NZSE:LIC

Stock Analysis Report

Executive Summary

Livestock Improvement Corporation Limited, together with its subsidiaries, develops, produces, and markets artificial breeding, genetics, farm software, farm automation, and herd testing services.


Snowflake Analysis

Flawless balance sheet, undervalued and pays a dividend.

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0%

LIC

1.6%

NZ Food

0.3%

NZ Market


1 Year Return

-5.9%

LIC

3.4%

NZ Food

21.9%

NZ Market

Return vs Industry: LIC underperformed the NZ Food industry which returned 1.9% over the past year.

Return vs Market: LIC underperformed the NZ Market which returned 21.1% over the past year.


Shareholder returns

LICIndustryMarket
7 Day0%1.6%0.3%
30 Day0%0.6%-0.2%
90 Day0%2.3%7.2%
1 Year5.3%-5.9%4.7%3.4%26.9%21.9%
3 Year44.3%22.6%59.2%46.0%60.1%39.2%
5 Year-35.0%-47.5%119.0%79.3%98.3%54.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LIC (NZ$0.8) is trading below our estimate of fair value (NZ$4.43)

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


Price To Earnings Ratio

PE vs Industry: LIC is good value based on its PE Ratio (5.7x) compared to the Food industry average (15.7x).

PE vs Market: LIC is good value based on its PE Ratio (5.7x) compared to the NZ market (19.8x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: LIC is good value based on its PB Ratio (0.4x) compared to the NZ Food industry average (1.2x).


Next Steps

Future Growth

How is Livestock Improvement forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

14.6%

Forecasted Food, Beverage & Tobacco industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Livestock Improvement has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Livestock Improvement performed over the past 5 years?

23.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LIC has high quality earnings.

Growing Profit Margin: LIC's current net profit margins (7.9%) are lower than last year (11%).


Past Earnings Growth Analysis

Earnings Trend: LIC's earnings have grown significantly by 23.3% per year over the past 5 years.

Accelerating Growth: LIC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LIC had negative earnings growth (-27%) over the past year, making it difficult to compare to the Food industry average (-9.7%).


Return on Equity

High ROE: LIC's Return on Equity (6.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Livestock Improvement's financial position?


Financial Position Analysis

Short Term Liabilities: LIC's short term assets (NZ$104.5M) exceed its short term liabilities (NZ$61.7M).

Long Term Liabilities: LIC's short term assets (NZ$104.5M) exceed its long term liabilities (NZ$60.8M).


Debt to Equity History and Analysis

Debt Level: LIC's debt to equity ratio (7.3%) is considered satisfactory.

Reducing Debt: LIC's debt to equity ratio has reduced from 9.5% to 7.3% over the past 5 years.

Debt Coverage: LIC's debt is well covered by operating cash flow (226.9%).

Interest Coverage: LIC's interest payments on its debt are well covered by EBIT (49.6x coverage).


Balance Sheet

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

Debt Coverage by Assets: LIC's debt is covered by short term assets (assets are 4.7x debt).


Next Steps

Dividend

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

13.72%

Current Dividend Yield


Dividend Yield vs Market

company13.7%marketbottom25%2.9%markettop25%5.5%industryaverage4.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: LIC's dividend (13.72%) is higher than the bottom 25% of dividend payers in the NZ market (2.87%).

High Dividend: LIC's dividend (13.72%) is in the top 25% of dividend payers in the NZ market (5.62%)


Stability and Growth of Payments

Stable Dividend: LIC's dividend payments have been volatile in the past 10 years.

Growing Dividend: LIC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (77.7%), LIC's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Wayne McNee 0

6.6yrs

Tenure

Mr. Wayne McNee has been the Chief Executive Officer at Livestock Improvement Corporation Limited since July 2013. Mr. McNee was Director-General for the Ministry for Primary Industries (MPI) since Novembe ...


Leadership Team

NamePositionTenureCompensationOwnership
Wayne McNee
Chief Executive Officer6.6yrsno data0.028% NZ$32.0k
David Hazlehurst
Chief Financial Officer1yrsno datano data
David Chin
General Manager of Operations & Service0.3yrsno datano data
Richard Spelman
Chief Scientist5.7yrsno data0.028% NZ$32.0k
Andrea Black
Chief Information Officer0.08yrsno datano data
Roz Urbahn
Chief People Officer2.5yrsno datano data
Geoff Corbett
Chief Executive Officer of LIC Automation2.3yrsno datano data
Gillian Brennan
Company Secretary6.8yrsno datano data

2.4yrs

Average Tenure

Experienced Management: LIC's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Philip Lough
Independent Director17.3yrsNZ$60.00kno data
Murray Jagger
Director19.7yrsNZ$47.00k0.066% NZ$75.6k
Gray Baldwin
Director7.7yrsNZ$47.00k0.010% NZ$11.4k
Murray King
Chairman0yrsNZ$114.00k0.095% NZ$108.2k
David Jensen
Director7.7yrsNZ$47.00k0.013% NZ$14.7k
Sophie Haslem
Independent Director1.2yrsno datano data
Alison Watters
Director5.7yrsNZ$47.00k0.024% NZ$27.5k
Candace Reed
Independent Director4.3yrsNZ$28.00kno data
Matt Ross
Director2.7yrsno data0.068% NZ$77.9k
Ben Dickie
Director1.7yrsno data0.0073% NZ$8.3k

5.7yrs

Average Tenure

Experienced Board: LIC's board of directors are considered experienced (5.7 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 been diluted in the past year, with total shares outstanding growing by 3.2%.


Top Shareholders

Company Information

Livestock Improvement Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Livestock Improvement Corporation Limited
  • Ticker: LIC
  • Exchange: NZSE
  • Founded: 1909
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: NZ$113.876m
  • Shares outstanding: 142.34m
  • Website: https://www.lic.co.nz

Location

  • Livestock Improvement Corporation Limited
  • Corner Ruakura and Morrinsville Roads
  • Newstead
  • Hamilton
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LICNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDApr 2004

Biography

Livestock Improvement Corporation Limited, together with its subsidiaries, develops, produces, and markets artificial breeding, genetics, farm software, farm automation, and herd testing services. The company operates in four segments: NZ Market Genetics, Herd Testing, Farm Software, and Farm Automation. The NZ Market Genetics segment provides bovine genetic breeding materials, and related services to dairy farmers. The Herd Testing segment offers herd testing and animal recording services for pastoral farmers. The Farm Software segment provides data recording and farm management information services. The Farm Automation segment offers dairy automated equipment and technology. The company is also involved in the provision of diagnostic, animal health, research and development, and support services. It operates in New Zealand, Australia, Ireland, the United Kingdom, and internationally. Livestock Improvement Corporation Limited was founded in 1909 and is headquartered in Hamilton, New Zealand. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 10:31
End of Day Share Price2020/02/13 00:00
Earnings2019/11/30
Annual Earnings2019/05/31


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.