Archive | Archive – local business

26 January 2002

Transit NZ has let an $11.5 million contract to build the Puhinui interchange on the Southern Motorway by 2003. It will form part of the future South-western Motorway (State Highway 20) link to State Highway 1, providing a key section of the western ring route and better airport access. Auckland Regional Council said in its fortnightly transport update Transit was close to finalising the shortlist of route options for connecting State Highway 20 from the Mt Roskill leg to the North-western Motorway, and expected to start public consultation on the shortlist in March.

Resource consent hearings on the Greenhithe & Hobsonville sections of the Upper Harbour Motorway (State Highway 18) were concluded this week. the ARC’s communication strategist, Jo Mackay, said resolution of the cycleway width still had to be resolved. Enabling works, involving a significant earthworks contract on the Greenhithe section at Ashby Place near the Albany Highway, will begin mid-February.

The first section of a 500m priority lane for the North Shore Busway, being built beside Esmonde Rd between the Assembly of God Church and the Northern Motorway, was opened this week. The next step is to widen the two bridges forming part of the priority lane by March. Hearings start on 4 February over the busway’s designations & resource consents. These cover the busway priority lane between Esmonde Rd and Constellation Drive; four bus stations at Constellation, Sunnynook, Westlake & Akoranga; and the new Esmonde Rd interchange. Transit hopes to go to the market soon with the first design contract for the Esmonde Rd interchange.

23 January 2002

The Reserve Bank left the official cash rate unchanged today at 4.75%. Reserve Bank governor Don Brash said the decision reflected a balancing of risks between “a domestic economy that seems rather more buoyant than we expected at the time of the November 2001 monetary policy statement and continuing weakness offshore.” He said the outlook in Japan was of particular concern. Commodity prices for New Zealand’s exports had fallen quite substantially, and earlier than expected. But he said consumer spending appeared more buoyant than expected previously, business investment seemed to be holding up better than expected, the housing market had strengthened in recent months, and the labour market remained relatively tight. As foreshadowed in November, CPI inflation for the year to March 2002 is likely to be well above 2%, which would become a concern if any resultant increase in inflation expectations were reflected in price and wage-setting behaviour.

21 January 2002

Act leader Richard Prebble, said in his Letter from Wellington today that Finance Minister Michael Cullen’s super fund, which was to be financed by government surpluses but is now all borrowed, has already started losing money. “The money will be invested in overseas equities. Act says this is as sensible as borrowing on your credit card to finance your retirement fund… The Letter can reveal that Dr Cullen has already started to waste the fund. The latest government accounts show the finance minister has taken the $256 million set aside for the fund in the five months to 30 November, and invested it temporarily with the Treasury at the official cash rate of 4.75%. During the same five months, the government borrowed $549 million at 6.44%. The difference of 1.69% is what Dr Cullen is losing taxpayers on the fund. Act’s finance spokesman, Rodney Hide, has calculated the taxpayer is losing $83,200 a week on the deal.”

Latest: No new blood at Fletcher Building board table, Hallenstein raises Christmas revenue 3%, Fletcher Challenge breakup programme.

1 February 2001

Fletcher Challenge has introduced no new blood to the board for the launch of the new-look, revitalised Fletcher Building, carrying on with the same team of six who have headed the conglomerate in its final months. The chief executive was to have taken a board seat but left before the job officially began. There is some new blood on the Fletcher Challenge Forests board and plenty on the board of the new-ideas creation, Rubicon.

Hallenstein Glasson Holdings Ltd said December sales were up 3% on December 1999, margins were maintained and stock levels compared favourably. The company expected group sales for the full six months to yesterday would be marginally ahead. The result will be released in late March.

29 January 2001

The High Court issued orders and directions today on the procedure for Fletcher Challenge Ltd’s breakup: A special shareholder meeting will be held at the Ellerslie Convention Centre at 2pm on 6 March, with four resolutions to be decided. Two relate to Building, one for Building division shareholders requiring a 75% majority and the other for Energy and Forests shareholders requiring a simple majority, and the other two votes relating to Energy’s sale requiring similar votes. A special meeting for capital noteholders will be held on 19 February to approve the arrangement under which they will get 35% of their notes as Building notes and the rest as cash.

