GRO's 80.81% owned Agria Asia subsidiary owns 379.1 million shares of PGW.NZ, which paid out NZ$0.032 per share in fiscal 2013 cash dividends - with GRO receiving USD$8.17 million cash! With 55.38 million shares outstanding - GRO received $0.15 per share in cash from its PGW investment this past year!
PGW.NZ is now projecting a large earnings increase this year and said they will continue paying out cash dividends every six months that will increase/decrease based on earnings/cash flow. In fiscal 2013, PGW.NZ earned EPS excluding non-cash writedowns of NZ$0.02 and free cash flow of NZ$0.042 per share. PGW.NZ dividend of NZ$0.032 per share equaled 76% of free cash flow.
This fiscal year, analysts project PGW.NZ to double EPS to $0.04. If PGW.NZ's free cash flow also increases by NZ$0.02 to NZ$0.062 and PGW.NZ pays out 76% of free cash flow in dividends once again, PGW.NZ could pay NZ$0.047 per share in dividends and if so - GRO would receive $12 million or USD$0.22 per share in cash from PGW!
With GRO currently $1.30, it's trading for only 5.9X the cash they will likely receive this year from PGW! A fair valuation would likely be 10-15X projected USD$0.22 per share in cash to be received this year from its PGW.NZ dividends - for a share price of $2.20 to $3.30!
Disclaimer: We own 550,000 shares of GRO and intend to sell these shares once GRO reaches much higher prices.