Share Investor Friday Free for all: Edition 9

Airport lands big numbers in 2011



Auckland Airport

News today that Auckland Airport(AIA) is going to plunk down a huge NZ$180 million to expand the international terminal to coincide with the 2011 Rugby World Cup-the year we get the cup back,yeah right-means that the company clearly needs to borrow more or has a partner with deep pockets.

The extension will almost completely revamp the entire terminal and mean extra revenue streams through extended retail, car parking and the like.

No more news about the Canadian Pension Fund takeover yet but an extension such as this could make any possible sale more palatable given that Manukau and Auckland City Councils are shareholders and would want the airport to cope with all those South Africans springboking over here in 2011.

Long-term, Auckland Airport looks good for growth and shareholders would be much better off holding on to their shares.


Sky City Folds


Auckland Sky Tower,
just above the Casino


I'm not sure about you but the Sky City Entertainment(SKC) Annual meeting today left me none the wiser.

Recent profit guidance's were confirmed, much was made of the revamp of Auckland Casinos main floor and the usual blah.

Of more concern was news that the Adelaide Casino sale process was on hold and shareholders wont find out whether the company is going to be bought until the end of November.

We were told not so long ago that we would find out at the end of October and that Adelaide would still be on the block.

Now there is talk of revamping Adelaide in a similar way to the Auckland Casino because they know they can get it right, after years of getting it wrong and this is a turnaround from a few months back where management were "identifying assets to sell" and Adelaide was a prime candidate.

You would have to ask what has changed?

At least management have confirmed that the Cinema division is still on the block and we will know what for at the end of October.


Contact has Gas



Contact Energy Geothermal Plant

Contact Energy(CEN) also got together for an annual meeting today. The biggest subject on the agenda, the appointment of some directors, particularly little Timmy Saunders, who was a director of failed Feltex Carpets.

Like all boards, Contacts board is supposed to be made up of independent directors but Tim Saunders allegiances lie with Origin Energy, the majority Aussie owner of Contact.

Institutions want Saunders removed because of his involvement with the Feltex collapse and his twice advocating a bungling a sale of Contact, that cost the company millions but Origin want him to stay to keep them primed for another attempt at a takeover.


NZX up in the Charts


Mark Weldon

Stock Exchange operator NZX today reported a 49 per cent lift in third quarter net profit after tax to $NZ2.3 million.

The company said the lift in net profit for the three months to the end of September from $1.5m in the third quarter of 2006, was achieved on operating revenue up 34 per cent to $8m.

We have seen a dearth of listings this year, unless you count spectacular failures like Burger Fuel(BFW) and Xero(XRO), a number of companies have been swallowed up and a high number of the larger blue chips look set to go as well, with The Warehouse(WHS) Auckland Airport(AIA) and Sky City Entertainment(SKC) under the cloud of a sale process.

Weldon said that he looked forward to more quality listing in 2008, with a number of private equity owners looking to sell down.

One he mentioned was the owner of Griffins and Tegal, Pacific Equity Partners.


NZX Market Wrap

A slide to one-month lows for top stocks Telecom(TEL) and Contact Energy(CEN) depressed the New Zealand sharemarket today, in contrast to solid gains for markets around the region.

The NZSX-50 benchmark index closed down 40.43 points, or 0.9 per cent, at 4226.71, on turnover totalling just $88 million. Falls outnumbered rises 62 to 40.

"Our market bucked the trend really. We were down, but mainly around company-specific news like Contact," said Philip Hunter of First NZ Capital.

Telecom fell 11c, or 2.5 per cent, to a month low of $NZ4.31 after announcing an undertaking to have fast broadband to every town in the country within four years. Telecom will spend $1.4 billion on its next generation network and fast broadband over five years.

Contact Energy fell 19c, or 2 per cent, to $9.05 after it told shareholders that earnings would be flat, as the company battled high gas prices and low wholesale power prices.

"They just reiterated that the environment was going to be a bit tougher this year, so the market took that as a cue to just bring the stock price back a bit," Mr Hunter said.

Sky City(SKC) was down 2c to $5.40 after it said it was quitting the sale of its Adelaide casino while bidders sized the company up. It said it was comfortable with its August projection of a 10-12 per cent increase in profit in fiscal 2008.

NZX jumped 19c to $9.50 after it reported a 49 per cent rise in third quarter net profit to $2.29m.