2 December 2001

Sky City Entertainment Group Ltd/ was named company of the year in Deloittes/Management magazine’s top 200 awards. Sky chief executive Evan Davies, who was named executive of the year in 2000, said the award was “the culmination of a challenging and rewarding year. We set tough financial targets, and again exceeded them. We opened our second New Zealand property in Queenstown, refurbished & relaunched SkyCity Adelaide and have progressed significantly on the construction of our third property, in Hamilton.”

International rail operators will discuss Auckland’s rail development plans with regional council officers next week. The regional council says provisional 2001 census data indicates 220,000 people live within 1km of Auckland’s 38 existing railway stations, 333,000 within 2km, at least 153,000 work within 1km of the existing stations and another 61,000 work near the proposed central transit corridor through the central business district.

Force Corp Ltd, now under the control of Sky City Entertainment Group Ltd, has appointed Force’s company secretary, Peter Holdaway, as a director.

Australasian Property Holdings Ltd plans to change its name to Australasian Property Holdings Group Ltd so it can become registered as a foreign company in Australia and pursue a dual stock exchange listing from 10 December.

22 June 2003

Strategic Finance Ltd expects to make $13 million net profit after tax for the year to 30 June, almost double the 2002 result. But chief executive Jock Hobbs said growth on that scale wasn’t likely to continue, as the result included fees from 2 significant transactions. Shareholders’ funds have grown 55% to $33 million and the asset base has grown from $188 million to a projected $220 million, against projected liabilities of $187 million. Mr Hobbs said the company’s gearing should be 13%, compared to an industry-sector average of 8.58% last year.

20 June 2003

Click for correction: Watson still holds Metlifecare interest. Original story said United Healthcare (controlled by Eric Watson’s Cullen Investments Ltd) has sold its 10% of Metlifecare Ltd. The shares were held by NZ Funds Management Ltd, which disclosed the change of ownership level today. As the next Snapshot on Local Business shows, Mr Watson still holds an interest.

18 June 2003

The stock exchange, rebranded from 30 May as NZ Exchange Ltd, will change its market trading hours from Monday 30 June, from the present 9-4 to the new 10am-5pm.
Website: NZX

18 June 2003

The Securities Commission has accepted written undertakings from Ross Collins, of Papamoa, south of Mt Maunganui, & 2 of his companies –NZFIL 3 Ltd, and promoter NZ Forestry Investments Ltd – concerning a scheme to invest in forestry near Wanganui. The commission banned advertising in November 2002 because Mr Collins offered shares in the company before it was incorporated, without a prospectus or investment statement. The company registered a prospectus in March, but the commission received complaints about it in April & May and found the prospectus & some advertising were likely to deceive/mislead/confuse investors. Mr Collins has agreed to make amendments to comply with the law, appoint an independent director and carry out regular compliance audits. This is the 1st time the Securities Commission has accepted enforceable undertakings under powers given to it when the Securities Act was amended in December.
Website: Securities Commission

17 June 2003

The board of Fletcher Challenge Forests Ltd has accepted a Macquarie NZ Ltd recommendation to sell its entire forest estate through a trade sale. A confidential information memorandum will go to selected participants this week. The Fletcher board said it continued to believe the realisable value was significantly above the value implied by the share price. Fletcher wants wood supply & forests management arrangements as part of the sale process. It said the sale would help it reinvest in processing & distribution and enable a substantial return to shareholders.

17 September 2002

Air New Zealand cut its domestic passenger space by 8.2% but recorded only a 6.6% fall in passenger revenue in July, compared to July 2001, resulting in a 1-point rise in load factor to 68%. The airline said its capacity was high a year ago after Qantas NZ’s April 2001 collapse. Air NZ cut its international capacity 12.3% in the wake of the global economic slowdown and impact of the 11 September terrorist attacks. Revenue/passenger kilometre (RPK) fell 9.6%, raising the load factor 3 points to 79%. Overall group RPK fell 9.3% on an 11.8% capacity cut for a 2-point load factor gain to 77%.

