Archive | Archive – local business

Snapshot on local business, week to 6 April 2003

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.

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Snapshot on local business, week to 6 October 2002

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.

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Snapshot on local business, week to 24 June 2001

Latest: Shore council reschedules works to cut rate rise, Environment chief heads to nursery, tax review details on view.

24 June 2001

Transport Minister Mark Gosche and Minister for Auckland Judith Tizard turned the first sods on Friday on the $20 million Puhinui interchange which will link Auckland’s Southern Motorway and State Highway 20, the South-western Motorway. Completion is scheduled for May 2003.

Transfund will increase its spending on roads and passenger transport services by $10 million, taking its total spending this year to $950 million. Transport Minister Mark Gosche said $189 million of this would be spent on roading and passenger services in the Auckland region, up 10.4% ($18 million) on last year, and the patronage funding system (supporting regional councils which increased passenger numbers) had increased passenger transport funding 17% to $61 million. Projects for the year include the Grafton Gully motorway link to the port, a South-western Motorway flyover at Puhinui and design funding for Spaghetti Junction improvements.

Auckland Regional Council chairman Phil Warren said the annual national roading programme lacked any significant new road construction spending for the region. “Most of the activity in the Auckland region appears to be on investigation and design, with precious little funds committed to construction,” Mr Warren said. “We seem to take forever to work through funding and consent approvals and are not able to get these processes streamlined.” He said a shift in the benefit-cost ratio from 3.0 to 4.0 meant less money would be spent on transport.

The New Zealand Institute of Economic Research’s June consensus forecasts, an average of 14 institutional economists’ picks, show an expectation of a cut in real gdp growth from 2.6% to 2.4% for the March 2001 year, mainly because of a cut in export growth from 8.1% to 5.5%. The actual figure is due out next Friday. For the next year, the basket of economists has forecast a growth cut from 2.9% to 2.7%, based on a slower export rise of 4%, compared to 5.4% in their previous forecast. The basket picks 0.7% inflation for the June quarter, making 2.9% for the March 2002 year, but expects inflationary pressure to ease for a 2.3% annual rate, still higher than the previous forecast of 2%. Details: http://www.nzier.org.nz/.

North Shore City Council has rescheduled some capital works projects, helping to cut the rates rise from the originally proposed 7.16% to 4.95%. Mayor George Wood said the $287 million budget, including $121 million of capital works, would maintain the council’s focus on upgrading infrastructure. That includes $40 million on sewerage and wastewater-related projects. The council increased its grant to Enterprise North Shore by $200,000 to $625,000 and budgeted another $150,000 for economic development initiatives.

21 June 2001

Ministry for the Environment chief executive Denise Church has resigned after five years in the job and will leave in August to look after her two-year-old daughter. She will remain on the board of Landcare, a Crown research institute providing research and services in the sustainable management of land, an appointment made this week.

20: The Tax Review team released its issues paper on Wednesday, throwing up the possibility of taxing housing equity as the most controversial subject. The paper will form the basis of a second round of public submissions which will close on 1 August. The entire issues paper is available in Adobe PDF format, and the executive summary available in both PDF and HTML (text) formats. Click here to see the paper: Tax Review issues paper. The section on taxing housing equity is in chapter 2, tax bases, and runs from section 46 on page 32 to section 67 on page 37. Immediately preceding it is a segment on the risk-free return method (RFRM), on which the notion of taxing housing is based. That runs from section 38 on page 30.

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Snapshot on local business, week to 16 March 2003

14 March 2003

The Securities Commission has found the initial public offering by Vertex Group Holdings Ltd was likely to mislead investors because it didn’t adequately disclose the risks, but didn’t find evidence to suggest the directors believed the offer document was misleading. Commission chairman Jane Diplock made some observations which are probably more widely applicable than to a single IPO: Businesses should distinguish between units for which they can forecast and those for which only projections can be given. The financial reporting standards don’t provide clear guidance on this point and the commission has referred the matter to the Institute of Chartered Accountants (Iconz). Management communication to the board about the performance of individual business units was deficient, several directors didn’t understand how to present the prospective information and some didn’t seem to know it could be presented as either a forecast or a projection. There was also confusion about PricewaterhouseCoopers’ role as financial advisor to Vertex, and the accountancy firm’s responsibilities in relation to the prospective financial information. Ms Diplock said the commission also referred to Iconz the lack of professional guidance for auditors relating to examining prospective financial information.
Full report: Securities Commission website

