TGR - Tassal Group

[tge oracle]

I have attached a quote from legendary investor Carl Icahn from an article on the front page of today’s SMH. He is very bearish on the world economy and, in particular, Australia. He does, however, single out agriculture ( presumably also aquaculture ) as a bright spot in Australia’s future. I have not posted the full article but it is worth a read.

Quote:

“For Australia, the end of the China-led commodities boom does not spell an end to China-led export growth. Agriculture represents a huge opportunity, as do services and education, while China's need for commodities will never be modest.”


For full article follow link:

http://www.smh.com.au/comment/a-glo...h-us-down-the-wrong-path-20151002-gjzuu8.html



Disc – Invested in MGC, AAC, CGC, WBA, TGR, HUO and CSS

 

[craft]

Tasmanian salmon producer Tassal has been benchmarked as the world’s top seafood company in an international report that benchmarks the world’s top 100 companies for sustainability reporting and transparency.

I don’t know how much weight the seafoodintelligence.com report carries but surely its better to come first than last. Company thought it worth a ASX release.

http://www.asx.com.au/asxpdf/20151202/pdf/433jcdlddskdnn.pdf

ps did anybody hear what came of the senate inquiry into the environmental impact of salmon farming? -perhaps it hasn't reported yet - or more likely a storm in a tea cup, whatever its obviously missed my radar.

 

[galumay]

ps did anybody hear what came of the senate inquiry into the environmental impact of salmon farming? -perhaps it hasn't reported yet - or more likely a storm in a tea cup, whatever its obviously missed my radar.

http://www.abc.net.au/news/2015-08-21/senate-inquiry-backs-tasmania's-salmon-industry/6716076

yep, storm in a teacup! One of my better performers this year!

 

[craft]

Its nice to see Tassal putting in some yards for their employees.

http://www.asx.com.au/asxpdf/20160603/pdf/437ny73hr938r6.pdf

We are part of the community - it is part of our social licence

I give this philosophy a big tick.


I also noted they have been nominated for another environment award.

TASSAL has been named a finalist in the business category of the United Nations Association of Australia World Environment Day awards.

FINALIST: Tassal Operations Pty Ltd, Sustainability – It’s How We Do Business (TAS)

http://www.theadvocate.com.au/story/3923222/tassal-finalist-in-un-environment-awards/

 

[Value Collector]

Its nice to see Tassal putting in some yards for their employees.

http://www.asx.com.au/asxpdf/20160603/pdf/437ny73hr938r6.pdf



I give this philosophy a big tick.


I also noted they have been nominated for another environment award.




http://www.theadvocate.com.au/story/3923222/tassal-finalist-in-un-environment-awards/

Isn't the announcement just basically saying "instead of sending out Margate production to Coles, we are now sending it to Woolworths"?

 

[Klogg]

Isn't the announcement just basically saying "instead of sending out Margate production to Coles, we are now sending it to Woolworths"?

Yes, but you're racking up goodwill with the community.
And chances are there is a cost in moving operations for Woolies distribution from current location to Margate. So there would be a cost, but it's well played by management.

 

[Value Collector]

Yes, but you're racking up goodwill with the community.
And chances are there is a cost in moving operations for Woolies distribution from current location to Margate. So there would be a cost, but it's well played by management.

I don't think there will be extra costs, the Margate plant currently produces salmon portions for Coles, the coles contact has finished, so now it will continue producing portions but instead send them to woollies, not much will change that I can see.

It just frees up some capacity at the lidcome facility to pack more branded product, which would be higher margin than the Coles contract. I think losing the Coles contract was probably a strategic win, frees up Tassal salmon and production capacity for a higher value market, and handballs the low bid to a competitor.

 

[craft]

I don't think there will be extra costs, the Margate plant currently produces salmon portions for Coles, the coles contact has finished, so now it will continue producing portions but instead send them to woollies, not much will change that I can see.

