# WBA - Webster Limited



## So_Cynical (21 December 2008)

Webster Limited is Australia’s fourth oldest business...and biggest walnut orchard 
manager (2200 hectares), there also big in carrots and onions....seriously. WBA 
is also the largest shareholder in Tassal - TGR with 26%

Market Cap: 40,696,210
Issued Shares: 64,597,159
First listed:	01 Jan 1974 
52-wk High: 1.94
52-wk Low: 0.60
Dividend: 0.045 cents

http://www.websterltd.com.au/

The food business is supposed to be recession proof so I figure there could be some 
value here with the SP at current level....FCL sold their holding on Friday.

Opinions?


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## Rainmaker2000 (21 December 2008)

*Re: WBA - Webster*

Must concede I keep a very close eye on Webster mainly to track it's share price compared to Tassels......I've owned a few for a while, hold many more Tassell.......

When I first bought WBA, it was a case of paying the equivalent of their Tassell holding.......and getting the WBA businesses for free........some of those were losing money then (auto) but a key thing to remember is that even poor businesses or loss makers......I put WBA mainly in that category are worth cash....as WBA proved when they sold off auto


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## oldblue (21 December 2008)

*Re: WBA - Webster*

They're even cheaper now!
Their TGR stake has an MV of $70m v WBA's own MV of around $40m at current prices.
I'll be taking a closer look.


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## Rainmaker2000 (21 December 2008)

*Re: WBA - Webster*

hehe, Old Blue, you are just ahead of me....I did that analysis just after writing............the key question you would ask yourself is how much you like Tassell.....I'm a big fan....

So there Tassell share is worth about 70 mill, market cap of bout 40 with debt of about 20....it's very interesting since their underlying business that the debt is attached to is obviously worth a pretty penny......

I notice that motorcycle riding, management hard nut, Chris Corrigan recently showd up on the board and appears to own about 5% of the company on my rough calculation........he would be the last person I would bet turning up on Webster's share register......WBA is not exactly a major entity


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## uzumaki (11 January 2009)

*Re: WBA - Webster*

Interesting observation Rainmaker. No one seem to be interested in WBA, but high volume Friday with lots of buying and not many sellers left. Perhaps its related to the positive article i found online on http://theinflationist.com/agriculture/the-inflationist-invests-in-walnuts-carrots-onions-and-salmon. 
new site but interesting concept to outperform mr haselhurst in his own game by inviting the public to take the challenge of investing publicly. Signed up myself, not sure what to buy yet. winner will be invited to dinner in melbourne! http://theinflationist.com/the-inflationist-challenge-2009/the-speculator-challenge-2009

see you guys over dinner in 2010! im gonna kick the speculators ass!


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## oldblue (11 January 2009)

*Re: WBA - Webster*

WBA SP has firmed a bit but still look to be a cheap way into TGR.
WBA market cap now $45.2m v market value of their 26% TGR holding at $70m. Before taking account of the value of the rest of WBA's business!

Disc: Not holding but getting interested!


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## Bluebeard (9 March 2009)

*Re: WBA - Webster*

what fruits do they produce (if thats the right terminology) I notice they have interest in carrots, onions, and i think walnuts ... do they have anything else that they produce.


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## oldblue (10 March 2009)

*Re: WBA - Webster*



Bluebeard said:


> what fruits do they produce (if thats the right terminology) I notice they have interest in carrots, onions, and i think walnuts ... do they have anything else that they produce.




No, nothing else.
Their shareholding in TGR is still their main asset, worth substantially more than their own market cap.
The only thing that stops me from buying is their mico-cap status and the thin trading that goes with that.


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## oldblue (8 December 2010)

*Re: WBA - Webster*

Private equity interest in TGR looks like paying off for WBA at last!

I never followed this one up, too micro and thinly traded even for the speculative part of my portfolio - but good luck to any WBA holders on this forum.


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## craft (30 July 2013)

*Re: WBA - Webster*

Interesting letter received today from Petra Capital seeking to purchase shares in WBA on behalf of Institutional clients.

Fat Chance IMO and no liquidly in the market either - Nice.


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## Country Lad (30 July 2013)

*Re: WBA - Webster*



craft said:


> ...............no liquidly in the market either - Nice.




I noticed the buy opportunity above 56 from the double bottom.  Excellent pattern and I often looked at its rise at the pace of a snail on crutches and passed on each occasion because of the liquidity.  The piece on Landline a few weeks ago did it no harm.

