Archive | Archive – local business

Snapshot on local business, week to 20 April 2003

18 April 2003

Foodland Australia Ltd, Perth-based owner of New Zealand’s Progressive Enterprises and Farmer’s retail chains, has delisted from the New Zealand Stock Exchange. It had 4 shareholders here. They’ll be transferred to the NZ registry.

16 April 2003

Voting for a mainstreet programme fell short of the required 60% in Pt Chevalier and Royal Oak, with 48% support from Pt Chevalier businesses and 49% from those in Royal Oak. Auckland City has 16 mainstreet programmes, which are supported financially by levying a separate rate over a designated mainstreet area.

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Snapshot on local business, week to 28 January 2001

Latest: Infratil target bought 30% above book value as income falls, Carter Holt earnings up but outlook gloomy.

28 January 2001

Infratil NZ’s purchase, through a consortium, of Glasgow Prestwick International Airport from Stagecoach Group for a total £33.4 million ($NZ112 million) sounds promising — if the New Zealand-listed infrastructure investor can explain what it sees in a business with declining returns for which its price (£26.1 million, excluding a debt repayment agreement and acquisition costs) is more than £6 million or 30% above book value. It made £3.6 million in the April 1999 year, £2.3 million last year. The £22 million equity will be held £14.8 million by Infratil and £5 million by the Special Utilities Investment Trust PLC (Suit), through a consortium holding 90%, and local investor and airport services provider Omniport, holding 10% with an option to buy another 10%.

24 January 2001

Carter Holt Harvey reported earnings up 50% for the first three quarters of its year to March 2001, from $145 million to $218 million, and sales up 21% to a record $2.854 billion. But things aren’t looking so rosy for this year, as chief executive Chris Liddell warned in his commentary on the outlook for the company’s products: “Since the September quarter earnings release the immediate outlook for most of the company’s markets has deteriorated. Globally, the US economy has slowed, which is also impacting on Asian economies. Demand in Asian export markets for pulp and linerboard has fallen from cyclical highs seen in the middle of the last year, while industry inventory levels have been steadily increasing. Export log prices in Japan and Korea have also been weak although some increases may eventuate in the Northern spring. While Australian and New Zealand construction markets, particularly for residential dwellings, appear to have bottomed, only a modest recovery is expected which may not occur until the second quarter of the year.”

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Snapshot on local business, week to 16 September 2001

16 September 2001

Brierley Investments Ltd and Singapore Airlines will spend $150 million each increasing their equity stakes in Air New Zealand to 37% and 34% respectively, by investing in new shares at 67c instead of the $1.31 previously intended price for a Singapore Airlines stake increase. If the price falls the stakes increase. The New Zealand Government has provided Air NZ with a $550 million credit facility, met by two equal tranches of seven-year & 10-year subordinated notes, and will provide a two-year revolving credit facility of up to $200 million for working capital. The deal meant stopping financial support for Ansett. Brierley will cut by $163 million the carrying value of its associate, Air NZ, resulting from the airline’s $1.3 billion Ansett charge. Brierley expected to return to profit after selling its 28.7% James Hardie stake in May, but now expects to report a loss when it announces the June year result on 27 September.

Air New Zealand wrote off $1.32 billion on its Ansett investment, and reported a $1.425 billion loss for the June year ($600 million loss in 2000), on revenue more than doubled from $3.7 billion to $8 billion, but operating expenditure also up, from $4.57 billion to $8 billion. It made a $280.2 million loss ($143.3 million profit) before unusuals & tax. The net loss after tax, excluding unusuals, was $173 million. Group earnings before interest & tax fell from $269.1 million to a $53.7 million loss. Ansett Holdings Ltd’s net assets of $620 million have been written off. Total group equity fell from $1.839 billion to $518 million, and gearing rose at balance date from 75.7% to 93%. Australian revenue passenger kilometres (rpks) fell slightly, keeping the load factor stable at 74%. Year-on-year Australian yield fell 13.8%. Ansett International lost $22.8 million before interest & tax, $16.5 million at associate’s level. Air NZ international operations lost $50.9 million before interest & tax on 3.9% more capacity and revenue passenger kilometres up 5.7%. Domestic ebit rose 24.8% to $149.3 million, the load factor rose to 67.9% on capacity growth of 5.3% for an 11% yield.

