Most of that is true, but a couple of points: - they have never used the milk from their farms in manufacturing. It was always swapped with Warnambool Cheese & Butter as they had contracts closer to Murray Bridge and Bestons farms were closer to their factory. The whole spin about controlling the inputs to the products they make is just that - spin - until recently they didn’t have the customer base to sell sufficient dairy products (mainly cheese) to consume the milk they were buying under contract. This is the real reason for a lot of their overstocks, which in turn turned into them being a milk trader to get rid of it.
Their valuation of the dairy factory and protein plant is massive, even when they hadn’t commissioned the protein plant. These valuations are not remotely close to what they’d realise if they were to sell them. The Scorpio/PFG is another classic example. They were broke from day 1 and eventually had to be bought out or go bankrupt.
This is not a company. It is a feel good concept that they have stuffed up beyond normal incompetence. Without naming people, reputations have been shredded by this disaster. The funny part is their sheer arrogance prevents them from realising it when they are considered a laughing stock in the business world, particularly by those in the Adelaide bubble.
BFC Price at posting:
8.5¢ Sentiment: Hold Disclosure: Not Held
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