Cheers
Country Lad


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## piggybank (24 August 2013)

*Re: WBA - Webster*

Nice work again CL.


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## piggybank (29 October 2013)

*Re: WBA - Webster*

Update:-


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## piggybank (15 November 2013)

*Re: WBA - Webster*

Update


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## craft (29 November 2013)

*Re: WBA - Webster*

Webster's Walnuts Australia division wins 2013 Export Australia Agribusiness Award.

http://www.exportawards.gov.au/Winners/2013/Walnuts-Australia-TAS-

A good little known long term agriculture exposure potential here for those that like to dig.


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## piggybank (30 December 2013)

*Re: WBA - Webster*


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## piggybank (22 January 2014)

*Re: WBA - Webster*

Hi,

I don't know what has kept the share price appreciating given there hasn't been any announcements to the market since the 29th November (last year). That announcement was god news that it won an export award.

*Webster Ltd wins National Export Award*
On Tuesday, 26 November 2013 Walnuts Australia, an operating division of Webster Limited, won the Agribusiness of the Year Award at the 51st Australian Export Awards in Melbourne. On hand to receive the award in the presence of Prime Minister, Tony Abbott, and Trade Minister, Andrew Robb, was Webster Limited’s, Chief Executive Officer, John Hosken.

If you would like to read more, then you can do so by clicking on this link:- http://stocknessmonster.com/news-item?S=WBA&E=ASX&N=399054


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## craft (31 January 2014)

*Re: WBA - Webster*

Early indications that this year’s crop looks good.
The new cracking facility will be ready for the harvest. 
Avondale development schedule on track.


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## piggybank (17 February 2014)

*Re: WBA - Webster*

*Webster Limited - A Potted History*

Webster Limited is Australia's fourth oldest business. It commenced operating in 1831, just 28 years after the settlement of Van Diemen's Land, as a traditional pastoral house. One hundred and eighty years on, it is now a diversified food and agribusiness with a growing reputation locally and internationally for the quality of its produce.

The Company saw many changes during the 19th and 20th centuries. In particular, Webster played a part in the historical development of the dairy, energy and paper making industries by supplying generators, refrigeration equipment, pumps and motors to these sectors over a period of more than 100 years.

In the 1960s, Webster also established itself as a specialist in bearings and engineering supplies. These industrial businesses operated as Webster Trucks & Machinery, and Webster Bearings and Engineering Supplies.

Webster Limited listed on the Australian stock exchange in 1974 (ASX:WBA).

Using its traditional rural services, merchandising and heavy equipment segments as a base, Webster entered the horticultural industry with the acquisition of leading onion exporter, Vecon Pty Ltd in 1996. Rationalisation of the onion industry then saw 3 former competitors combine their resources... 

If you want to read the rest of the article can be seen by clicking on this link:- http://www.websterltd.com.au/corporate/history

An interesting video about the company can be seen here:- http://www.websterltd.com.au/corporate/about.php

​


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## lukelee (30 December 2014)

*Re: WBA - Webster*

The company has negative cash flow for 5 / 6 years: 2009, 2010, 2011, 2012, 2014.
In most of years, the "Receipts from customers" can barely cover "Payments to suppliers and employees".
Anyone has a clue on this??


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## craft (4 January 2015)

*Re: WBA - Webster*



lukelee said:


> The company has negative cash flow for 5 / 6 years: 2009, 2010, 2011, 2012, 2014.
> In most of years, the "Receipts from customers" can barely cover "Payments to suppliers and employees".
> Anyone has a clue on this??




Yep that is correct - They have stayed about cash break even *operationally*.  But to understand the merits of WBA you need to recognise the significance of that achievement produced from an immature orchard that they have also been expanding rapidly (both size and vertically) and then consider the competitive advantages they have as the major southern hemisphere owner of a maturing orchard and cracking facility.

WBA has also morphed over those 5/6 years into a focused vertically integrated walnut business. Though the new acquisition (50% water rights to secure the permanent walnut tree water requirements) will take them into row cropping in the wet years.

IMO - a good story if you dig into it.


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## craft (28 February 2015)

*Re: WBA - Webster*



craft said:


> WBA has also morphed over those 5/6 years into a focused vertically integrated walnut business.



 Scratch that.

The walnut business that I brought into still exists (the only thing they haven't sold off) and its still a good little business IMO. But with the latest announcements WBA has morphed way beyond just Walnuts.
The recent Kooba acquisition nearly doubled the size of the balance sheet and the proposed Bengerang acquisition and Tandou (TAN) bid will over double it again and make it an ASX300 size company with the largest portfolio of water rights in Australia and a massive cropping grade land bank.