It just frees up some capacity at the lidcome facility to pack more branded product, which would be higher margin than the Coles contract. I think losing the Coles contract was probably a strategic win, frees up Tassal salmon and production capacity for a higher value market, and handballs the low bid to a competitor.

Tyson

They didn't lose the Coles contact, they withdrew from the tender as they wished to redirect volume to other areas to maximise returns. See 7 April announcement.

 

[McLovin]

Did anyone watch Four Corners last night? That seemed like a giant stitch up of TGR. The CEO of a company with a sketchy environmental past (that wasn't even mentioned) gets on TV and accuses TGR, WWF, ASC, the Tasmanian government and the EPA of all being cahoots and covering up an environmental disaster. I expect better from the ABC.

Or did I miss something?

 

[Klogg]

Did anyone watch Four Corners last night? That seemed like a giant stitch up of TGR. The CEO of a company with a sketchy environmental past (that wasn't even mentioned) gets on TV and accuses TGR, WWF, ASC, the Tasmanian government and the EPA of all being cahoots and covering up an environmental disaster. I expect better from the ABC.

Or did I miss something?

I watched it and thought the exact same thing, it was laughable. None of the 'evidence' was worthwhile, nor was there any real science in it. As you mention, Huon has a history of breaching standards (see ann by TGR on 16/12/15). On top of that, she (HUO director) claims that the WWF didn't want to be associated with Huon, even if they wanted to work together on environmental issues...

Of course if you have no background on it, you'd be inclined to believe the 4corners report.

 

[craft]

I watched it and thought the exact same thing, it was laughable. None of the 'evidence' was worthwhile, nor was there any real science in it. As you mention, Huon has a history of breaching standards (see ann by TGR on 16/12/15). On top of that, she (HUO director) claims that the WWF didn't want to be associated with Huon, even if they wanted to work together on environmental issues...

Of course if you have no background on it, you'd be inclined to believe the 4corners report.

It was quite a stitch-up of Tassal. Not a balanced debate at all which is a shame because there are certainly legitimate pros and cons of the industry that would make a good debate?
There are people passionately opposed and there are real benefits from the industry.

Overall it seemed quite misrepresentative of Tassal from my research but then I’m obviously not an investigative journalist.

And what is Huon’s story? Like a Chihuaha picking fights first with its food supplier who it refuses to pay and now it would seem with the rest of the industry. They probably have worked out that their investment in high energy offshore farming is never going to be competitive against Tassal’s business plan and positioning. So what do they do? Whip up some environmental fundamentalism, portraying themselves as the good guys and Tassal as the bad guys probably hoping that fear and unfounded beliefs over science pushes all other competitors further off shore and incur the same expenses and economies Huon is exposed to.

If world best practice Fish Farming balancing economics and environment can’t occur in Tasmania – then just shoot us and put us out of our misery- actually get rid of two thirds+ of the worlds population while your at it if you don't want intensive agriculture because you cant sustain them 'naturally' Let’s by all means have sensible debate backed up by science and I’m all for acting responsibly for the environment, but crap sensationalism which knowingly or otherwise promotes one companies economic agenda is a bit disappointing from 4 Corners.

Tassal and Skretting (fish feed producer) have both put out media releases following the 4corners story with the sort of information that I would have thought should have been in a program with balanced representation of the industry.

As far as business impact goes, some of the mud will stick – might even affect demand to some degree but economically it small bickies compared to something like the supply implications of last summer’s water temperatures.

I still think Tassal is a good responsible business - But that's probably because I'm biased.

 

[So_Cynical]

I can understand the flushing issues with Macquarie Harbour, its still a new industry and there are lessons to be learned and if i had a million dollar sea view i certainly wouldn't want it polluted with salmon pens.

Not big issues, a bit of a beat up.

 

[galumay]

I thought the episode was oddly unbalanced for 4 Corners, normally the standard of investigation and journalism is much higher on 4 Corners. No matter, I don't think it will have any consequences, the claims made were easily refuted.