Savoy Equities Ltd has gone from $10.35 million revenue and a $1.76 million loss in the June 2000 half, to just $4000 of sales and $11,000 of other revenue, and a $333,000 net loss in the June 20001 half. The company is surviving entirely on its assets, as chairman Garry Wells explained at the annual meeting. Savoy is down to two staff, including executive director Kerry Haycock.

10 September 2001

The US Securities & Exchange Commission has charged the Tri-West Investment Club with securities fraud over an internet scam in which phony prime bank investments were offered. It was promoted recently in New Zealand, particularly in Palmerston North, Tauranga & Whakatane. The SEC website has pages devoted to internet fraud, prime bank fraud, and how to report suspicious activity involving possible internet fraud, and has a press release on its site about the Tri West charges.

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Snapshot on local business, week to 25 May 2003

23 May 2003

Air NZ Ltd increased traffic (measured by rpks – revenue passenger kilometres) by 5% in April over April 2002 on capacity (asks – available seat kilometres) up 13.7% for a 5.7-point fall in passenger load factor. Capacity was cut by 7% for May and 11% for June. For the 10 months to April, traffic has grown 6.1%, capacity 1.9% for a group load factor up 3 points to 75.8%. Traffic on the domestic express class rose 12.3% in April (including Easter this year, not so last year, and comparing with Air NZ plus Freedom last year) on capacity up 6.3%. Year-to-date domestic load factor was 73.6%. International capacity rose 14.8% due to the return of a Boeing 77-400 withdrawn after 11 September 2001 and transfer of 2 Freedom planes from domestic use. International passenger traffic rose 4%, but the load factor fell 7.1 points to 68.4%. Year-to-date international traffic rose 6.1% on 2.6% capacity growth for a 2.5-point load factor gain to 76.1%.

Ports of Auckland total container volumes rose 9% in the 12 months to April to 644,204 teus (20ft-equivalent units), and rose 13% for the month of April. Full import container volumes rose 11% for the year but only 3% for the month. Export volumes rose 1% for the year, 4% for the month. Transhipments grew 6% for both year & month. High imported vehicle numbers contributed to the 9% rise for both year & month in non-containerised imports.

AMP Ltd has agreed to sell its $249 million Australia/NZ rural lending portfolio for around book value to the Dutch Rabobank Group, subject to regulatory approval & contractual obligations, settlement 1 July. AMP is in talks to sell its construction & other property finance loans retained by AMP Bank and AMP Finance, and may outsource or restructure various functions at its Australian retail banking business.

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Snapshot on local business, week to 9 June 2002

4 June 2002

The Auckland regional land transport committee is preparing a 10-year implementation plan ranking all major transport projects — roads & public transport infrastructure — which will be attached to the regional land transport strategy, become a statutory document and be subject to annual updating. The startup list shows $5.9 billion for roads, $1.4 billion for public transport infrastructure, and $25 million for walking & cycling infrastructure. The committee will get a full draft of the plan in July and expects to present it for consultation later this year.

Logan Corp Ltd, wholly owned by Cullen Investments Ltd (managing director Phil Newland, central company in Eric Watson’s group) has made a new bid for the rest of Pacific Retail Group Ltd. Cullen owns 73%, has agreed to buy 3.77% from Nick Gordon (who has resigned from the board as a consequence), and is offering $2.25/share for the rest. Independent directors Richard Reilly & Jock Irvine have commissioned an appraisal from Grant Samuel Ltd, which shareholders should receive by 14 June.

Westpac Banking Corp has completed the sale of AGC to GE Capital in Australia & New Zealand.

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Snapshot on local business, week to 3 June 2001

Latest: Deka sale off, Fletcher can buy Carter doors business, Metlifecare cuts inventory and focuses on operations, PDL shifts commodity manufacturer offshore, July decision on rapid transit option, paper on takeover scrip offers, warning to forestry scheme promoters, Securities Commission looks at trustees’ role, Qantas moves on Air NZ, public transport innovation tenders.

2 June 2001

Foodland Associated Ltd said Number One Retail Group Ltd had withdrawn from negotiations to buy the remaining Deka stores. Six Deka stores have been converted to Farmers and more will be converted over the next three months. Meanwhile, the remaining Deka chain will continue trading until the rebranding and revised closure plans are finalised.

The Commerce Commission has cleared Fletcher Building Products to acquire Carter Holt Harvey’s wooden-door manufacturing assets. Fletcher has its own unit, Plyco. Commission chairman John Belgrave said the commission concluded Fletcher would have a large national market share “but would be constrained by the combination of existing competitors, potential competitors and the countervailing power of buyers.”

