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unga limited takeover
littledove
#101 Posted : Tuesday, February 13, 2018 9:01:28 AM
Rank: Member


Joined: 7/1/2014
Posts: 631
Location: sky
sparkly wrote:
Spikes wrote:
obiero wrote:
VituVingiSana wrote:
Swenani wrote:
mlennyma wrote:
Spikes wrote:
[quote=Angelica _ann]Crooks, so who knew the suspensions has been lift?

It was done quietly! They didn't want to hype the market while 10% rule was inactive.

Why pay 60bob?


price manipulation

First 2 trades at 30/- ... some poor folks got suckered into selling at 30.

Anyway, takeover or not some good news for Unga

Low demand, competition sharply cut wheat prices
https://www.businessdail...301924-vcu4e/index.html

Despite the "competition" it seems that imported wheat has moderated the prices of local wheat allowing for savings to be passed onto consumers who in turn can consume more wheat vs maize (or other substitutes eg rice).

The 60 bob buyer fellow is strange http://live.mystocks.co.ke/m/stock=UNGA[/quote]

Trading psychology of the 60/- Unga buyer can perfectly be compared to 2.1/- KQ seller. And the converse is true!


Bigger fool theory. Maybe the 60/- buyer is expecting a Rea Vipingo where the offer will be doubled. Who is the fool then?

their is also a possibility the buyer is a shareholder who wanted to hype the price so as to sell at a higher price, the 100 shares are suspect
There are only two emotions in the stock market, fear and hope. The problem is, you hope when you should fear and fear when you should hope
Swenani
#102 Posted : Tuesday, February 13, 2018 9:14:22 AM
Rank: User


Joined: 8/15/2013
Posts: 12,662
Location: Vacuum
littledove wrote:
sparkly wrote:
Spikes wrote:
obiero wrote:
VituVingiSana wrote:
Swenani wrote:
mlennyma wrote:
Spikes wrote:
[quote=Angelica _ann]Crooks, so who knew the suspensions has been lift?

It was done quietly! They didn't want to hype the market while 10% rule was inactive.

Why pay 60bob?


price manipulation

First 2 trades at 30/- ... some poor folks got suckered into selling at 30.

Anyway, takeover or not some good news for Unga

Low demand, competition sharply cut wheat prices
https://www.businessdail...301924-vcu4e/index.html

Despite the "competition" it seems that imported wheat has moderated the prices of local wheat allowing for savings to be passed onto consumers who in turn can consume more wheat vs maize (or other substitutes eg rice).

The 60 bob buyer fellow is strange http://live.mystocks.co.ke/m/stock=UNGA[/quote]

Trading psychology of the 60/- Unga buyer can perfectly be compared to 2.1/- KQ seller. And the converse is true!


Bigger fool theory. Maybe the 60/- buyer is expecting a Rea Vipingo where the offer will be doubled. Who is the fool then?

their is also a possibility the buyer is a shareholder who wanted to hype the price so as to sell at a higher price, the 100 shares are suspect


I suspect it was VVS who bought the 100 shares at 60bob
Poverty is the root of all evil
Spikes
#103 Posted : Tuesday, February 13, 2018 9:33:08 AM
Rank: Elder


Joined: 9/20/2015
Posts: 2,458
Location: Mombasa
Swenani wrote:
littledove wrote:
sparkly wrote:
Spikes wrote:
obiero wrote:
VituVingiSana wrote:
Swenani wrote:
mlennyma wrote:
Spikes wrote:
[quote=Angelica _ann]Crooks, so who knew the suspensions has been lift?

It was done quietly! They didn't want to hype the market while 10% rule was inactive.

Why pay 60bob?


price manipulation

First 2 trades at 30/- ... some poor folks got suckered into selling at 30.

Anyway, takeover or not some good news for Unga

Low demand, competition sharply cut wheat prices
https://www.businessdail...301924-vcu4e/index.html

Despite the "competition" it seems that imported wheat has moderated the prices of local wheat allowing for savings to be passed onto consumers who in turn can consume more wheat vs maize (or other substitutes eg rice).

The 60 bob buyer fellow is strange http://live.mystocks.co.ke/m/stock=UNGA[/quote]

Trading psychology of the 60/- Unga buyer can perfectly be compared to 2.1/- KQ seller. And the converse is true!


Bigger fool theory. Maybe the 60/- buyer is expecting a Rea Vipingo where the offer will be doubled. Who is the fool then?

their is also a possibility the buyer is a shareholder who wanted to hype the price so as to sell at a higher price, the 100 shares are suspect


I suspect it was VVS who bought the 100 shares at 60bob


There's 99% possibility that this was @vvs trying to manipulate market price in a botched attempt that saw WVMA at 37.50 below the 40/- takeover offer- already rejected by minority shareholders.

I remember a time that ploy failed to rally HARF when prominent Wazuans executed 100 shares at more than 350%.
Ignorance of the victim is big business for the villain.
obiero
#104 Posted : Tuesday, February 13, 2018 10:19:59 AM
Rank: Elder


Joined: 6/23/2009
Posts: 10,631
Location: nairobi
Spikes wrote:
obiero wrote:
VituVingiSana wrote:
Swenani wrote:
mlennyma wrote:
Spikes wrote:
[quote=Angelica _ann]Crooks, so who knew the suspensions has been lift?

It was done quietly! They didn't want to hype the market while 10% rule was inactive.

Why pay 60bob?


price manipulation

First 2 trades at 30/- ... some poor folks got suckered into selling at 30.

Anyway, takeover or not some good news for Unga

Low demand, competition sharply cut wheat prices
https://www.businessdail...301924-vcu4e/index.html

Despite the "competition" it seems that imported wheat has moderated the prices of local wheat allowing for savings to be passed onto consumers who in turn can consume more wheat vs maize (or other substitutes eg rice).

