Forum Archive Index - January 2000

[Nigel McCarter <n.mccarter@clear.net.nz>]

vincent/mike nufarm holders

I can see some negative impacts but 
N America represents 10% of turnover, europe 35%. australia 45%

The company has four plants in north america ... they weren't all affected
by Hurricane floyd
The company has six plants in europe, that therefore can't be affected by
adverse currency movements when they are selling within europe - one of the
advantages of having overseas plants in high value markets.


According to the interim statements sales revenue is budgeted for a modest
4.8% increase and EBITDA is budgeted for 14.5% increase this year.  At
those levels the share price should go to about $5.50

Either the statement or the brokers letter are incorrect 

A debt ratio of 60-70% is not particularly high for a company that has
expanded rapidly in the last five years.

Even reducing Revenue, EBIT, and profit by 10% still leaves PE at 12.5, PS
at 0.7 and profit margins at healthy 5%.  You have to slash revenue and
profits by close to 30% before I can see justification for $4.00 share price



I suspect, and hope, that the current drop is pure panic prior to the move.
and the share price will pick up rapidly when its complete. 
Very strange. 

\At 11:25 AM 1/27/00 +1300, you wrote:
>   Apart from those reasons mentioned by some of you,  I think the
>following two reasons also would have negative impacts on Nufarm's 
>profitability:      Nufarm has a weak balance sheet, its debt ratio is as
>high as 66%.          to 60-61 cents(against Greenback) by the end of this 
>year as some economists predicted, then Nufarm would incur some exchange 
>loss.   RGDS,         Disclosure: holder of Nufarm  shares 
Nigel McCarter
Safety Management and Information Services Ltd
Box 23 019 Hamilton
Phone 64 7 858 2429 Fax 64 858 2689
Mobile 02 212 4901

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