My problem is that this business is now something I don’t fully understand, but a play thing for the directors and major shareholders (Chris Corrigan, David Crushing, David Robinson, Pete Joy, Verolot)
Most of the above directors/shareholders are on both sides of the latest transactions – So the potential for conflict is large. 

Not sure what to do with current holding –Against my normal approach to investing but I’m very tempted to hang on blind for a while and coat tail what to me is a formidable directorship with aligned shareholdings building the type of agricultural exposure that I want and is currently not available elsewhere on the market. But there are risks (and rewards) I never foresaw when buying into the Walnut business. Investing is never dull.


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## craft (5 March 2015)

What a tangled web. Some notes to help me remember what I dug up on the relationships of the latest transaction proposal. 

David Robinson was a former chairman of Webster around 2006-2008.
On 14/11/14 He received a placement of 17,475,728 WBA shares as part of the Kooba Acquisition for $1.03 cash. (Market price $1.14)
27/2/15 proposed that he will receive 36,548,806 WBA share @ $1.15 for the Bengerang transaction  (Market price $1.33) 

Bengerang was born out of the remnants of the listed PrimeAg and have five private owners: David Robinson; Chris Corrigan; Verolot; Eagle Securities & Kaplan 

Verolot is a mystery to me but it is a related party because it has a substantial holding of 13,299,781 in WBA and will receive another 18,916,081 @ $1.15 via the Bengerang transaction.

Kaplan will receive 30,434,783 WBA shares @ $1.15 via the Bengerang transaction. Kaplan is a private equity fund manager which Chris Corrigan is chairman of. 

Eagle Securities is on the WBA register with 4,934,792 shares. They will receive 3,854,369 WBA shares @ $1.15 via the Bengerang transaction. Eagle securities also recently purchased 10% of Tandou @$0.44 from David Cushing(WBA director and substantial Holder) for those TAN shares they will receive 8,748,889 WBA shares.  Eagle Securities is a Virgin Islands mystery broker but rumours abound relating it to Chris Corrigan.   

Peter Joy owns 17,481,039 WBA shares and will receive 6,705,050 WBA shares via the TAN transaction. Peter Joy has a residential address in London as does Chris Corrigan – I recall hearing somewhere that their wives are best friends from way back, not sure if that is true at all but it would explain how Chris Corrigan first got involved in little ol' WBA.

David Cushing is a director and shareholder of NZ agriculture investment company Rural Equities. He owns 11,431,136 WBA shares and will receive 9,640,706 WBA shares from the TAN transaction. 

Chris Corrigan owns 23,837,637(thanks to another discounted placement)  in WBA and will receive 17,916,081 WBA share @ $1.15 for the Bengerang transaction. He may or may not have influence over / interest in the eagle securities holdings and the Kaplan Holdings.

Rod Roberts and Simon Stone don’t strike me as directors that champion minor holders interest and the other two directors are new, so don’t know anything about them. 

Conclusion – Webster is not what you would call a minority shareholder focused company.

However,  the Bengerang and TAN related party transactions are for WBA shares not cash and the competing self interests of the major players who will all have major personal stakes in WBA following the transaction is probably the best safeguard against being raped by a dodgy related party transaction.  – Unless they are all in cahoots. 

I’m still inclined to coat tail their self interests as I like what is being built (ASX 300 Company with high quality agricultural land & water entitlements) even though I have doubts about their commitment to minority holders in the process.


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## Ves (6 March 2015)

craft said:


> Conclusion – Webster is not what you would call a minority shareholder focused company.



Thanks for the comprehensive notes on this one.    I still do follow it,  and have a look from time to time,  but my initial analysis is becoming more and more redundant over time,  due to the increasing complexity (and diversity) of the business model.

I'm not a big fan of acquisitions / mergers like this.   I think they've gone from 150m shares issued to about 350m.   That's a very large increase...   especially when,  as you said,  minority shareholders are most likely (or almost certainly) diluted in the process.   Even worse if they are using potentially undervalued currency (their own shares) to acquire other companies.

I echo your thoughts on agricultural exposure via listed entities,   it is damn hard to get quality exposure at all, let alone those within my circles of competence.


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## craft (6 March 2015)

Ves said:


> I'm not a big fan of acquisitions / mergers like this.   I think they've gone from 150m shares issued to about 350m.   That's a very large increase...   especially when,  as you said,  minority shareholders are most likely (or almost certainly) diluted in the process.   Even worse if they are using potentially undervalued currency (their own shares) to acquire other companies.




