In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO.
The calculation of returns includes dividends and tax credits.
Goodman Fielder Ltd [GFF.NZ] has been OK to its shareholders in terms of returns since its IPO in December 2005 at $NZ2.13 . With $NZ 49 cents in net dividends (see chart above) paid and another 20% average of that figure gained for those eligible for associated tax credits (GFF have never had full tax credits), a slightly less than 30% return (see chart below for the share price percentage gain against the average of all NZX indexes) and over the 4.3 year listing an approximate annual net return of just under 7%.
This is approximately double the return compared to the average of all NZX indexes.
Disclosure I own GFF shares in the Share Investor Portfolio
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Goodman Fielder @ Share Investor
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Hi Darren,
ReplyDeleteI recently saw GFF in the news again with their debt facility being assured for another year. I have GFF shares but one thing that has always bothered me is why this company which has agreat business needs such a large debt facility. That must be costing a bit in fees and interest payments. Do you think they could better manage their cash flow so that a much smaller debt facility might be needed?
Cheers
Hi RJ, what I think is that because of stable high cashflows management is taking advantage of that to gear up as much as possible.
ReplyDeleteThe debt kicked off after Graeme Hart sold down during the IPO a few years back and management seem to like to have it on the balance sheet.
I don't and it is dragging down profit year by year.