Ann: Nufarm HY25 results presentation, page-117

Nufarm chair John Gillam is under increasing pressure to put a ‘for sale’ sign on the entire company as its stock price plummets since reporting a weak first-half profit.

Allan Gray’s Simon Mawhinney is due to meet with the board on Wednesday and told The Australian he wants the board to test the market’s interest in a takeover.He sees this as preferable to the present plan to seek more external equity to help keep the seed technology expansion on track.

The stock price has fallen 42 per cent from $4.02 early this month to $2.38 a share on Monday after its first-half profit disappointed.

Mr Hunt has been successful in pushing Nufarm into new technologies including Omega 3 canola and carinata seed but global commodity volatility has slowed delivery.

He has also built a strong management team including portfolio boss Rico Christensen and Asian Pacific boss Brett Sutherland along with European boss James Barkhouse and seed boss Brent Zacharious.

Mr Gillam and Mr Hunt are focussed on meeting shareholder demands but are likely to push back against a perceived fire sale.

Company insiders say it is rare for businesses to achieve their full value with a fire sale especially when it is yet to receive a full offer and the earnings weakness in the seed business.

Global leader Corteva trades at around 15 times earnings, more than three times the Nufarm multiple.

Shareholder angst is understood by the board given the plummeting share price.

Fish oil prices slumped last year after Peru significantly increased its allowed catch.

The first half is always peak debt for Nufarm with inventory sold off in the second half bringing down working capital, but Morgans broker Belinda Moore is forecasting net debt to EBITDA to fall from 4.5 times to 2.5 times, above management’s guidance.