Archive | Archive – local business

13 March 2002

The food price index fell 0.5% from January to February — fresh vegetables were up 15% in January and specials on Valentine’s Day chocolates helped cut February grocery prices 10%. But over the year from February 2001, the food price index rose 4.5%. Meat, fish & poultry were up 11.2%, Statistics NZ said.

12 March 2002

Latest overseas trade indexes shown New Zealand’s merchandise terms of trade fell 2.2% in the December quarter after rising 1.1% in the previous quarter. Statistics NZ said export prices fell & import prices rose. The terms of trade for services rose 0.5% on a higher rise in export than import prices. Price falls were recorded for exports of non-food manufactures, dairy products & non-fuel crude materials. Price increases were recorded in several of the main import commodities. Excluding mineral fuels (mainly petroleum & petroleum products), import prices would have risen 1.1%.

January retail sales rose 9.1% over January 2001 figures to $3.95 billion. Excluding the 13.6% rise in vehicle retailing, the rise was 9.9%. Biggest category rises were by furniture/floor coverings 16.5%, clothing/softgoods 16.3%, footwear 14.9% & food retailing 10.5%. Accommodation/hotels/liquor rose 7.8%. Sales in the Auckland region rose 10.8% to $1.26 billion & Waikato region sales rose 11.6%.

Insurance company American International Group (AIG) is offering a stand-alone terrorism policy in response to widespread demand following the 11 September terrorist attacks in the US. “Despite the recent US tragedies we still consider terrorism as an insurable event,” AIG’s New Zealand general manager, Anton du Plessis, said. “Banks & large institutions with property interests are being advised that the exclusion of terrorism cover in property mortgages & other loan programmes will reduce their security against those loans.”

Latest: Auckland City supports Government move on rail, Hellaby cornerstone for new insurer, Steel & Tube positions to buy Fletcher Steel, Force changeover, Savoy loss snipped to $76.7m, Manukau growth at 7.8%.

7 April 2001

Auckland City Council said on Thursday it supported in principle the Government’s offer to take over negotiations with Tranz Rail Ltd to secure regional control of Auckland rail corridors. The Government would pay the cost of the lease, and would then sublease to a local authority trading enterprise, and has also said it wants the price cut from the proposed $112 million. Tranz Rail’s rail services contract expires in 2003. The council wants to see a deal concluded by June. Other councils are being asked to agree to the government offer by next Tuesday.

Hellaby Holdings Ltd will take an initial 72% cornerstone stake in startup life assurance company Club Life Holdings, and Hellaby’s chairman Bill Falconer, and managing director David Houldsworth will be its directors. Mr Houldsworth said market consolidation had created the opportunity for a New Zealand-owned life insurer. It would start business in June with a $5.5 million capital base, $4 million from Hellaby and the rest from management and associates, with another $1 million to come in the next year from brokers and advisors.

Steel & Tube Holdings Ltd has taken a shot back at Fletcher Building, which sought Commerce Commission approval to take 100% of Steel & Tube. On Thursday, Steel & Tube said Fletcher Building’s steel operations might fall into the poor-performing or non-core business units category from which Fletcher proposed to exit after completing its strategic business review. So Steel & Tube as lodged an application with the commission to take up to 100% of Fletcher Steel.

Force Corporation trio Peter Francis (chairman), Peter Garner and Derek Presland-Tack (managing directors) resigned this week to make way for Sky City trio Evan Davies (Sky executive chairman and now Force chairman), David Kennedy and Alistair Ryan.

Savoy Equities reported a $77 million loss for 2000 on 30 March, but got the figure down to $76.7 million this week with a couple of balance sheet changes.

The Counties Manukau sub-region of the Auckland region recorded 7.8% growth last year, double the national rate. Inflation was at 4%, employment 4.6% higher than in 1999, unemployment was down from 7.5% to 6.9%.

18 December 2001

Singapore Changi Airport Enterprises Pte Ltd has sold its 7.14% stake in Auckland International Airport Ltd through a bookbuild to local investors & international institutions for $107.7 million, at $3.58/share, an 11c discount to the day’s opening price & 8c on the close. Singapore Changi bought its stake in November 1999.

The Commerce Commission has approved Calan Healthcare Properties Trust’s application for The Ascot Hospital & Clinics Ltd to acquire the private, elective, surgical operating business of the Mercy Hospital. The two companies will trade under the Mercy Ascot name. Calan said the ruling firmly established its flagship Auckland property, the Ascot Hospital, as New Zealand’s pre-eminent private surgical hospital. Calan said the ruling would have significant flow-on effects, creating a new centre of excellence for private healthcare which should lead to the growth of existing services and the likely introduction of new areas of specialty & services. Existing services will be consolidated and there will be site specialisation, with an expanded cardiac programme to be run out of the current Ascot Hospital site.

