Download 2 August 2017: Rice Industry Leaders Forum Funding Options PDF Document

SunRice Grower Forum A well funded and capitalised SunRice

John Brennan

Group Chief Financial Officer

Background and Context

• You have heard from Rob about the strategy…

• Performance over the last six years has been strong

• …and there are many exciting opportunities to profitably grow the business for the benefit of you, the growers and SunRice shareholders alike

• However these opportunities will require funding over the next five years

• SunRice's funding options are….

  • Profits

  • Cash tied up in the business

  • Surplus assets

  • Borrowing from the banks and

  • Raising equity

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    Sources of Funds - Profits

• SunRice's NPAT has averaged

  $40 million over the last five years

• From this we have paid out on average 50% in dividends.

• Dividend represents the necessary return paid to shareholders on their investment

• Many of our shareholders depend on this income

• Funds available after paying dividends are generally around $20 million

  Profits represent a limited source of funds to support growth opportunities

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  Sources of Funds - Cash tied up in the Business

• $280m at the end of April 2017

• Made up of

• Money owed by customers (receivables) - minimse by timely collection

• Stock and Inventory - optimise, customer service vs lead time less

• Money owing to suppliers (payables) - maximise by agreeing reasonable and acceptable payment terms.

Impacted by size of harvest but some opportunity to further reduce over time.

$m's	2013	2014	2015	2016	2017
Receivables	150	127	143	144	123
Inventories	456	413	495	454	372
Payables	(215)	(233)	(278)	(217)	(216)
NWC	391	307	360	380	279
NWC % of NSV	37%	27%	29%	30%	25%

Working capital represents a somewhat limited source of funds to support growth opportunities

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