Ricegrowers Ltd. Class B · ASX:SGLLV
Ricegrowers Ltd. Class B — SunRice — Corporate Update (June 2012)
20 slides from Ricegrowers Ltd. Class B's corporate update, June 2012
Slide 1: SunRice Update RGA Branch Meetings
SunRice Update RGA Branch Meetings June 2012 1
Slide 2: Agenda
Your Company I Your Future Agenda • Capital structure • The Board • Business performance and creating shareholder value • Questions 2
Slide 3: SunRice stronger second half performance and paddy price
Your Company I Your Future • SunRice has experienced a stronger than anticipated second half performance. • The 2011 crop paddy price should be above $250 per tonne (subject to financial year end audit). • The strong result has allowed for retentions to continue to address debt and gearing. • The Bo
Slide 4: Capital Structure
Your Company I Your Future Capital Structure • Since converting to a company, drought and an external offer have highlighted shortcomings with the structure adopted in 2005. • Following the return to normal crops the Board will review the current structure to assess if it is appropriate for the futu
Slide 5: Capital Structure
Your Company I Your Future Capital Structure • In 2005 it was anticipated that Active Growers/A Class shareholders would convert Rice Bonds/RMB Equity to B Shares to provide permanent capital and funding for SunRice. • Conversion by A Class shareholders has been limited, partially because of the dro
Slide 6: Capital Structure
Your Company I Your Future Capital Structure • Some growers choose not to have an A Share (and not make any financial contribution) or to have an A Share (and make a minimal financial contribution) – yet receive the benefits of premium markets and brand investment. • A Paddy Supply Charter is propos
Slide 7: The Board
Your Company I Your Future The Board • After seven years Russell Higgins will retire as an External Director. He will be greatly missed. • Under the Constitution and the RMB arrangements seven Directors must be A Class shareholders. • Therefore the Board has a concentration of Grower skills and a he
Slide 8: Business Performance and Creating Shareholder Value
Business Performance and Creating Shareholder Value Rob Gordon CEO 8
Slide 9: Introduction
Your Company I Your Future Introduction • SunRice has experienced a strong 12 months:- – Returning to full production and re-establishing our operations; – Reclaiming significant international markets lost during the drought, including the Middle East, North Asia and the Pacific; – Establishing new
Slide 10: SunRice Gearing Target
Your Company I Your Future SunRice Gearing Target • Debt has been an ongoing issue for SunRice. • In 2009 the Board set a gearing target of 70%: – At the time SunRice’s gearing was 168% and its peers’ gearing was around 57%. – SunRice’s reliance on bank funding meant it was vulnerable to profit shoc
Slide 11: Key Drivers to Reduced Gearing
Your Company I Your Future Key Drivers to Reduced Gearing • At October 2011, SunRice’s average gearing for the previous six months was 98%. At year end, subject to finalisation of audit, we expect our gearing to drop below the target we set in 2009. • We have achieved this through a combination of a
Slide 12: Consolidated Group Gearing Ratio
Your Company I Your Future Consolidated Group Gearing Ratio Consolidated Group Gearing Ratios (Debt : Equity) 400% 344% 350% 318% 300% 257% 250% 219% 200% 168% 118% 150% 102% 100% 50% 0% 2005 2006 2007 2008 2009 2010 2011 12
Slide 13: Gearing Ratios of Comparable Companies
Your Company I Your Future Gearing Ratios of Comparable Companies • While SunRice’s gearing ratio has reduced over the past 18 months, so too has that of our peer group companies. • Due to the seasonal nature of the business, funding needs vary considerably during the year. • In a continued volatile
Slide 14: Gearing Ratios of Comparable Companies
Your Company I Your Future Gearing Ratios of Comparable Companies 300% Apr 08 250% 257% 200% 150% Apr 11 100% 102% 2008 Median (57%) 50% 2011 Median (30%) 102% 24% 65% 68% 49% 35% 43% 21% 0% 2008 2011 14 14
Slide 15: Addressing SunRice's Capital Structure
Your Company I Your Future Addressing SunRice’s Capital Structure • While the 70% gearing target reduces SunRice’s dependence on short term debt:- – It is still too high in the current economic environment; and – It still does not provide capacity to fund future growth. • SunRice will continue to ta
Slide 16: Creating a Platform to Grow our Business
Your Company I Your Future Creating a Platform to Grow our Business • My mandate from the Board is to identify the next phase of development for the SunRice business. • Substantial work has already started, including: – Developing a new Strategic Plan for SunRice and its subsidiaries; – Global end-t
Slide 17: Creating a Platform to Grow our Business cont.
Your Company I Your Future Creating a Platform to Grow our Business cont. • SunRice has great potential and with the return of good supply conditions we need to be positioned to take advantage of opportunities in line with our Strategic Plan. • To do this we will need financial capacity. Accordingly
Slide 18: SunRice Annual General Meeting
Your Company I Your Future SunRice Annual General Meeting 10:30am Friday, 24 August 2012 Jerilderie Civic Hall 33 Jerilderie Street Jerilderie 18
Slide 19: Chairman's Conclusion
Chairman’s Conclusion 19
Slide 20: Questions
Questions 20