Investing for the future Effective leveraging of the beef business

Transcription

1 Investing for the future Effective leveraging of the beef business Hosted by Seminar synopsis: Thursday 7 May am to 12.30pm $30/ticket James Lawrence Pavilion - Gallagher Energizer Room Over the last few years, investors have turned to the agriculture sector as both a source of stability, and growth potential given the global increase in demand for protein. This session will give an overview of investment activity in agriculture, and in particular beef and beef related businesses. Topics to be explored include current investment relative to historic levels, examples of recent deals in the sector, an overview of the motivation for such investment, and some of the investment models which have been applied. This seminar will be facilitated by: Charlie Blomfield - Managing Director, Agricultural Management Company Pty Ltd, and Mark Steinhardt - Associate Director, InterFinancial Corporate Finance Limited.

2 How to tell if a beef business is successful Presented by Dr Phil Holmes - Holmes & Co Phil Holmes, one of the authors of the Northern Beef Situation Analysis, will present the key findings and insights from the analysis of 12 years of financial data for Northern beef producers. The data indicated that the majority of northern beef businesses are not economically sustainable at present. That said, there is considerable variation in performance between beef businesses within the industry. Phil will outline why the top 25% performers (across all regions, herd sizes and markets) consistently outperform the average and have businesses more likely to be economically sustainable over the long term. This indicates that there are successful business models for producing beef in northern Australia, primarily attributable to higher income through better herd productivity, and lower operating expenses, largely through better labour efficiency. Landlord or operator? One of the key challenges for investors looking at the beef sector involves the separation of land and operations. A number of models have emerged depending on the risk / return appetite of investors, the investment time horizon, and the desire for ongoing participation from investee businesses. This panel session will explore some of these models in turn, and suggest improvements for the future based on likely investor demand. Facilitated by Charlie Blomfield - Managing Director, Agricultural Management Company Pty Ltd Case Study 1 - Allied Beef Presented by James Maclean - Managing Director, Allied Beef Producing and marketing over 100,000 head of cattle per year, Allied Beef is Australia's premium beef cattle partner that works with the supply chain to improve the success of partner businesses. Established in 2007, Allied Beef is a private independent company and does not have processing, lot feeding or saleyard interests which ensures advice is not influenced by other company agendas. The idea that producers should work together in order to reduce costs and maximise returns is not new. Plenty of producer groups have sought to create alliances in order to improve their impact on higher levels of the supply chain. James believes the Allied Beef business model differs from other alliances because it offers its property partners greater flexibility. James will share insights into Allied Beef s business model and that by working collectively (as opposed to individually), greater achievements can be made for producers with regards to market access, maximising property production and cash flow.

3 Case Study 2 Mackay Sugar Presented by David Armstrong - Cane Development Manager, Mackay Sugar Mackay Sugar was formed as a cooperative in 1988 when five formerly independent milling cooperatives in the Pioneer Valley merged and acquired Pleystowe from CSR Limited. The need to be flexible and to maximise value-adding opportunities led shareholders to vote in favour of incorporating Mackay Sugar to a restricted public company in July Mackay Sugar shareholders are, predominantly, the approximately 800 growers who supply sugar cane to Mackay Sugar. Mackay Sugar is Australia s second largest sugar milling company. It operates four sugar mills and generates revenue from sugar, molasses and renewable energy. It also holds a share in Sugar Australia, a company that refines and markets sugar in Australia and New Zealand. Case Study 3 Australian Country Choice Presented by Michael Lee - General Manager Livestock Supply Chain & Agribusiness Assets, Australian Country Choice Australian Country Choice (ACC) is one of the largest vertically integrated supply chain organisations in the world. Since 1972, ACC has supplied exclusively to Coles Supermarkets and a number of export customers. Today, ACC has a long- term contract in place with Coles as the principal northern supplier and processor of beef products for YLC Coles. The ACC livestock procurement strategy adopts the principles of the I.M.O Livestock Supply System with an inner circle of Dedicated Producers (65% of the supply) through to Alliance Producers and Market Producers. Weaner cattle are sourced from producers and herds in NSW and Queensland to go on to ACC owned, managed and contract backgrounding operations to grow out and provide an unbroken supply chain through to their feedlots. The ACC feedlot group also buy cattle for direct entry into one of their owned or contracted feedlots. How to become investor ready and bankable Facilitated by Mark Steinhardt - Associate Director, InterFinancial Corporate Finance Limited Presentations by Charlie Blomfield and Mark Steinhardt Many business owners don t consider succession planning until they are ready to exit. As a result, there is often a gap between how a private business is run and what an investor is looking for. This session will explore some of the factors that business owners should consider ahead of a search for investors, including corporate structure, presentation of financial results,

