Tuesday, August 31, 2010

Allan Hubbard Statement on SCF Receivership

The following is a statement from Allan Hubbard on the receivership of South Canterbury Finance and comments on other parts of his former empire.

In it he take no blame for the collapse and in fact blames the Government for moving to place his other business into statutory management for his business problems.

He has lost most of his assets but so have have others who invested with him, number one being the hard pressed taxpayer who has just forked out $1.6 billion to bail SCF out.

I will give him kudos for fronting up but to deny his substantial part in this whole fiasco is simply ignoring the reality of the situation.

Like other finance company heads to have been dealing cards from their sleeves, Allan Hubbard should go to prison.

Allan Hubbard's Statement

Following today’s announcement that South Canterbury Finance (SCF) is to be placed in
receivership, majority shareholder in the company, Allan Hubbard, said he is firmly of the
view that if he had not been removed from the board of the company, and subsequently
placed in statutory management, he could have helped to save the business.

“It has been deeply frustrating and hurtful, over the last nine months, to have been sidelined
by my fellow SCF directors, and subsequently straight-jacketed by the Government
regulators, from working to save South Canterbury,” he said.

“Since the impact of the global credit crisis became obvious, I have done everything I can to
save SCF, including investing hundreds of millions of my own investments into the company.
“I have always attempted to place investors’ returns first, and my personal financial interests
as secondary, and as the severity of the global credit crunch became apparent, I moved
quickly to inject my own assets into South Canterbury,” he said.

“For me it has always been a matter of trust and personal integrity to investors. In a crisis like
that, you do what you have to do to save the business.”

He said that in this day and age that might sound old fashioned and that he has resolved to
fight back to protect his and his wife’s reputation.

He went on to say that when they were personally placed in statutory management on June 20
this year, that was a serious blow to them, South Canterbury Finance and “unbelievably short
sighted” on the part of the Government which acted on the advice of the Registrar of
Companies.

“Surely they realised that by freezing me out and taking over control of my affairs that they
would be dealing a body blow to South Canterbury Finance?”

Big day for the regulators and a sad day for investors

“It was a big day for the regulators and a sad day for investors,” he said.

“Instead they bring down the boom, take me out, freeze my access to my personal funds and
now so many families, small businesses, farms and enterprises, throughout the South Island
in particular, are going to be seriously suffering,” he said.

“It was an unnecessary, knee jerk bureaucratic response and it required a strategic solution
not a sledge hammer.”

Mr Hubbard said that his action was deeply hurtful and it was painful to be forced to watch
events, announced today, unfold from the sideline.

“I have spent my life supporting businesses, investors and charities and my track record
speaks for itself,” he said. “I have been prudent and diligent, to the very best of my ability,
and have always been deeply respectful of the trust placed in me.”

Mr Hubbard said that while he acknowledges that some may consider his management
systems old fashioned he has never defrauded a single investor of a single cent.

He said that when he was ambushed last week by the statutory managers, with their second
investors’ report, and with no advance warning or the courtesy of a copy of their report, he
resolved to have more to say.

He said today’s announcement on South Canterbury’s fate had hardened his resolve.
“I will be providing my own analysis, with the assistance of my team of professional legal
and financial advisors, to put my side of the story and I will be taking this matter further,” he
said.

“I cannot allow my reputation to be savagely attacked by this shameful process and all of
those who trusted Jean and me, over so many years, to allow this tragic set of events to go
unanswered,” he said. “Those who care about us know I am unwell and that hardens my
resolve.”

Mr Hubbard said he would not be commenting further until he and his advisors had prepared
their case against the statutory manager’s report and their response to today’s announcement
regarding SCF.


Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Market Alert: South Canterbury Finance to be placed in Receivership
Allan Hubbard: Ignorant Supporters Blissfully Unaware
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


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The Intelligent Investor: The Definitive Book on Value Investing. A     Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
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c Share Investor 2010

VIDEO: Sandy Maier - full news conference on SCF Receivership

3 News Video On Demand

South Canterbury Finance head Sandy Maier discusses the fallout of the collapse of the company on 31 August 2010. Full Press Conference.

