margins over recent years - False

When you take into account all operating expenses, the average profit margin over the last 5 years was 8.38%, in this report it was 8.58% pretty much right at the five year average, and thats with the beeotic costs, and other noise, so really the operating margin is well above the 5 year average.

Claim 3 - Receivables are to high, and they are being screwed - False / incorrect view

Receivables are 17.2% of annual sales, thats less than their 5 year average of 17.69%.

but thats only half the story, the net amount of capilano's funds tied up in these receivables is a much smaller number than the total amount, because capilano also owes their supplies,

In the half year report customers owed Capilano $23, 585,405, but capilano owed its suppliers payables of $$15,814,781, So Capilano only had $7,770,624 of its own funds tied up, which is 5.6% of annual sales, roughly 20 days, not where near the 1/3 of a year claimed.

claim 4 - Running out of cash / no cash generation - False.

Capilano have been generating plenty of cash, they have just been investing it in worth while things.

In the last 5 years they have bought 2 packing plants, Invested in 2 honey production JV's, rebuilt inventories, more than doubled the dividend, and launched a new product.

The honey inventory is more liquid than most other companies inventory (Pardon the pun), it can be turned back into cash rapidly, its basically like storing gold bars, that you get to sell at a profit.

Claim 5- demand has dropped off - False 

Domestic sales are up 5%, exports (except bulk industrial) are up, where is the lack of demand?


----------



## galumay (6 February 2017)

Value Collector said:


> where _*we*_ want them...




(my bolded, italic.)

The use of the first person personal when talking about an inanimate corporate entity always makes me consider that the person discussing has far too much emotional capital invested!


----------



## Value Collector (6 February 2017)

galumay said:


> (my bolded, italic.)
> 
> The use of the first person personal when talking about an inanimate corporate entity always makes me consider that the person discussing has far too much emotional capital invested!




The "we" refers to us shareholders.

Eg, "we would want the stock levels to be at that level"

you could also use "we" when discussing negative things, e.g. thats going to lead to litigation and "we" don't want that.

I can't see a problem with a group of owners talking to each other using terms such as that when talking about their company.

I mean if I am talking about a companies businesses with another share holder I might even say something like "Our mines are the lowest cost producers in the Pilbara" I don't think it means I am getting emotional


----------



## galumay (6 February 2017)

Value Collector said:


> I don't think it means I am getting emotional




Ok, hope I didnt offend! Anyway, the perception remains for me. I am also unconvinced you are talking collectively as the shareholders, because when you say, "...we can run them down anytime we need to." that doesnt sound like something the shareholders can do! 

Anyway, its rather petty on my part, but I do respect and enjoy what you post VC, and hence I thought it was worth sharing my perceptions of the use of the first person, personal. I am sure you would share my belief that psychology and emotion play very important roles in markets and we should always be on guard for biases that may influence our critical decision making!


----------



## Value Collector (6 February 2017)

galumay said:


> Ok, hope I didnt offend! Anyway, the perception remains for me. I am also unconvinced you are talking collectively as the shareholders, because when you say, "...we can run them down anytime we need to." that doesnt sound like something the shareholders can do!




No offence taken, it's just the way I generally talk about the companies I own, don't look to deep into it, I am just basically saying that the company wouldn't have any problems running down the stock.

Saying that though, I don't see companies as these bits of paper we trade, I see the company as a conduit used for the share holders to own the assets, So if we are talking about capitano's inventory, I don't see it as something completely unrelated to me as a share holder, it's my property, when I buy shares I see it as owning the under lying assets, so yes if I am talking with other shareholders I will say stuff like "Our inventory" "We could run it down" because I see the management as people working for us, working with our assets.

It doesn't mean I have an emotional attachment, it's just part of how I think and talk about companies.


----------



## galumay (6 February 2017)

Value Collector said:


> It doesn't mean I have an emotional attachment, it's just part of how I think and talk about companies.




Ok, I also see my shareholdings as part ownership of the company, I just dont identify with the inanimate entity to the extent that I would talk about it in the first person.


----------



## fiftyeight (6 February 2017)

VC you identified the company very early on and secured what I imagine would be a very good average price. Now you can let the divs roll in.

But the price even after the pull back is at historical highs, its seems the "growth"  has occurred and now CZZ is another well run well priced company. As a value collector, do you still see value in the company ie are you still accumulating?