Hi Ves.

That’s the key question.  Have I given up more in the value of the walnut business then I have gained in value of the new assets? 

I thought the walnut business was an underpriced ripper of an asset. It now however represents about a quarter of the business – however the new assets in some cases complement, via supplying suitable land in the right geographies for new orchards and secure water rights. The combination of permanent plantings and annual crops to best utilise water rights depending on varying water allocation makes lots of sense.

The discounted placement  that has occurred to get Chris Corrigan and David Robinson on board is a bit disturbing – but they also bring a lot to the table in the form of financial clout and also agricultural operational knowledge in Robinsons case.

Webster’s transformation is only possible because of the key players now backing the company – and they have significantly tied themselves to the company’s success.

I don’t know the quality of the new assets yet, which is a problem in holding but the Walnut business that I do understand is enhanced and I’m going to be eating the same cooking as the key players on the new assets so I will stay in as I try to come up to speed with the new assets. Ideally I would step aside for a while until I fully understood the quality of the new assets, however that would crystallise a pretty big tax liability  - bigger than the risk of staying in as I currently see it.

Maybe I should ask for a farm stay in their new farm house for research purposes


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## Ves (6 March 2015)

In a sense  (but not to the same degree)  this is similar to why I keep holding RFG.   I think the way they approach capital raisings advantages the bigger holders,  but for now the smaller holders have been taken along for the ride due to the fantastic quality of the underlying assets.

For your sake  I hope the guys pulling the strings at the top keep carrying along the minority shareholders for the ride.

I see SHV  is planning on buying some more assets as well.   It appears that their are plenty of opportunities to expand both organically and by acquisition for the bigger agricultural firms in Australia.  In that respect you can read my comments in the context of a double edged sword....  it's all about the price they pay when expanding.  

Thanks for bringing this to my attention when it was about 40 cents.   I haven't made any money,   but I felt like I've learned a lot following the story.


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## craft (6 March 2015)

Ves said:


> In a sense  (but not to the same degree)  this is similar to why I keep holding RFG.   I think the way they approach capital raisings advantages the bigger holders,  but for now the smaller holders have been taken along for the ride due to the fantastic quality of the underlying assets.
> 
> For your sake  I hope the guys pulling the strings at the top keep carrying along the minority shareholders for the ride.
> 
> ...




SHV is interesting – It has had a very good run on the market as a few good seasons have fallen in line for them and the inherent leverage in the business has worked to the bottom line. But as far as I’m concerned Olam has the competitive advantage in Almonds in Aus so SHV is not an optimum long term investment for me. I like WBA’s walnut business a lot more, clearly has the competitive advantage now in the southern hemisphere growing season. Not sure why – but I’ve never looked deeply into RFG – another mistakes of omission by the looks of its chart.


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## craft (11 March 2015)

WBA having another crack at $1.40 and has currently cleaned out the sell side. It will be interesting to see where the sell volume comes back in.


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## craft (13 June 2015)

As of Friday Webster has succeeded with its TAN takeover and the Benerang acquisition has also been approved by WBA share holders.   

Coincidently WBA’s Enterprise Value is now basically identical to SHV at 814M.  SHV is in the ASX200, WBA has no index representation at all *YET*.

WBA’s Market Cap 642M (SHV – 713M)
WBA’s Equity 363M (SHV – 262M)
WBA’s Price/Book 1.77 (SHV – 2.72)
WBA’s Price/NTA 1.80 (SHV – 3.06)
WBA’s Debt /Equity 47.2% (SHV 38.9%)

WBA is Australia’s largest Walnut producer with 90% of local production and competitive advantage in southern hemisphere growing season.

SHV is second largest Australian Almond producer with 19% market share. Olam has the competitive advantage for Almonds in southern hemisphere growing season.

WBA has enough water entitlements to sustain its current and future *permanent* walnut plantings under the most severe conditions.  In the better rainfall years it has massive *annual* cropping acreage (mainly cotton) to utilise the excess water or it could sell into the water market if the price was right. 

SHV estimates in its annual report that it owns water entitlements for approx 25% of its requirements and purchases the rest on market with duration between spot & 3 years.

Water is the biggest variable in orchard production costs – SHV is highly leveraged to it. Great in the good years, but it’s a double edged sword.   As a long term investor I much prefer WBA’s water position.  