The 60 bob buyer fellow is strange http://live.mystocks.co.ke/m/stock=UNGA[/quote]

Trading psychology of the 60/- Unga buyer can perfectly be compared to 2.1/- KQ seller. And the converse is true!

Empty debe. One was a low point entry which marks astute stock trading but for Unga which has already been earmarked for sale at KES 40 it's suicidal to buy at KES 60
COOP 5,500; KCB 2,500; KQ 95,000
Spikes
#105 Posted : Tuesday, February 13, 2018 10:45:58 AM
Rank: Elder


Joined: 9/20/2015
Posts: 2,458
Location: Mombasa
obiero wrote:
Spikes wrote:
obiero wrote:
VituVingiSana wrote:
Swenani wrote:
mlennyma wrote:
Spikes wrote:
[quote=Angelica _ann]Crooks, so who knew the suspensions has been lift?

It was done quietly! They didn't want to hype the market while 10% rule was inactive.

Why pay 60bob?


price manipulation

First 2 trades at 30/- ... some poor folks got suckered into selling at 30.

Anyway, takeover or not some good news for Unga

Low demand, competition sharply cut wheat prices
https://www.businessdail...301924-vcu4e/index.html

Despite the "competition" it seems that imported wheat has moderated the prices of local wheat allowing for savings to be passed onto consumers who in turn can consume more wheat vs maize (or other substitutes eg rice).

The 60 bob buyer fellow is strange http://live.mystocks.co.ke/m/stock=UNGA[/quote]

Trading psychology of the 60/- Unga buyer can perfectly be compared to 2.1/- KQ seller. And the converse is true!

Empty debe. One was a low point entry which marks astute stock trading but for Unga which has already been earmarked for sale at KES 40 it's suicidal to buy at KES 60


I'm very sceptical about your analytical skills . You just shout, making noise does not qualify you to be a stock analyst. You must posses top-notch aptitude to trade profitably . No wonder you're consistently in the red with KQ in a record 10year running . I like Wazuans like @ MugandaMan albeit I don't agree to his point of view the guy is very critical and has clear stand to support his arguments.
Ignorance of the victim is big business for the villain.
obiero
#106 Posted : Tuesday, February 13, 2018 12:39:42 PM
Rank: Elder


Joined: 6/23/2009
Posts: 10,631
Location: nairobi
Spikes wrote:
obiero wrote:
Spikes wrote:
obiero wrote:
VituVingiSana wrote:
Swenani wrote:
mlennyma wrote:
Spikes wrote:
[quote=Angelica _ann]Crooks, so who knew the suspensions has been lift?

It was done quietly! They didn't want to hype the market while 10% rule was inactive.

Why pay 60bob?


price manipulation

First 2 trades at 30/- ... some poor folks got suckered into selling at 30.

Anyway, takeover or not some good news for Unga

Low demand, competition sharply cut wheat prices
https://www.businessdail...301924-vcu4e/index.html

Despite the "competition" it seems that imported wheat has moderated the prices of local wheat allowing for savings to be passed onto consumers who in turn can consume more wheat vs maize (or other substitutes eg rice).

The 60 bob buyer fellow is strange http://live.mystocks.co.ke/m/stock=UNGA[/quote]

Trading psychology of the 60/- Unga buyer can perfectly be compared to 2.1/- KQ seller. And the converse is true!

Empty debe. One was a low point entry which marks astute stock trading but for Unga which has already been earmarked for sale at KES 40 it's suicidal to buy at KES 60


I'm very sceptical about your analytical skills . You just shout, making noise does not qualify you to be a stock analyst. You must posses top-notch aptitude to trade profitably . No wonder you're consistently in the red with KQ in a record 10year running . I like Wazuans like @ MugandaMan albeit I don't agree to his point of view the guy is very critical and has clear stand to support his arguments.

Atleast you are in doubt, but in my case I am certain that you are a clown
COOP 5,500; KCB 2,500; KQ 95,000
VituVingiSana
#107 Posted : Tuesday, February 13, 2018 12:40:02 PM
Rank: Chief


Joined: 1/3/2007
Posts: 14,906
Location: Nairobi
Whoa! Easy goes... No personal insults. Please.

Back to Unga (from KQ)...

Bottomline: The stated NAV/Share [FY 2016-17] as of 30th June 2017 is approx 50/-
There's 6 months of (profitable?) trading from July-Dec 2017.
Add another 8 months of (profitable?) trading from Jan-Sep 2018.
The "Operating Lease Rentals" (land) value as of 30th June 2013 was only 27mn BUT in Note 25 it says
"The operating lease prepayment relates to leasehold land. The leasehold land was revalued as at 30 June 2013 by Knight Frank Valuers Limited on an open market value basis for existing use at Shs 878,500,000."
Cash on Hand for the Group was 1.714bn (Note 29b)

In 2016-17, there were one-off provisions for:
Closure of the Uganda factory/plant [which was a drain on the business]
Nakumatt [non-cash since Nakumatt wasn't going to pay anyway]
Ennsvalley [bad debt provisions, write-down of goodwill, etc BUT mostly non-cash]

In 2017-18
1) New wheat mill in Nairobi is fully operational
2) Jul-Dec 2017 had subsidized maize so little risk to Unga. At the AGM, they said "Jogoo" was the preferred brand among consumers and sales were brisk i.e. they sold all they milled under the subsidy program.
3) There was a cheap "feedstock" shortage in 2016-17 but remedied thanks to the subsidy program since 1H 2017-18.

