While Elders may have tidied-up some of its debt, apparently it still has a large whack to go. i.e. It has sold-off the AACo stake, sold-off the auto business, and now also sold-off the Insurance business. And still has large debt! Gee, makes you wonder why people at the top of these companies responsible for getting them into these situations are ever lauded at industry events, doesn’t it!
The remaining debt is still concerning the analysts. And if that’s the case and there’s not a lot left to sell and not a lot of free cash-flow to deal with the debt replayments, then perhaps on a local level it’s not even as well off as your family-owned local independent. Will there be pressure applied to the local Elders agencies from where all of the cash has to come now that it’s not getting any more from other sources? And if so, what form will the pressure take?
A few other thoughts here too. Elders is listed on the ASX which brings with it more pressures. ie. It has just appointed a new COO and new CIO. These might be necessary for large organisations but their costs, along with that of the CEO, the various adminstration staff, office leasing costs etc etc add to the burden for which the local independent doesn’t need to account.
Before their ‘troubles’ both Elders and Landmark had begun their ‘fee-for’service’ models. e.g. $2.50 per ear-tag added and $2 per head for scanning. And I guess in a user-pays, capitalistic economy, that’s a fair thing if you want to cover your costs and be sure you can keep your business alive. The header mechanic doesn’t fix your rig and hold-over payment til the crop cheque is in, so why shouldn’t the agent be paid as they go. What this approach may affect however, is whether the value is in the 5.5% selling fees if it’s just covering loading and sale day.
What do you think?
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Archive for August, 2009
How Will The Elders ‘Restructure’ Affect Producers?
The Great Meat Rip-off Much Is More Than High Fuel Costs
Agforce is right to advise consumers that they are headed for even higher costs if the fuel rebate is scrapped. Agforce on fuel costs
However, they are stuck between a rock and a hard place, aren’t they as we should be more focussed on the current rip-off by processors and retailers. Australia’s meat is purchased at the lowest cost in the developed World and sold at the highest! Click for the facts
While it’s all very well for MLA to advertise to increase consumption, I would prefer they work on removing the rip-off. It must be difficult for them though when they are representing both producers and the processors ripping them off!
What do you think?
Please leave your comment below.