20 September 2001

Royal & SunAlliance Insurance NZ Ltd is to buy AMP Ltd’s general insurance business in New Zealand for $60 million. The sale includes GIO NZ and its 50% of the AA joint venture. AMP described the sale as “the establishment of a partnership”: an exclusive distribution agreement will enable AMP to brand & distribute general insurance products manufactured by Royal & SunAlliance. AMP recently sold its Australian & British general insurance businesses with similar agreements. The change of ownership is expected to take place on 1 October.

Government and Opposition parties supported the introduction into Parliament today of the Commerce Clearance Validation Bill, which will make it clear that the Commerce Commission was correct in its treatment of takeover bids made by 26 May. A change in dominance law was made on 29 May, and the Appeal Court ruled against the Commerce Commission interpretation on Wednesday, stopping Foodland Associated Ltd of Perth’s bid, through New Zealand subsidiary Progressive Enterprises Ltd, for the Woolworths supermarket chain owned by Dairy Farm International of Hong Kong.

19 September 2001

New Zealand’s Reserve Bank has followed others this week in cutting interest rates as a consequence of the US terrorist attacks. The bank cut the official cash rate by 50 basis points to 5.25%. The US federal funds rate was cut by 50 points to 3% on Monday. The Reserve Bank is next scheduled to look at its official cash rate on Wednesday 3 October.

1 December 2002

Auckland City Council will hold a special closed meeting on Thursday 5 December to discuss the process of selling its 25.7% stake in Auckland International Airport Ltd. Cllr Doug Armstrong, who chairs the sale working group, said staff & commercial advisors would give a full briefing.

The Auckland Regional Council is establishing a contestable community grants fund to allocate coastal revenue to coast-care projects, as part of a decision to dedicate all funds generated from seabed licences to the sustainable management of the coastal marine area. Environmental management committee chairman Cllr Brian Smith said the council had received $900,000 from the Half Moon Bay marina seabed licence back-fees following a Privy Council decision which found the council was entitled to receive this revenue. The committee recommended that the money be allocated over 3 years to projects that benefit the coast. The regional council will consider these recommendations on 16 December.

28 November 2002

The Securities Commission’s answer to the international clamour for better behaviour in the securities markets is to publish a set of principles it says should underlie the practices of all participants. The statement of principles, Strengthening confidence in New Zealand’s capital market – a statement on certain aspects of corporate governance & financial reporting, is on the commission’s website. The principles include: financial reporting, corporate governance & market regulation should align with international best practice; boards & management should have high ethical standards and be mindful of their responsibilities to their investors; investors should be able to have confidence in the quality of audits; an independent oversight body should monitor issues of audit quality & auditor independence; regulators should take a rigorous approach to monitoring the securities market and enforcing the law; regulators should identify regulatory gaps and recommend reform of the law. Chairman Jane Diplock said the commission would “continue to make best use of existing law and will identify regulatory gaps and recommend appropriate reforms of the law.” Sounds mealymouthed to me, like a slap on the wrist with a rotten piece of 4×2.

Research commissioned by the Securities Commission recommends New Zealand adopt International Financial Reporting Standards (IFRS), that it adopt these standards at the same time as Australia & the European Union, and that it do so for both public & private sectors. Other recommendations from Professor Keitha Dunstan, of the Centre for Accounting, Governance & Taxation Research at Victoria University, are that a strong, independent & representative standard-setting body be funded from a number of different sources, and that the financial information disclosure requirement of the Securities Regulations 1983 be replaced by a requirement to comply with generally accepted accounting practices defined in the Financial Reporting Act 1993, consistent with the Securities Commission’s proposed changes to the regulations. The full text of the study is on the commission’s website.