----------



## Value Collector (7 February 2017)

galumay said:


> Ok, I also see my shareholdings as part ownership of the company, I just dont identify with the inanimate entity to the extent that I would talk about it in the first person.




Do you really think I was saying "we" as in me and the inanimate entity?

"we" obviously refers to people, e.g., shareholders and management.

e.g. "we (shareholders and management) can run down stock if needed" 

anyway, this line of discussion is tiresome.


----------



## Value Collector (7 February 2017)

fiftyeight said:


> As a value collector, do you still see value in the company ie are you still accumulating?





except for taking a bit of stock in the capital raising, I haven't purchased any shares in CZZ for a over 4 years, but I have also never sold any, you can see in the annual report my holding hasn't changed for 4 years except for adding some in the 2016 cap raising.

But yes I see value in the company, I think it's a good place to have some of my equity stored, I think the company will grow over time at a satisfactory rate, and profit growth will outpace inflation, I am happy to collect what I believe will be a growing dividend from a growing company.


----------



## fiftyeight (7 February 2017)

I had a look at the annual report and couldn't find VC as a substantial holder

Thanks for the reply, sheds some light on what I was pondering


----------



## pixel (13 April 2017)

My sentiment as well, VC
Even though I'm not on the Top 20 list, I do hold a Long position that I intend to increase once the chart tells me a bottom is in place and can be trusted to hold.
Today's chart suggests we might be "nearly there" 







but I have to say this: For the last AGM, I had submitted a question about the legal case against the pesky blogger, and I am very disappointed that they kept silent - both at the AGM and in subsequent news releases. It seems the slander continues unabated, and that might well create an impression "some mud always sticks". And that stinks.


----------



## pixel (13 April 2017)

Chart after the final Close was even better, although, with the day's vwap of $14.72 still well below the breakout level, that could have been stage-managed.


----------



## pixel (27 June 2017)

still waiting for the break above $15.50
if it happens, the optimist in me considers a Double Bottom pattern possible.


----------



## pixel (11 July 2017)

pixel said:


> still waiting for the break above $15.50



so far, so good.
Now it i
	

		
			
		

		
	





	

		
			
		

		
	
 s $16.50's turn


----------



## tech/a (11 July 2017)

Nice Pixel

I like that volume thrust through as well.
Nice little consolidation on diminishing volume.
Bit of a coil I think!


----------



## pixel (14 July 2017)

tech/a said:


> Nice Pixel
> 
> I like that volume thrust through as well.
> Nice little consolidation on diminishing volume.
> Bit of a coil I think!



Today could well be *The Day*


----------



## tech/a (14 July 2017)

TWANG


----------



## pixel (17 July 2017)

tech/a said:


> TWANG



Make that "BINGO"


----------



## pixel (26 September 2017)

This is dragging out into one helluva long pennant. 
Volume required to break out of the box...


----------



## pixel (27 October 2017)

Breakout Alert. 1st target $17, most likely higher


----------



## pixel (29 October 2017)

pixel said:


> Breakout Alert. 1st target $17, most likely higher



My charting software had a little hiccup on Friday. Here is the breakout, including the requisite patterns that caught my attention early enough. 






It *could *pop out further and shape a Cup & Handle. That would invite some more accumulation. On the flip side, I have raised my trailing stop to $16.50.


----------



## rnr (29 October 2017)

pixel said:


> My charting software had a little hiccup on Friday. Here is the breakout, including the requisite patterns that caught my attention early enough.
> 
> View attachment 73207
> 
> ...




Hi Pixel,
Do you mind disclosing your MACD settings please?


----------



## pixel (29 October 2017)

rnr said:


> Hi Pixel,
> Do you mind disclosing your MACD settings please?



No problem, @mr
The short answer: I use 3, 13, 8 
The long answer and rationale can be found here:
http://rettmer.com.au/TrinityHome/Trinity/MACD slides.pps


----------



## pixel (17 November 2017)

AGM held today.
Reports are looking good and the Market reacted positively. Going by the voting results (less than 3% grizzling over Remuneration) it looks like it's been a Love Fest.
Will be interesting to see whether $17 becomes the new support and holds next week.
I've added some more last month on the way up; now sitting "sweet"


----------



## pixel (21 November 2017)

Approaching resistance again.
A pullback from here will set the stage for a likely Cup & Handle Pattern. Or the price could break straight through and into "blue sky". Smallish volume suggests the former, but I've covered the bases by adding on the way up towards $17.


