Auckland Airports new directors must focus on shareholders

After yesterday's vote at Auckland International Airport [AIA.NZ] AGM a number of the original board was gone and replaced by a motley crew of local politicians, individuals with axes sharpened and ready to grind and a couple of incumbents only just scraping in.

The amount of mud slinging by the current elected directors aimed at each other in the media recently could well leave one thinking that turbulence in the board room will be de rigeur.

Individual agendas are likely to be the order of the day, with newly elected Lloyd Morrison the person with the most to gain. Through his company Infratil [IFT.NZ] and a partnership with the NZ Super Fund, Morrison owns around 9% of AIA. He also owns a majority stake in Wellington Airport and is behind the proposal to build a second airport in Auckland.

Morrison's conflict of interest is clear but his agenda isn't. He made a bid for the Airport earlier this year at a share price of less than what Dubai Aerospace was prepared to pay but said in the meeting yesterday that NZ companies had been "undersold in the past".

Auckland businessman Richard Didsbury, a director nominated and acting on behalf of Auckland City Council and John Brabazon, nominated by Manukau City Council but now stood down, are two individuals with political direction with Didsbury acting on behalf of his council to keep the airport in "New Zealand hands", whatever that means because it is currently a publicly owned company with shareholders living in many countries and Brabazon still possibly imbued with Manukau's don't sell at any price strategy.

Chairman John Maasland is going to have a difficult job getting anyone to agree on a single defined direction for the company as it goes forward because they all seem to have their own ideas as to where the company should go. Ego has raised its ugly head in the lead up to the directorship elections yesterday but it has no place in the board room.

What these individuals seem to have forgotten is that there are shareholders out there who haven't had decent representation over the last 6 months or so during a possible sale of the company. The 2 offers that were turned down outright by the board, Dubai Aerospace and the original Canada Pension Plan scenario should have been put to shareholders and then put to the vote.

Instead directors fell to local and national political interference and public opinion when the property rights of AIA shareholders should have been given preference for it is they who own the company.

The new board need to keep this uppermost in their minds every board meeting and business dinner and lunch that they have.

Disclosure: I own AIA shares


Auckland International Airport @ Share Investor

Latest Airport coverage
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?


Related Links

AIA Financial Data

• Summary
• Charts
• Dividends
• News
• Announcements
• Price History
• Related Securities

Related Amazon Reading



Mergers, Acquisitions, and Corporate Restructurings by Patrick A. Gaughan
Buy new: $47.25 / Used from: $41.94
Usually ships in 24 hours


c Share Investor 2007

Pumpkin's expansion comes at a cost

The mood at today's Pumpkin Patch Ltd [PPL.NZX] AGM seemed a little dire.

Talk of extra expenses due to expansion seemed the main theme of the day and a weaker US dollar and stronger Kiwi having a big impact on profit repatriated back to New Zealand.

The "Patch" is expecting earnings growth to come from local markets, increased interest charges, store opening costs and market development costs in the USA and UK continue to have an impact the on the company's results short to medium term.

Like Burger Fuel Worldwide Ltd [BFW.NZX] the initial costs of establishing a sustainable global brand are a necessary evil and in my opinion will increase before they start to decline. If you are invested in Pumpkin Patch to make a buck short term unfortunately the big bucks for this investment are more likely to be realised long term.


A 3,200 ft² shop at 77 Clarence Street, Kingston, UK
leased to Pumpkin Patch Ltd on a new 10 year lease
at a headline rental of £333,330 p.a.x.


If you unhappy with that as an investor then clearly you should have your money elsewhere.

Quite often, when establishing a brand such as this, companies make losses, so it is to the credit of the management of Pumpkin Patch that as yet this hasn't been the case.

Carefully building up a profitable Australasian business before moving to new overseas markets has put the company in a great position to use cash flow to allow them to borrow to grow their new business.

Michael Hill International Ltd [MHI.NZX] has used the same strategy in building their brand in Canada and like PPL they are still running at a loss there.

Store numbers are now at 200 and management look to add around 20 new stores this financial year, down from last years 35 stores, so associated costs should be ameliorated.

The only real threat seems to be from the currency swap from the strong Kiwi dollar if it continues long term but it is something management will have to deal with if it stays strong, perhaps make it a side issue and not give it the significance they seem to every reporting season, simply because there is nothing they can do about it.

Short to medium term though shareholders like me could be in for a bumpy ride.

The market punished the gloomy outlook by cutting the share price by 16c to NZ$2.72 on good volume.


Disc I own PPL shares in the Share Investor Portfolio




Pumpkin Patch @ Share Investor

Share Investor's Total Returns: Pumpkin Patch Ltd
Share Price Alert: Pumpkin Patch Ltd 3
Share Price Alert: Pumpkin Patch Ltd 2
Share Price Alert: Pumpkin Patch Ltd
Stock of the Week: Pumpkin Patch Ltd
VIDEO INTERVIEW: Pumpkin Patch CFO Matthew Washington
Pumpkin Patch Ltd: 2010 Full Year Profit Analysis
Pumpkin Patch Ltd move downmarket
Long Term View: Pumpkin Patch Ltd
Pumpkin Patch's North American Downsizing a Prudent move
Digging at Pumpkin's Profit
Long vs Short: Pumpkin Patch Ltd
Pumpkin Patch Buyback shows Confidence in the Future
Pumpkin Patch takes a hit
Pumpkin Patch ripe for the picking
What is Jan Cameron up to?
I'm buying
Why did you buy that Stock? [Pumpkin Patch]
Rod Duke's Pumpkin Patch gets bigger
Buyer of large piece of Pumpkin Patch a mystery
Pumpkin Patch a screaming buy
Broker downgrades of PPL lack long term vision
Pumpkin's expansion comes at a cost
Pumpkin Patch vs Burger Fuel
Pumpkin Patch profits flatten
New Zealand Retailers ring up costs not tills

Discuss PPL @ Share Investor Forum




c Share Investor 2007

Wellington March Against Electoral Finance Bill(UPDATED DETAILS)

The protest at Auckland, Sat November 17, 2007


There is a march against the Electoral Finance Bill on Wednesday 21 November 2007.
Assemble at Civic Square from 12 noon...March at 12.30PM. to Parliament.

C Political Animal : Words and Images 2007

Winston Peters Big Baubles

Winston Peters was dressed immaculately as usual, at the Electoral Finance Bill protest, Queen St Auckland New Zealand November 17, 2007.

Winston was heard to say that he is only voting for the bill because his baubles of office told him to.

When asked by a TV3 Journo what his baubles had to do with anything Peters replied, "I didn't get where I am today without large baubles".

Peters got up and addressed the crowd but finished quickly when he soon realized that there were no TV cameras trained on him and everyone was under 40 anyway, so there were no votes to be had.

When asked about the fact that the bill, if passed, would stop free speech in an Election year Peters first blamed the journalist for asking such a profound question, then said the question of free speech for the general public wasn't a problem because he spoke for all New Zealanders and knew what they wanted anyway. He added, "what was really important was that he had free speech in an election year and what is more important than that?"

Going back to the bauble question, Winston was asked where he put them for this momentous occasion because they were not at first obvious to the casual glance.

Oh, Winston curtly replied, like the mongrel of old, "Helen has them in a vice back in Parliament".

With that, his tail between his bauble less legs Winston slinked off more like a lap dog than the mongrel of yesteryear.

C Political Animal 2007