Seems like a fair analysis but I don't think profit share will...

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pn8343

52 Posts.

14/01/16

10:29

Post #: 16793245
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Originally posted by kellbys ↑

My costings ,

Farm Gate price - .50c (many posters have suggested .47c / litre of milk is average price, so rounded up)

Export cost -- $1 ( current cost to export 1 litre of milk to China)

China GST / Import Duty - $1.30 ( China 15% GST / 15% import duty)

Brownes Dairy selling price - $1.30 ( my estimated price Brownes Dairy sell 1 litre milk to Green Lake for export to China. )

Milk retail price China. $8 - $10 Aus Litre. ( lets use lower price of $8 )

So, if you take $3.60 from $8 it leaves Green Lake with about $4.40 to cover their costs and take profit margin. ( Farm gate price of .50c is absorbed in the $1.30 that Browne's Dairy receives from Green Lake. )

So if Green Lake then has costs of say $1.90 / litre to run it's stores in China ( Remember they don't just sell milk) then that leaves them a very lucrative profit of about $2.50 / litre by my estimates.

So if they give CCF 20% profit share of that $2.50 that would be about .50c / litre back to CCF.

So CCF receive .50c/ litre at Farm Gate.
Then another .50c / litre in profit sharing.
= $1 / litre to CCF before costs.

So on 25 million litre / year exported to China in 2017 CCF would receive about $25 million in revenue from the milk export business.

Then you have about $3 million revenue from the Carbon Forest sinks as well.

Total estimated revenue of $28 million.

So if they made a profit of $10 million after tax and costs on a P/E of 25 would give a $250 million MC.

Current MC is $19 million at .135c

These are my rough estimates only and should not be taken as investment advise.

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Seems like a fair analysis but I don't think profit share will be 20%, maybe a bit lower, but hopefully we can get an ann sometime soon, I'm hoping to hold this LT and even though I've been burnt a fair bit am not worried if the analysis is even 50% on target as that'd give it a sp of around 75-90c which is a pretty good return for a few months of holding.

Let's just hope global markets pick up and a recession isn't right around the corner and hope for the best.

CCF Price at posting: 13.5¢ Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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