ELD - Elders Limited

[eskys]

Missed the low of today, decided not to chase now since I don't hold anymore (out in July at breakeven)

One of our relationship managers warned of a long time ago because he deals in rural businesses.

 

[farmerge]

Missed the low of today, decided not to chase now since I don't hold anymore (out in July at breakeven)

One of our relationship managers warned of a long time ago because he deals in rural businesses.

Nor a company I am fond of.
Many years i sent She who is never wrong to the Midland branch to pick up some product. She was ignored and when finally when the counter hand decided ot serve her treatd her as if she was diseased.
Had a go at the manager and gave him a mouthful.
Been with Wesfarmers and its various names since then, over 40 years now

 

[divs4ever]

Nor a company I am fond of.
Many years i sent She who is never wrong to the Midland branch to pick up some product. She was ignored and when finally when the counter hand decided ot serve her treatd her as if she was diseased.
Had a go at the manager and gave him a mouthful.
Been with Wesfarmers and its various names since then, over 40 years now

my trader buddy got scorched with this during the GFC

i watched what they did to preferential share-holders

so have kept clear of them

 

[So_Cynical]

Settle down team , Elders still trading well above the 52 week low $5.99 ~ IRE down 32% thats one to get upset about!

 

[farmerge]

Settle down team , Elders still trading well above the 52 week low $5.99 ~ IRE down 32% thats one to get upset about!

Still reckon that Elders is not for me. Company is probably good but the experience She had certainly left a sour taste. Employ duds and it keeps moving up or down the chain.

 

[eskys]

I don't understand................unfortunately, I don't hold..........it's up $1.00

Elders $ELD reported net income for the full year that met the average analyst estimate. Net income $100.8 mln, -38% y/y, estimate $100.7 million (Consensus). Underlying profit $103.7mln, -32% y/y, estimate $101.4mln. Underlying Ebit $170.8mln, -26% y/y, estimate A$168.6mln

 

[mullokintyre]

I don't understand................unfortunately, I don't hold..........it's up $1.00

Elders $ELD reported net income for the full year that met the average analyst estimate. Net income $100.8 mln, -38% y/y, estimate $100.7 million (Consensus). Underlying profit $103.7mln, -32% y/y, estimate $101.4mln. Underlying Ebit $170.8mln, -26% y/y, estimate A$168.6mln

Yeah, I was a little surprised.
Given the collapse of cattle and sheep prices, expectations of low rainfall due to Ell Nino, and an expected slowdown in the ecomomies of our trading partners.
But, hey, the market thinks its great, perhaps it was the upbeat words of Mark Ellison.

Elders boss Mark Allison says the rural services company is well placed to weather the dry summer conditions forecast for many of Australia’s agricultural regions, having diversified the business to a point where it is protected from extreme weather patterns and market shocks.
Referring back to previous weather patterns over the past decade, Mr Allison said Elders had proven itself to be a resilient company that delivered stable returns.

“(If you look at) Elders results through El Niño, La Niña, bushfires, pandemic - it doesn’t make any difference - and the key reason is because of the multiple diversifications in the business,” he said.
“We’ve got geographical diversifications, but there’s also product and service diversification - there’s channel diversification. So we’re wholesale and retail, and there’s business model diversification.

Mick

 

[finicky]

 

[Dona Ferentes]

“My sense is that if you’ve got a quality product and an efficient supply chain, you can compete globally and having a very strong, consistent market is actually helpful… Do we enjoy them manipulating price, holding back their buying and then ramping up their buying? No, we don’t enjoy that, but then we don’t enjoy a lot of things that happen to Australia in the world.”
- Mark Allison, CEO, Elders Ltd
.
. hmm

 

[Dona Ferentes]

• Revenue declined by 6% to $3.13bn
• underlying earnings before interest and tax fell 25% to $128m.
• Net profit after tax to shareholders dropped 55% to $45.1m. These results reflect the impact of lower livestock prices and reduced demand for crop protection products early in the year, though a recovery in livestock markets and improved trading conditions in the second half provided some relief.
• Costs rose 14% to $509.6m, driven by acquisitions and investments in growth initiatives, further pressuring margins.

