Forum Archive Index - July 2000

["nick" <acummin@es.co.nz>]

           Good post , snoopy.
 Now i see why you may be rather sceptical about their prospects.
Hopefully its the case that you are seeing them as they were rather than
as they are now, time will tell i guess.
         It depends how much of the decline was due to major
problems with the farming sector in the last decade, and how much to
incompetence
on the part of wrightsons. Probably a mixture of the two.
        Fortunatly the low dollar and a good growing season has put the
farmers
back on their feet.  For years they have put off buying new equipment etc,
now they are all bouyed by new found optimism they are going on a spending
spree.  One brother in law has a farm near ashburton , the other in
alexandria,
they both are exuding the feel good factor right now.
               The question is have wrightsons learned their lesson?   The
experience over the last five or so years must of taught them something and
they should now be a leaner meaner outfit, especially with GPG on board.
   Myself, im confident of  at least a 20% rise in share price over the next
year.
 Not spectacular i grant you, but a fairly safe assumpion i feel.
nick

> ----------------------------------------------------------------
> Nick, a very good question that I don't mind answering.
>
> I got into Wrightsons when it was split off from Fletcher Challenge
> some years back.  So I never actually consciously bought the shares.
> I got them via a shareholding in Fletcher Challenge.
>
> I started taking a more active interest in them in 1995, when the
> share price ranged between around $1.10 and $1.20.  Yield was good
> (dividend was 16cps in 1995).  New Zealand is a farming country  and
> I had no other interest in farming, so I thought.  "What the heck, a
> safe boring investment for the bottom drawer."
>
> In subsequent years the dividend was cut and cut again (until in
> 1999 no dividend was paid) and the share price plunged to around the
> 30c level.   There was a somewhat , I thought at the time,
> opportunistic offer for small shareholders to cash up at around 60c
> while the shares were on the way down.  I thought if the company was
> a good enough for Wrightson's to buy it's own shares I should hold
> too (with hindsight I should have bailed then of course).   At the
> low point the total worth of my shares in the company was around
> $300.  In other words,  I would lose 10% of my capital by selling.
> Since I could get by without the $300, I decided to leave it there.
>
> When GPG started to show an interest and did a lightning raid on the
> company, that again got my interest.   I entertained the idea of
> buying some more and riding on Sir Ron's coat-tails.   But strangely
> enough, whenever, I had the spare cash to invest, there seemed to be
> better investments around.   And putting on my Warren Buffet hat, I
> was struggling to see where Wrightson's competitive advantage was.
>
> Sorry to sound negative, but from 1995 to 1999 how would you feel
> about a steadily sliding share price and ever reducing dividend?
> There was the annual beat up about how things were going to get
> better the next year, yet they never did.   So that is why I am
> questioning whether the current board/management has the ability to
> turn the company around.  They are *all* accountants and lawyers,
> albeit some with a hobby type interest in farming.   Accounting and
> legal knowledge are essential to business to be sure.   But the
> current board seem like wannabee farmers masquerading as experts.
> Why did they authorise buying their own shares at 60c, when
> subsequent to that deal the price has been nowhere near there?
> Being a merchandising company I would like to see at least *someone*
> with that sort of background at either senior management or board
> level.
>
> I guess I'm still sticking around with the thought that Sir Ron might
> buy me out in the medium term.  I don't expect the share to plunge in
> value from here, but I don't expect it to soar either.
>
> To end on a positive note I did get a very nice picnic lunch and
> fascinating tour of the Wrightson Lincoln based research centre at
> the 1998 AGM. SNOOPY
>
>
>
>
>
> ---------------------------------
> Message sent by Snoopy
> e-mail  tennyson@caverock.net.nz
> on Pegasus Mail version 2.55
> ----------------------------------
> "You can tell me I'm wrong twice,
> but that still only makes me wrong once."
>
> --------------------------------------------------------------------------
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