12 March 2003

Act leader Richard Prebble managed to issue a couple of thoughtful barbs in his weekly Letter from Wellington this week while the party fights off slanging over how it runs its offices. 1st up was the new Land Transport Management Bill, which he said would turn every new road into a political decision: “The history of NZ politics was roads and bridges – MPs made their careers by getting taxpayer funding for a road for their electorates. The old National Roads Board, now Transit, has as its central policy the legal requirement to provide ‘safe & efficient roads.’ This depoliticised roading decisions. Engineers were able to develop robust cost/benefit ratios & safety records so that new roading could be prioritised in a non-political list. The new bill scraps the need for efficiency and instead sets social, environmental & cultural criteria. There is no way to objectively assess roading by social or cultural factors. Politicians will be making the decisions. This nonsense has come about to keep the Green MPs’ vote.”

Mr Prebble’s 2nd barb advances a theory based on the “principle” of political survival that you don’t antagonise a large bloc of supporting voters: “Labour is embarrassed at having to admit that ministers did talk about achieving top half of the OECD by 2011 and now admitting that it is not achievable. Act believes for once the 9th-floor spin is correct; Helen Clark never supported the goal. What she said was, it’s achievable ‘if we set our minds to it.’ She has always set her mind against it. Clark is convinced that any government that tackles NZ’s structural problems — 350,000 able-bodied adults on welfare, real tax reform — will be swept away.”

Car sales, up 15.1% to $617 million, led an overall 7.9% rise in retail sales to $4.255 billion in January. Vehicle services rose 11.6% to $598 million. Excluding the vehicle sector, sales rose 5.8% to $3.04 billion. Leading sectors were department stores, up 13.2% to $234 million, cafés, restaurants & takeaways, up 12.6% to $322 million, footwear, up 9.7% to $28 million, and furniture & floorcoverings, up 9.4% to $107 million. Sales in the Auckland region rose 8.1% to $1.36 billion, Waikato sales rose 3.9% to $424 million, South Island sales excluding Canterbury rose 12.3% to $491 million.

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Snapshot on local business, week to 22 February 2004

20 February 2004

Fletcher Challenge Forests Ltd shareholders passed the necessary resolutions today to sell the bulk of its forests to the Kiwi Consortium and for the capital return scheduled for March. The company also announced it had renamed itself Tenon Ltd – 1st definition in the online dictionary is “a projection on the end of a piece of wood shaped for insertion into a mortise to make a joint.,” but chairman Sir Dryden Spring waxed more lyrical than that. He said the company had consulted widely & researched carefully to identify a new name to take it forward following the forest sale transaction. “Tenon Ltd is focusing its activities on wood processing, marketing & distribution. Tenon is a powerful link to the heritage of wood-working. It is the way to form 1 of the strongest wooden joints possible. It is short, unique, easily remembered, and lends itself to strong visual branding.”

19 February 2004

43% of the 200 respondents to an Auckland City Council survey say they’ve changed their behaviour when it comes to disposing of kitchen & garden waste. Most commonly mentioned changes were composting, leaving grass clippings on the lawns, and using low-waste or smart-gardening techniques. The survey followed a Create your own Eden campaign last year. But works committee chairman Bill Christian said the results suggested the campaign might have encouraged those already doing something to do more, rather than motivating those who were doing less.

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Snapshot on local business, week to 3 March 2002

The Securities Commission has recommended significant changes to the law relating to investment advisers, after getting 40 submissions to a discussion paper, Law Reform: Investment Advisers, issued last August. Commission chairman Jane Diplock said there was strong support for the paper’s reform proposals relating to disclosure of important information that might indicate conflict of interest, and the adviser’s qualifications & experience; making the recommendation of illegal offers of securities an offence; and strengthening the enforcement of investment adviser law. The recommendations have been delivered to Commerce Minister Paul Swain, but their content has not been put on the commission’s website.

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Snapshot on local business, week to 25 March 2001

Latest: Colonial lifts stake in Sky, Fletcher separation complete.

25 March 2001

Colonial First State Investment Managers NZ Ltd has lifted its stake in Sky City Ltd from 14.5% last September to 18.92% on Thursday.

24 March 2001

Trading in Fletcher Challenge Building and Energy division,/B> shares ended on Friday. The new Fletcher Building and Rubicon companies’ shares will trade on the New Zealand and Australian stock exchanges from Monday, and Fletcher Building American depository shares are expected to trade form Monday. Fletcher Building is well advanced in its application for New York Stock Exchange listing.