The company emphasised its focus on diversification, which allowed it to partially offset regional and product-specific challenges. Notable achievements included the launch of Elders Wool, a state-of-the-art wool handling facility, and the expansion of its geographic footprint through 13 acquisitions and 21 additional points of presence. Despite these efforts, return on capital fell to 11.3%, down from 16% the previous year.

The board declared a final dividend of 18 cents per share, bringing the total dividend for the year to 36 cents, down from 46 cents in 2023. This reflects an elevated payout ratio of 88%, attributed to the lower earnings base.

 

[qldfrog]

• Revenue declined by 6% to $3.13bn
• underlying earnings before interest and tax fell 25% to $128m.
• Net profit after tax to shareholders dropped 55% to $45.1m. These results reflect the impact of lower livestock prices and reduced demand for crop protection products early in the year, though a recovery in livestock markets and improved trading conditions in the second half provided some relief.
• Costs rose 14% to $509.6m, driven by acquisitions and investments in growth initiatives, further pressuring margins.

The company emphasised its focus on diversification, which allowed it to partially offset regional and product-specific challenges. Notable achievements included the launch of Elders Wool, a state-of-the-art wool handling facility, and the expansion of its geographic footprint through 13 acquisitions and 21 additional points of presence. Despite these efforts, return on capital fell to 11.3%, down from 16% the previous year.

The board declared a final dividend of 18 cents per share, bringing the total dividend for the year to 36 cents, down from 46 cents in 2023. This reflects an elevated payout ratio of 88%, attributed to the lower earnings base.

Based on previous crashes, not even sure these agricultural stocks will hold on the next downturn...
I would so much like to invest in these stocks Aac, RFF etc but performance are not there...

 

[Dona Ferentes]

Based on previous crashes, not even sure these agricultural stocks will hold on the next downturn...
I would so much like to invest in these stocks Aac, RFF etc but performance are not there...

and now

Acquisition of Delta Agribusiness and Equity Raising​

KEY HIGHLIGHTS
• Elders Limited (Elders) has entered into an agreement to acquire 100% of the shares in Delta Agribusiness Pty Ltd for an enterprise value of $475 million
• Delta is an Australian agribusiness providing rural products and advisory services through a network of 68 locations and approximately 40 independent wholesale customers
• In the LTM to 30 June 2024, Delta generated revenue of $835 million and EBITDA of $53 million
• The Acquisition values Delta at approximately 11.1x LTM to 30 June 2024 adjusted EBIT4 pre synergies and 8.7x LTM to 30 June 2024 adjusted EBIT post synergies
• Compelling strategic rationale with a complementary geographic footprint, filling retail gaps in New South Wales, North West Victoria, South Australia and Western Australia, and enhancing Elders’ technical expertise and offering in ag tech and precision agriculture
• Delta’s experienced leadership team is excited to join Elders and will continue to manage the business following completion of the Acquisition
• Potential to generate net EBITDA synergies of $12 million per annum (before one-off implementation costs), to be gradually realised over the next three years post completion
• Expected to deliver pro forma FY24 mid single digit EPS accretion pre synergies and mid teens EPS accretion post synergies
• The Acquisition, transaction costs and additional balance sheet flexibility to support future growth opportunities to be funded through:
o a $246 million fully underwritten pro rata accelerated non-renounceable entitlement offer;
o a $110 million new revolving loan facility; and
o $190 million of new Elders shares issued to Delta shareholders as scrip consideration at $8.52 per share (approximately 22 million shares)
• All Elders Directors who are eligible have confirmed their intention to participate in the Equity Raising
• Elders expects pro forma balance date net debt / EBITDA for the combined group to be approximately 2.0x by 31 March 2025 pre synergies

 

[divs4ever]

Based on previous crashes, not even sure these agricultural stocks will hold on the next downturn...
I would so much like to invest in these stocks Aac, RFF etc but performance are not there...

am treating this sector as 'safe-havens ' ( rather than multi-baggers )

will their share prices drop in the next downturn ? very likely , but most should be able to pay some divs ( and give me cheaper entry points )

i am not a fan of ELD for various reasons , but hold several other stocks in the same sector ( SHV , D2O , RFF , GNC , SGLLV )

this sector will always face hard to predict challenges floods , droughts bush-fires , trade wars etc. , etc, and will always seem to be badly priced using a risk v. reward calculation