Metlifecare Ltd cut inventory from $27.7 million in 1999 to $12.1 million at the end of 2000, contributing to a $9 million (11%) cut in bank debt, after strong second-half sales of occupation licences for new homes, increased resales of occupation licences and improved occupancy in care facilities. Chairman Peter Fitzsimmons told the annual meeting on Thursday Metlifecare averaged 96.3% occupancy in nursing homes, compared to a 91% industry average, and 95% for hospitals (industry average 89%). The company raised $21 million from a fully subscribed 2:5 rights issue. Mr Fitzsimmons said Metlifecare would concentrate more on operating than developing.

PDL Holdings Ltd chief executive Mark Stewart said on Thursday the company will move the manufacture of commodity products offshore — 30% of its electrical products business. Mr Stewart said the company had changed its product development emphasis to higher technology areas such as its variable speed drive business, investments in building operating systems and application software. The new emphasis would require significant investment in staff, to develop innovations quickly into effective solutions.

The Auckland Regional Council will run “Working Forum B” on 6 July, the final session for delegates from all the region’s local bodies to define the future rapid transit network on Auckland’s rail corridors. They’ve been evaluating six network options, including mode technology, service delivery arrangements, costing scenarios, and evaluation of the options against agreed criteria. A preferred option will be taken back to councils for their formal consideration. Councils also need to work out interim service beyond June 2003, when the existing rolling stock will need refurbishing or replacing.

The Securities Commission has set out proposals for possible prospectus exemptions for scrip offers in a takeover. The commission wants comments in by 15 June. The new Takeovers Code comes into force on 1 July. The commission’s paper is on its website, www.sec-com.govt.nz.

29 May 2001

The Securities Commission issued a warning to forestry investment scheme promoters to tidy up their advertising, particularly on websites. Commission chief executive John Farrell said some didn’t comply with the law and were likely to mislead investors. He didn’t name any promoters, but did specify some of the ways they erred — quoting an “equivalent bank interest rate” and representing it as the expected rate of return on forestry investments was likely to mislead investors, website promotions had to be current, and he suggested that websites should lead visitors through (not just to) the investment statement before giving them a link to the application form. Bans and prosecution would be considered for future non-compliance.

The Securities Commission has a discussion paper on its policy for approving trustees and statutory supervisors on its website, for comment by 6 July. The commission wants views on whether it should monitor these investor guardians after their appointment, and whether they have a useful role.

Sir Selwyn Cushing has stepped aside as chairman of both Air New Zealand Ltd and Brierley Investments Ltd, but will remain a director of both, as Qantas Airways Ltd moves to take a significant stake in the airline company. Qantas gave no quantity or valuation, saying its proposal was conceptual at this stage. Brierley (now Singapore-controlled) owns 30% and Singapore Airlines 25% of Air NZ. Qantas was a founding minority shareholder at listing.

The Auckland Regional Council has called tenders for new trial public transport services two months earlier than usual to take advantage of the Government’s patronage funding kick-start scheme, which includes a 60% Transfund subsidy. “We’re encouraging all operators to submit tenders for new bus, train and ferry services around Auckland,” transport committee chairman Les Paterson said. Tenders close on 6 June and successful tenders will be confirmed after the committee’s 7 July meeting.

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Snapshot on local business, week to 21 April 2002

15 April 2002

Auckland City Council’s transport committee has recommended that public consultation begin on extending the bus priority network into Karangahape Rd, Khyber Pass Rd & Broadway, with a report back to the committee in June.

Fletcher Building Ltd will apply to the Australian Stock Exchange to convert its listing from a foreign exempt issuer to full listing. Fletcher Challenge Forests Ltd said it wouldn’t meet the new thresholds requiring either net tangible assets of $A2 billion or operating profit for each of the past three years of at least $A200 million, so it will also apply for full listing in Australia.

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Snapshot on local business, week to 7 September 2003

6 September 2003

Merchandise exports fell 8.8% in July from July 2002 to $2.325 billion, according to revised figures. Statistics NZ said main contributors to the fall were logs, wood & wood articles, fruit, petroleum & petroleum products. The July trade deficit was $456 million, 19.6% of exports. The $29 billion of exports for the July year was down 9.6% on the previous year and equalled 10.6% of exports.

Kiwi Income Property Trust has decided to pull the Australian Stock Exchange listings for its units & notes from Friday 12 September because of low volume.