17 July 2003

Auckland City Council’sfinance & corporate business committee wants the Ministry of Economic Development to amend the Securities Act to overcome dissenting councillors’ votes preventing the issuing of a prospectus, as happened when the council majority wanted to offer half the council stake in Auckland International Airport Ltd to small investors. The proposal will go to the full council meeting on Thursday 24 July.

12 October 2002

Auckland deputy mayor David Hay issued a happy press release marking the first year of the present council’s term: “Looking back critics may say it has been a rocky road but in reality it has been an incredibly positive year for council and the city. In all my years in local government this has been the most progressive 12 months. At the top of my list of wins for the ratepayer would have to be the council’s holding of rates at 1.6% — less than inflation and the lowest increase in New Zealand.”

The city’s mayor, John Banks, said his focus in the next year would be on 4 main areas: Fixing Auckland’s transport, stormwater & footpath infrastructure; promoting international convention & exhibition facilities; encouraging major commercial developments; and taking the lead on waterfront & Britomart precinct development. “Improving our economic infrastructure is imperative if we are to make Auckland a great place to live, work & invest. Auckland should be the country’s event destination capital, not just a gateway..” he said.

North Harbour Stadium’s field has been ripped up to be entirely replaced — from the sand base to the turf, with better drainage and a harder-wearing surface. Next match, in mid-December, is New Zealand’s world soccer cup qualifier, probably against Australia.

10 October 2002

Auckland Regional Council will ask 3 rail operators — Connex, Serco and Stagecoach — to tender to run Auckland’s passenger train service from TranzRail. The initial operating contract will be for about 5 years.

5 October 2001

Arthur Andersen Corporate Finance has been appointed to appraise Logan Corp Ltd’s full takeover for Pacific Retail Group Ltd.

Steel & Tube Holdings Ltd and Australian joint venture partner One Steel Ltd have agreed to sell the Canadian steel distribution business of AJ Forsyth & Co Ltd to Russel Metals Inc of Ontario for cash, which for Steel & Tube is expected to be slightly above the $C24.9 million (net, before minorities) book value. Steel & Tube chief executive Nick Calavrias said the sale would end the growth strategy in as market where the company had determined returns this business cycle were unlikely to be acceptable. “We will now focus our growth strategy in Australia & New Zealand, where it is considered to be more advantageous for our shareholders.”

The Government turned back the clock yesterday, recognising Air New Zealand as a national flag carrier promoting the New Zealand brand abroad, a philosophy expressly abandoned (although not entirely relinquished) when the airline was privatised 12 years ago. The programme to save the airline requires the Government to invest up to $885 million in two stages, the first $300 million by 19 October and initially as a loan (at the 90-day bank bill rate plus 4%, currently about 9.3% in total), to be turned into convertible preference shares later at 24c/share. The rest will be taken up as ordinary shares at a price determined after due diligence. If that price is below 24c, the preference share price will also be cut. Acting chairman Jim Farmer said shareholders’ funds had fallen to $156 million after recognition of $350 million in further Ansett Australia losses, from $506 million at 31 August. The second recapitalisation phase will be conducted in December-January. The Government will then hold 83% of the company. The airline will announce flight schedule reductions as soon as its new board has looked at them, to significantly cut costs.

13 December 2002

The Auckland Regional Council has extended the period for submissions on variations 2-6 of the proposed Auckland regional coastal plan to 31 January. The variations, notified on 29 October, are to define aquaculture marine areas and develop a policy framework to manage development in those areas.

11 December 2002

Port of Tauranga Ltd said today it would be the North Island port of call for the Mediterranean Shipping Co’s new service. Auckland cargo will move through the Tauranga company’s Metroport inland port in Manukau.

ASB Bank Ltd accepted $50 million of oversubscriptions for its $150 million perpetual preference share issue when it closed on Monday. Total subscriptions were well above $200 million, so scaling applied. The bank said 4500 investors had taken up the offer, which gives them 7.4% in the 1st year (1.3% above 1-year interest rates). The bank was happy to tell of the oversubscriptions, but you have to wonder about a financial system where a primary lender sees the need to offer over the odds to attract investors.

9 December 2002

Merchandise imports topped imports by $696 million in October (imports $3.177 billion, exports $2.481 billion). Statistics NZ said that as a percentage of exports, this October’s 28% was the biggest October deficit since 1989.

