Back on 4th October 2019, it was a very special day for Caluka Farms. It was our inaugural field day for shareholders, and invited guests and family. It was a day to show the shareholders a glimpse of what we have done so far with their investment, and to outline where we want to grow from here.
The day was a crucial point for me on our journey so far because I considered it vital for the shareholders to see what was possible. I have mentioned many times that this first farm is a proof of concept. Not a proof of concept as to how much profit can be made, yet, but as to how many sheep can be run on the pastures. The farm is too small to be able to be run intensively and pay wages for me and another staff, and so the plan from the beginning was to show investors that very high numbers of sheep can be run on the farm, and then to grow with further investment. Profit is of course essential, but farmers can very easily see that what we are doing will be very profitable on a larger scale.
Having had two mates die of heart attacks that were younger than I now am, I am in a "hasten slowly" mode to make as much profit as quickly as possible for investors while I am still on this beautiful earth. And, my dream continues to be fulfilled. The feedback from the shareholders at the field day was very encouraging. Everyone who wrote or spoke to me or the Board members wanted us to accept further investment as soon as possible and accumulate more land, as long as their initial investment was rewarded (new investors pay more than they had to) and to consolidate what we currently have.
So the Board has advised me to pause in accepting more investments until we receive legal advice. They just want to make sure all the i's are dotted etc. and that the current shareholders are all protected (rewarded). The initial shareholders are the ones who stepped out in faith when all the corporate investors would not, and we now have some large investors wanting to be shareholders in Caluka after seeing what we have achieved so far. I have expected this from the beginning that as soon as people "see" what we can achieve, then large and very large investors will be knocking on our door. And they are starting to.
At the time of writing, we are still waiting on that legal advice before we accept these large investments.
But, in the meantime, I want to share a growing pain we've experienced. We don't have enough sheep, and we missed putting all of the spring flush into skinny sheep to fatten them up and make a quick profit. We purchased too many sheep according to the finance company, but we needed another 2,000 at least. We had 4,600, but needed at least 6,500 on the 185ha. As fast as we were turning off sheep, we were not getting enough new ones in to keep up with the pasture. We purchased not only trade sheep (skinny ones to fatten up), but ewe lambs that we are joining with rams. This is needed for the longer term growth of Caluka Farms, but they cost more than trade sheep and very quickly the amount of sheep we had been purchasing made the finance company uncomfortable. They had been fantastic in helping Caluka Farms, but this halt to allowing us to buy more skinny sheep was very disappointing because we missed turning the spring flush into a lot of dollars.
We have investors wanting to put in substantial funds to Caluka Farms that would enable us to pay off the land and pay off all the sheep finance, and with plenty more that would enable us to buy more sheep whenever we wanted, and to sell them to whom ever we wanted. However, we are waiting on the legal advice.
But I was thinking, perhaps there are people who are only earning 2-3% on their fixed interest funds and might be willing to loan funds to us to buy all the sheep we need, so that we can grow faster, and in return receive 7% interest, paid quarterly, with a full repayment in 12 months? This doesn't involve any shares, but is just a loan. If this is of interest to you, please email me at wayne@calukafarms.com.
The Board is considering all the options as we grow and advice/requests from the current shareholders. I know there are many people curious at what we are doing and would like to invest once they see us growing for a few years. I will soon be organising dates for interested people to come and see the farm, and I do urge you to come and see before you offer to invest with us. In fact, I insist :-). While you look at what we have done, it will become clear how we are doing it and that we can achieve what we are aiming at, and it is easier to ask questions while you have it all in front of you.
The share price has risen 20% for all shareholders who bought in after the initial shareholders did, and it will jump another 15-20% if the legal advice allows us to accept more large investors. Remember my plans are to double your investments in <6 years. If we can continue to grow, I think this is going to be very easy to achieve. Watch this space for more news. In the meantime, here are some photos from the field day.
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