"In Kenya, Unga Limited recorded lower gross margins compared to the prior year. This was due to the loss of maize volumes occasioned by the scarcity of raw materials and availability of lower priced competitor products."

4) "The costs of raw materials for Unga Limited increased compared to the prior year with maize and finger millet prices increasing by 12% and 21% respectively within this financial period. Unga Farm Care (EA) Limited experienced cases of irregular flow of raw materials, particularly maize, in the last quarter which impaired our ability to fulfill market demands. To manage this impact we opted to utilise substitutes such as local wheat and barley which was competitively priced, although in limited supply."

5) "Maize supply is also expected to stabilise with effect from July 2017 as the Government maize subsidy program settles down. The unusually high import levels of maize have created significant pressure on port logistics causing delays in both maize and wheat receipts at the mills. The North Rift maize crop is expected to find a market that is in relatively short supply, thereby forcing pricing for a 90kg bag to be above Kes 3,000." >>> Probably sorted out or better in 2017-18 reducing transport costs.

6) "In order to increase Unga Limited’s storage capacity, we rehabilitated the Commercial Street wheat silos and also installed a new 11,540 metric ton silo complex in Eldoret. The new silos are expected to reduce our input costs previously incurred from warehousing, handling and bagging." >>> Good for long-term growth (storage) and reduction in operational costs.

Bottomline: I think the "value" of each Unga share should be 65-80. Let's see where this ends up!
I await [@pesanane here is looking at you!] the 1H 2017-18 results


Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Spikes
#108 Posted : Tuesday, February 13, 2018 1:01:09 PM
Rank: Elder


Joined: 9/20/2015
Posts: 2,458
Location: Mombasa
obiero wrote:
Spikes wrote:
obiero wrote:
Spikes wrote:
obiero wrote:
VituVingiSana wrote:
Swenani wrote:
mlennyma wrote:
Spikes wrote:
[quote=Angelica _ann]Crooks, so who knew the suspensions has been lift?

It was done quietly! They didn't want to hype the market while 10% rule was inactive.

Why pay 60bob?


price manipulation

First 2 trades at 30/- ... some poor folks got suckered into selling at 30.

Anyway, takeover or not some good news for Unga

Low demand, competition sharply cut wheat prices
https://www.businessdail...301924-vcu4e/index.html

Despite the "competition" it seems that imported wheat has moderated the prices of local wheat allowing for savings to be passed onto consumers who in turn can consume more wheat vs maize (or other substitutes eg rice).

The 60 bob buyer fellow is strange http://live.mystocks.co.ke/m/stock=UNGA[/quote]

Trading psychology of the 60/- Unga buyer can perfectly be compared to 2.1/- KQ seller. And the converse is true!

Empty debe. One was a low point entry which marks astute stock trading but for Unga which has already been earmarked for sale at KES 40 it's suicidal to buy at KES 60


I'm very sceptical about your analytical skills . You just shout, making noise does not qualify you to be a stock analyst. You must posses top-notch aptitude to trade profitably . No wonder you're consistently in the red with KQ in a record 10year running . I like Wazuans like @ MugandaMan albeit I don't agree to his point of view the guy is very critical and has clear stand to support his arguments.

Atleast you are in doubt, but in my case I am certain that you are a clown


My conscience is very clear,no better way to describe you than to tell you pointblank you are a noise maker.Period.
Ignorance of the victim is big business for the villain.
obiero
#109 Posted : Tuesday, February 13, 2018 1:05:48 PM
Rank: Elder


Joined: 6/23/2009
Posts: 10,631
Location: nairobi
VituVingiSana wrote:
Whoa! Easy goes... No personal insults. Please.

Back to Unga (from KQ)...

Bottomline: The stated NAV/Share [FY 2016-17] as of 30th June 2017 is approx 50/-
There's 6 months of (profitable?) trading from July-Dec 2017.
Add another 8 months of (profitable?) trading from Jan-Sep 2018.
The "Operating Lease Rentals" (land) value as of 30th June 2013 was only 27mn BUT in Note 25 it says
"The operating lease prepayment relates to leasehold land. The leasehold land was revalued as at 30 June 2013 by Knight Frank Valuers Limited on an open market value basis for existing use at Shs 878,500,000."
Cash on Hand for the Group was 1.714bn (Note 29b)

In 2016-17, there were one-off provisions for:
Closure of the Uganda factory/plant [which was a drain on the business]
Nakumatt [non-cash since Nakumatt wasn't going to pay anyway]
Ennsvalley [bad debt provisions, write-down of goodwill, etc BUT mostly non-cash]

In 2017-18
1) New wheat mill in Nairobi is fully operational
2) Jul-Dec 2017 had subsidized maize so little risk to Unga. At the AGM, they said "Jogoo" was the preferred brand among consumers and sales were brisk i.e. they sold all they milled under the subsidy program.
3) There was a cheap "feedstock" shortage in 2016-17 but remedied thanks to the subsidy program since 1H 2017-18.

"In Kenya, Unga Limited recorded lower gross margins compared to the prior year. This was due to the loss of maize volumes occasioned by the scarcity of raw materials and availability of lower priced competitor products."

4) "The costs of raw materials for Unga Limited increased compared to the prior year with maize and finger millet prices increasing by 12% and 21% respectively within this financial period. Unga Farm Care (EA) Limited experienced cases of irregular flow of raw materials, particularly maize, in the last quarter which impaired our ability to fulfill market demands. To manage this impact we opted to utilise substitutes such as local wheat and barley which was competitively priced, although in limited supply."

5) "Maize supply is also expected to stabilise with effect from July 2017 as the Government maize subsidy program settles down. The unusually high import levels of maize have created significant pressure on port logistics causing delays in both maize and wheat receipts at the mills. The North Rift maize crop is expected to find a market that is in relatively short supply, thereby forcing pricing for a 90kg bag to be above Kes 3,000." >>> Probably sorted out or better in 2017-18 reducing transport costs.

