Long Term View: The Warehouse 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.

The Warehouse Group Ltd [WHS.NZ] has been very good to its shareholders in terms of returns since its IPO in October 1994 at $2.50 and its subsequent listing in November of that year. A 1:5 bonus share issue in 1995 and a 1:1 in 2000, plus $NZ 6.00 (approx, adjusted for the bonus issues) in net dividends (see chart above) paid and tax credits at an average of 30% , WHS gives a slightly more than 500% return (see chart below for the share price percentage gain against the average of all NZX indexes) over the 16 year listing, an approximate annual net return of 30%.

This is approximately a 220% better return when compared to the average of all NZX indexes.


Disclosure: I own WHS shares in the Share Investor Portfolio.





Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
Briscoe Group Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hellaby Holdings Ltd
Metlifecare Ltd
Restaurant Brands Ltd
Sky City Entertainment Group Ltd
Telecom NZ Ltd
Telstra Corp Ltd


The Warehouse Group @ Share Investor

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Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
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The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

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Download WHS company reports

Shop online at The Warehouse


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The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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c Share Investor 2010

Securities Commission needs a clean out

The resignation of Securities Commission director David Jackson over the non disclosure of the breaking of banking covenants by Nuplex Ltd [NPX.NZ] highlights what conflicts of interest other Securities Commission Directors might have.

I agree with Mark Weldon, NZX CEO, that directors on the commission need to be full time and independent. Currently they are neither. A bit rich coming from Mark though when his own NZX Ltd [NZX.NZ] has a number of conflicts of interest in the day to day running of the exchange.

The SEC commissioners (see below) hold a number of positions on NZX listed companies that put them in direct conflict with their positions on the commission.

Simon Botherway has a directorship on Fisher & Paykel Appliances [FPA.NZ]. Annabel Cotton has interests in listed funds manager Fisher Funds and Mark Verbiest is on the Freightways Ltd [FRE.NZ] board.

Unacceptable to the average investor like myself because as a person with a financial interest in a company you can hardly be expected to regulate without bias that company as a SEC director and also do the job of director at that company with a clear conscience should anything need your regulatory hand.

Both positions are therefore compromised.

I know it is a small pool of competent individuals from which we seem to choose and we expect people with experience in the field (and that means NZX listed company investors and directors) but I think any bias needs to be a criteria that has to be exceeded and weeded out at the interview process before an SEC director is employed and that means selling those shares and resigning those directorships.

It looks likely that the SEC is going to be disbanded soon to be replaced by another market watchdog and that gives politicians the perfect opportunity for a clean out of the dross at the SEC and the appointment of a watchdog that is squeaky clean, has more clout and is able to prosecute law breakers with quick, effective and meaningful punishment.

The alternative is more of the same insider stuff that pervades stockmarket investing in New Zealand, the continued compromise of investors and the stockmarket in general and a lack of confidence in a market by current investors and more importantly those new investors who would like to buy shares but see stockmarket investing as the wild west or old boys club.


The current Members of the Commission are

Jane Diplock AO BA (Hons), LL B, DipEd (Sydney), Dip Int Law (ANU), FIPAA, FNZIM
Chairman of the Commission since September 2001.
Professional: Barrister and Solicitor of the ACT Supreme Court and High Court of Australia, Barrister of the New South Wales Supreme Court; Fellow of the Institute of Public Administration of Australia;
Chevening Fellow at London School of Economics; Chairman of the Executive Committee of IOSCO;
Member of the Financial Crisis Advisory Group; Fellow of the New Zealand Institute of Management.

David Mayhew BA LLB Hons
Commissioner for Financial Advisers.
Professional: Professional: Barrister and Solicitor of High Court of NZ, Solicitor of Supreme Court England and Wales .

Simon Botherway CFA, B Comm
Professional investor.
Directorship: Fisher and Paykel Appliances Holdings Limited.

Shelley CaveLLB
Solicitor, Auckland
Professional: Partner of Simpson Grierson specialising in corporate and securities law.

