v2 Report
TASMAN.ul Tasman Farms Ltd

Commentary: Tasman Farms Limited owns and operates dairy farms in Tasmania. They also farm sheep and beef cows. It has a significant portion of its non-current assets in farm land, which provides the potential for capital appreciation for investors, as well as the revenue generated from the farming business e.g. beef, milk and dairy products, sheep etc. One key feature is the fact that the land owned by Tasman is located in Australia so there is some currency exposure, which in recent times has been somewhat negative with the appreciation of the NZD; however as the NZDAUD falls the value of Tasman should rise. Thus Tasman gives exposure to the farming business and commodity prices, real estate, and exchange rates.

The most significant recent events for Tasman are not so much operating or structural issues as they are economic and global issues. Recently there has been a global commodities boom which has been a boon for producers such as Tasman; however there has also been a period of prolonged weakness of the USD against the AUD and NZD - which has a direct impact on the financial performance of Tasman. Indeed as mentioned above Tasman could provide good exposure to a falling NZDAUD (this would increase the net asset figure), and potentially also a falling AUDUSD if it resulted in higher export receipts or competitiveness. Drought has also had a negative impact, which has depressed farm values also; looking forward the break in the drought may see this discount coming off.

In terms of financial performance, the net asset figure has clearly been impacted by the strong NZD, as has NPAT. All profitability figures are down year on year, but conservative balance sheet shows no pressure on liquidity or financial strength. In terms of market ratios the P/E ratio could be seen as too high given the low profitability, however looking forward profitability should improve in the next financial year, and the price to net assets ratio is less than 1, indicating the market values the net assets lower than book value - thus there may be a decent value investment opportunity here if economic conditions end up playing out favourably for Tasman.

by Callum Thomas
1-September-2007

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IPOs and Investment Opportunities

Financials 
 

Statement of Financial Performance
	2007	2006	2005	2004
Revenue
Sales	23,887,000	24,626,000	21,970,000	19,545,000
Interest received	163,000	68,000	-	-
Other	1,588,000	2,515,000	2,136,000	584,000
Total Revenue	25,638,000	27,209,000	24,106,000	20,129,000
Expenses
Cost of sales	21,635,000	21,009,000	17,569,000	19,338,000
Other expenses	-	-	109,000	-
EBITDA	4,003,000	6,200,000	6,428,000	791,000
Depreciation	-	-	379,000	411,000
Amortisation	-	-	-	-
EBIT	4,003,000	6,200,000	6,049,000	380,000
Interest expense	3,446,000	3,185,000	3,253,000	3,142,000
Taxation	-	-	-	-
NPAT	557,000	3,015,000	2,796,000	(2,762,000)
Statement of Financial Position
	2007	2006	2005	2004
Assets
Current Assets
Bank and cash	85,000	114,000	184,000	158,000
Receivables	1,807,000	1,381,000	968,000	903,000
Inventory	254,000	202,000	248,000	241,000
Other	-	-	-	-
Total Current Assets	2,146,000	1,697,000	1,400,000	1,302,000
Non Current Assets
Property Plant & Equipment	87,179,000	91,870,000	55,512,000	58,733,000
Investments	1,942,000	2,052,000	1,837,000	1,716,000
Goodwill & Intangibles	-	-	-	-
Other	30,983,000	31,304,000	25,650,000	25,820,000
Total Non Current Assets	120,104,000	125,226,000	82,999,000	86,269,000
Total Assets	122,250,000	126,923,000	84,399,000	87,571,000
Liabilities
Current Liabilities
Payables	1,575,000	1,543,000	1,282,000	2,222,000
Short term borrowings	187,000	23,000	92,000	-
Other	-	-	-	-
Total Current Liabilities	1,762,000	1,566,000	1,374,000	2,222,000
Non Current Liabilities
Long-term Borrowings	46,761,000	47,982,000	43,813,000	46,833,000
Other	-	-	-	-
Total Non Current Liabilities	46,761,000	47,982,000	43,813,000	46,833,000
Total Liabilities	48,523,000	49,548,000	45,187,000	49,055,000
Net Assets	73,727,000	77,375,000	39,212,000	38,516,000
Statement of Cashflows
	2007	2006	2005	2004
Cash flows from operating activities
Operating revenues	20,754,000	21,708,000	19,328,000	18,523,000
Operating expenses	21,331,000	20,636,000	19,166,000	20,160,000
	(577,000)	1,072,000	162,000	(1,637,000)
Cash flows from investing activities
Inflows	14,000	5,000	1,492,000	2,311,000
Outflows	1,017,000	310,000	1,278,000	1,299,000
	(1,003,000)	(305,000)	214,000	1,012,000
Cash flows from financing activities
Inflows	1,386,000	-	-	568,000
Outflows	-	776,000	435,000	-
	1,386,000	(776,000)	(435,000)	568,000
Net Increase (decrease)	(194,000)	(9,000)	(59,000)	(57,000)
Opening cash	92,000	100,000	151,000	215,000
Closing cash	(102,000)	91,000	92,000	158,000
	Analysis
Per share figures
Dividend/shares	-	-	-	-
NPAT/shares (EPS)	0.01	0.04	0.04	(0.04)
EBITDA/shares	0.06	0.09	0.10	0.01
Net Assets/shares	1.10	1.15	0.58	0.57
Profitability
ROA	0.46%	2.38%	3.31%	-3.15%
Equity multiplier	1.7	1.6	2.2	2.3
ROE	0.76%	3.90%	7.13%	-7.17%
ROavgE	0.74%	5.17%	7.19%	-
Net profit margin	2.17%	11.08%	11.60%	-13.72%
Liquidity
Net working capital	384,000	131,000	26,000	(920,000)
Current ratio	1.22	1.08	1.02	0.59
Quick ratio	1.07	0.95	0.84	0.48
Working capital ratio	0.00	0.00	0.00	-0.01
Capital structure
Debt to equity	0.66	0.64	1.15	1.27
Interest coverage	1.16	1.95	1.86	0.12
Shares	67,135,857	67,135,857	67,135,857	67,135,857
Dividends paid	-	-	-	-
Dividend payout ratio	0%	0%	0%	0%
Growth rates
Revenue	-5.77%	12.87%	19.76%
EBITDA	-35.44%	-3.55%	712.64%
NPAT	-81.53%	7.83%	-201.23%
Total assets	-3.68%	50.38%	-3.62%
Net assets	-4.71%	97.32%	1.81%
g = (ROE*(1-DPR))	0.76%	3.90%	7.13%	-7.17%
Other
Share price (14-August-07)	$            0.95	Avg 4 yr growth rate (NPAT)		-91.64%
Market cap	$  63,779,064	Cmpdg 4 yr growth rate (NPAT)		n/a
Enterprise value (EV)	$112,302,064	Avg 4 yr growth rate (NA)		31.47%
EV/EBITDA	28.05	Cmpdg 4 yr growth rate (NA)		17.62%
P/E Ratio	114.50
P/NA ratio	0.87
Dividend yield	0.00%
Earnings yield (E/P)	1%

Company balance date: 31 May

Supplementary Information

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