ASX:GNC

Stock Analysis Report

Executive Summary

GrainCorp Limited operates as a food ingredients and agribusiness company in Australasia, Asia, North America, Europe, the Middle East, North Africa, and internationally.


Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has GrainCorp's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GNC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.3%

GNC

-5.4%

AU Food

-6.2%

AU Market


1 Year Return

-17.2%

GNC

-10.1%

AU Food

7.9%

AU Market

Return vs Industry: GNC underperformed the Australian Food industry which returned -7% over the past year.

Return vs Market: GNC underperformed the Australian Market which returned 10.9% over the past year.


Shareholder returns

GNCIndustryMarket
7 Day-3.3%-5.4%-6.2%
30 Day-4.6%-5.8%-5.9%
90 Day-2.1%-1.3%-2.7%
1 Year-17.2%-17.2%-7.3%-10.1%12.6%7.9%
3 Year-2.1%-7.4%6.1%-1.8%31.3%13.8%
5 Year-9.8%-16.8%27.9%16.9%42.6%10.6%

Price Volatility Vs. Market

How volatile is GrainCorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is GrainCorp undervalued compared to its fair value and its price relative to the market?

28.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GNC (A$8.11) is trading below our estimate of fair value (A$11.28)

Significantly Below Fair Value: GNC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GNC is unprofitable, so we can't compare its PE Ratio to the Food industry average.

PE vs Market: GNC is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate GNC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: GNC is good value based on its PB Ratio (1x) compared to the AU Food industry average (1.2x).


Next Steps

Future Growth

How is GrainCorp forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

62.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GNC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.1%).

Earnings vs Market: GNC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: GNC's is expected to become profitable in the next 3 years.

Revenue vs Market: GNC's revenue (1.9% per year) is forecast to grow slower than the Australian market (4.1% per year).

High Growth Revenue: GNC's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GNC's Return on Equity is forecast to be low in 3 years time (5.4%).


Next Steps

Past Performance

How has GrainCorp performed over the past 5 years?

-17.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GNC is currently unprofitable.

Growing Profit Margin: GNC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: GNC is unprofitable, and losses have increased over the past 5 years at a rate of -17.8% per year.

Accelerating Growth: Unable to compare GNC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: GNC is unprofitable, making it difficult to compare its past year earnings growth to the Food industry (-21.4%).


Return on Equity

High ROE: GNC has a negative Return on Equity (-6.15%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is GrainCorp's financial position?


Financial Position Analysis

Short Term Liabilities: GNC's short term assets (A$1.9B) exceed its short term liabilities (A$1.1B).

Long Term Liabilities: GNC's short term assets (A$1.9B) exceed its long term liabilities (A$906.8M).


Debt to Equity History and Analysis

Debt Level: GNC's debt to equity ratio (76.1%) is considered high.

Reducing Debt: GNC's debt to equity ratio has increased from 54.4% to 76.1% over the past 5 years.


Balance Sheet

Inventory Level: GNC has a high level of physical assets or inventory.

Debt Coverage by Assets: GNC's debt is covered by short term assets (assets are 1.4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: GNC has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: GNC has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is GrainCorp's current dividend yield, its reliability and sustainability?

2.05%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%2.4%markettop25%5.7%industryaverage3.6%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate GNC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate GNC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if GNC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if GNC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: GNC is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of GNC's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure


CEO

Mark Palmquist (62yo)

5.3yrs

Tenure

AU$1,604,000

Compensation

Mr. Mark L. Palmquist, BBus, GAICD, has been the Chief Executive Officer of GrainCorp Limited since October 1, 2014. He served as Managing Director of GrainCorp Limited from October 1, 2014 to April 26, 20 ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD1.06M) is about average for companies of similar size in the Australian market ($USD1.38M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mark Palmquist
Chief Executive Officer5.3yrsAU$1.60m0.10% A$1.9m
Alistair Bell
Group Chief Financial Officer9.3yrsAU$755.00k0.035% A$657.2k
Klaus Pamminger
Chief Operating Officer0yrsAU$894.00k0.0094% A$174.8k
Cate Hathaway
Chief People & Transformation Officer1.6yrsAU$515.23kno data
Darren Smith
President & CEO of GrainCorp Malt0yrsAU$703.18k0.0075% A$139.6k
Luke Thrum
Senior Manager of Corporate Affairs & Investor Relations0yrsno datano data
Stephanie Belton
Group General Counsel & Joint Company Secretary1yrsno datano data
Angus Trigg
Director of Corporate Affairs0yrsno datano data
Annerly Squires
Joint Company Secretary1.2yrsno datano data

1.6yrs

Average Tenure

Experienced Management: GNC's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Donald McGauchie
Non-Executive Director10.2yrsAU$150.00k0.039% A$721.4k
Jane McAloon
Non-Executive Director0.2yrsno datano data
Barbara Gibson
Non-Executive Director8.9yrsAU$180.00k0.0031% A$56.8k
Graham Bradley
Chairman of the Board2.8yrsAU$370.00k0.015% A$271.7k
Peter Richards
Deputy Chairman0.7yrsAU$172.00k0.0044% A$81.1k
Daniel Mangelsdorf
Non-Executive Director11yrsAU$175.00k0.0068% A$126.0k
Simon Tregoning
Non-Executive Director11.2yrsAU$162.00k0.013% A$243.3k
Kathleen Grigg
Non-Executive Director0.2yrsno datano data

5.8yrs

Average Tenure

69.5yo

Average Age

Experienced Board: GNC's board of directors are considered experienced (5.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

GrainCorp Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: GrainCorp Limited
  • Ticker: GNC
  • Exchange: ASX
  • Founded: 1916
  • Industry: Agricultural Products
  • Sector: Food, Beverage & Tobacco
  • Market Cap: AU$1.856b
  • Shares outstanding: 228.85m
  • Website: https://www.graincorp.com.au

Number of Employees


Location

  • GrainCorp Limited
  • 175 Liverpool Street
  • Level 28
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GNCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMar 1998
GRCL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 1998
G3CDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 1998
GNCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDMar 1998

Biography

GrainCorp Limited operates as a food ingredients and agribusiness company in Australasia, Asia, North America, Europe, the Middle East, North Africa, and internationally. It operates through three segments: Grains, Malt, and Oils. The Grains segment receives, transports, tests, stores, and imports grains comprising wheat, barley, canola, and sorghum, as well as other bulk commodities. It also markets grain and agricultural products; and operates grain pools. The Malt segment produces malt products; provides brewing inputs and other malting services to brewers and distillers; sells farm inputs; and exports malt. The Oils segment is involved in processing and crushing oilseeds; supplying edible oils and feeds; operating bulk liquid port terminals; and the provision of storage, packaging, transportation, and logistics services. GrainCorp Limited was founded in 1916 and is headquartered in Sydney, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 10:35
End of Day Share Price2020/02/26 00:00
Earnings2019/09/30
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.