Retail sales rose 8.6% in October, compared to a year earlier, totalling $4.247 billion. The rises in car retailing (6.9% to $593 million) & vehicle services (6.8% to $619 million) were lower than the overall increase. Excluding them, sales rose 9.3% to just over $3 billion. Furniture & floor coverings continued to show the biggest increase, 14.2%. Food was up 7.5%, footwear 11.3%, takeaways/eating out 12%, department stores 11.9%, according to Statistics NZ figures.

Are we going to have a merry Christmas? Merrily down the gurgler, according to Act’s latest Message from Wellington: “The latest financial update from Statistics NZ reveals in the year to March, households spent $2.5 billion more than they earned, leading to a household savings deficit of 3.7%. Central government spending rose 7%, local government spending by 5%. The economy under Labour is experiencing record transfers of money away from working households to government & the ‘non-productive’ sector. Living standards & consumer spending are being sustained by record credit card & household mortgage debt. The banks are financing this by overseas borrowing. It is not sustainable.”

7 November 2003

The Warehouse Group Ltd increased 1st-quarter sales by 12.1% (for the 13 weeks to 2 November) to $483 million. Red Shed sales rose 9.9%, same-store 7.2%, Warehouse Stationery sales rose 23.5%, same-store (excluding B2B) 11%. The Warehouse Australia’s sales rose 16.4%, same-store 1.1%, in local money. Founder & acting managing director Stephen Tindall said opening of the new 13,000m² Whangarei store in late October gave the company the opportunity to experiment with new ranges such as specialty pet supplies & store-within-a-store concepts. The Warehouse has moved to 13-week comparisons, away from month-end quarterly accounts.

Briscoe Group Ltd increased 3rd-quarter sales, to 31 October, by 6.22% to $68.2 million, and by 0.49% same-store. Briscoes Homeware sales increased 7.77% to $45.9 million and Rebel Sport sales rose 3.18% to $22.3 million.

16 December 2002

KFC fastfood chain owner Restaurant Brands NZ Ltd will switch chicken suppliers in 2004, from the Tegel division of HJ Heinz to Inghams. “We currently spend about $40 million a year on chicken and changing suppliers will reduce the company’s costs by $5 million-plus each year for the 7-year term of the new contract,” chief executive Jim Collier said. Inghams will expand operations in Mt Maunganui, Te Aroha & Cambridge. As well as a price advantage, Inghams will offer advanced technology & product innovation.

The Auckland Regional Council takes delivery this week of the 1st of the 10 refurbished trains which will be the basis of the regional passenger train service. The council also decided to add 2 trains to the interim fleet by mid-2003, 4 between August 2003 & March 2004 and 4 more in the 2005 financial year. The initial 2 SX trains will be on charter from Tranz Rail, at a total $3.2 million over 4 years.

3 November 2002

ASB Capital Ltd, part of ASB Bank Ltd, will issue up $150 million of perpetual preference shares, with a right to accept oversubscriptions of $50 million, carrying a dividend for the 1st year of the greater of 7.4% & the 1-year interest rate swap rate plus a 1.3% margin, and a dividend measured on the swap rate (plus 1.3% margin) after that. The offer is to open on Monday 11 November, closing on 9 December.

1 November 2002

The Securities Commission has banned advertisements for a forestry investment scheme offered by NZ Forestry Investments Ltd (Ross Collins, sole director & shareholder, a former director of Avalon Investments Ltd, Mt Maunganui). Securities Commission enforcement director Norman Miller said the company was based in Mt Maunganui, the forest is in the Wanganui region, and neither of the required prospectus or investment statement has been offered. The scheme has been promoted for 2 months in the Bay of Plenty, offering $5200 shares in NZ Forestry Investments (No 3) Ltd, which isn’t a registered company.

29 October 2002

It struck me that Ross Armstrong’s demise was more likely to have been engineered by finance minister Michael Cullen while prime minister Helen Clark was out of the country, a suitable time to dispose of a concept Dr Cullen didn’t like. So it’s been amusing to read & hear the superficial coverage of politics as it relates to this affair. Act leader Richard Prebble takes the subject further than I’d surmised, in his Letter from Wellington today. Sometimes Mad Dog’s Epistle is a delight. Today’s takes you inside politics, succinctly.

28 October 2002

Infratil Ltd has completed & signed documentation of a coinvestment arrangement with Orion NZ Ltd and the Government’s Venture Investment Fund (VIF) which will see each commit $20 million for investment in developing technology companies. IO Management, jointly owned by Orion and HRL Morrison & Co, will manage the $60 million IO Fund. Infratil shareholders approved the arrangement at the company’s annual meeting on 23 August.