4 systems and processes in the business, and how to articulate growth opportunities to an investor, using case studies to help demonstrate real life examples. Given the capital intensive nature of the beef industry, having a good relationship with debt providers is essential. This session will explore ways in which private businesses can better communicate with debt providers, in order to ensure that they have an appropriate capital structure in place to fund future growth. Presentations by: Doug Snell General Manager Business Banking and Agribusiness, Bank of Queensland Brad James - State Manager Queensland & Northern Territory, Rabobank Bio Charlie Blomfield Charlie is co-founder and Managing Director of Agricultural Management Company Pty Ltd (AMC), a leading farm management and agribusiness advisory service provider in Australia. Charlie is from a multigenerational farming family background and has been involved with production agriculture his entire career in livestock, cropping, cotton and horticulture. Charlie has worked with clients such as Terra Firma, Qatar Investment Authority, SGRF Oman, Landmark, Guinness Peat Group in investing and managing their agricultural assets. Charlie possesses a unique ability to deliver results in the paddock and the boardroom. He has direct networks with clients in regional Australia, the Middle East, Asia and North America. Each year, he is also invited to the Forbes Global CEO Conference, a meeting of 400 selected global CEO s, entrepreneurs and leaders. Charlie has a Bachelor of Agricultural Science, is RG146 compliant for Managed Investments, and is a graduate of the Australian Institute of Company Directors. Bio - Mark Steinhardt Mark joined InterFinancial in June 2010 as an Associate Director and has over a decade of experience analysing Australian equity markets. His career started in 2003 as an Equities Analyst, specialising in providing research to institutional investors on listed Australian equities. Following this, Mark worked for 18 months at Transpacific Industries, assisting the company through a major recapitalisation process and subsequently implementing an investor relations function. Mark has a Bachelor of Commerce and Bachelor of Science from the University of Southern Queensland and is a Charterholder with the Chartered Financial Analyst Institute.

5 With expertise in engineering, mining services, food and agribusiness Mark understands that every business and transaction is unique. Bio Dr Phil Holmes Phil Holmes is Principal of Holmes & Company, a company that provides private consulting to family owned beef businesses in northern Australia and detailed consulting to northern beef corporate entities on specific business, environmental and technical matters. Prior to establishing Holmes & Company, Phil was Director of Holmes Sackett & Associates Pty Ltd. His other positions have included consulting editor to the Beef Improvement News and Manager of Technical Services for MSD AGVET Australia. Phil is the co-author of the 2009 and 2013 Northern Beef Reports, industry status updates published by Meat & Livestock Australia and is the designer and constructor of the MLA BusinessEDGE course. Phil has a Graduate Diploma in Applied Finance and Investment (Securities Institute of Australia), a Bachelor of Science and Doctor of Philosophy, both from the University of Sydney and is a Fellow of the Financial Services Institute of Australia. Phil s high interest activities include sustainable agriculture with particular reference to the rangelands; beef and wool production with special reference to genetics, production and marketing; whole farm business management and financial analysis; and capital allocation and investment. Bio James Maclean James is the Managing Director of Allied Beef. Allied Beef is a progressive cattle company with the primary focus of producing premium and consistent backgrounded feeder cattle that meet customer specifications. The company achieves this objective with economies of scale through working closely with property partners in diverse regions of Australia. Over the past 20 years, James has gained extensive experience across all areas of the beef supply chain, having held roles in finance, lot feeding and agricultural business development. James is a Board member of Beef Australia and has a Masters of Applied Finance and a Diploma in Farm Management.

