# SGL - Ricegrowers Limited



## System (19 March 2019)

SunRice is a $1.1 billion global food business and one of Australia's leading branded food exporters. 

With sales, marketing and operations spanning the globe, SunRice supply domestic markets and almost 50 countries with a diverse range of food products, from table rice, flour and snacks, to rice meals and companion animal and livestock products.

It is anticipated that SGL will list on the ASX during April 2019.

https://www.sunrice.com.au


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## So_Cynical (28 March 2019)

Beats me why Sunrice would list as Ricegrowers? it wasn't that long ago that another agricultural co/op listed and almost immediately blew up, Murray Goulburn, i think that management didn't have much experience with running a public company.

Anyway should be thinly traded after an initial listing flurry as the general public hasn't been able to hold before now, i did read that they wanted to raise capital so perhaps a placement of other offer will come about soon after listing? the super thin margins are a bit of a concern, 1.1 billion in revenue and only 34 million profit.


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## The Triangle (18 June 2019)

Thinly traded is correct.  It's taken me a few weeks to build a decent holding (Yes, I'm already down a few percent).  Positives are a very good EV/EBITDA and dividend yield for the sector as well as an acceptable cash balance to fund some growth.   They've been trading on the NSX for years so it's a reasonable assumption that this company knows what it is doing and is not the next MG.    Unfortunately liquidity is extremely low and it sits outside of the ASX300.  Hopefully annual results are out before the end of next week and this can get some attention.


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## So_Cynical (29 June 2019)

Results out - 1.2B in revenue for a profit of just 32.8 million, 33c FF dividend ~ 6% net yield at today's SP.

https://www.asx.com.au/asxpdf/20190628/pdf/44665q411src0f.pdf


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## The Triangle (24 June 2021)

Revenue (1.02B) and profit (18m) down again, but SP up.   the 33cps dividend now at nearly a 100% payout for about 4.9% FF.  SGL is actually now at a "fair value"  or maybe slightly high value.    Two years of declining earnings is not a good thing, but they were so undervalued on switching to the ASX that I think the decline will be forgiven.    

Will keep until dividend is paid, but may offload these shares if this price persists after that and look to re-enter at a more reasonable price at a later date.    Thankfully there is some liquidity now so selling and buying doesn't shift the SP by +-10%


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## mullokintyre (24 June 2021)

The improved out look for growing rice (mostly the increase in water availability from Murray Valley irrigation system) after two lean years of drought will not do it any harm either.  My mate who does ag spraying has been pretty busy of late (not just Rice, but cotton,  grapes, almonds you name it).
Mick


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## mullokintyre (9 October 2021)

Rice prices , while well below the big spike in June 2020, have been on a genrally upward trend this year.
It is averaging about ten percent above the recent  median prices since 2015.
As this is the time for planting Rice, farmers will be weighing up the  options of growing rice, with good water availability, low water prices , and reasonable rice prices on the plus side, versus a greater potential supply over demand  forecast for next 12 months, and the options of growing other crops perceived as less risky.
SGLLV been on a bit of an upward trend since it hit lows back in mid September, might have to have a small pice of this one.
Mick


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## divs4ever (16 December 2021)