On the 26th May in an announcement that wasn’t even marked as sensitive Richard Haire (Industry stalwart and most recently MD of Olam Aust) was made Executive Chairman of WBA. Existing Chairman Rod Roberts steps down but remains on board. Existing CEO steps down to become one of two division heads, the other divisional head  being Joe Robinson who is an AFF executive and I assume is David Robinson’s son.  Talk about a bloodless / efficient re-organisation.  Just in case you missed the driving force behind the entrepreneurial reshaping of the business – Chris Corrigan signed the announcement on behalf of the board. 




> Webster is now entitled to compulsorily acquire of all of the outstanding shares in Tandou. Webster
> expects to commence the compulsory acquisition process as soon as possible following completion of
> the transfer of Tandou shares held by accepting shareholders under the Offer. Webster will also
> proceed to issue Webster shares in accordance with the Offer within the next 7 – 10 days.




Could be some TAN holders looking to get out of WBA??? I've taken a bit of a punt and sold a few recently that I wouldn't mind replacing at lower prices if I get the chance.


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## Vitalitd (23 June 2015)

Thanks craft.  Tracking this thread with interest (including a few shares).  Is today's fall the TAN shareholder rebalancing you think?  End of financial year?

The walnut competitive advantage was a long time in the making.  Nice to see it coming together.


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## craft (23 June 2015)

Vitalitd said:


> Thanks craft.  Tracking this thread with interest (including a few shares).  Is today's fall the TAN shareholder rebalancing you think?  End of financial year?
> 
> The walnut competitive advantage was a long time in the making.  Nice to see it coming together.




Tan sellers were my theory, so I’ll stick with that – but who really knows?

I was selling again last week and whoever was buying felt very solid until they failed to turn up on Friday.  Will they be back? They obviously didn’t seem to share my TAN share allotment theory?  Or maybe they were holding it up to give the drop impetus when they stopped – I don’t know, everybody plays tactics.

Now I have two theories, Ex tan Holders on the sell and potential insto on the buy. 

So usual story - price could do anything.

At $1.90+ I think Value is stretched on near term headline accounting numbers (integration costs and current cotton crop aint  going to be flash)  but infatuation with Corigan & co, Probable index inclusion and good long term big picture strategy could see it hold higher then I would hope for, but at some stage I’m sure I’ll get the an opportunity to rebuild back to a full position – I’m very patient.(actually that’s a lie but I do_ try _to be patient)


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## So_Cynical (24 June 2015)

So_Cynical said:


> (21st-December-2008) Market Cap: 40,696,210




7 years after i started this thread and WBA now has a Market cap of 430 million, more than a 1000% increase in 7 years...im stunned.

From Carrots and Walnuts for f**k sake.


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## skc (24 June 2015)

craft said:


> Tan sellers were my theory, so I’ll stick with that – but who really knows?
> 
> I was selling again last week and whoever was buying felt very solid until they failed to turn up on Friday.  Will they be back? They obviously didn’t seem to share my TAN share allotment theory?  Or maybe they were holding it up to give the drop impetus when they stopped – I don’t know, everybody plays tactics.
> 
> ...




Tried and failed to secure any borrow for WBA when there was a 6-9% gap in the TAN/WBA merger arbitrage. I thought about just buying TAN outright, but the time lag between accepting the offer and being issued with WBA shares meant that I can't risk a position large enough to be worthwhile.

WBA was very strong since announcement of the offer. It was either the market's endorsement of the deal, or an attempt to create a perception as such (to entice TAN holders to accept the offer). The broader agri sector was also strong during the period as well.

WBA is thin at the best of times so I am surprised that you are willing to give up some of your position. Although newbie ex-Tan holders might be uncomfortable with the WBA share price downward movement and sell into your waiting bids.

Interested to see how this plays out.


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## craft (24 June 2015)

skc said:


> WBA is thin at the best of times so I am surprised that you are willing to give up some of your position.




Its thicker than it used to be, but unless some of the director/dealmakers sell a few liquidity could still be an issue for institutional participation in the stock .

For me its more about my perception of value, risk and portfolio interaction then a primary focus on fancy short term footwork.  I wouldn’t risk a long term position on being clever in the short run – but occasionally I get lucky short term when thinking long term.


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## tge oracle (14 October 2015)

An interesting article from today’s Australian reports on the impact “ El Nino “ will have on agricultural commodities and more importantly commodity prices.
This is as a result of weather related supply shortages. I hadn’t considered the effect of “ El Nino” , however, I consider it to be another event akin to a favourable macro-economic event such as the falling AUD.