6) "In order to increase Unga Limited’s storage capacity, we rehabilitated the Commercial Street wheat silos and also installed a new 11,540 metric ton silo complex in Eldoret. The new silos are expected to reduce our input costs previously incurred from warehousing, handling and bagging." >>> Good for long-term growth (storage) and reduction in operational costs.

Bottomline: I think the "value" of each Unga share should be 65-80. Let's see where this ends up!
I await [@pesanane here is looking at you!] the 1H 2017-18 results



@vvs.. why was the bloody thing trading at sub KES 30 over such an extended period of time.. but I like the arguments you have listed on the post
COOP 5,500; KCB 2,500; KQ 95,000
VituVingiSana
#110 Posted : Tuesday, February 13, 2018 1:52:03 PM
Rank: Chief


Joined: 1/3/2007
Posts: 14,906
Location: Nairobi
obiero wrote:
VituVingiSana wrote:
Whoa! Easy goes... No personal insults. Please.

Back to Unga (from KQ)...

Bottomline: The stated NAV/Share [FY 2016-17] as of 30th June 2017 is approx 50/-
There's 6 months of (profitable?) trading from July-Dec 2017.
Add another 8 months of (profitable?) trading from Jan-Sep 2018.
The "Operating Lease Rentals" (land) value as of 30th June 2013 was only 27mn BUT in Note 25 it says
"The operating lease prepayment relates to leasehold land. The leasehold land was revalued as at 30 June 2013 by Knight Frank Valuers Limited on an open market value basis for existing use at Shs 878,500,000."
Cash on Hand for the Group was 1.714bn (Note 29b)

In 2016-17, there were one-off provisions for:
Closure of the Uganda factory/plant [which was a drain on the business]
Nakumatt [non-cash since Nakumatt wasn't going to pay anyway]
Ennsvalley [bad debt provisions, write-down of goodwill, etc BUT mostly non-cash]

In 2017-18
1) New wheat mill in Nairobi is fully operational
2) Jul-Dec 2017 had subsidized maize so little risk to Unga. At the AGM, they said "Jogoo" was the preferred brand among consumers and sales were brisk i.e. they sold all they milled under the subsidy program.
3) There was a cheap "feedstock" shortage in 2016-17 but remedied thanks to the subsidy program since 1H 2017-18.

"In Kenya, Unga Limited recorded lower gross margins compared to the prior year. This was due to the loss of maize volumes occasioned by the scarcity of raw materials and availability of lower priced competitor products."

4) "The costs of raw materials for Unga Limited increased compared to the prior year with maize and finger millet prices increasing by 12% and 21% respectively within this financial period. Unga Farm Care (EA) Limited experienced cases of irregular flow of raw materials, particularly maize, in the last quarter which impaired our ability to fulfill market demands. To manage this impact we opted to utilise substitutes such as local wheat and barley which was competitively priced, although in limited supply."

5) "Maize supply is also expected to stabilise with effect from July 2017 as the Government maize subsidy program settles down. The unusually high import levels of maize have created significant pressure on port logistics causing delays in both maize and wheat receipts at the mills. The North Rift maize crop is expected to find a market that is in relatively short supply, thereby forcing pricing for a 90kg bag to be above Kes 3,000." >>> Probably sorted out or better in 2017-18 reducing transport costs.

6) "In order to increase Unga Limited’s storage capacity, we rehabilitated the Commercial Street wheat silos and also installed a new 11,540 metric ton silo complex in Eldoret. The new silos are expected to reduce our input costs previously incurred from warehousing, handling and bagging." >>> Good for long-term growth (storage) and reduction in operational costs.

Bottomline: I think the "value" of each Unga share should be 65-80. Let's see where this ends up!
I await [@pesanane here is looking at you!] the 1H 2017-18 results



@vvs.. why was the bloody thing trading at sub KES 30 over such an extended period of time.. but I like the arguments you have listed on the post

Why is (profitable) KK trading at 15/- while (not yet profitable) KQ is trading at 16/-?
Why is (profitable) Coop trading at 17 while (barely profitable) NBK at 8.30?

In other words, the market often mis-prices the value of a firm.
As a Warren Buffett fan, I recognize this and try [& do not always succeed] in buying "undervalued" shares but one has to be patient.
https://en.wikipedia.org/wiki/Undervalued_stock

KenRe with a NAV/share of 32+ [& growing] trades at 20/-.
@Ericsson and I are in TPSEA which at 36 is under-valued [IMHO]
I believe NIC is under-valued vs peers.

Why is/as Unga under-valued [IMHO]?
1) Ennsvalley. The purchase of Ennsvalley from the Ndegwa Family (& friends) was done at a crazy high price. It was valued by Unga at KES 1bn at the time and Unga had to write off debts (Nakumatt), lay off staff (costs) and close locations (loss of equipment, furniture and goodwill).

The above left a sour taste in investors' mouths. The clean up helps focus on future growth BUT before we got there, the Seaboard+Victus/Ndegwa bid came through.

2) Uganda - Another botched acquisition. After buying out the minority shareholders at a premium, the plant was scrapped and manufacturing ceased. The staff was laid off (costs) and plant scrapped (one-off writedown).

This transaction was a drag on earnings and used up cash. Now that the UG plant is closed, the management can focus on profitable exports to UG from Eldoret.

3) The controlling shareholders (Ndegwas) might not be in Merali's league but they are not "Aga Khan" either i.e. benefits are shared with the minorities.