----------



## Value Collector (23 November 2017)

pixel said:


> Or the price could break straight through and into "blue sky".





lol, so far it looks like she heading for your blue sky, she's on a tear this morning.


----------



## pixel (23 November 2017)

Value Collector said:


> lol, so far it looks like she heading for your blue sky, she's on a tear this morning.



Looking sweet indeed; but it seems my theoretical taget of $19.10 is "the one" - or close enough. Total shares on offer are exceeding the buying interest by a small margin, so it's possible we'll see a pullback from here. The Trader in me is willing to take at least part profit and reload again at around $17.50.


----------



## kid hustlr (23 November 2017)

pixel said:


> Looking sweet indeed; but it seems my theoretical taget of $19.10 is "the one" - or close enough. Total shares on offer are exceeding the buying interest by a small margin, so it's possible we'll see a pullback from here. The Trader in me is willing to take at least part profit and reload again at around $17.50.




Considered the same Pixel a retrace from here wouldn't surprise me but I need to remember what game I'm playing!


----------



## pixel (20 December 2017)

Interesting news item out late today:
Kerry Stokes AO of Seven fame has taken a 20% combined interest in CZZ.
In such illustrious company, maybe some topping-up is in order?


----------



## Value Collector (20 December 2017)

pixel said:


> Interesting news item out late today:
> Kerry Stokes AO of Seven fame has taken a 20% combined interest in CZZ.
> In such illustrious company, maybe some topping-up is in order?




Do you have a link? is this a new investment? or is it just talking about the investment he holds via Wroxby?

edit- I just read the announcement, Kerry's wroxby holdings has increased their stake from 19.58% to 20.58%, they have held the first 19.58% for a few years now.


----------



## pixel (10 January 2018)

Are we finally on the way to crack $19? Or is it simply anticipation of the Half-yearly?
Either way, I hold.


----------



## Value Collector (10 January 2018)

pixel said:


> Are we finally on the way to crack $19? Or is it simply anticipation of the Half-yearly?
> Either way, I hold.
> 
> View attachment 85606




I am looking forward to the half year report, since the capital raising and the expansion into honey production JV’s it has not been clear what the return on the expanded equity base will be.

I think as the Jv’s are bedded down, if they end up being a use of capital providing good return on equity we may see earning per share grow

But if returns from the jvs are Luke warm, earnings per share may stagnate for a while, and we may see a sell down.

I hold, and am waiting to see how this Jv’s Play out.


----------



## Nomad Investor (21 January 2018)

Hello all. I am a new partial owner of Capilano and just came across this wonderful thread (from a fundamentalist view point).

I have recently written about Capilano (see part 1 at nomadinvestorblog.wordpress.com/2018/01/14/is-there-money-in-capilano-honey-asx-czz-part-1/) (parts 2 and 3 can be accessed from part 1) which I believe are, in general, not inconsistent with the content here (I have gone through the whole thread), but would appreciate any thoughts or comments, especially on things that I missed out or are wrong about.

Also, I am an overseas investor and therefore am not familiar with the weather condition and honey situation in Australia. Does anyone know if calendar year 2017 H2 is a good honey season (with not-too-cold winter and decent rain in spring)?

The company seems positive on the FY2018 crop, with the FY2017 report saying "_[t]he improved rain patterns in key production areas has led to a notable increase in honey supply in recent months, with our largest ever winter honey supply for many, many, years. Weather permitting, we remain very optimistic of the potential for increased honey production in the coming season from spring 2017_" and AGM presentation stating "_FY18 crop prospects are looking promising, with an above average crop forecast_", and I just wanted to double check if this is still the case now.

Also, another question is is the honey harvest season in Australia (in areas that matter to Capilano) usually co-related with that in New Zealand (in areas that matter to Comvita). I am asking this because, if they are co-related, then I can use Comvita's commentaries on its honey season as a reference for Capilano's expected honey season, which is useful for someone not based in Australia.


----------



## pixel (21 March 2018)

Nomad Investor said:


> Capilano's expected honey season



even inside Australia, honey seasons differ between States, at least if you consider similar honey varieties.
As an example, there is currently a record bloom of Redgums in South-Western Australia, while Jarrah flowering has been disappointing. Then consider the devastating bush fires in Victoria and NSW.
Given all those, I wouldn't think there is a high correlation between Oz and NZ, at least not in the high-value specialty market.