SunRice Group FY2022 Half Year Financial Results:
 Strong earnings recovery despite global supply chain challenges 
 Strong improvement in earnings, with EBITDA of $36.9 million and NPAT of $16.7 million, up 32% and 38% respectively on the prior corresponding period, underpinned by 11% growth in revenue
  The return of rice in the Riverina, a progressive turnaround in the performance of key Pacific markets and the accretive contribution of recent acquisition KJ&Co Brands were the key contributors to this rebound in financial performance
  Group anticipates that in 2H FY2022 there should be an acceleration in the recovery commenced in 1H FY2022, however there are ongoing global supply chain challenges 
 With improved Group performance coupled with a favourable outlook, SunRice today declared an interim dividend of 10 cents per B Class Share 
 Estimated range for 2021 (CY21) pool currently being processed and marketed has been updated to $405 to $435 per tonne for medium grain Reiziq 
 Based on plantings, next Riverina rice crop (to be harvested from March 2022) is expected to be in excess of 600,000 paddy tonnes  SunRice made further progress on executing its Sustainability Strategy in 1H FY2022, including climate scenario planning as part of commitment to adoption of Taskforce on Climate-related Financial Disclosures recommendations 
 Investor Conference Call to be held at 9.30am AEDT on Friday 17 December (details below) SunRice today released its Financial Results for the period ended 31 October 2021 (1H FY2022) with Group CEO, Mr Rob Gordon, commenting: “After successfully navigating one of the most difficult periods in our history, with the dual challenges of COVID-19 and two consecutive years of extremely low Riverina production, I am pleased that we are now seeing a strong recovery in financial performance.
 “Despite the challenges of the past two years, we have continued to make investments in strategic and organic growth initiatives, and a number of these are now realising benefits. “We expect our recovery to accelerate throughout the remainder of FY2022, but we continue to face a number of challenges – including unprecedented escalation in freight rates and shipping disruption due to COVID-19, and operational challenges in CopRice which could impact the scale of this recovery.” 
The 1H FY2022 Financial Results were driven by a range of factors: 
 Recovery of the Australian Rice Pool Business, which is once again able to absorb its share of overhead costs as a consequence of the increased crop of 417,000 paddy tonnes harvested earlier in 2021. The larger rice crop underpinned the return of larger volumes of Australian rice to premium export markets across the Middle East and Asia in 1H FY2022, in contrast with the past two years. 
 Continued positive performance of the International Rice segment, reflecting the SunRice Group’s multi-origin strategy and deep understanding of consumer preferences, enabling the Group to offer high-quality products for each of its brands at multiple price points. This sourcing expertise, coupled with nimble commercial initiatives to adapt to market conditions and cost containment discipline, delivered improved profitability in the Pacific markets. 
 Accretive contribution of the recently acquired KJ&Co Brands in the Riviana Foods segment, and organic growth in its Always Fresh, Fehlberg’s and Roza’s Gourmet brands across most categories via innovation and increased ranging with retailers. 
 Upturn in performance in the Rice Food segment, particularly in microwave products where SunRice gained market share, supported by initiatives such as the re-launch of “Our Best Yet” microwave pouch range. 
 While improved seasonal conditions in Australia benefited the Group as a whole, these conditions and a range of other factors, including operational challenges, contributed to a slow recovery of the CopRice segment in 1H FY2022. 
 Ongoing effects of COVID-19 on the economies of countries dependent on tourism, the decimating effect of prolonged lockdowns on the food service sector in NSW and Victoria, the pervasive disruption to the global shipping industry, inflationary pressure on manufacturing inputs, and labour shortages in certain regions also affected the Group. 

Interim dividend 
Through the ongoing execution of the 2024 Growth strategy, which has seen the Group deliver through the drought cycle, and the ongoing diversification of its earnings portfolio, SunRice is progressively building a more robust earnings base, less dependent on fluctuations in Australian rice production. 
This is illustrated by the growth in its complementary Profit Businesses such as Riviana Foods. In this context and considering the positive turnaround in performance achieved in 1H FY2022 and a favourable outlook for the rest of the year, the Group today declared a fully franked interim dividend of 10 cents per B Class Share. 