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Snapshot on local business, week to 16 December 2001

15 December 2001

Pacific Retail Group Ltd increased September half net profit after tax by 124% to $5.4 million on an operating surplus before unusuals & tax up 23.2% to $7.5 million, from revenue up 7.2% to $214.3 million. Earnings/share rose 124% ot 10.67c. No interim dividend will be paid — chief executive Peter Halkett said the company preferred to retain those funds to reinvest in its growth & development strategies. Mr Halkett attributed the gains to “appliance store development, better stock & supplier management, along with reduced costs through improved distribution & logistics.” The large-format Big Byte specialist computer & communications concept was launched during the half, with plans for 8-10 of these stores. Gift & homeware retailer Living & Giving opened six stores. Chairman Maurice Kidd said the finance division’s expansion outside the core hire purchase finance role was a big growth opportunity.

Restaurant Brands NZ Ltd increased fourth-quarter sales (the 12 weeks to 3 December) by 11.8% to $62.6 million. KFC sales rose 6.8%, Pizza Hut 16.1% & Starbucks Coffee 61.5%. KFC same-store sales grew 6.7%, the strongest performance for five years, and Pizza Hut same-store sales grew 11.6%. Although Starbucks’ total sales grew significantly to $4.5 million, same-store sales fell 7.2%. Chief executive Jim Collier said this was because a price increase was rolled over the previous year and some stores were cannibalised through new openings. He expected Starbucks’ same-store sales to grow again by the second quarter of 2002.

Statistics NZ said retail sales fell 0.1% (seasonally adjusted) from September to October, and there were signs that the sales trend was easing after growth of 21% in 3½ years.

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Snapshot on local business, week to 29 June 2003

29 June 2003

Eoin Johnson (Aratas Investment Trust) increased his stake in Savoy Equities Ltd from 8.274% to 9.15% after taking up his full entitlement in the company’s cash issue. Mr Johnson, a Savoy director, is a former director of Works Infrastructure Ltd, Opus International Consultants Ltd and Wilson Neill Corp Ltd (now in receivership & liquidation), and is a current director of Port of Wellington (1988) Ltd, Centreport Ltd and Wellington Cable Car Ltd.

24 June 2003

Eric Watson’s interests still hold 10.6% of Metlifecare Ltd, despite what I wrote on Monday. A substantial securityholder notice issued today said the Watson relevant interest, held through United Healthcare Ltd and Sapphire Equities Ltd, was down from 17.3% to 10.6%. The change in interest is not through a sale but results from expiry of a June 2000 agreement between the 2 Watson-controlled companies and NZ Funds Management Ltd. Under the agreement, United Healthcare had a relevant interest in shares controlled by NZ Funds Management.

Tranz Rail Holdings Ltd will put a market release presentation on its website after a Wednesday morning conference call with analysts. The presentation will include 2004 budgets and more details of the company’s proposed deal with the Government.
Website presentation, in Powerpoint format

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Snapshot on local business, week to 16 June 2002

15 June 2002

New Zealand was 1 of 9 countries elected to the governing body of the 170-member/affiliate member International Organisation of Securities Commissions, which NZ commission chairman Jane Diplock said was “important international recognition of New Zealand as an increasingly well regulated market and one suitable for international investment.” I’m sceptical about the recognition — more often, as with Mike Moore’s appointment to the World Trade Organisation, it’s a case of momentary enthusiasm — and sceptical about the value of worldwide input to issues derived from US activity which has been dealt with speedily there. Nevertheless, the role has potential for strong New Zealand input & gains, because the executive committee is dealing with implications of the Enron collapse, issues relating to the independence of analysts’ reports, accounting & auditing standards and demutualisation of stock exchanges.

14 June 2002

Sky City Entertainment Group Ltd applied to the Australian Stock Exchange today for a full Australian listing from 1 July, to maintain a dual listing. Managing director Evan Davies said about 65% of the casino company’s shareholders — 18,000 — were New Zealand residents. Many of its Australian institutional investors joined the register when Brierley Investments Ltd sold down its holding.

11 June 2002

ASB Bank said its lending to rural customers had topped $2 billion 5 years earlier than budgeted, 9 years after the rural division was opened. Its 30% growth over the past 12 months was at twice the market rate, ASB Bank Rural general manager Derek Farrelly said. The first $1 billion took 6 years to lend.

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