TO read the full article, follow the link below. 
I have also quoted one of the more relevant sentences in the article for your consideration:

Quote; 

“ Several agricultural prices have rallied off their lows on fears of weather-related supply shortages. Sugar prices have risen 31 per cent over the past three weeks; dairy is up 36 per cent, palm oil has gained 13.1 per cent and wheat is up 6.1 per cent over the same *period.”


http://www.theaustralian.com.au/bus...-nino-takes-hold/story-fnay3ubk-1227567903112


Disc – Opinion only. Invested in MGC, CGC, AAC and WBA. DYOR.


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## Craton (19 October 2015)

The prospect of El Nino and higher prices may be well and good but without water, ya can't grow nothing and hence the TAN t/over.

Uncertainty to what would happen with TAN assets, what WBA had planned for its own assets and the fact it would take some years for WBA to transistion made me jump the TAN ship and forfeit becoming a WBA s/holder. 

I'm very happy to be an ex-TAN holder selling into market strength some months ago for a nice tidy gain, it was just simply too much enticement.


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## craft (21 October 2015)

Craton said:


> The prospect of El Nino and higher prices may be well and good but without water, ya can't grow nothing and hence the TAN t/over.
> 
> Uncertainty to what would happen with TAN assets, what WBA had planned for its own assets and the fact it would take some years for WBA to transistion made me jump the TAN ship and forfeit becoming a WBA s/holder.
> 
> I'm very happy to be an ex-TAN holder selling into market strength some months ago for a nice tidy gain, it was just simply too much enticement.




Nice move in the short term. But I still see WBA as an excellent long term prospect. The combination of Water, permanent plantings and annual cropping land gives them unique flexibility.

I really like the latest presentation. Serious people with serious skin in the game putting the facts simply and just as I see them as well. 

The time frame and risks on this one probably doesn't suit most but I have been and will continue to re-accumulate.

http://www.asx.com.au/asxpdf/20151021/pdf/4327sbvmy4xjnx.pdf


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## Ves (5 November 2015)

craft,

Forgot to post at the time,  but I did read that presentation and the language in it contained a lot of the key themes I looked for as a long-term investor.

Agree with all your previous comments about the walnut business and the competitive advantage.

It took me a long time to get my head around it - but ironically when I finally did the whole landscape (pardon the pun) changed.

I understand the additional land gives them water and flexibility  (both in terms of balance sheet funding opportunities and also matching their product mix to the economic demand of the time).

That's all fine.   The opportunities are there.   The key ingredient,  which is in that presentation (and the earlier acquisition releases),  is in my opinion, execution risk,  especially the human factor!

My research tells me that in agriculture,  the only things you can change once you have the land position,  is the way the land is managed,  and of course who manages it.

It's not a business that anyone can run.  It seems you're confident in the key people involved  and you will definitely need to be to hold through the tough times that will no doubt come.

But even then the key people can't guarantee success.  Not all land is made for market beating returns on capital   (in fact in aggregate,  the statistics I found show that most agricultural land is a poor investment).

In the end it's a commodity business IMO, there's a bit of luck (market demand / weather) and the rest  through great management is having lower costs than your competition  (water rights helps reduce costs).

I noticed that the top 20% decile of farming businesses (in the statics you can find with a google search) seem to be far, far more profitable than the rest.   No coincidence if you look at most industries.

I could have missed something though.  Any other source of competitive advantage that you can see for non-Walnut land?


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## craft (5 November 2015)

Ves said:


> craft,
> 
> Forgot to post at the time,  but I did read that presentation and the language in it contained a lot of the key themes I looked for as a long-term investor.
> 
> ...




Operationally Richard Haire and David Robinson have a lot of experience and respect. Strategically David Cushing and Chris Corrigan both bring something to the table. All except Haire have considerable skin in the game.  

The Bengerang property in my view introduces the most valuation risk because it was purchased from the director and associates – but they did take shares – so long as they keep those shares I’m more relaxed. It is mostly ex Prime Ag assets and as far as my research goes I think the price paid is pretty fair. The Kooba station property purchase looks timely and has a direct strategic fit with the TAN water assets.

As far as Competitive advantage – I’m not counting on anything more than the Walnuts and the 100% coverage of water rights for these permanent plantings. (in contrast SHV have about 25%). The flexability of what they can do with excess water in good years is also some advantage. (Tan didn’t have this flexibility so the water rights are more valuable in WBA’s hands) But basically a lot of the land probably won’t earn any more than cost of capital over a cycle of bad & good years. But even that to ensure you never have to be exposed to astronomical spot prices in drought years (if the water is for sale at all) to keep your permanent plantings (which do have a competitive advantage) alive is an acceptable return to me.