 

[pixel]

It was quite a stitch-up of Tassal. Not a balanced debate at all which is a shame because there are certainly legitimate pros and cons of the industry that would make a good debate?
There are people passionately opposed and there are real benefits from the industry.

Overall it seemed quite misrepresentative of Tassal from my research but then I’m obviously not an investigative journalist.

[...]

As far as business impact goes, some of the mud will stick – might even affect demand to some degree but economically it small bickies compared to something like the supply implications of last summer’s water temperatures.

I still think Tassal is a good responsible business - But that's probably because I'm biased.

I had a quick look at the segment through iView, and gathered the same impression: A beat-up.
Generally, I find ABC's journalism above the industry standard - think ACA, yuck!

But sometimes, their Left-leaning intellectualism can let them down and produce ludicrously imbalanced and distorted presentations. Of course, minnows like Huon recognise that and milk it to suit their ends. A bit of Social Media irresponsibility creeps into the picture. Remember the stink they created for Live Export?

 

[craft]

I had a quick look at the segment through iView, and gathered the same impression: A beat-up.
Generally, I find ABC's journalism above the industry standard - think ACA, yuck!

But sometimes, their Left-leaning intellectualism can let them down and produce ludicrously imbalanced and distorted presentations. Of course, minnows like Huon recognise that and milk it to suit their ends. A bit of Social Media irresponsibility creeps into the picture. Remember the stink they created for Live Export?

I don't know about left leaning intellectualism as the cause. I think it's just more a case of of the production team doing a crap job and that now being sadly acceptable to put to air on the ABC.

For all intents and purposes i'm a greenie, I certainly love nature and all my recreation is based around adventures in it. I hope I'm pragmatic enough to see it from the big picture though, not just a my backyard perspective. I welcomed Salmon farming being put under scrutiny when I first heard about the program and watched it hoping to gain some more perspective that maybe my bias had blinded me too. Its not that the program was one sided that bothers me, it's the wasted opportunity for a thoughtful debate that is the casualty. Might as well turn the telly off altogether, obviously the only ones still watching just want sensationalist crap. At least the Internet allows you to dig for the facts, so long as you have your own bias filters under control.

 

[McLovin]

At least the Internet allows you to dig for the facts, so long as you have your own bias filters under control.

The same internet was available to the producers. Which makes you wonder...

 

[Klogg]

Looks like Mark Ryan and the Tasmanian Government have put their 2cents in:
http://www.themercury.com.au/news/t...n/news-story/7c5798ef8b60bff22f7583bc1aee9f4d


This point is interesting:

The controversial report quoted research by Melbourne University’s Associate Professor Tim Dempster, which was funded by the Fisheries Research Development Corporation.

Especially when you see this:

The Fisheries Research and Development Corporation (FRDC) is a co-funded partnership between its two stakeholders, the Australian Government and the fishing industry.

I wonder why the fishing industry would want a reduction in farmed salmon...
That's basically the argument used to suggest the WWF and TGR were in cahoots.


And apparently 4Corners is on the same level as ACA or Today Tonight. Made me chuckle.

In the minister’s view, Four Corners is a current affairs program, not a science-based documentary.

 

[Value Collector]

 

[galumay]

Had a phone call today from someone representing TGR asking if I had got the documents about the SPP and whether I would be participating. I pointed out I could buy on market, pay brokerage and be well in front. I guess the interest has been tepid at best!

 

[galumay]

Can someone with more experience explain to me how free cash flow works with TGR, I usually use "Payment for Property Plant & Equipment" as a proxy for Capex, but with TGR this amount is only slightly less than Operating Cashflow, meaning that I end up with very little free cash flow in comparison to EPS.

Normally I would see that as a big red warning, but I think in this case its actually not capex but the lease costs - regardless it has a very big impact on FCF!

I have some other more complex formulas I use for FCF and they also generate very low numbers.

I suspect there is something about a commodity producer in agriculture that I am missing here?