The Securities Commission will distribute a discussion document & questionnaire on corporate governance principles on Monday 8 September and wants responses back by Friday 7 November so it can report to the Minister of Commerce in December. The documents are available on the commission’s website. “We are taking a principles-based approach as the Australians have done, rather than a rules-based approach as in the US,” commission chairman Jane Diplock said.
Website page: Securities Commission corporate governance documents

Australian company Toll Holdings Ltd has raised its offer for Tranz Rail Holdings Ltd from 95c to $1.10/share, and won support from the Tranz Rail board & major shareholders. The new offer will be open until 10 October. Toll said it would seek a dual listing in New Zealand.

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Snapshot on local business to July 2000

The SNAPSHOTS series is designed to keep you abreast of events without providing much detail. This series is organised into property and more general business news, locally and internationally.

26 July 2000

UnitedNetworks said today it would install, own and manage underground fibre optic networks in the Auckland and Wellington cbds, as the first stage in three to deliver more ultra-high bandwidth in New Zealand. It should be working early next year. The Auckland network will be linked to the Southern Cross cable linking New Zealand to Australia, Fiji and the US, which should be operating in November.

24 July 2000

Beware of two new get-rich-quick schemes — Millionaires of the World (part of the Hope Foundation Members Association SA) and the Wairua Tahi Trust (Goldrush) schemes — says the Securities Commission’s senior operations executive, Norman Miller. Your money goes offshore for a supposedly very high return (tax-free, which of course it will be if you get nothing back) and additional profits are suppsoedly sent to disaster relief.

10 July 2000

Local Government Minister Sandra Lee has set down an ambitious timetable for the review of local government funding powers, and indicated a number of changes which would come into force for the 2001 and 2004 triennial elections. Provisions she wants enacted by May 2001 include the ability to introduce the single transferrable vote for local body elections (though this option would not become available until 2004), proposals to limit campaign spending by candidates, and issues related to multiple candidacy. The minister told the Local Government Association’s conference today she recently approved revised draft terms of reference for the funding powers review begun by the previous government, and that these terms “correct a perceived bias in the review process towards user charging regimes” and incorporate a review of Crown rating exemptions. Ms Lee wants policy decisions on the review completed by next April and the bill enacted by November 2001 so it can be used in the March 2003 financial year.

1 July 2000

Northland Port Corporation has unveiled plans for a $65 million deepwater port at Marsden Pt, to be developed, owned and managed in a joint venture with the Port of Tauranga. Land operations would be run by a second joint venture between the two port companies and Carter Holt Harvey. The proposal will go to Northland Port shareholders at their annual meeting in Whangarei on 17 July. Carter Holt is building a laminated veneer lumber (lvl) plant at Marsden Pt. Assuming approval, Fletcher Construction would start work about October for April 2002 completion.

13 June 2000

Designer Textiles managing director Kerry Harding said today weak consumer demand in New Zealand and Australia, plus continuig rationalisation of Australia’s textile and apparel industries, impacted significantly on the company’s sales in the three months to April and sales for the June half were likely to be 10% down on the first half at $30 million. He said taxpaid trading profit should be about $1.3 million.

6 June 2000

The Securities Commission has found Kerry Hoggard breached insider trading law on 15 December 199, when he was Fletcher Challenge chairman. He resigned his directorship after the event was revealed and arranged to compensate people who sold shares to him that day. The commission found JB Were, which handled the transactions, did not rely on the inside information from Mr Hoggard for any purpose. The insider trading occurred between a 14 December Fletcher board meeting and the 16 December announcement that the company would dismantle its letter-share structure. The commission says it is for Fletcher Challenge and its shareholders whether to pursue a financial penalty against Mr Hoggard under the Securities Amendment Act. Go to External links/Government/Securities Commission for full report.

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Snapshot on local business, week to 11 August 2002

8 August 2002

Acting transport minister Judith Tizard & Australia’s transport minister, John Anderson, signed the 2 countries’ open skies air services agreement in Auckland today, formalising a memo of understanding signed in November 2000 and incorporating the single aviation market arrangements signed in 1996. The agreement was a key component of Air New Zealand’s decision to buy Ansett Airlines, and the Australian Government’s failure to sign it earlier helped the demise of both Ansett and Air NZ. While Air NZ no longer has an Australian infrastructure to give the agreement the liftoff it wanted, Qantas can use it to fly through New Zealand and compete more strongly against Air NZ.

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