4) Drought/Elections/Politics. Reduced spending power, uncertainty and maize/wheat (esp in RV) politics which prevents imports of cheaper grains.

I remain optimistic about Unga [as long as the management doesn't screw up] and I would rather NOT sell at 40/- and support efforts that it remains a Listed Firm as others look at it as an acquisition target. Of course, there's always a price that I will accept and sell out!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
VituVingiSana
#111 Posted : Tuesday, February 13, 2018 2:03:34 PM
Rank: Chief


Joined: 1/3/2007
Posts: 14,906
Location: Nairobi
tandich wrote:

Regulator on the spot over freeze on Unga Group shares
https://www.businessdail...2646-r5kunlz/index.html
"Unga’s minority investors have argued that besides the discount to book value, Seaboard’s offer is inadequate since no benefit, including dividends will accrue to them in the miller’s current financial year ending June.
CMA says the company’s shareholders will decide on their own whether to accept or reject Seaboard’s offer after relying on the firm’s disclosures and the findings of an independent adviser."

I hope the "Independent Adviser" is truly independent from the reach of the Ndegwas.
Victus is acting in concert with Seaboard and is unlikely to sell their shares at 40/- so why should minorities do so?
Who is the chairman on the CMA?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
obiero
#112 Posted : Tuesday, February 13, 2018 2:51:15 PM
Rank: Elder


Joined: 6/23/2009
Posts: 10,631
Location: nairobi
VituVingiSana wrote:
obiero wrote:
VituVingiSana wrote:
Whoa! Easy goes... No personal insults. Please.

Back to Unga (from KQ)...

Bottomline: The stated NAV/Share [FY 2016-17] as of 30th June 2017 is approx 50/-
There's 6 months of (profitable?) trading from July-Dec 2017.
Add another 8 months of (profitable?) trading from Jan-Sep 2018.
The "Operating Lease Rentals" (land) value as of 30th June 2013 was only 27mn BUT in Note 25 it says
"The operating lease prepayment relates to leasehold land. The leasehold land was revalued as at 30 June 2013 by Knight Frank Valuers Limited on an open market value basis for existing use at Shs 878,500,000."
Cash on Hand for the Group was 1.714bn (Note 29b)

In 2016-17, there were one-off provisions for:
Closure of the Uganda factory/plant [which was a drain on the business]
Nakumatt [non-cash since Nakumatt wasn't going to pay anyway]
Ennsvalley [bad debt provisions, write-down of goodwill, etc BUT mostly non-cash]

In 2017-18
1) New wheat mill in Nairobi is fully operational
2) Jul-Dec 2017 had subsidized maize so little risk to Unga. At the AGM, they said "Jogoo" was the preferred brand among consumers and sales were brisk i.e. they sold all they milled under the subsidy program.
3) There was a cheap "feedstock" shortage in 2016-17 but remedied thanks to the subsidy program since 1H 2017-18.

"In Kenya, Unga Limited recorded lower gross margins compared to the prior year. This was due to the loss of maize volumes occasioned by the scarcity of raw materials and availability of lower priced competitor products."

4) "The costs of raw materials for Unga Limited increased compared to the prior year with maize and finger millet prices increasing by 12% and 21% respectively within this financial period. Unga Farm Care (EA) Limited experienced cases of irregular flow of raw materials, particularly maize, in the last quarter which impaired our ability to fulfill market demands. To manage this impact we opted to utilise substitutes such as local wheat and barley which was competitively priced, although in limited supply."

5) "Maize supply is also expected to stabilise with effect from July 2017 as the Government maize subsidy program settles down. The unusually high import levels of maize have created significant pressure on port logistics causing delays in both maize and wheat receipts at the mills. The North Rift maize crop is expected to find a market that is in relatively short supply, thereby forcing pricing for a 90kg bag to be above Kes 3,000." >>> Probably sorted out or better in 2017-18 reducing transport costs.

6) "In order to increase Unga Limited’s storage capacity, we rehabilitated the Commercial Street wheat silos and also installed a new 11,540 metric ton silo complex in Eldoret. The new silos are expected to reduce our input costs previously incurred from warehousing, handling and bagging." >>> Good for long-term growth (storage) and reduction in operational costs.

Bottomline: I think the "value" of each Unga share should be 65-80. Let's see where this ends up!
I await [@pesanane here is looking at you!] the 1H 2017-18 results



@vvs.. why was the bloody thing trading at sub KES 30 over such an extended period of time.. but I like the arguments you have listed on the post

Why is (profitable) KK trading at 15/- while (not yet profitable) KQ is trading at 16/-?
Why is (profitable) Coop trading at 17 while (barely profitable) NBK at 8.30?

In other words, the market often mis-prices the value of a firm.
As a Warren Buffett fan, I recognize this and try [& do not always succeed] in buying "undervalued" shares but one has to be patient.
https://en.wikipedia.org/wiki/Undervalued_stock

KenRe with a NAV/share of 32+ [& growing] trades at 20/-.
@Ericsson and I are in TPSEA which at 36 is under-valued [IMHO]
I believe NIC is under-valued vs peers.

Why is/as Unga under-valued [IMHO]?
1) Ennsvalley. The purchase of Ennsvalley from the Ndegwa Family (& friends) was done at a crazy high price. It was valued by Unga at KES 1bn at the time and Unga had to write off debts (Nakumatt), lay off staff (costs) and close locations (loss of equipment, furniture and goodwill).

The above left a sour taste in investors' mouths. The clean up helps focus on future growth BUT before we got there, the Seaboard+Victus/Ndegwa bid came through.

2) Uganda - Another botched acquisition. After buying out the minority shareholders at a premium, the plant was scrapped and manufacturing ceased. The staff was laid off (costs) and plant scrapped (one-off writedown).