CEO Sandy Maier stated that unwise property ventures in Auckland, Queenstown and Fiji led to SCF downfall.

“South Canterbury's failure is as a result of its own actions and activities and poor choices historically... we could not overcome all that baggage. The ultimate cause of this is South Canterbury's problem, a management, governance and misdirection problem.

As fast as the trustee and the Crown can get the money out I'd say to the retail establishment and the investment establishments there's a wave of people coming at you.”

Allan Hubbard meanwhile has blamed others for the collapse.

Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

VIDEO: Ministerial Statement on SCF Failure - Bill English, Sept 8 2010
Allan Hubbard Statement on SCF Receivership
Market Alert: South Canterbury Finance to be placed in Receivership
Allan Hubbard: Ignorant Supporters Blissfully Unaware
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A     Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

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c Share Investor 2010



Market Alert: South Canterbury Finance to be placed in Receivership

South Canterbury Finance is about to be put into receivership and shares in the company have been suspended.

From the NZX


South Canterbury Finance Ltd - Request to Appoint Receiver

NZX Announcement

South Canterbury Finance Limited announced today that it has been unable to complete a recapitalisation and restructure. As a result, the Company would have been unable to certify to Trustees Executors Limited, in accordance with the terms of its debenture trust deed with Trustees Executors Limited, that it was compliant with various financial covenants under the debenture trust deed for the financial year ended 30 June 2010.

Accordingly, South Canterbury Finance Limited has requested Trustees Executors Limited to appoint a receiver in respect of the whole of its undertaking and assets, and Trustees Executors Limited has done so. A further announcement will be made by the Company in due course.


Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Allan Hubbard: Ignorant Supporters Blissfully Unaware
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A     Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

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c Share Investor 2010

Monday, August 30, 2010

Long Term View: Westpac Banking Group Ltd



In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

Westpac Banking Group Ltd [WBC.NZX] has been a stellar investment for shareholders since its 1970 listing* on the ASX at $AU 2 per share and 1992 listing on the NZX at an adjusted $NZ 6.50. With $AU15.62c in net dividends (see NZX chart above and ASX chart here ) and numerous share splits, bonus issues, rights issues,share buybacks capital raisings and ; a 1:5 bonus issue in 1970 ,1:4 bonus issue in 1973 and 1977, a 1:4 rights issue in 1985 and 1988, a 5% share buyback and numerous capital raisings ** in 1996 gives WBC an 1970% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 40 year listing of WBC an annual net return of 49.25 %***!.


* We will look at the full history for this Australian stock that listed in 1970 on the ASX and December 1992 for a New Zealand listing on the NZX.

**Estimated dilution of 90% for shareholders.

*** For holders of New Zealand listed shares the annual return has been just over 28 % since available data based on a 1992 share price of NZ$6.50, AU$9.48 in net dividends, 30% in tax credits and a 5% share buyback in 1996. This compares to a 7.22% return from the average of all NZX indexes.

! This compares to a 51.21% return for ANZ Bank over 41 years.




Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
ANZ Banking Group Ltd
Briscoe Group Ltd
Cavalier Corporation Ltd
Comvita Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Infratil Ltd
Kirkcaldie & Stains Ltd
Kiwi Income Property Trust Ltd
Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
Methven Ltd
Mowbray Collectables Ltd
NZ Oil & Gas Ltd
New Zealand Refining Ltd
New Zealand Stock Exchange Ltd
Nuplex Industries Ltd
PGG Wrightson Ltd
Port Of Tauranga Ltd
Postie Plus Group Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sealegs Corp Ltd
Scott Technology Ltd
Skellerup Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Smiths City Group Ltd
Steel & Tube Ltd
Telecom NZ Ltd
Telstra Corp Ltd
Tourism Holdings Ltd
Trustpower Ltd
Turners Auctions Ltd
Turners & Growers Ltd
The Warehouse Group Ltd
Vector Ltd
Wakefield Health Ltd

Westpac Banking Group Ltd @ Share Investor


Discuss WBC @ Share Investor Forum
Download WBC Company Reports


Recommended Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A     Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

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Fishpond


c Share Investor 2010

NZ Superfund: Performance & Investment Detail




Source: TV One Q & A, August 29, 2010.

