The briefing will be available online so I won't repeat everything.
With the possibility of expansion in oilseeds, the CFO said there'd be an improvement in yields that would eventually plateau, while the CEO said that there was good demand internationally as well as in Australia.
The CEO said that oilseeds expansion was a strategic move by GNC, whether for food, canola meal or use as fuel.
Margins increase more in 'good' years for oilseeds than they decline in 'poor' years.
With the crop insurance over the first four years, GNC has paid $210 million but received $58 million from White Rock Insurance. (This reflects three years of four having seen very good to excellent crops and therefore volumes handled.)
Interestingly, the CEO said its investment in UMG was a 'liquid cash investment', much as you or I might regard it. (I long ago sold due to the poor management).
One analyst remarked the cash balance could be as much as $600 million in a couple of years, with one assumption being UMG was taken over. I didn't get the impression GNC would acquire other businesses just to 'do so', so its claim it'd remain 'disciplined' is good. No rational SH would want it to go off half-cocked such as WOW once did with Masters Hardware (hindsight is a wonderful thing).
In closing, Mr Spurway used the word 'delighted' to be able to share this morning's information. SH would agree, even if for the pessimistic, 'drought' sits in the recesses of minds given this is Oz and not tropical Palau, Panama or Philippines.
GNC Price at posting:
$7.56 Sentiment: Hold Disclosure: Held
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