Rubicon

NZ: RBC

NZD$102.8m market cap

NZD$0.2 last close

Rubicon is an NZX-listed investment company whose ArborGen subsidiary 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

Rubicon (RBC) is now a pure-play, advanced forestry genetics business with leading positions in large international markets for its seedlings and its maiden first-half report (to September) with this corporate structure contained good updates on operational and commercial initiatives in the seasonally quieter section of the year. For the record, the company generated revenue of US$10m and a US GAAP EBITDA loss of US$5m (before restructuring costs of US$2m) in the period. Rubicon should be able to clearly demonstrate its business model characteristics in H2 through notably stronger revenue, EBITDA and positive cash flows, although it acknowledged (on 24 January) that US weather events around the end of H1 has resulted in a revised FY19 target EBITDA of c U$6m (previously approaching U$7m).

Y/E Mar
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 6.0 (6.0) (1.0) (0.2) N/A N/A
2018A 35.0 6.0 4.0 1.2 11.8 17.3
2019E 50.0 5.0 5.0 1.1 12.9 11.6
2020E 59.0 9.0 10.0 2.0 7.1 7.7
Last updated on 14/03/2019
Industry outlook

The economic growth outlook in each of its core countries being the USA, 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 (being construction, and the pulp and paper industries) are in a positive cyclical phase.

Last updated on 14/03/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (US$m) 19
Forecast gearing ratio (%) 13
Price performance
%
1m
3m
12m
Actual (4.6) (8.7) (19.2)
Relative* (5.5) (15.0) (25.1)
52-week high/low NZ$0.3/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