Thought my last post may need some clarification. Here's why I believe the directors need to (or have to) liquidate/privatise this company:
1. In 2012 the company had 7.5 of profits before tax which I believe does not represent the true profitibility as cash flow from operations was a negative 1.4m
2. Increase in market value of crops is put through the profit and loss statement (3.8m in 2012) which I believe is aggressive as it is before it is sold.
3. Water entitlements are treated as inventory instead of an asset. Gains on water trading are then put through P+L as ordinary income (6.4m EBIT 2012). Management believe they have a record trading water but these are just capital gains on assets.
4. Recent dividend paid was unfranked, a sign that the company hasn't made taxable profits
I am happy to be proved wrong on these points but I believe the directors should return the 95m ($0.66, directors valuation) to shareholders. I belive that once Primeag is dealt with GPG will force the directors hand due to its liquidation of non Coates assets. There seems to be a pattern in recent history with Primeag, Clearview, Tower all putting themselves up for sale.
TAN Price at posting:
41.5¢ Sentiment: Hold Disclosure: Held