----------



## peter2 (29 March 2018)

The price chart of CZZ doesn't look very healthy. The price is sliding lower and an equal move abc shows a target near $10. I know the daily volume is very low and the MD thin. This means things can change very quickly with a big buyer or seller.


----------



## galumay (8 June 2018)

Just saw on Twitter that CZZ have lost 2 court cases recently, dont imagine that will help the SP.


----------



## Value Collector (13 July 2018)

galumay said:


> Just saw on Twitter that CZZ have lost 2 court cases recently, dont imagine that will help the SP.




They haven't lost anything, the guy they are suing told a sob story about him being a single parent and managed to get the case moved to Melbourne instead of Sydney, He then went on social media claiming to have had a big "win", it just shows how much this guy try to distort the truth.


----------



## Knobby22 (13 July 2018)

Didn't they lose the Coles contract due to them now wanting imported honey? I thought that was why the company was on the nose.

https://www.smh.com.au/business/com...cocktail-off-the-shelves-20180705-p4zpq4.html

Also, the mite that has devastated bee populations overseas has been detected. like the oyster disease foreign agents bring in the problem to curb our advantages. If the mite takes hold it will be devastating.

https://www.weeklytimesnow.com.au/n...e/news-story/8d65c459b2e3da8d5813110af89e9f65

So a lot of risk, hence the fall in SP price.


----------



## Value Collector (13 August 2018)

Capilano is the Target of a bid from private equity to take the company private, for $20.06 / share.

I am still examining the details.


----------



## galumay (13 August 2018)

Might have been a small arbitrage opportunity for the quick moving!

Interesting premium in the TO offer given how soft the results were.


----------



## Value Collector (13 August 2018)

galumay said:


> Might have been a small arbitrage opportunity for the quick moving!
> 
> Interesting premium in the TO offer given how soft the results were.




The results were not soft when you take out some of the noise of prior years results, eg capital gains on assets sales that made the results look better etc.


----------



## galumay (13 August 2018)

I was taking out the capital gains, the comparison to 2016 makes it look pretty flat. Export sales really going nowhere, cashflow is weak. 

Maybe my reading is too pessimistic?! That would explain the TO premium.


----------



## Value Collector (13 August 2018)

galumay said:


> I was taking out the capital gains, the comparison to 2016 makes it look pretty flat. Export sales really going nowhere, cashflow is weak.
> 
> Maybe my reading is too pessimistic?! That would explain the TO premium.




You also have to take into account the increased shares on issue, etc, I follow the company pretty closely, but considering the position now I am not really to keen to dive into a deep conversation on the analysis of it all.


----------



## Value Collector (1 September 2018)

Value Collector said:


> Capilano is the Target of a bid from private equity to take the company private, for $20.06 / share.
> 
> I am still examining the details.




Looks like there may be another competing bid.

In the last hour of trade on Friday some one started buying shares at $21.00 a $0.94 premium to the current offer. 

Speculation in the media is saying the buying may be from Bega Cheese, it will be interesting to see if a counter offer is made soon. 

https://www.afr.com/street-talk/capilano-soars-as-fundies-watch-for-interloper-20180831-h14smk


----------



## luutzu (1 September 2018)

Value Collector said:


> Looks like there may be another competing bid.
> 
> In the last hour of trade on Friday some one started buying shares at $21.00 a $0.94 premium to the current offer.
> 
> ...




Now you're just showing off


----------



## galumay (1 September 2018)

Value Collector said:


> Looks like there may be another competing bid.




It just keeps getting better for you! Accepting that you probably would prefer the business not to be taken over at all.


----------



## Value Collector (3 September 2018)

Value Collector said:


> Looks like there may be another competing bid.
> 
> In the last hour of trade on Friday some one started buying shares at $21.00 a $0.94 premium to the current offer.
> 
> ...




It’s confirmed, the buying on friday was Bega Cheese, the just released a substantial holder notice that shows they now own over 5% and have been buying since May.

I read their latest presentation over the weekend, and they state their goal is to continue building porftfolio of Australian brands.

So it seems like a good fit for them, last year they purchased Vegemite and the peanut Butter company formally owned by kraft, so they already have a presence in the spread market.

It will be interesting to see what happens from here, first bidders are touring Australia at the moment talking to bee keepers about the deal, so they seem very committed, they may end up having to raise their offer price.

Interesting situation.


