Investor presentation was 2pm, not 11am - I was on hold for...

Investor presentation was 2pm, not 11am - I was on hold for 3hours! j/k

First, their growth CAPEX is massive. They have $9m being invested in Tasmania's Bell Bay upgrades which will be in the next 24 months (July 2023). In addition they have plans (if approved) to invest $15m for the graincorp terminal in Geelong - I don't personally like this one. If you add in the $4m p/a maintenance CAPEX, then we're talking around $32m over the next two years in cash flow for investing. That compares with the $5.5m this year and $4m the year before. Part of the way this will be funded is through the sale of the 'north of Melbourne' land - they already have $2.9m coming in FY22 for a $3.2m that was booked in FY21; and they have another $20m over the next 4-5years they plan on selling. But still, there's around $25m shortfall in cash flow for financing that will need to come from operations (read: instead of dividends) and financing (read: increased debt).

Second, they are sitting on $99m of plantation land (increased by $11m this year). They have been talking for over 3yrs of selling it, managing it on behalf of the buyer, and maintaining the offtake arrangements to secure ~20% of their supply. Unfortunately this does not seem to have progressed. Around 30mins of the 45mins conference call were people pushing the point: sell the land, go capital light, close the discount of share price to NTA (around 35% at the moment).

Finally, my calculations are that if the volumes hold up (+25%) as planned - which I think they should because most of the supply agreements are in place - and if the pricing holds up (+5%) - which I think they should based on woodchip futures price being pretty stable and increasing demand coming through - then we should see around +$25-30m in cash flow from operations once you factor in additional costs etc. Freight costs could weigh a bit on that as bulk commodities shipping costs are increasing. We will see this REALLY clearly in 1H22 results if it's real or not - sure some volume may be stacked towards 2H due to Tasmania's increase for example, but pricing is already in place for Japan and much of China.