Ann: FY21 Financial Results Summary, page-6

Unfortunately I missed the webinar this morning. Overall, I didn't feel this was such a strong performance. Doesn't change the long term faith in the business, but there's a few red flags to monitor.

• NAV has increased 13% to $2.20, so currently trading at $2.60 or 1.18xNAV (this is on the higher side, generally good entry points are <1.1x or around $2.40). Most the increase has come from fair value adjustments (+1% water, +4% land) as well as CAPEX for macadamias.
• The land reevaluation is perhaps a bit lower than Rabobanks national primary industry expectations. Rabobank has posted gains of around 13%, and other agricultural land holders on the ASX have gotten closer to that figure. So only a 5% - some of which dates back from 3yrs ago too - is not a great sign.
• The adjusted NAV is bolstered by the $100m cap raise, which helped reduce debt gearing from 30% to 25% . Gives them headroom, but most of that will be taken by macadamia CAPEX (1000ha of planting) and upgrades on their existing cattle farms. Doubt there will be any huge acquisitions at this point.
• The red flag that remains is AFFO - we know it has gone backwards from 13.5c / 5.1% to 11.9c / 4.6%, which is scary as distributions are 11.3c / 95% payout. As they will continue to grow dividends by 4%, next year AFFO will be 11.6c / 3.9% and payout will be 11.73c / 101%. Note this does not include the 1000/ha of macadamias plantings being completed in FY22 which will be accretive to AFFO once rented - but not sure when they may happen?

I post my research on RFF on FinTwit for any followers, at DownunderValue. GLTAH.