A really interesting interview with Paul Holmes interviewing Adrian Orr, head of the New Zealand Superannuation Fund (NZSF) and what he thinks about the NZ and global economy and where it might be headed.

He briefly outlines the investment profile and goals of the NZSF and gives his view on what makes a good investment for the long-term.

I don't agree on the Government or rather taxpayer funding our retirements but be that as it may returns have been pitiful since the funds inception in 2003. An annual return of 5.39% before tax is what kiwis have to look forward to.

Yes, it is a long term 20 year investment horizon but after 7 years we have lost money on this escapade - we have invested on borrowed money.

Investments in the NZSF are spread across the world, including New Zealand, from equities to bonds to foreign exchange.

Find out more about the NZSF

Full list of Equities
Returns to June 30 2010

NZSF Statement of Intent
NZSF 2009 Annual Report


Related Share Investor Reading

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Every Bastard Says No: The 42 Below Story

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c Share Investor 2010

Allan Hubbard: Ignorant Supporters Blissfully Unaware

The support from individuals for Allan Hubbard and his failing financial and personal empire in the facing of damning disclosure in the latest Grant Thornton Report is either blind loyalty or extreme ignorance.

Groups on Facebook like Paul Carruther's (see Paul's racist comments to me)Help Allan Hubbard and Leave Allan Hubbard Alone seem to be embroiled in some sort of conspiracy that someone is "out to get him" and have a practiced mantra that there is no evidence of Mr Hubbard's wrong doings, so why go after him?

Well, if you read the Thornton Report you will come to a different conclusion. It points out Hubbard's financial misdemeanors in plain, clear English. There is more detail to come on this but because of the complex nature of his business; the inter-party lending and inadequate bookkeeping, it may take many more months for this sorry saga to unfold.

What is also clear is that the Serious Fraud Office is investigating him and his businesses and the South Canturbury Finance Company that he used to head is close to collapse at the risk of $1.5 billion of taxpayer money due to a Government Guarantee put in place by the outgoing Labour Government in late 2008.

Much of the support Hubbard has received has waned in the face of the Thornton Report but the very small core group left behind are adamant that Mr Hubbard has done nothing wrong.

This kind of ignorance is the kind that got investors putting money into the finance company sector in the first place, including Allan Hubbard's various companies. Those people didn't do their homework, were greedy for higher returns and took big risks and have or will lose money as a result of that ignorance.

These people want you and me to bail out their ignorant backsides!

It is time to face the reality that Mr Hubbard has been found out and while he is not as bad as most of the fraudsters who have taken investors money and run, the outcome of his business dealings have had the same effect on people.

Many investors have lost their life savings and a desperate for help.

As a supporter of Hubbard, putting your head somewhere where you feel better about him and yourself isn't going to make the situation any better.

Face the music, if you don't your blinding ignorance will lead us back down the same path sometime in the future.

That is unacceptable to us all.

Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Market Alert: South Canterbury Finance to be placed in receivership
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Discuss this topic @ Share Investor Forum - Register free


From Fishpond.co.nz

Bird on a Wire: The Inside Story from a Straight Talking CEO

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz

Fishpond


c Share Investor 2010

Saturday, August 28, 2010

Michael Hill International: Tall Tales & Rumours

A little birdy told me something interesting this morning that got my mind in an overactive and speculative mood.

The move by the Hill family earlier this week to take a larger share of Michael Hill International [MHI.NZX] got me a bit hot under the collar but I put a question to an accountant client of mine this morning and asked him what he thought of the move.