This transaction was a drag on earnings and used up cash. Now that the UG plant is closed, the management can focus on profitable exports to UG from Eldoret.

3) The controlling shareholders (Ndegwas) might not be in Merali's league but they are not "Aga Khan" either i.e. benefits are shared with the minorities.

4) Drought/Elections/Politics. Reduced spending power, uncertainty and maize/wheat (esp in RV) politics which prevents imports of cheaper grains.

I remain optimistic about Unga [as long as the management doesn't screw up] and I would rather NOT sell at 40/- and support efforts that it remains a Listed Firm as others look at it as an acquisition target. Of course, there's always a price that I will accept and sell out!

I don't know why you should bring up KQ in this comparison but your point is valid
COOP 5,500; KCB 2,500; KQ 95,000
Ericsson
#113 Posted : Tuesday, February 13, 2018 2:58:47 PM
Rank: Elder


Joined: 12/4/2009
Posts: 5,662
Location: NAIROBI
obiero wrote:
VituVingiSana wrote:
obiero wrote:
VituVingiSana wrote:
Whoa! Easy goes... No personal insults. Please.

Back to Unga (from KQ)...

Bottomline: The stated NAV/Share [FY 2016-17] as of 30th June 2017 is approx 50/-
There's 6 months of (profitable?) trading from July-Dec 2017.
Add another 8 months of (profitable?) trading from Jan-Sep 2018.
The "Operating Lease Rentals" (land) value as of 30th June 2013 was only 27mn BUT in Note 25 it says
"The operating lease prepayment relates to leasehold land. The leasehold land was revalued as at 30 June 2013 by Knight Frank Valuers Limited on an open market value basis for existing use at Shs 878,500,000."
Cash on Hand for the Group was 1.714bn (Note 29b)

In 2016-17, there were one-off provisions for:
Closure of the Uganda factory/plant [which was a drain on the business]
Nakumatt [non-cash since Nakumatt wasn't going to pay anyway]
Ennsvalley [bad debt provisions, write-down of goodwill, etc BUT mostly non-cash]

In 2017-18
1) New wheat mill in Nairobi is fully operational
2) Jul-Dec 2017 had subsidized maize so little risk to Unga. At the AGM, they said "Jogoo" was the preferred brand among consumers and sales were brisk i.e. they sold all they milled under the subsidy program.
3) There was a cheap "feedstock" shortage in 2016-17 but remedied thanks to the subsidy program since 1H 2017-18.

"In Kenya, Unga Limited recorded lower gross margins compared to the prior year. This was due to the loss of maize volumes occasioned by the scarcity of raw materials and availability of lower priced competitor products."

4) "The costs of raw materials for Unga Limited increased compared to the prior year with maize and finger millet prices increasing by 12% and 21% respectively within this financial period. Unga Farm Care (EA) Limited experienced cases of irregular flow of raw materials, particularly maize, in the last quarter which impaired our ability to fulfill market demands. To manage this impact we opted to utilise substitutes such as local wheat and barley which was competitively priced, although in limited supply."

5) "Maize supply is also expected to stabilise with effect from July 2017 as the Government maize subsidy program settles down. The unusually high import levels of maize have created significant pressure on port logistics causing delays in both maize and wheat receipts at the mills. The North Rift maize crop is expected to find a market that is in relatively short supply, thereby forcing pricing for a 90kg bag to be above Kes 3,000." >>> Probably sorted out or better in 2017-18 reducing transport costs.

6) "In order to increase Unga Limited’s storage capacity, we rehabilitated the Commercial Street wheat silos and also installed a new 11,540 metric ton silo complex in Eldoret. The new silos are expected to reduce our input costs previously incurred from warehousing, handling and bagging." >>> Good for long-term growth (storage) and reduction in operational costs.

Bottomline: I think the "value" of each Unga share should be 65-80. Let's see where this ends up!
I await [@pesanane here is looking at you!] the 1H 2017-18 results



@vvs.. why was the bloody thing trading at sub KES 30 over such an extended period of time.. but I like the arguments you have listed on the post

Why is (profitable) KK trading at 15/- while (not yet profitable) KQ is trading at 16/-?
Why is (profitable) Coop trading at 17 while (barely profitable) NBK at 8.30?

In other words, the market often mis-prices the value of a firm.
As a Warren Buffett fan, I recognize this and try [& do not always succeed] in buying "undervalued" shares but one has to be patient.
https://en.wikipedia.org/wiki/Undervalued_stock

KenRe with a NAV/share of 32+ [& growing] trades at 20/-.
@Ericsson and I are in TPSEA which at 36 is under-valued [IMHO]
I believe NIC is under-valued vs peers.

Why is/as Unga under-valued [IMHO]?
1) Ennsvalley. The purchase of Ennsvalley from the Ndegwa Family (& friends) was done at a crazy high price. It was valued by Unga at KES 1bn at the time and Unga had to write off debts (Nakumatt), lay off staff (costs) and close locations (loss of equipment, furniture and goodwill).

The above left a sour taste in investors' mouths. The clean up helps focus on future growth BUT before we got there, the Seaboard+Victus/Ndegwa bid came through.

2) Uganda - Another botched acquisition. After buying out the minority shareholders at a premium, the plant was scrapped and manufacturing ceased. The staff was laid off (costs) and plant scrapped (one-off writedown).

This transaction was a drag on earnings and used up cash. Now that the UG plant is closed, the management can focus on profitable exports to UG from Eldoret.

3) The controlling shareholders (Ndegwas) might not be in Merali's league but they are not "Aga Khan" either i.e. benefits are shared with the minorities.

4) Drought/Elections/Politics. Reduced spending power, uncertainty and maize/wheat (esp in RV) politics which prevents imports of cheaper grains.