Annabel M. Cotton BMS (Accounting and Finance), ACA, CSAP
Business Consultant, Hamilton.
Professional: Consultant to companies listed in New Zealand and overseas.
Directorships: Genesis Power Limited, Kingfish Limited, Barramundi Limited, Marlin Global Limited and a number of private companies.

Keitha Dunstan PhD (QLD), M Bus (QUT), Grad Dip Mgt (UCQ), B Com (QLD), CA, FCPA
Professor, Australia.
Professional: Head of School of Business, Bond University Australia.

Elizabeth Hickey M Com(Hons), FCA, MInstD
Professional: Chartered Accountant, Auckland.
Directorships: New Zealand Institute of Chartered Accountants.

John Holland B Com, LL B
Solicitor, Christchurch.
Professional: Partner of Chapman Tripp specialising in securities and competition law and mergers and acquisitions.
Directorships: Board member of Chapman Tripp.

Neville O. Todd B Com
Company Director, Wellington.
Directorships: Kinloch Funds Management Limited and its subsidiaries. Formerly a director of Milford Asset Management and Salomon, Smith Barney New Zealand Limited, and a member of the New Zealand Stock Exchange.

Mark Verbiest LLB
Company Director, Wellington.
Professional: Consultant Simpson Grierson
Directorships: AMP Haumi Management Limited (manager of AMP NZ Office Trust); Freightways Limited, Government Superannuation Fund Authority, Southern Cross Medical Care Society, Health Trust and related entities, Aptimize Limited (Chairman).

Related

Securities Commission

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c Share Investor 2010

Long Term View: Telstra Corp 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.

Telstra Corp Ltd [TLS.NZ] has been very good to its shareholders in terms of returns since its IPO in November 1998 at $3.50(in 2 installments - see 1998 prospectus)With $NZ 5.94 cents in net dividends (see chart above) paid and tax credits at an average of 20% , TLS gives a slightly more than 300% return (see chart below for the share price percentage gain against the average of all NZX indexes) over the 12 year listing, an approximate annual net return of 25%.

This is approximately a 300% better return when compared to the average of all NZX indexes.




Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
Briscoe Group Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hellaby Holdings Ltd
Mainfreight Ltd
Metlifecare Ltd
New Zealand Refining Ltd
Port Of Tauranga Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Telecom NZ Ltd
Telstra Corp Ltd
The Warehouse Group Ltd


Telstra @ Share Investor

Download TLS Company Reports

Discuss TLS @ Share Investor Forum - Register free


Recommended Amazon Reading


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




c Share Investor 2010

Rod Drury on Xero and Growing Business

A really interesting interview today on Radio New Zealand given by Rod Drury, the founder of Xero Ltd [XRO.NZ]

Apart from the fact that he is clearly a smart cookie, entrepreneurial and is fully aware of technology and its application in the real world and a very positive person (and don't we just need that in our little negative backwater of New Zealand - such a negative thing to say Darren!) I found what he said about business in general and his own Xero to be quite revealing.

I got the impression from what he said is that Xero could be one of those companies that one builds up with the intention of flogging off to a willing buyer sometime in the future.

Rod cited a number of cases that this has happened, Trademe was one but two that really interested me were 42 Below and the upcoming listed player Ecoya.

42 Below was built up to sell and the intention is that Ecoya will probably go along the same lines.

42 Below is yet to make money but did of course for those that sold the company and Rod hinted that this is a business model that he liked. He also mentioned that Xero could break even in 2011.

I haven't heard it indicated before although I have wondered to myself as to whether Xero is a company along the same lines as the aforementioned and the founders are just waiting for some kind of large sugar-daddy like Reckon Ltd [RKN.AU] or MYOB to snap them up to remove the losses from their balance sheet.

I like businesses that grow and make money but hey that's just me, unconventional and completely off the wall.

*Please see Rod's response to this blog here - seems my impression was wrong.

**Rod is going to do a Share Investor Q & A. Please submit reader questions here.


Xero @ Share Investor

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Discuss Xero @ Share Investor Forum

Listen to Rod Drury Interview


Related Links

Xero - Corporate Website




c Share Investor 2010