He told me that when a large holder of such a stake in a business consolidates its shareholding and seeks to increase it, it is more likely an indication that the protagonist is trying to make the shareholding more attractive to a possible buyer, rather than wanting to take control of the company themselves.

My source told me when he was a director at Whitcoulls and Graehme Hart was running the show this was the approach Hart took before he sold the company to Blue Star Group.

Of course this is just more idyll speculation on my part but after thinking about the scenario it makes more sense than the reason the Emma Hill gave for wanting to take a mere 2.1% more in the company:

"...the family wants to take advantage of a depressed share price to take control. We've always wanted to buy a bigger stake in the company, and we think the stock is undervalued right now. It is just opportunistic with the right price coming at the right time."

If that is indeed the case why not pitch for a bigger stake than 2.1% more. Why not go for gold if the share price is such a bargain? (which it is I might add).

I am not saying that the Hill's are going to sell their stake any time soon but my accountant friend's thoughts should be considerd by the market because I think there is some merit in what he told me.

That is just between you and me though.


Disc I own MHI shares in the Share Investor Portfolio


Michael Hill International @ Share Investor


Hill Family makes Claytons Takeover bid for Michael Hill International
Michael Hill International Ltd: 2010 Full Year Profit Analysis
Long Term View: Michael Hill International Ltd
Michael Hill International: 2010 half year profit commentary
Michael Hill Makeover kicks off
Michael Hill International: 2009 full year profit commentary
Toughen Up: What I have learned from the hard times
Stock of the Week: Michael Hill International
Michael Hill TV3 60 Minutes Interview
Long VS Short: Michael Hill International
Marketwatch: Michael Hill International
Michael Hill's profit shines
Michael Hill takes on the windy city
Why did you buy that stock? [Michael Hill International]
MHI has defined growth strategy
MHI profit sparkles

Discuss MHI @ Share Investor Forum

Download MHI Company Reports


Buy Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up - Fishpond.co.nz


c Share Investor 2010

Thornton Report 2: Allan Hubbard Guilty as Charged

In the ongoing saga of Allan Hubbard and his crumbling business empire there were further revelations yesterday when the second report from statutory managers Grant Thornton came out.

It appears that Mr Hubbard has been running his Hubbard Management Funds (HMF) business, Aorangi Securities and a number of other investment vehicles in a slack, fraudulent and underhanded manner. In those respects it makes him as bad as your Hotchins, Watsons, Bryers and their filthy thieving ilk.

On first look though, what appears different is that Hubbard looks to have been motivated by the "Robin Hood" factor. That is, he was using other peoples money to lend to those who "needed" it.

All very altruistic sounding at first glance but bound to end in tears when incoming funds and assets didn't match outgoings.

There have been claims made in the second report that Aorangi Securities has been borrowing money on call while lending the proceeds to second rate and overvalued farming assets, the bulk of which are connected to the Hubbards - nothing altruistic going on there.

Aorangi made interest free loans to a charitable trust that the Hubbards have a financial investment in and that trust was being charged 10% interest on those loans - very dodgy.

Investment values overstated by 25% in the Hubbard Management Funds business with $13 million of assets allocated to investors in the fund that apparently don't exist - looking very bad here.

An overstatement of cash at hand at HMF of more than $5.5 million.

Inter-party lending that advantages Mr Hubbard and his financial interests over his investors is a good indication that he was covering his own ass in the event of a meltdown.

Mr Hubbard's businesses all suffered from a lack of full detailed documentation.

It is clear now while Mr Hubbard did not set out to deliberately fleece investors as other finance company heads have over the last 3 years, Mr Hubbard is no saint.

I have until now largely reserved my judgement on Hubbard and his predicament but if you read the report you can come only to the conclusion that Hubbard has been a naughty boy and supporters need to take a good hard look at themselves if they wish to continue to back Mr Hubbard in the face of the reality of his offenses thus far revealed.

Yep, it isn't right that the other thieves out there have largely been untouched by authorities but the object of our interest here is Allan Hubbard and we now should wait for the additional detail that will come out from the Serious Fraud Office and the Statutory managers of Hubbard's business and personal financial dealings.


Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Discuss this topic @ Share Investor Forum - Register free


From Fishpond.co.nz

Bird on a Wire: The Inside Story from a Straight Talking CEO

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz

Fishpond


c Share Investor 2010

Friday, August 27, 2010

Hidden Gems: Teamtalk Ltd

I own a 17 shares in the Share Investor Portfolio and they are mostly larger companies which are well known to investors and to the public in general.

While doing a Long Term View series post yesterday I had come down to doing some of the smaller companies listed on the NZX . Largely most of these are penny dreadful losers or companies that have very patchy results and pasts but when I came down to calculating the long-term returns for Teamtalk Ltd [TTK.NZX] I found to my surprise that this tiny little Telecom sector company with less than a $50 million market capitalisation is one of the better investments listed on the NZX.

With an annual net return of 17.61% (including dividends and tax credits)for the last 6 or so years since listing and a nearly 7% annual gross return, Teamtalk outperforms most other listed NZX companies by a large margin.

The company
began in 1994 as Managing Director David Ware, annoyed by the poor service and lack of professionalism from telecommunications companies, set out to start his own.

They struggled through the deregulation of the Telecoms sector in the 1990s and the bankruptcy of their owner in 1999 and ended up buying the company themselves and listed it in 2004.

The company has performed well since then and by management's reckoning see a positive future for thew company ahead.

The company is not for me because I don't fully understand what they do but it might be well worth looking at if you are well versed in this sector.

You could well do alot worse.


Teamtalk Ltd @ Share Investor

Long Term View: Teamtalk Ltd

Discuss TTK @ Share Investor Forum
Download TTK Company Reports
TTK Prospectus

From Fishpond.co.nz

Bird on a Wire: The Inside Story from a Straight Talking CEO

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz

Fishpond


c Share Investor 2010

Thursday, August 26, 2010

Long Term View: Teamtalk Ltd



In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

Teamtalk Ltd [TTK.NZX] has been a great investment for shareholders since its May 2004 listing at $1.75c per share (see TTK prospectus for more detail) . With $1.25c in net dividends and another 30% of that figure gained for those eligible for associated tax credits gives TTK (see NZX chart above) a 111% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 6.3 year listing of TTK an annual net return of 17.61%.

This compares to an annual return from the average of all NZX indexes of 2.38%.




Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
ANZ Banking Group Ltd
Briscoe Group Ltd
Cavalier Corporation Ltd
Comvita Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Infratil Ltd
Kirkcaldie & Stains Ltd
Kiwi Income Property Trust Ltd
Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
Methven Ltd
Mowbray Collectables Ltd
NZ Oil & Gas Ltd
New Zealand Refining Ltd
New Zealand Stock Exchange Ltd
Nuplex Industries Ltd
PGG Wrightson Ltd
Port Of Tauranga Ltd
Postie Plus Group Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sealegs Corp Ltd
Scott Technology Ltd
Skellerup Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Smiths City Group Ltd
Steel & Tube Ltd
Telecom NZ Ltd
Telstra Corp Ltd
Tourism Holdings Ltd
Trustpower Ltd
Turners Auctions Ltd
Turners & Growers Ltd
The Warehouse Group Ltd
Vector Ltd
Wakefield Health Ltd

Teamtalk Ltd @ Share Investor


Discuss TTK @ Share Investor Forum
Download TTK Company Reports
TTK Prospectus


Recommended Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A     Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours

Buy The Intelligent Investor & more @ Fishpond.co.nz

Fishpond


c Share Investor 2010

Wednesday, August 25, 2010

Hill Family makes Claytons Takeover bid for Michael Hill International

The announcement today that the Hill family, the largest shareholder of the publicly listed Michael Hill International [MHI.NZX] is looking to consolidate and increase its family shareholding in the company from 48% to 50.1% of the company is a significant move by the family and ditto has significance for shareholders, for a number of reasons.

