Richard Robinow, who established REA (RE.) about forty years ago, came by for lunch yesterday. He is an engaging and intelligent fellow. RE. is coming more and more right and, given that the consumption of palm oil goes up around 3.5% p.a. whereas production is increasing at only 1% p.a. the outlook is bullish indeed for RE.. As against that Richard’s son Luke who runs the show in Indonesia must have the patience of Job given the bureaucratic hurdles faced on a day to day basis. But RE. copes. Personally I would lose my temper.
RE.’s accounts ran to 8 pages forty years ago. They are now up to 160 pages. hardly any of which are read by shareholders. They simply have not got the time.
On balance I reckon RE. are a strong buy at 100p whilst the 9% prefs are okay for the more cautious at 82p.