Our outlook 
The Group anticipates that in 2H FY2022 there should be an acceleration in the recovery that commenced in 1H FY2022, in particular as global shipping issues contributed to an overhang of FY2021 inventory in market which slowed that recovery down in 1H FY2022. The Group will continue to look for synergies with its recently acquired businesses, so they can deliver additional benefits and contribute positively to consolidated earnings. 
The significant and rapidly escalating disruptions to the global shipping industry caused by the COVID-19 pandemic and other factors in 1H FY2022 are expected to continue in 2H FY2022. Unprecedented escalation in freight rates – more than 1000% in some cases – also put significant pressure on margins for both the Australian Rice Pool business and some of the Group’s profit businesses in 1H FY2022. As a result, SunRice now expects to incur at least $30 million in additional and unplanned freight costs on a full-year basis at Group level in FY2022. 
The Group continues to monitor a range of other factors that have the potential to impact the scale of the recovery in full-year revenue and profitability, including strong pasture conditions in eastern Australia and a range of operational challenges which are hampering the pace of CopRice’s recovery in the short-term. Despite global challenges, the Group is pleased that the recovery in the Rice Pool Business is supporting an update to the estimated range for the CY21 pool to $405 to $435 per tonne for medium grain Reiziq.
 This is despite the Australian Rice Pool being expected to absorb at least $40 per tonne of unplanned freight costs on a full-year basis. With planting now concluded, the next Riverina rice crop (to be harvested from March 2022) is expected to be in excess of the 623,000 paddy tonne crop harvested in 2018. This larger volume of Australian rice will underpin the Australian Rice Pool’s exports to premium markets in FY2023, which is expected to support positive returns to our A Class Shareholders and growers.
 Based on the return to more favourable conditions, the Group intends to continue to execute its 2024 Growth Strategy, with a focus on new merger and acquisition opportunities, new product initiatives and various capital projects to support greater diversification and resilience.

 DYOR

 i hold SGLLV

 hmmm looks like my plan to add extra has been delayed


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## mullokintyre (16 December 2021)

divs4ever said:


> SunRice Group FY2022 Half Year Financial Results:
> Strong earnings recovery despite global supply chain challenges
>  Strong improvement in earnings, with EBITDA of $36.9 million and NPAT of $16.7 million, up 32% and 38% respectively on the prior corresponding period, underpinned by 11% growth in revenue
>  The return of rice in the Riverina, a progressive turnaround in the performance of key Pacific markets and the accretive contribution of recent acquisition KJ&Co Brands were the key contributors to this rebound in financial performance
> ...



Interesting, I would like to know what they have in mind when they say the Group intends to continue to execute its 2024 Growth Strategy, with a focus on new merger and acquisition opportunities, new product initiatives and various capital projects to support greater diversification and resilience.
I don't like these motherhood statements. Show me an acquisiton target, then let me evaluate it.
Will keep holding, the divvy is probably worth holding for.
Mick


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## divs4ever (16 December 2021)

grabbed these because of the agriculture sector exposure  ( last month )  , am not sure what they can acquire in rice-producers  , but bolt-ons might be possible  , things like water-rights  or a fertilizer company , one might be cautious if they start buying farms specializing in other crops 

 sadly 'motherhood statements ' are widespread across the ASX , i agree with what you are saying 

 surely they wouldn't do something quirky  like snapping up a dairy producer so they can sell creamed rice 

 from memory they already sell rice-cakes ( biscuits ) and i doubt they can compete with the Asians to make rice-wine/vinegar    a profitable like 

 this is more about sector exposure for me , 

 cheers 

 ( BTW the extra div. was a surprise , it normally pays yearly , so suspect this div. will  be a one-off )


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## mullokintyre (23 December 2021)

mullokintyre said:


> Interesting, I would like to know what they have in mind when they say the Group intends to continue to execute its 2024 Growth Strategy, with a focus on new merger and acquisition opportunities, new product initiatives and various capital projects to support greater diversification and resilience.
> I don't like these motherhood statements. Show me an acquisiton target, then let me evaluate it.
> Will keep holding, the divvy is probably worth holding for.
> Mick



Well, I got my wish.
Announced they have acquired Pryde's easy feeds fro 38 mill.
Prydes revenue was $30 mill last year, and has grown every year for the past five years.
Sunrice expect it to be earnings accretive in the first year.
Not a lot of other useful  info in the announcement to evaluate the deal.
On the face of it, it does not seem a natural fit in the rice processing business, but will wait and see.
Mick


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## The Triangle (23 December 2021)

divs4ever said:


> grabbed these because of the agriculture sector exposure  ( last month )  , am not sure what they can acquire in rice-producers  , but bolt-ons might be possible  , things like water-rights  or a fertilizer company , one might be cautious if they start buying farms specializing in other crops
> 
> sadly 'motherhood statements ' are widespread across the ASX , i agree with what you are saying
> 
> ...