6 Bio David Armstrong David Armstrong was employed as the Cane Development Manager for Mackay Sugar in August In this role he is responsible for growing the Mackay Sugar cane supply, both in terms of area under cane and yield. Prior to this appointment he worked for 12 years for Tongaat Hulett Sugar, a listed agribusiness with sugar growing, milling and refining operations in a number of African countries. His roles for Tongaat Hulett included Project Manager for a number of large agricultural developments as well as manager of the Agricultural Business Unit, managing the Tongaat Hulett cane growing operations. He holds a Master of Science degree in Agricultural Economics from the Royal Agricultural University, Cirencester, UK and a Master of Business Administration degree from the University of Natal, South Africa. Bio Michael Lee In 2001 and after completing a meat science diploma Michael Lee headed out to the group s cattle operations and became involved in all aspects of beef cattle management and husbandry. Since that initial agribusiness training, Mr Lee worked his way through all areas of the meat processing facility in Brisbane and after 6 years within the plant fulfilled supervisory and then management roles which gave him a full appreciation of the integrated supply chain before returning to the agribusiness group. His current role encompasses, land and asset development, capital works and budgeting, commodity purchasing for both Brindley Park and Brisbane Valley feedlots running approximately 25,000 head, land tenure and contract negotiations and oversees the supply of around 40% of the weekly flow of Prime cattle into the ACC facility which producers around 5,700 head per week. As a family member of business he is also involved in the strategic decision making surrounding expansion opportunities and the tactical direction of the business. Away from his ACC duties, Michael is a member of the Ministerial Industry Skills Advisory Group (ISAG). Bio Doug Snell Doug has been a banking professional since 1990 where he spent time in Trade Finance, completing all aspects of import and export documentation and payments. He then moved into Financial Markets, specialising in Foreign Exchange, including spot, forwards and structured options. Doug was promoted to lead the NSW dealing teams and structured investment team for Commonwealth Bank in 2006, before taking up the role of Head of Global Markets, running the dealing rooms

7 for CBA Brisbane, Singapore and Hong Kong saw a move into commercial and agribusiness banking, where as General Manager was responsible for CBA s QLD and NT businesses as well as their national Specialised Agribusiness Solutions teams. In 2012 Doug took the opportunity to move to BOQ, where he holds the position of General Manager of the BOQ Business Group (including Business Banking, Corporate, Property, Agribusiness and Private Banking). He currently manages a national team of highly motivated, client solutions-based professionals, where servicing existing clients and on-boarding new clients is the focus. Doug completed post graduate studies with Finsia where he also lectured on financial markets topics. Bio Brad James Brad James has a strong affiliation with the bush having spent the majority of his banking career specialising in the agriculture sector. Educated in country Queensland Brad moved straight into a career in banking after completing his formal education. During his early career he specialised in both the commercial and corporate banking sector before finding his niche in agriculture in the early nineties. During Brad s career in agribusiness he has specialised in a host of commodities from beef through to sugar cane. Brad joined Rabobank in 2003 as Branch Manager for Rockhampton branch. In 2007 he became Regional Manager for Rabobank Central Queensland before taking on the top job for Rabobank as State Manager Qld/NT in Brad s key focus is on the sustainability of Agriculture here in Australia across all aspects of the various sectors, this includes sustainable practices, both on farm and off farm and succession through ensuring that the next generation possess the necessary skills to continue on.