8 October 2003

Fletcher Challenge Forests Ltd must get to sell its 100,000ha forest estate out of this: The Campbell Group, negotiating a $685 million deal, has agreed Fletcher can also negotiate with the Kiwi Forests Group, offering $725 million. Fletcher has put down $8.5 million, half Campbell’s break fee, and must front up with the rest if Campbell loses out. If Campbell wins, Fletcher gets its deposit back. “If the Kiwi Forests Group offer is successful, the NZ$725 million sale price more than compensates the company for the full break fee the company would have to pay to The Campbell Group. On the other hand, if The Campbell Group is successful, the company will not have incurred any additional cost,” joint chief executive John Dell said. None of that explains why Fletcher entered a break deal when Kiwi Forests was knocking on the door – unless it was only the making of that Campbell deal that forced Kiwi’s hand.

7 October 2003

Restaurant Brands Ltd’s net profit for the half-year to 8 September fell 14.7% to $4.3 million although revenue increased 4% to $168.4 million. Operating revenue before unusuals & tax fell 17.2% to $6.9 million. Earnings/share fell 17.4% to 4.38c/share. KFC sales fell 1.6% to $94.3 million, earnings 12.5% (ebitda $14.3 million, 15.1% of sales). Pizza Hut sales rose 9.1% to $44.9 million, 7.6% same-store, earnings rose 25.4% (ebitda $6.7 million, 14.8% of sales). Starbucks Coffee sales rose just 0.3% to $12.1 million, falling 6.1% same-store, earnings rose 0.6% (ebitda $1.3 million, 11% of sales). 1 problem for KFC was the sale/leaseback of its last 6 outlets, resulting in higher rent. Restaurant Brands now has 262 stores and expects to have 267 at year end. The board expects a better 2nd half, in line with last year’s, on a better sales trend & continuing cost management.

31 March 2003

Air NZ has cancelled 21 flights in May-June between Auckland & Los Angeles (the withdrawal of United Airlines hasn’t been followed by a transfer of business), and to Hong Kong & Japan. Bookings to the 2 Asian markets were down 5-10%, and the fall at the end of June may be higher. Air NZ said the cuts represented 3.3% of total available international capacity, 1% of international flights.

The estimated merchandise trade balance in February was just $21 million, 0.9% of the value of exports. The February surplus over the previous 10 years range from 1.6% to 19% of exports. New Zealand’s current account deficit for the December quarter was $1.9 billion and the country’s net debtor position rose $1.6 billion over the quarter to $100.9 billion. An offset was that the high dollar reduced the value of foreign currency liabilities overseas more than it reduced the value of foreign currency assets. Gross domestic product rose 0.8% in the December quarter after rises of 1.7% in June & 0.9% in September for a 4.4% annual rise. Consumer spending rose 2% in the December quarter.

6 October 2002

Auckland is 1 of 3 New Zealand ports (Napier & Port Chalmers are the others) which will get the regular scheduled business of new-generation 4100-TEU (20ft-equivalent unit) containerships, and Auckland will be the only New Zealand port of call for 2200-TEU ships. The new services will start in December, the result of restructuring by shipping lines of services on the Europe & North American east coast trade routes. It will be the first time New Zealand has had a direct weekly fixed-day service to & from Europe & the North American east coast.

2 October 2002

The Reserve Bank left the official cash rate at 5.75% today. The bank’s next statement on the official cash rate will be made on Wednesday 20 November, when it also releases its monetary policy statement.

1 October 2002

The first chief executive of Fletcher Challenge Forests Ltd as a standalone company, Terry McFadgen, will retire next April. Chairman Sir Dryden Spring said the company had been rebuilt under Mr McFadgen’s leadership with a solid financial & operational base, and was now very well positioned for growth & expansion. “Terry’s achievements are well demonstrated in the company’s result for the 2001/2002 financial year, which represented a significant turnaround in financial & operational performance across all aspects of the business,” Sir Dryden said.