I don't think this dividend will be a one off.  SGL have been for some time working to become more accepted as a genuine investment.  A single annual dividend is annoying for some people and running with a half year dividend is a good idea.

A new acquisition today, looks like they've picked up horse feed for $38 million in cash.  Can't know how good or bad this deal is for some time, but it's obviously a very complementary business. 

In general I prefer an acquisition of a family run/founded private business because typically you have a bit more pride in that company and it should have been well managed.   Also, if you run/own your own business sometimes the only way to actually make money (for yourself) is to sell out.   Looks like the seller is remaining with SGL which is also usually a good sign.

_Mr Pryde will continue in his role as Managing Director of Pryde’s EasiFeed, alongside other Pryde family members who will remain in the business._

As a side note I like how SGL are paying cash for these businesses - not issuing shares and diluting holders.


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## divs4ever (23 December 2021)

apart from  the lack of liquidity ( that doesn't worry me  but might concern others ) SGLLV has a lot to like 

 we will see with the div. intervals ( i won't be sending back the extra payments  , but did only budget for one a year )

 apart from product diversity  i haven't spotted the silver lining in the new acquisition  , unless they plan to enter the stock-feeds market  with say a product that uses rice production waste  ( say for pig or goat food ) and need a 'door-opener' to retailers/wholesalers


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## divs4ever (20 April 2022)

NSW Government renews rice vesting arrangements for a period of 5 years

The SunRice Group welcomes the decision of the NSW Government to renew the rice vesting and Sole and Exclusive Export Licence (SEEL) arrangements for a further five years (enclosed).
These arrangements are policy mechanisms of the NSW Government that provide the Rice Marketing Board (RMB) the right to control the marketing of all rice grown in NSW, provided it generates net benefits to the NSW rice industry and the general community.
Under the arrangements, the RMB issues a SEEL to SunRice to help obtain the highest possible premiums and freight scale advantages for the export of NSW-grown rice through its Australian Rice Pool Business.
Commenting on the NSW Government’s decision, SunRice Chairman, Mr Laurie Arthur, said: “As our Riverina rice growers harvest the largest crop in five years, this decision from the NSW Government is a major vote of confidence in our industry and will enable SunRice to continue to navigate increasingly complex global rice markets. “The vesting and single desk marketing arrangements allow SunRice to deliver significant export price premiums and freight scale advantages, which ultimately lead to higher farmgate prices for the ~98 per cent of Australian rice growers who farm in the NSW Riverina region.
“The RMB has reported that these export price premiums have totalled more than $455 million in the nine years since Financial Year 2012. “This includes through SunRice strategically targeting higher-value markets, investing in Australian brands and their association with the high-quality reputation of NSW grown rice, countering tariff, subsidy and quota protections in global markets and delivering significant scale benefits for growers. “This unique partnership between the NSW Government, Riverina rice growers and SunRice, and the structured marketing arrangements, have allowed the industry to build positions and strong market demand for branded and other rice products in approximately 50 markets.
“These arrangements only apply to the export of NSW-grown rice – the Australian domestic rice market is one of the most open and competitive in the world and remains so for the benefit of NSW and Australian consumers. “Importantly, the arrangements are strongly supported by those most impacted by their continuation or removal – the rice growers of the Riverina region, and the communities and businesses which rely upon them. “The continuation of the arrangements also provides ongoing support for SunRice’s Riverina operations, which generate close to $400 million in direct economic activity annually in years of normal production, through payments to growers, staff and local businesses.”

DYOR

i hold SGLLV


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## Dona Ferentes (20 April 2022)

looked up SGL but couldn't get anywhere. ASX trading seems to be happening on SGLLV (the B class shares)

*About SunRice’s structure *
The structure of Ricegrowers Limited (SunRice) contains non-standard elements including its dual class share structure comprising A Class Shares and B Class Shares. 

