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The better managers are, in my view, those which are able to differentiate between their core and non-core businesses, and focus their effort on improving the former.

And so, QAF's divestment of Rivalea should be seen positively, and not just because they might want to pay shareholders 50 cents instead of the usual 5 cents dividend. But because Rivalea has absolutely no synergy with sliced/par-baked bread manufacturing.

You can say that having Rivalea protect's QAF's overall revenue if something bad were to happen to the bread business. But if that's how their management thinks, it means that they will go into just about any other business, which pulls their attention away from doing the best work in their core business. A company which diversifies is almost always a bad sign of management complacency and neglect of their core business.

As for local investors seeking exposure to agriculture, there are plenty listed elsewhere, and it has never been easier to own shares listed in foreign exchanges.
QAF Limited has previously announced its intent to pursue a sale of its Australian primary production business, including Rivalea. The marketing process associated with the sale has commenced in August 2020. This will include, among other things, advertisements appearing in a major Australian newspaper. 
https://links.sgx.com/FileOpen/QAF_Annou...eID=629325

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Clarifications
Reference is made to a report published by The Australian on 20 September 2020 titled “QAF out to bring home the bacon with Rivalea sale” (the “Press Report”). The Press Report states that: “It is understood the company has recently received offers between $80m and $100m.”. 
The above statement in the Press Report is incorrect; no such offers have been received by the Company to-date. 

As announced by the Company on 26 August 2020, the sale process for the Primary Production business has recently been launched and is in its preliminary stages. 

The Rivalea group’s Diamond Valley Pork plant in Laverton, Melbourne continues to operate at two-thirds capacity and subjected to prescribed strict safety protocols. There were no new Covid-19 outbreaks at the plant since the initial outbreak announced on 25 July 2020. A long and substantial closure of the DVP plant may have an adverse impact on the Primary Production business and as this latest development has not been factored into the FY2020 forecast above, it may result in a deviation in the forecast. As the Covid-19 pandemic is an unprecedented event and the situation is evolving, the impact cannot be reliably estimated with certainty at this point in time. Losses arising from the pandemic are not covered by insurance policies in Australia.
https://links.sgx.com/FileOpen/QAF_Annou...eID=632432

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QAF has been pretty active lately and today it hit the $1 mark.

Wonder if they are something positive to announce on the disposal of their primary production business?
Has anyone got any view on QAF results. Writeoff primary production business came as surprise but it indicates that they are serious of selling that business. Bakery business continue to do very well.
(02-03-2021, 09:17 AM)buddy Wrote: [ -> ]Has anyone got any view on QAF results. Writeoff primary production business came as surprise but it indicates that they are serious of selling that business. Bakery business continue to do very well.

for all these hard work of trying to divesting rivalea, shareholders get to receive only an one-time special dividend of 2 cents"...hmm it doesn't look like it's worth the efforts at the expense of risk diversification benefits ( i would think its remaining core of bakery production line, and distribution have low barrier to entry)
write off could probably make the net book value of primary production looks more value buy for sale?
but 2 cents is not even 1 x ebdita. they would rather completely write off primary business if its worth 2 cents
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(03-03-2021, 09:59 PM)buddy Wrote: [ -> ]but 2 cents is not even 1 x ebdita. they would rather completely write off primary business if its worth 2 cents
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The management merely stated that they plan to pay a special dividend of 2 cents per share in the event that they are successful in divesting Rivalea, this does not mean that the disposal will only bring in 2 cents a share in proceeds.

Based on the carrying amount of the disposal group, it would seem that they expect the sale to bring in ~$133 million. That is likely on top of being able to recover any loans made by the holding company to Rivalea.
There is very good growth in its PP segment, and they were lucky that they had their new plant ready before the buying surge. It is likely that growth in PP will continue in the many years to come as they expand their distribution network and incomes grow.

Management will be wise to invest more money in PP to further improve their distribution and product mix, than try to get a beachhead in other markets. If they execute well -- and it isn't difficult since they already dominate the market -- the sales and earnings from PP may eventually grow to become the largest slice of its pie. So there's still a lot of room for QAF to grow its earnings. If this growth is realised in future years, the stock at current prices is cheap.

The 2c dividend is quite disappointing, but it signals that they probably already have plans on what to do with the divestment proceeds. It could be a privatisation, acquisition, or a massive expansion.
The indicative aggregate purchase price for the Sale Shares is to be satisfied entirely in cash and, asat the date hereof, is estimated at approximately A$107.9 million (equivalent to approximately S$110.3million) (the "Indicative Purchase Price"). Shareholder loans extended by the QAF Group to thePrimary Production business (amounting to approximately A$40.0 million (equivalent toapproximately S$40.9 million)) will be fully repaid on completion of the sale. Together with theIndicative Purchase Price, QAF Group will, subject to and on completion, receive estimated totalcash of A$148.1 million (equivalent to approximately S$151.3 million). Please see Section 4.2 belowfor further information.

Use of proceeds.

The Group is in the process of adding a new line at the Gardenia Malaysia plant in Bukit Kemuning (approximately S$26 million). Plans to expand production facilities at North Luzon in the Philippines are also being reviewed (approximately S$40 million). An additional bread line at the Johor plant (approximately S$30 million) to supply both Malaysia and Singapore markets, and an upgrade to the bread production lines in Singapore (approximately S$20 million) are currently being studied. Total expected capital expenditure for these projects is approximately S$116 million. This is in addition to the significant investments into the Bakery business in Philippines (approximately S$80 million) and Malaysia (approximately S$130 million) that had been made in recent years, as the Group seeks to expand its bakery production capabilities. The disposal of the Primary Production business would enable the Group to focus on and support the growth of the Bakery and Distribution and Warehousing businesses and enable the Group to invest in new business opportunities related to these businesses

https://links.sgx.com/1.0.0/corporate-an...6.2021.pdf
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