----------



## Knobby22 (3 September 2018)

The Age today.
The imported honey from China is adulterated, mixed with something else. Capilano have some ranges involved.
Where would be be without Fairfax? One of the last organisations doing real research (with the ABC but they haven't done much lately).


----------



## Value Collector (3 September 2018)

Knobby22 said:


> The Age today.
> The imported honey from China is adulterated, mixed with something else. Capilano have some ranges involved.
> Where would be be without Fairfax? One of the last organisations doing real research (with the ABC but they haven't done much lately).




I think it's a beat up, the samples and testing was funded by one of the guys thats been against CZZ for ages.

Either way though, I did think there might be a chance the issue might derail one or both take over offers, So today I sold 50% of my holding at $21.

I have left the remaining 50% at play/risk incase a higher bid does come through at above $21.


----------



## galumay (3 September 2018)

Value Collector said:


> I think it's a beat up




Be careful of your biases VC, i agree about where the funding came from, but this is more serious this time. This form of testing is being moved to internationally and also its been proposed Australia move to this standard. I dont think there is much doubt the imported honey is nearly all adulterated.

The damage to CZZ may be limited because they can probably honestly claim not to have known about the adulteration, but the market and aquirers may not be so forgiving as me!


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## Value Collector (4 September 2018)

galumay said:


> Be careful of your biases VC, i agree about where the funding came from, but this is more serious this time. This form of testing is being moved to internationally and also its been proposed Australia move to this standard. I dont think there is much doubt the imported honey is nearly all adulterated.
> 
> The damage to CZZ may be limited because they can probably honestly claim not to have known about the adulteration, but the market and aquirers may not be so forgiving as me!




It is not as clear cut as you think, the method of testing is highly reliant on the database of previous samples, and the European test done may not reflect the region of the sources honey.

Also, the same samples passed the test at other labs.

Not to mention that the lawyers with one of the bidders has just announced that they were involved in commissioning the tests.

But you are right, mud sticks and the public might not care about the facts, hence why I reduced my exposure at a price that is very good considering my entry price 5 years ago.

https://tendaily.com.au/shows/theproject/news/a180903dyg/statement-from-allowrie-20180903


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## notting (4 September 2018)

It's not a beat up.
It's honey production is not complicated.
You can easily disclose exactly how you do it, where you source the product, how you make it etc.  You can take journalists through the entire process.  It's easy.

If you don't do that and just start slurring the 'testing process,' that is as good as an admission of guilt!

The NDA tests are far more sophisticated than the Australian standards tests.
There is nothing wrong with a bidder commissioning tests, it's called due diligence.

It's great that this has been exposed.  I've never liked the company.  Always smelt like something fishy was going on.
Oh then there is the problem of the so called real honey which is gotten from feeding bees sugar rather than using bees to gather pollen and convert it to honey the natural way! 
Not as bad as using rice syrup from the poisoned land of China, but still pretty disgusting!


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## Value Collector (4 September 2018)

notting said:


> It's not a beat up.
> It's honey production is not complicated.
> You can easily disclose exactly how you do it, where you source the product, how you make it etc.  You can take journalists through the entire process.  It's easy.
> 
> ...




The honey samples passed nda tests from some labs and only failed at one lab.

It is possible the lab where it failed didn’t have a data base that covered he region of production.

Capilano are a honey packer, they buy honey from about 1000 bee keepers, how exactly are they going to “run a journalist through the production process” 

If it turns out that Capilano did get sold a pup and some suspect honey made it through their strict testing process, then they are as much a victim as the consumer, because they have been ripped off too.

But as I said it’s to early to judge exactly what has happened yet.


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## notting (4 September 2018)

Nup. They know exactly what is going on!!  Of course they do.
If you look at the body language etc of the Costa Group guy that outed them, you can tell it was well known within the industry about the corruption.  I had heard about it too, prior to this.  Had told my partner not to buy it, but get local stuff from local bee keepers.!!
Was a great trade/investment never the less.
We have to get on top of this China problem.  It is massive.  They pretty much destroy everything that is good!


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## CanOz (3 October 2018)

From the ABC today....

NZ sells 10000 tons a year but only produces 1700!


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## SirRumpole (3 October 2018)

Expecting companies to self regulate is pie in the sky.

If we want confidence in our food production then there needs to be regular testing by a government based (csiro or university) organisation.


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## System (13 December 2018)

On December 7th, 2018, Capilano Honey Limited (CZZ) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement where Bravo BidCo Pty Limited has acquired 100% of the share capital of CZZ.


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