Norgate unfazed by PGG Wrightson share price slide
PGG Wrightson chairman Craig Norgate is unperturbed over the recent weakness in the company's share price ahead of its annual result next month.
This year, PGG Wrightson shares have lost nearly a quarter of their value to currently trade at just under the $1 mark.
Mr Norgate said the share price decline is “just a case of a few people exiting with little demand.”
“The company is travelling well.”
Last month, the company downgraded its operating earnings guidance for the current year by 16% to $30-32 million from its previous forecast of $36-42 million. It cited the global recession and the slump in world dairy prices as the reason for the drop.
Forsyth Barr analyst John Cairns said the market was also responding to the company’s downgraded forecast coupled with its earlier commitment to reduce is total debt level by $125 million by December 2010.
He estimated PGG Wrightson’s total core debt in June at $400 million.
The reduction was announced in February. PGG Wrightson said it received bank commitments to refinance all of its facilities.
ANZ, BNZ and Westpac provided a total of $475 million in three tranches: - $275 million of core debt for a 30-month period to September 2011 - $125 million amortising facility to December 2010 - $75 million of seasonal working capital to April 2010.
Prior to that announcement, the market grew pessimistic about the company’s ability to secure funding to replace $180 million of debt that was to mature in April.
Meanwhile Mr Norgate is continuing to keep busy. He was recently appointed as a director to the board of the New Zealand Institute of Chartered Accountants.
“It’s getting back to the profession I started with,” he said.
Mr Norgate holds a number of directorships including Wool Partners International, Westgate Port Taranaki, Dexcell, Aotearoa Fisheries, Sealord Group and Rural Portfolio Investments, the company he formed with Baird McConnon to buy Wrightson before a takeover of Williams and Kettle and the merger with Pyne Gould Guinness.