Mainfreight(MFT) rose 8c to $7.40, continuing a strong run recently, (FRE)Freightways lost a cent to $3.79.

The general tone is that the domestic economy is getting a little bit tougher, costs are coming up a bit and margins are getting squeezed."

Auckland Airport(AIA) fell 5c to 306, Fisher & Paykel Healthcare(FPH) was flat at $3.28, F&P Appliances(FPA) shed 12c to $3.45, and NZ Refining(NZR) fell 15c at $7.41.

Air New Zealand(AIR) was down 2c at $2.12, Rakon(RAK) was 9c lower at $5.26, Pumpkin Patch(PPL) fell 3c to $3.05, and Fletcher Building(FBU) was off 8c at $12.18. Fletchers has dropped markedly this week over market worries related to a possible takeover by the company of Carter Holt.

Ryman(RYM) gained 4c to $2.15, Tourism Holdings(THL) was up 4c at $2.36, Nuplex(NPX) gained 8c to $7.58.

NZPA & Share Investor

NZ Dollar Wrap

Reuters currency rates:

4.30 today 5pm yesterday(NZ Time)

NZ dlr/US dlr US76.38c US75.36c
NZ dlr/Aust dlr A83.89c A83.47c
NZ dlr/euro 0.5334 0.5281
NZ dlr/yen 87.30 86.95
NZ dlr/stg 37.22p 36.81p
NZ TWI 71.03 70.24
Australian dollar US91.03c US90.28c
Euro/US dollar 1.4322 1.4269
US dollar/yen 114.28 114.07

Disclosure: I own SKC, AIA shares

C Share Investor 2007

Duck Season Extended: Trevor Mallard must go

Trevor takes out the Trash


You don't get comedy written this well. Trevor Mallard took a swing at Tau Henare and him square in the face in a Parliamentary corridor yesterday.

Mallards motivation was the taunting by Henare in chambers about Mallards personal life falling about his ears.

The main spark to the big ducks fire was the National Party member Henare calling Mallard a hypocrite for abusing Don Brash in Chambers last year about leaving his wife for a new partner 20 years ago, while all the while Trev had left his wife or was possibly cheating on her, although that cannot yet be confirmed.

Mallard was one of the collectivists who voted for the anti smacking bill this year, a bill supposedly passed to stop violence. The "h" word is clearly appropriate again.

Lets face it, Mallard is one if the most inappropriate people to be in the position he is in.

His nasty, venal and ugly form of politics is more at home in Muldoons era rather than the touchy feely PC hairiness of Helen Clark's far left smothering.

He can dish out the nastiness but cannot take it. He clearly ain't clever enough to use his intellect to retort so has to resort to fisticuffs.

The most interesting part of this whole saga though is the reaction of Clark and her sisterhood to the violence that Mallard has displayed.

If this had been Hehare throwing the punch you can be sure Helen and co would be baying for Henare's job and the language used by her to describe the incident would be forceful and straightforward.

Instead Mallard has apologised and Clark has done her best to sweep the whole thing under the carpet.

The double standards are obvious here.

The physical violence of Mallard is of course is only surpassed by the social, psychological and economic violence of Labour Party policies of the last 8 years, so the acceptance by the Labour Party of Mallards despicable behaviour could be at least understood somewhat.

Parliamentary rules require that such incidents require severe punishment even losing ones position in Parliament completely.

Clearly this needs to happen in this case and nothing short of Mallard losing his job should be acceptable to the New Zealand public, excluding nutcase Labour voters of course.

Real violence like this, isn't acceptable. Duckman has made a habit of this kind of offensive stuff, once threatening to place a large Heineken bottle up a prominent persons dark places. This should be the last post for him.

Any other person in any other job would be sacked instantly.

Duckman needs the bullet.


C Darren Rickard

Conflicting Emotions

I was prompted to write this piece after having a discussion with someone in the real world-offline that is-about this blog, my reasons for writing and how I could possibly write about companies that I have a financial interest in.

What I would argue, is how can you write about a company with any authority and conviction without having some of your own moola on the line.

Of course one of the biggest arguments against writing and having a pecuniary interest in your subject is that your output may be tainted and that of course you have a financial imperative to spin your story to make it positive and fluffy.

That is true of some but you are bound to get caught out eventually if all that you commit to the PC is unmitigated candy floss.

I prefer to write about what is happening in the company from day to day, good or bad.

Of course I may put my own "slant" on things but it is unintentional and is purely my own style of writing.