I remain optimistic about Unga [as long as the management doesn't screw up] and I would rather NOT sell at 40/- and support efforts that it remains a Listed Firm as others look at it as an acquisition target. Of course, there's always a price that I will accept and sell out!

I don't know why you should bring up KQ in this comparison but your point is valid


True KQ shouldn't be brought up,watu wastick to the topic at hand
VituVingiSana
#114 Posted : Tuesday, February 13, 2018 5:01:17 PM
Rank: Chief


Joined: 1/3/2007
Posts: 14,906
Location: Nairobi
obiero wrote:
VituVingiSana wrote:
obiero wrote:
VituVingiSana wrote:
Whoa! Easy goes... No personal insults. Please.

Back to Unga (from KQ)...

Bottomline: The stated NAV/Share [FY 2016-17] as of 30th June 2017 is approx 50/-
There's 6 months of (profitable?) trading from July-Dec 2017.
Add another 8 months of (profitable?) trading from Jan-Sep 2018.
The "Operating Lease Rentals" (land) value as of 30th June 2013 was only 27mn BUT in Note 25 it says
"The operating lease prepayment relates to leasehold land. The leasehold land was revalued as at 30 June 2013 by Knight Frank Valuers Limited on an open market value basis for existing use at Shs 878,500,000."
Cash on Hand for the Group was 1.714bn (Note 29b)

In 2016-17, there were one-off provisions for:
Closure of the Uganda factory/plant [which was a drain on the business]
Nakumatt [non-cash since Nakumatt wasn't going to pay anyway]
Ennsvalley [bad debt provisions, write-down of goodwill, etc BUT mostly non-cash]

In 2017-18
1) New wheat mill in Nairobi is fully operational
2) Jul-Dec 2017 had subsidized maize so little risk to Unga. At the AGM, they said "Jogoo" was the preferred brand among consumers and sales were brisk i.e. they sold all they milled under the subsidy program.
3) There was a cheap "feedstock" shortage in 2016-17 but remedied thanks to the subsidy program since 1H 2017-18.

"In Kenya, Unga Limited recorded lower gross margins compared to the prior year. This was due to the loss of maize volumes occasioned by the scarcity of raw materials and availability of lower priced competitor products."

4) "The costs of raw materials for Unga Limited increased compared to the prior year with maize and finger millet prices increasing by 12% and 21% respectively within this financial period. Unga Farm Care (EA) Limited experienced cases of irregular flow of raw materials, particularly maize, in the last quarter which impaired our ability to fulfill market demands. To manage this impact we opted to utilise substitutes such as local wheat and barley which was competitively priced, although in limited supply."

5) "Maize supply is also expected to stabilise with effect from July 2017 as the Government maize subsidy program settles down. The unusually high import levels of maize have created significant pressure on port logistics causing delays in both maize and wheat receipts at the mills. The North Rift maize crop is expected to find a market that is in relatively short supply, thereby forcing pricing for a 90kg bag to be above Kes 3,000." >>> Probably sorted out or better in 2017-18 reducing transport costs.

6) "In order to increase Unga Limited’s storage capacity, we rehabilitated the Commercial Street wheat silos and also installed a new 11,540 metric ton silo complex in Eldoret. The new silos are expected to reduce our input costs previously incurred from warehousing, handling and bagging." >>> Good for long-term growth (storage) and reduction in operational costs.

Bottomline: I think the "value" of each Unga share should be 65-80. Let's see where this ends up!
I await [@pesanane here is looking at you!] the 1H 2017-18 results



@vvs.. why was the bloody thing trading at sub KES 30 over such an extended period of time.. but I like the arguments you have listed on the post

Why is (profitable) KK trading at 15/- while (not yet profitable) KQ is trading at 16/-?
Why is (profitable) Coop trading at 17 while (barely profitable) NBK at 8.30?

In other words, the market often mis-prices the value of a firm.
As a Warren Buffett fan, I recognize this and try [& do not always succeed] in buying "undervalued" shares but one has to be patient.
https://en.wikipedia.org/wiki/Undervalued_stock

KenRe with a NAV/share of 32+ [& growing] trades at 20/-.
@Ericsson and I are in TPSEA which at 36 is under-valued [IMHO]
I believe NIC is under-valued vs peers.

Why is/as Unga under-valued [IMHO]?
1) Ennsvalley. The purchase of Ennsvalley from the Ndegwa Family (& friends) was done at a crazy high price. It was valued by Unga at KES 1bn at the time and Unga had to write off debts (Nakumatt), lay off staff (costs) and close locations (loss of equipment, furniture and goodwill).

The above left a sour taste in investors' mouths. The clean up helps focus on future growth BUT before we got there, the Seaboard+Victus/Ndegwa bid came through.

2) Uganda - Another botched acquisition. After buying out the minority shareholders at a premium, the plant was scrapped and manufacturing ceased. The staff was laid off (costs) and plant scrapped (one-off writedown).

This transaction was a drag on earnings and used up cash. Now that the UG plant is closed, the management can focus on profitable exports to UG from Eldoret.

3) The controlling shareholders (Ndegwas) might not be in Merali's league but they are not "Aga Khan" either i.e. benefits are shared with the minorities.

4) Drought/Elections/Politics. Reduced spending power, uncertainty and maize/wheat (esp in RV) politics which prevents imports of cheaper grains.

I remain optimistic about Unga [as long as the management doesn't screw up] and I would rather NOT sell at 40/- and support efforts that it remains a Listed Firm as others look at it as an acquisition target. Of course, there's always a price that I will accept and sell out!

