The chairman of the country's largest meat company is urging farmers to take a long-term view of their industry and reject one-off price inducements from companies wanting their stock.
Silver Fern Farms (SFF) chairman Eoin Garden said with prime lamb prices back sharply from last season, the obvious kneejerk reaction from farmers was to take the best price offered for their stock on the day.
But, he warned, that ignored the need for the sector to make long-term structural changes which could only come by farmers supporting companies which were taking a long-term view, he said.
The Dunedin meat co-operative holds its annual meeting in Gore tomorrow, the first since it listed its shares on the Unlisted exchange, albeit with caveats protecting majority control of supplier shareholders.
The shares were listed at $1, but have hit a low of 47c and yesterday were trading at 55c.
Since listing in late October, there have been 63 trades involving 466 million shares worth $277 million.
It was part of a exchange offer and rights issue which raised $22.2 million in new capital for SFF, but the low share price and average end-of-year profit of $43 million including one-off gains, could prompt questions from shareholders tomorrow.
Mr Garden said the low price reflected farmers not traditionally trading in shares, and failed to recognise SFF's structural changes, such as reducing debt by $200 million and aligning with consumer needs.
To structurally turn the industry around took time and required commitment from shareholders to companies which he said rejected short-term focused business models.
Craigs Investment Partners broker Peter McIntyre agreed the SFF share price was not a fair reflection on the company's performance and changes it had made.
Independent analysts Grant Samuel estimated in the share listing prospectus shares would have a value of $1.70 if there was a 50% take up of the rights issue, but take up was lower than that.