Once you get to know how I write then I guess you may be able to see right through the crap!

Clearly I bought the companies that I sometimes write about so I do see them as good buys and I am bound to accentuate the positive when things are going well. On the other hand if anything is going wrong, I will be one of the first to point it out.

If anything, when I have a financial interest in my subject I tend to be more critical than if I had no money invested. My passion for the subject allows me to explore the negative aspects of a company even if individuals reading it get the wrong idea and perhaps decide they wouldn't want to buy shares in a company because I may have have written something disparaging about it.

Every company goes through bad patches and I will talk about those as well as the good times, I will leave it up to broking houses, brokers and some mainstream commentators to give the market the spin.

In the end it is up to the reader and individual investor to accept or reject the screeds of comment about some companies and make up their own mind.


c Share Investor 2007

Wednesday Political Soup: Edition 3

Two Time Loser

Last week saw the Labour Party chief finger wagger Steve Maharey announce that he wasn't going to run for the 2008 Election but take up the offer by Massey University for the position of Vice Chancellor.

He was previously a student, then a lecturer at the University and after nearly 18 years in Parliament has never held a productive job in the private market sector in his life.

A perfect candidate for the Labour Party of course but both Labour and Massey University will be losers. Losers because Labour need an effective smarmy politico to push more nut case lefty social reforms and Massey are big losers because they are lumbered with a collectivist who will want to push the same sorts of "Labour Like" Socialist reforms on campus.

The only winners will be the New Zealand public who no longer have to put up with this control freak who was behind one of this countries biggest attacks on the family, the anti smacking law, that was passed earlier this year.


Say what?

Dillousional Labour MP
Darien Fenton.

From the department of silly walks and departmental office of equidistant paper clips comes news this week that Labour wants to outlaw working over 40 hours per week.

That is, not just lowering the working week and allowing workers overtime rates after that but making it illegal to work more than 40 hours!

State worshiper and freedom hater, Labour MP Darien Fenton says, "employees currently work too hard". She says the grind of long hours at the office is, "causing too much stress".

Surely individuals are big enough and ugly enough to decide whether they want to work or not eh Darien?

No, not Ms Fenton, a lifelong union "advocate" and succubus of the working man.

Quite apart from the stupidity of Fenton's idea, the chaos that it would cause employers , employees and the economy would be horrendous and would be vast and far reaching.

Employees would have to apply for state assistance to provide additional income and employers would have to find extra imaginary employees to fill the vacuum left.

It fits the Socialist argument that everyone should be equal though, and that of course extends to income, where Labour's bright idea for a 40 hr week would be yet another tool to achieve that end.

France tried the 35 hr week and it nearly sunk their economy. They are of course now trying to move away from that sort of nonsense.


Let them eat Cake


"A lie told often enough becomes truth" Lenin

Tax cuts are on the agenda again this week.

Yes Micheal "Fiscal Drag" Cullen has been making excuses again in Parliament as to why he wont give back the money he has stolen in high taxes to those that earned the money in the first place.

This quote may help out readers of this column:

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation" Lenin

Replace bourgeoisie with middle classes and you get what Cullen and Helen Clark are doing to New Zealand's new proletariat.

Nanny State worshiper Helen Clark is also a disciple of Lenin and seems intent on grinding the masses to a lifeless pulp or until most of them leave to live in Australia.

Cullen and Clark are not about to relinquish the control that they have over the hapless middle class that comes with high taxes.

Any "tax relief" in the grab for control next election year will come in the from of State sanctioned or controlled benefits, like the "working for families" welfare package and bribes that have some sort of State apparatus attached to them for absence of the State means no control over the people:"When there is state there can be no freedom, but when there is freedom there will be no state" Lenin



PC Banging


Almost the end of a Kiwi institution this Guy Fawkes Day when a multitude of restrictions come into use over the sale and restriction of fireworks.

Sure, fireworks are dangerous but they are also fun and the labeling last year by David Benson "Tennis Ball" Pope of Kiwis who like to have a little fun with fireworks as "naughty boys and girls" and if they don't behave public use of fireworks will be made illegal is more than a little over the top when one considers what Mr Pope used to do with school pupils in his days as a teacher in Tauranga.

State sanctioned hand wringing will be De rigour again this year and it is possible that State run firework displays will be sanctioned by the anointed should New Zealand have the misfortune of morons having them elected again in 2008.





c Darren Rickard 2007