I don't know why you should bring up KQ in this comparison but your point is valid

But, but... I also mentioned TPSEA, NIC, KK, & KenRe Laughing out loudly Laughing out loudly Laughing out loudly
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
mkenyan
#115 Posted : Tuesday, February 13, 2018 5:03:47 PM
Rank: Veteran


Joined: 4/1/2009
Posts: 1,670
Swenani wrote:
Sending money anonymously
1. Mobile transfer from you internet banking-If your bank supports it
2. Direct deposit-If you have a specific mpesa vendor your transact with(KYC)
3. Give the money to office messenger, your guard, househelp, cousin,mpango wa kando to transact

in fact most banks wont even bother with your id card when depositing 12k. he should just walk into any bank and deposit the money into the bank account of sparkly. for his name he can even write swenani the fishmonger and the bank wont care. this anonymity thing is just bullshit for non-payment of the money.
Angelica _ann
#116 Posted : Tuesday, February 13, 2018 5:08:14 PM
Rank: Elder


Joined: 12/7/2012
Posts: 9,516
I have being laughing at the Unga saga (VVS talked badly during the AK same scenario then, that if we (minority) are grumbling then we need to put in a counter offer) until it hit me that am in NIC and the Ndegwas are there too. Ok, minority shareholders need protection.
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
VituVingiSana
#117 Posted : Tuesday, February 13, 2018 5:12:07 PM
Rank: Chief


Joined: 1/3/2007
Posts: 14,906
Location: Nairobi
mkenyan wrote:
Swenani wrote:
Sending money anonymously
1. Mobile transfer from you internet banking-If your bank supports it
2. Direct deposit-If you have a specific mpesa vendor your transact with(KYC)
3. Give the money to office messenger, your guard, househelp, cousin,mpango wa kando to transact

in fact most banks wont even bother with your id card when depositing 12k. he should just walk into any bank and deposit the money into the bank account of sparkly. for his name he can even write swenani the fishmonger and the bank wont care. this anonymity thing is just bullshit for non-payment of the money.

Poor baby. I feel your pain. My bank does ask for "name, address and ID" for cash deposits.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
sparkly
#118 Posted : Tuesday, February 13, 2018 5:40:41 PM
Rank: Elder


Joined: 9/23/2009
Posts: 6,424
Location: Enk are Nyirobi
VituVingiSana wrote:
mkenyan wrote:
Swenani wrote:
Sending money anonymously
1. Mobile transfer from you internet banking-If your bank supports it
2. Direct deposit-If you have a specific mpesa vendor your transact with(KYC)
3. Give the money to office messenger, your guard, househelp, cousin,mpango wa kando to transact

in fact most banks wont even bother with your id card when depositing 12k. he should just walk into any bank and deposit the money into the bank account of sparkly. for his name he can even write swenani the fishmonger and the bank wont care. this anonymity thing is just bullshit for non-payment of the money.

Poor baby. I feel your pain. My bank does ask for "name, address and ID" for cash deposits.



1. Hide the call ID on your mobile, call me on 0708733938,

2. I will give instructions on where to drop the Bahasha near CBD Nairobi.

3. If you don't want to talk lest your voice give you away, flash 3 times before calling and i will go right to the instructions.
Life is short. Live passionately.
Swenani
#119 Posted : Tuesday, February 13, 2018 8:30:06 PM
Rank: User


Joined: 8/15/2013
Posts: 12,662
Location: Vacuum
sparkly wrote:
VituVingiSana wrote:
mkenyan wrote:
Swenani wrote:
Sending money anonymously
1. Mobile transfer from you internet banking-If your bank supports it
2. Direct deposit-If you have a specific mpesa vendor your transact with(KYC)
3. Give the money to office messenger, your guard, househelp, cousin,mpango wa kando to transact

in fact most banks wont even bother with your id card when depositing 12k. he should just walk into any bank and deposit the money into the bank account of sparkly. for his name he can even write swenani the fishmonger and the bank wont care. this anonymity thing is just bullshit for non-payment of the money.

Poor baby. I feel your pain. My bank does ask for "name, address and ID" for cash deposits.



1. Hide the call ID on your mobile, call me on 0708733938,

2. I will give instructions on where to drop the Bahasha near CBD Nairobi.

3. If you don't want to talk lest your voice give you away, flash 3 times before calling and i will go right to the instructions.


Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly Are you a kidnapper @sparkly? I think you have a hidden talent. You should hook up with impunity
Poverty is the root of all evil
iris
#120 Posted : Tuesday, February 13, 2018 9:00:57 PM
Rank: Member


Joined: 9/11/2014
Posts: 204
Location: Nairobi
Swenani wrote:
sparkly wrote:
VituVingiSana wrote:
mkenyan wrote:
Swenani wrote:
Sending money anonymously
1. Mobile transfer from you internet banking-If your bank supports it
2. Direct deposit-If you have a specific mpesa vendor your transact with(KYC)
3. Give the money to office messenger, your guard, househelp, cousin,mpango wa kando to transact

in fact most banks wont even bother with your id card when depositing 12k. he should just walk into any bank and deposit the money into the bank account of sparkly. for his name he can even write swenani the fishmonger and the bank wont care. this anonymity thing is just bullshit for non-payment of the money.

Poor baby. I feel your pain. My bank does ask for "name, address and ID" for cash deposits.



1. Hide the call ID on your mobile, call me on 0708733938,

2. I will give instructions on where to drop the Bahasha near CBD Nairobi.

3. If you don't want to talk lest your voice give you away, flash 3 times before calling and i will go right to the instructions.


Laughing out loudly Laughing out loudly Laughing out loudly Laughing out loudly Are you a kidnapper @sparkly? I think you have a hidden talent. You should hook up with impunity


What is Impunity's profession? smile
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