ArborGen Holdings


NZD$90.9m market cap

NZD$0.18 last close

ArborGen Holdings (formerly Rubicon) is an NZX-listed investment company. Its subsidiary ArborGen is the world’s largest integrated developer, commercial manufacturer and supplier of advanced forestry seedlings with operations in the US, Brazil and Australasia.

Investment summary

FY19 was ArborGen’s first full year as a unified company under single parent ownership and group EBITDA, PBT and EPS were in line with our expectations. Some restructuring activity and extreme US weather events held back in-year sales performance. Sales volumes grew in Australasia but were constrained by local market conditions in Brazil. The ASM on 17 September reiterated some near-term challenges in the US (hurricane damage will restrict volumes of advanced seedlings for the next couple of years) but all three regions should deliver improved performances in FY20 and overall group EBITDA progress is anticipated y-o-y. Despite post FY19 results estimate reductions (FY20 and FY21 PBT and EPS expectations lowered by 20–25%) our three-year EPS CAGR (to FY23) is still >30%, largely due to increased advanced seedling volumes as seed orchards mature and increase production. The company changed its name to ArborGen at the end of September.

Y/E Mar
Revenue (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2018A 35.4 6.0 3.6 1.3 8.8 15.9
2019A 49.1 4.6 4.7 1.1 10.4 13.8
2020E 58.2 7.7 7.7 1.6 7.1 8.7
2021E 64.4 9.5 9.6 1.9 6.0 5.4
Industry outlook

The economic growth outlook in each of its core countries (the US, Brazil, New Zealand and Australia) is either good or improving, according to OECD data. Consequently, the primary end-markets served by its plantation forestry customer base (construction and the pulp and paper industries) are in a positive cyclical phase.

Last updated on 14/11/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 22.8
Forecast gearing ratio (%) 15
Price performance
Actual (2.7) 4.0 (27.2)
Relative* (1.8) 5.6 (38.4)
52-week high/low NZ$0.2/NZ$0.2
*% relative to local index
Key management
Luke Moriarty CEO
Alex Brown IT
Mark Taylor Chief Financial Officer and Company Secretary
Sharon Ludher-Chandra Business Development Executive