I actually thought the same as you, that the company was just transporting livestock not trading it. it's not a complex business but the capital structure needs to be right. You can't scale up and you can't scale down quickly.
I'll take a wild guess that the animals are shipped once a letter of credit has been provided by the customer's bank.
Doesn't sound much like a going concern now, does it? $65m trading loss. Geez.
And what crap disclosure practice... one single shipment ran into trouble and company was forced to sell the cattles cheap, costing it $8-10m. Did that happen the day before the announcement? Or did that happen some time ago that the company should have announced as part of it's continuous disclosure. There's probably enough smoke for class action lawyers to sniff around.
Is it a takeover target? It does have some hard assets but it also has lots of debt. It might be in the lenders interest to take control and sell the hard assets, and it might be in the potential acquirer's interest to buy those assets from the administrator.
The actual operating business seems to have negative value based on the incompetence on display.
Sorry to hear mate. I think your top down thesis was correct. What you didn't expect was the sheer magnitude of management incompetence. I never read the prospectus in great detail but it would appear that the business was already in trouble operationally and financially, and the IPO was as much a lifeline as it was a public float.
Here's a interesting, stock proving its worthy of a look as it appears to be sustainable as, Wellard Limited (WLD) is a largest cattle exporter and a vertically integrated agribusiness that connects producers of cattle, sheep and other livestock to customers globally through a vertically integrated supply chain. Wellard operates in the beef, sheep meat and dairy industries.
Announced today with solid gains of over 31% it had been climbing since August last year from 0.06c to todays price of 0.12c, double in 6 months. Makes for a interesting prospect. (tricky business) can it maintain momentum...
HAD THIS TO SAY TODAY;
Wellard advised that is has successfully resolved its arbitration proceedings in London, against the Croatian Bank for Reconstruction and Development (Hrvatska banka za obnovu i razvitak, or HBOR), and is entitled to receive payments plus interest amounting to US$12.0m within 14 days. HBOR issued Company's subsidiary, Wellard Ships refund guarantees supporting Company's terminated 2015 contract for the building of the planned livestock vessel to have been known as the M/V Ocean Kelpie with the Uljanik d.d shipyard (Uljanik). When HBOR disputed payment under the refund guarantees, Company was forced to commence arbitration to recover the funds.
WLD has signed a binding contract to sell its remaining livestock vessel, the M/V Ocean Drover for US$50.0 million in cash (approx. A$81.2 million).
The sale of the Vessel represents the sale of the main undertaking of the Wellard business, and therefore requires shareholder approval to become final and binding.
The Vessel will be purchased by Meteors Shipping SA, a Marshall Islands company controlled by Göktaşlar Et-Et Ürünleri Yan Sanayi ve Ticaret Limited Şirketi, a significant Turkish agri-business with which Wellard has conducted successful business for some time.
Wellard currently has confirmed charters for the Vessel until June 2025, and subject to fulfilment of all conditions, expects completion of the sale to occur in July 2025.
Upon transaction completion, and before any return of capital to shareholders, the sale of the M/V Ocean Drover will result in a US$50.0 million (approx. A$81.2 million) increase in cash on hand, after costs related to the sale.