I think the asset class is the main attraction to this idea. A lot of private foreign enterprise has bought up Australian agricultural assets of late. As for climate change this will be a much better vehicle to ride out inconsistencies with weather particularly if they get scale about it.
i still dubious about 2 points to the transaction though.
first the current director is selling one of the farms to the new entity? That doesn't sound good and he isn't participating in the ipo as far as I can tell. Is that cba debt coming with the transaction ? Uh no.
second initially with two farms this will most likely generate only about 3 - 4 m in revenue and it would be lucky to make a 300 to 400 k profit, which with say 80m in shares on issue isn't much eps.
if they can get scale closer to a 100m litres of milk a yr then it becomes more attractive. Think I'll wait before buying anymore.
APP Price at posting:
4.0¢ Sentiment: Hold Disclosure: Held