_*A Class Shares *confer on their holders the right to vote at general meetings but no right to dividends. A Class Shares are not quoted on the ASX and may only be held by Active Growers. A Class Shareholding Limit: a person must not hold more than 5 A Class Shares. In practical terms the voting rights held by A Class Shareholders give those shareholders the right to control the election of directors and any changes to SunRice’s constitution. _

_*B Class Shares* are quoted on the ASX and confer on their holders the right to receive dividends, as determined by the directors from time to time. Holders of B Class Shares do not have the right to vote at general meetings of SunRice and may only vote on proposals involving a variation to their class rights or if required for the purposes of the ASX Listing Rules. This means B Class Shareholders have no right to vote on the election of directors of SunRice. No person may hold more than 10% of the total number of B Class Shares on issue._ 

For more details of the non-standard elements of SunRice’s structure see https://corporate.sunrice.com.au/investors/.


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## The Triangle (27 May 2022)

This update today reads like good news while just about everyone else on the market is updating with bad news.

_The Group experienced particularly favourable trading conditions throughout the final months of FY2022 which has underpinned a strong second half. Further detail on FY2022 performance and the outlook for FY2023 will be provided once finalised with the release of the FY2022 Full Year Financial Results, scheduled to be released on 23 June._


Dona Ferentes said:


> looked up SGL but couldn't get anywhere. ASX trading seems to be happening on SGLLV (the B class shares)
> 
> *About SunRice’s structure *
> The structure of Ricegrowers Limited (SunRice) contains non-standard elements including its dual class share structure comprising A Class Shares and B Class Shares.
> ...



I have often wondered if its the structure of the shares which has scared people off.


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## divs4ever (28 May 2022)

The Triangle said:


> This update today reads like good news while just about everyone else on the market is updating with bad news.
> 
> _The Group experienced particularly favourable trading conditions throughout the final months of FY2022 which has underpinned a strong second half. Further detail on FY2022 performance and the outlook for FY2023 will be provided once finalised with the release of the FY2022 Full Year Financial Results, scheduled to be released on 23 June._
> 
> I have often wondered if its the structure of the shares which has scared people off.



it didn't scare me off ( i hold )
but the lack of liquidity  might scare off traders

 i saw the update  , but took that as  'mixed news '  but then am not up to speed on the rice grades ( apart from what i buy in the super-market )
  maybe it is just me  but given the grain shortages elsewhere  , i thought the ann. might have been a tiny bit more upbeat

 maybe they are thinking the higher prices will  cut down the less affluent buyers  ( more $$ per tonne , but less grain sold )

 PS i bought in November 2021 @ $6.29   ( but was looking for returns in tough times  , rather than a multi-bagger )


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## JohnDe (29 June 2022)

A record year, world food shortages, and the SP drops. An opportunity or hidden dilemma?



> *Record year for SunRice.*
> SunRice has managed to withstand multiple pressures to finish in financial year 2022 (FY22) in a very strong position.
> 
> The global food company’s revenue, naturally determined paddy price and dividends are all at the highest levels in the group’s history.


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## JohnDe (28 September 2022)

Several months ago, I added SGLLV in my Alerts at (at the time), a ridiculously low price, today it went off.

What is happening?

I won't be buying anytime soon.


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## The Triangle (28 September 2022)

JohnDe said:


> Several months ago, I added SGLLV in my Alerts at (at the time), a ridiculously low price, today it went off.
> 
> What is happening?
> 
> I won't be buying anytime soon.



I don't think anything is happening, it's just very illiquid and difficult to trade in and out so there tends to be big swings up and down on small volumes.   Someone probably wanted out today and it's not been a good week for the market, but only about $50,000 was traded today.  3 months until the next set of results so doubt anyone is in a rush to buy SGL at the moment either.


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## divs4ever (28 September 2022)

JohnDe said:


> Several months ago, I added SGLLV in my Alerts at (at the time), a ridiculously low price, today it went off.
> 
> What is happening?
> 
> I won't be buying anytime soon.



 i bought a handful  in November 2021  ( sub $6.30  )

 would be looking for around the $6 to $6.15  to add more 

 being illiquid  is less important to me  than staying viable ( and paying divs. )

 didn't see any news about the company  , only 8055 shares changed hands today  , could be somebody spooked by exposure to the Asian economy 

 but cheers 

 might be time to glance at it more frequently


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