sunrice - the forgotten stock?, page-4

I missed checking on the directors, thanks.

Ten directors. for a market cap of $400M and a relatively low tech non complex operation. Seems an excessive number of directors.
I didn't find a directors remuneration report. (likely inside annual report?)


just noticed asx announcement 14/01/2022 "Rice Marketing Board of NSW election results"

"In line with the planned reduction in the number of Directors appointed to the SunRice Board, which
was approved by A Class Shareholders at the 2020 and 2021 Annual General Meetings, only two of
these three elected RMB representatives will be appointed to the SunRice Group Board. "

idk what to make of this, does not give me warm feelings as an investor, too much external influence on shareholders assets.

16/12/2021 " Half Yearly Report and Accounts" p17
Half year Half year
October 2021 October 2020
$000's $000's
Receipts from customers (inclusive of goods and services tax) 578,971 587,167
Payments to suppliers (inclusive of goods and services tax) (389,300) (444,883)
Payments to Riverina Rice Growers (76,499) (33,788)
Payments of wages, salaries and on-costs (71,388) (73,938)


17/12/2020 "Half Yearly Report and Accounts" p14


Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax) 587,167 580,474
Payments to suppliers (inclusive of goods and services tax) (444,883) (394,864)
Payments to Riverina Rice Growers (33,788) (66,743)
Payments of wages, salaries and on-costs (73,938) (75,072)

There should be some ASX announcements recording the $/tonne range paid to growers and rates paid to sunrice for product.
also
https://tradingeconomics.com/commodity/rice



NB: the rice harvest for CY21 was nearly 10X the CY20 harvest.
CY19 : 54,000 paddy tonnes
CY20 : 45,000 paddy tonnes
CY21 : 417,000 paddy tonnes

I'm trying to make sense of the internal business activities. there should be a high value add derived from the "wages paid to employees" or "payments to suppliers" (for processing rice harvested into higher value retail consumer products) which scales with the volume of rice harvested.

if the business has not scaled profit with harvest volume I'd suggest the company has potential for significant increase if they can restructure to achieve this. the Riviana Foods, Pryde's EasiFeed, NZ dairy nutrition business, Riverbank Stockfeeds & KJ&Co Brands purchase might achieve that.

23/12/2021 SunRice Group to acquire Pryde's EasiFeed
18/12/2020 SunRice Group acquires NZ dairy nutrition business
08/12/2020 SunRice Group acquires KJ&Co Brands
13/08/2020 CopRice acquires Riverbank Stockfeeds
(SunRice Group’s CopRice subsidiary .... acquire the dairy and beef business of Riverbank Stockfeeds)

I'm not a fan of share buy backs. this was announced 18 December 2019 then cancelled.
27/08/2020 "Final share buy-back notice - Appendix 3F'
"the Board has determined to terminate the on-market buy-back ......no B Class Shares were bought back"
There was a massive spike in rice prices between April-June 2020, then a significant dip.
idk how the spike then dip in rice prices affected the business.

looking at the comsec about > shareholders page : "No substantial shareholders"

generally in sub $B market caps I like to see a few major shareholders - it tells me someone can bully the board into maximising returns for shareholders. granted SGLLV shares are limited to 10% but pages for 'major shareholder' in other stocks often show 5-10% shareholders.

I have questions about the original listing process, feels like the setup of this company sold out the structure for profit with a deliberate strategy to harvest excess directors fees and maximise profits for growers.

(maximise profits for growers isn't a bad thing as long as all shareholders understand what drives the boards philosophy)

Am I missing the obvious buried elsewhere?

kindof dissapointed, with the time and depth of my research I was hoping to see better potential. my rebound thought is the buying of rice processors will capture profit. maybe. if the board can run those newly purchased companies profitably.