Maybe I’ll get lucky and Haire & Robinson and the properties owned combine to be in the top 20%. But I don’t think I have paid for this possibility.

People may think I’m crazy given the current share prices – but it wouldn’t surprise me if following a succession of low water allocation years WBA buys SHV for a song. (Although maybe not because Haire is ex Olam so he will clearly know that SHV doesn’t have the competitive advantage in Almonds)

WBA is back to early days in a fashion - This company will need to spend more capital maximizing their potential. Whilst personally I like this and also like to see the directors with major skin in the game talking in big strategic sweeps rather than minute detail – I seem to be pretty alone in contrast to others I have seen comment on WBA. This is not a shoot your lights out tomorrow investment. Walnut trees have a productive life of 25 years – that’s more like the time frame I am looking towards. Its early days – I could be wrong. But I like companies with this sort of potential; I also want the international exposure to soft commodities and any capitalization of land value that an improvement in AUD pricing of those commodities may bring about.

That’s basically my thoughts – *did I say I could be wrong*.......If not wrong certainly early as the value is not clearly evident from the numbers yet so probably no need to accumulate quickly.


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## Ves (6 November 2015)

Thanks for your thoughts as always,  craft.

Current price is pretty close to NTA  (if you believe the valuations on the properties are fair value).

I would have thought if they can achieve market rates of return on the non-Walnut assets,   any excess return at all over long periods of time on the walnut assets is a big bonus.

All big-ifs,   but there is an investment case if the management are competent enough.

As you've said,  the big turn-off for most people is that it'll take many years to play out.

It's funny,  as an _investment proposition_ it feels like it is similar to when it was closer to 50 cents when we first discussed it.


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## Vitalitd (24 April 2016)

Strikes me that cotton should be doing OK this year. Any thoughts on Chris Corrigan appointing himself as Executive Chairman?


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## peter2 (8 February 2017)

WBA at yearly highs. Nice looking BO on both weekly and daily charts. 
This stock's market depth does get thin at times but there's been larger volume the last four days. 
[Note: Must check for next scheduled report.]


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## Ves (8 February 2017)

peter2 said:


> [Note: Must check for next scheduled report.]



Webster generally release their half-yearly accounts in the last few days of February,  so still about 3 weeks.


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## peter2 (3 March 2017)

Finally seeing some demand in WBA. Price at new yearly highs, but plenty to go before new all time highs. 
Patience required for this one.


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## Ves (6 July 2017)

Assuming the $36m or so "profit"  on sale of the water rights announced late June 2017 is just a result of the accounting entry where they wrote down goodwill the year after purchase / takeover of Tandou?  If memory serves me there was some kind of strange accounting acrobatics (they needed to follow the AASB rules or something) in 2015 and then 2016 in relation to a large chunk of good will.


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## craft (7 July 2017)

Ves said:


> Assuming the $36m or so "profit"  on sale of the water rights announced late June 2017 is just a result of the accounting entry where they wrote down goodwill the year after purchase / takeover of Tandou?  If memory serves me there was some kind of strange accounting acrobatics (they needed to follow the AASB rules or something) in 2015 and then 2016 in relation to a large chunk of good will.



Bengerang was negotiated with consideration being shares issued @ $1.15 which was indicative of the market price at the time of negotiating the deal. Tandou bid was again share consideration, WBA market price at the time of takeover announcement was $1.33.

Accounting requirement for business combinations required the consideration to be valued at market price on day of completion. Which meant shares were valued at $1.915 for accounting purposes and a hefty goodwill component resulted. First opportunity WBA got the wrote the majority of the market driven goodwill amounts off.  Only leaving a goodwill component of 24M resulting from the increase in water rights on the water market between accusation date and finalising the purchase accounts – apart from this acknowledgement of increasing value of water rights over that small timeframe all other water rights are on the books at cost.

I see the profit on this sale is an indication that the water rights are considerably understated in the books currently.

Until this sale I saw WBA as likely needing to raise capital to fund their already stated operational expansions. They probably have the debt head room now to not raise but it’s a 50/50 depending on whether the major holders want to add funds or leverage the assets. If they do raise I expect it to be a pro-rated rights issue, none of this placement crap.