At 50.1 % the family would have majority control as a voting block to look after themselves rather than other shareholders. I am not saying the will put that in practice but majority holding will mean they can if they wish to do so.

The possible move to a 50.1% shareholding would also require an exemption to the Takeovers Act that normally requires offers for additional shares at this shareholding level be made to all shareholders.

This move is also contrary to the move made by the company to split the shares at the end of 2007 to increase liquidity in the trading of the shares on the stockmarket.

You can look at this move in two ways.

Firstly that it is a positive move by the family that they see value in the company at current share prices and are willing to stump up some cash to buy a bigger stake in the company. A good move when the company is under some pressure from a retail slump and the shares are trading at a good discount to the long-term outlook for the company.

Secondly, and a view that I tend to lean towards, is that the move is a rather cynical one because it is going to impact negatively on minority shareholders because the family will have more control over the company without having to make an offer to all shareholders for full control and they are seeking an exemption through the NZX and a vote put to shareholders at the November 5 annual meeting to achieve their purpose.

Michael Hill International has thus far proven a good corporate citizen and has treated MHI shareholders in a fair and balanced manner in terms of business operations and has been a good long-term investment for shareholders.

Should this claytons move to take over the company by the Hill family and its interests be accepted by the NZX and its operations and then voted approval by shareholders (it must be kept in mind that the family already has a 48% voting block and it wont take too many minority shareholders to vote in their favour or opt not to vote at all for their plan to realise gold) without a full offer made to take the company over, then the small shareholder is going to get shafted again.

I will be voting against the Hill's proposal and I urge other MHI shareholders to do the same.


Disc I own MHI shares in the Share Investor Portfolio


Michael Hill International @ Share Investor


Michael Hill International Ltd: 2010 Full Year Profit Analysis
Long Term View: Michael Hill International Ltd
Michael Hill International: 2010 half year profit commentary
Michael Hill Makeover kicks off
Michael Hill International: 2009 full year profit commentary
Toughen Up: What I have learned from the hard times
Stock of the Week: Michael Hill International
Michael Hill TV3 60 Minutes Interview
Long VS Short: Michael Hill International
Marketwatch: Michael Hill International
Michael Hill's profit shines
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Buy Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up: What I've Learned About Surviving Tough Times

Toughen Up - Fishpond.co.nz


c Share Investor 2010

Tuesday, August 24, 2010

Long Term View: Smiths City Group Ltd




In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

Smith City Group Ltd [SCY.NZX] has been poor investment for shareholders since its November 2003 listing * at 60c per share** . With 30c in net dividends and another 30% of that figure gained for those eligible for associated tax credits gives SCY (see NZX chart above) a 20% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 8 year listing of SCY an annual net return of 2.5%.

This compares to an annual return from the average of all NZX indexes of 3.75%.


* Previously listed on the "unlisted"exchange and now listed on the main board of the NZX.
** adjusted price when SCY listed on the NZAX in Nov 2003.




Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
ANZ Banking Group Ltd
Briscoe Group Ltd
Cavalier Corporation Ltd
Comvita Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Infratil Ltd
Kirkcaldie & Stains Ltd
Kiwi Income Property Trust Ltd
Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
Methven Ltd
Mowbray Collectables Ltd
NZ Oil & Gas Ltd
New Zealand Refining Ltd
New Zealand Stock Exchange Ltd
Nuplex Industries Ltd
PGG Wrightson Ltd
Port Of Tauranga Ltd
Postie Plus Group Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sealegs Corp Ltd
Scott Technology Ltd
Skellerup Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Steel & Tube Ltd
Telecom NZ Ltd
Telstra Corp Ltd
Tourism Holdings Ltd
Trustpower Ltd
Turners Auctions Ltd
Turners & Growers Ltd
The Warehouse Group Ltd
Vector Ltd
Wakefield Health Ltd


Smith City Group Ltd @ Share Investor


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Recommended Amazon Reading

The Intelligent Investor: The Definitive Book on Value Investing. A     Book of Practical Counsel (Revised Edition)
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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