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## So_Cynical (3 November 2017)

So_Cynical said:


> Dec 21, 2008
> Market Cap: 40,696,210
> Issued Shares: 64,597,159




9 Years later
Market Cap: 487,454,696
Issued Shares: 359,745,163

Webster has been very very busy issuing shares, raising money, buying stuff and selling stuff. Holding WBA for the last 9 years would of been significantly better then holding an Index ETF but not as good as holding many other stocks.

I reckon management has done a good job building the company and the asset base, growing the MC from 40m to 487m is a hell of an increase in just 9 years, if they can do that again WBA will be worth over 6 Billion in 2026.

Putting all the debt and one off financials to one side, WBA looks to be well positioned, Meat Sheep, Water, Walnuts and Land - a major agriculture play with significant growth potential that cant be disrupted, all they have to do is keep doing what they have been doing and annual returns of 10%+
would/could be expected.
~


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## peter2 (20 December 2017)

According to the chairman's address, this company has finally sorted through the mess created by the  acquisitions and subsequent expansion. The walnut crop is a bumper, the walnut flowers are getting pollinated, cotton is planted and there's plenty of water for all their crops/orchards. Their sheep could do with some rain, but nothing is perfect for a farmer. 

The share price tumbled after the chairman's address and is now at the bottom of it's current range. I'm no share valuer but the current price seems to provide an acceptable RR for me. I'd place a SL at 1.20, buy half here and plan to buy more when price gets to 1.45.

ps: I have to constantly remind myself that I'm a BO trader and not a share whisperer.


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## peter2 (12 March 2018)

Interesting development: *Webster acquires Sandy Valley almond property.
*
Patience paying off on this one as investor sentiment turns bullish. 






So cynical are you familiar with the expression "curl the mo"?


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## So_Cynical (13 March 2018)

peter2 said:


> Interesting development: *Webster acquires Sandy Valley almond property.
> *
> Patience paying off on this one as investor sentiment turns bullish.
> 
> So cynical are you familiar with the expression "curl the mo"?




Never actually heard "curl the mo" but i have a vision of one of those handlebar mo's of many years ago and self satisfied tip curling, i think i paid $1.32 per share a few days before i posted above in early Nov, looking good now with the latest run up..

In for the long haul.


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## So_Cynical (19 April 2018)

Bell Potter Agriculture research paper out today, WBA price target of $1.76 ~ Keen on the nut sector in general, pretty much all the Ag players get a mention even Buderim Ginger.

https://www.belldirect.com.au/smart...Potter_research_Agriculture__FMCG_roundup.pdf


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## So_Cynical (5 June 2018)

So_Cynical said:


> Bell Potter Agriculture research paper out today, *WBA price target of $1.76* ~ Keen on the nut sector in general, pretty much all the Ag players get a mention even Buderim Ginger.
> 
> https://www.belldirect.com.au/smart...Potter_research_Agriculture__FMCG_roundup.pdf




Well that didn't take long ^ $1.92 today's high, up 9.5% on NO news, the sellers all taken out.


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## peter2 (18 June 2018)

WBA is now at all time highs.


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## kid hustlr (23 June 2018)

Profit takers look like they've stepped in.

Right at 2 bucks again and we might not see that price for a while?


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## So_Cynical (23 June 2018)

kid hustlr said:


> Profit takers look like they've stepped in.
> Right at 2 bucks again and we might not see that price for a while?




Webster goes up and down a bit - as can be clearly seen in your chart, sharp runs up are often followed by sharp runs down...i really like the whole China/Asia growth & market maturity = demand for AU agricultural products theme.


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## So_Cynical (15 May 2019)

Webster now in the Honey business, they paid 8m for Australian Rainforest Honey, this mob i assume. http://arfhoney.com.au/

https://www.asx.com.au/asxpdf/20190515/pdf/4453mh3tyj02j2.pdf


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## peter2 (15 May 2019)

Interesting, this means they can place beehives into their almond orchards at the best time to ensure maximal pollination.


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## rnr (15 May 2019)

@peter2 your observation, which when coupled with the potential bullish A divergence, could lead to a strong move higher. Time will tell.


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## So_Cynical (3 October 2019)

Webster up 52% on a big down day, Take over scheme implematation straight out of left field, PSP Investments (A Canadian pension fund) $2 per share, looks like a done deal pretty much.

https://www.asx.com.au/asxpdf/20191003/pdf/449524vwjvp2p2.pdf


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## System (24 February 2020)

On February 21st, 2020, Webster Limited (WBA) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between WBA and its shareholders in connection with the acquisition of all the issued capital in WBA by Henslow Acquisitionco Pty Limited, a subsidiary of the Public Sector Pension Investment Board of Canada.


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