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Wednesday, November 10, 2010

Sky City Entertainment Group Ltd: Christchurch Casino purchase would fall short of company investment criteria

An update at the bottom of this post, originally made yesterday, confirms a bid was made by SKC and rejected by Skyline.

A whisper out yesterday that Sky City Entertainment Group Ltd [SKC.NZX] looks set to buy up the half share in the Christchurch Casino they don't already own isn't news to me.

In a June 15 interview with SKC CEO Nigel Morrison he indicated that the company was interested in Australian casino assets should they fit their investment criteria and purchase price and he indicated the company had access to just over NZ $1 billion for any acquisition opportunities should they arise.

The Christchurch Casino was purchased by SKC in June 2004, off Aspinall (NZ) Limited, which held a 40.5% shareholding in Christchurch Casinos Limited. The purchase price was NZ$93.75 million and in October 2010 SKC bought an 8.6 % stake held by Invercargill businessman Louis Crimp's Southern Equities, to take their holding to near 50%. In 2008 SKC bought a 5.2% stake off their then business partner the Crowne Plaza Hotel, taking their ownership interest in Christchurch Casino to 45.7%. With the 8.6% stake then SKC control the company with a 54.3% stake.

The cost of the 8.6% stake is likely to be around the $20 million mark if the rumoured purchase price of $100-110 million for the remaining 47.5% stake in the Christchurch Casino is accurate (it says 50% in the article but this is incorrect) and by the same rationale the 5.2% stake would be worth around $14 million.

This puts the purchase value of first 54.3% share of the combined stake of Southern Equities and Aspinall at around $128 million, so the rumoured $120 million max for the remaining 47.5% stake that Skyline Enterprises [SKYLINE] holds looks good value by comparison.

Sky City management have a set investment criteria when assessing an asset purchase or business. It must return a net income on investment of at least 15% before shareholder moola is plunked down on the table.

Would the Christchurch Casino purchase meet that criteria?

Editda for FY 2010 for Christchurch was $6.89 million for their at the time 45.7% stake so with a full 100% stake the Editda would be around $15 million. Take out a 35% cut for income and other taxes and expenses and the Net Profit for a 100% stake is around $10 million.

With a combined estimated purchased price for the whole casino at around $250 million a $10 million net profit is a 4% net return on the purchase price.

Some of my figures are of course ball-park guesstimates based on some raw available data but I think they are roughly in the pitch.

My question to Nigel would be, if you are buying the rest of the Christchurch Casino, why are you not sticking to your stated investment criteria?

Disclosure: I own SKC shares in the Share Investor Portfolio

UPDATE - 10/11/10

SKYCITY is aware that there has been discussion and uncertainty as to whether it has made a proposal to Skyline Enterprises to acquire the 50% interest in Christchurch Casino which SKYCITY does not hold.

SKYCITY wishes to confirm that it has advised Skyline Enterprises of a cash offer that it is willing to make for its interest in Christchurch Casino.

The Board of Skyline Enterprises has rejected SKYCITY's approach.

Allan Hubbard Saga: Going Feral - Part 2

Every good saga deserves a sequel, Star Wars, Indiana Jones, The Godfather, you get the idea.

Well this is the sequel to yesterdays first installment Paul Carruthers Goes Feral...Again.

Yesterday I was the main character who was taking moola from some mysterious benefactor to write my opinions on the Allan Hubbard Saga. Today though in Going Feral - Part 2, along with the payola implications are stories that I am a terrorist out to get my prey and there is a mysterious Russian after me.

I cant wait for part 3, Going Feral: The Wrath of Carruthers?

It is not a full moon, as far as I know, and neither is it a date with 3 sixes in it but I received an interesting reply this morning to a facebook exchange on an Allan Hubbard supporters page from one of the main ring leaders of the support group, Michelle Helliwell. She looks to be Paul Carruthers - the head spokesman for Allan Hubbard - right hand woman and seems to be taking her lead from him in terms of his feral like public relations style.

Of course little of what Michelle says below is even moderately close to any truth and some of it is indeed more than slightly paranoid, threatening and even a little creepy.

I mean, Russians under the bed somewhere ready to make a move on me.? Well, it would be an exciting escape from changing nappies on my 15 month old but I will stick to the crap from an infant rather than that hurled at me from a big grownup thanks very much mam.

On Allan Hubbard and his fate, there is a 5th Grant Thornton report due out at the end of November related to the statutory management of multiple failed Hubbard investment vehicles and a Serious Fraud investigation into the collapsed South Canterbury Finance, that lost almost $2 billion and was bailed out by the taxpayer.

The SFO investigation will be a long one as paperwork and crucial records are either missing or were not there from the get go and the complicated related inter-party lending on top of this makes for a mess only equaled by Mr Hubbard's fraudulent behavior.

We should see some information dribble out from the SFO case before Christmas.

Stay tuned!

Michelle Helliwell

It has come to our attention that you are responsible for the hateful Allan Hubbard page. You are a toxic terrorist on the support pages... and you are not welcome. Please go away.

On a positive note, I will thank you for making it so ob...vious internationally how much you hate Allan Hubbard (for no good reason other than Darren Rickard being on 'you know who' payroll). The battle between 'good' and 'evil' is becoming increasingly obvious.

Your attempts to slash Allans credibility in NZ has drawn attention from thousands that know Allan Hubbard internationally and you have made it so obvious how abhorrent you are by your bile.

Your attacks against Allan Hubbard are, and always have been, unjustifiably vicious. Your refusal to show your face in person is cowardly. You rip up the reputation of a man who doesn't own a computer on the internet... not very brave!

Allan Hubbard is incapable of dishonesty or fraud like no other person you have EVER met. Only an idiot would say otherwise. Your posts are imagination. Nearly all respect him and most love him.

By the way, I was asked about you in Auckland last weekend Darren. You have made a most unpopular impression on a certain Russian. We all suggest you voluntarily leave this page.

God bless, and goodbye.

Michelle Helliwell

Michelle, if you could give me Allan's contact details, I would only be too glad to let him have his say right here on this blog. It is an open invitation with no restrictions on what he wants to say.

A question and answer session would give him a right of reply to some of the things I and others have been writing about him.

Monday, November 8, 2010

From Xero to Hero?

In the last 3 weeks the stock price of Xero Ltd [XRO.NZX] (see one month chart above) has outstripped the rise in the NZX by 18% or 1000% more than the 2% rise on the NZX50 index (see chart below).

The stock price rose sharply after news on October 22 that an influential investor bought a large stake in the company but came back from that rise and evened out at the beginning of November.

Since then though the stock has risen from $1.65 to rise 15c to $1.80 at time of writing or just below 10%. This is an all-time high.

There has been nothing significant to report on developments over company progress so it looks like this is a case of the market getting carried away with itself.

Can the phantom Xero poster who keeps teasing me stop it please.

Xero @ Share Investor

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Allan Hubbard Saga: Paul Carruthers Goes Feral... Again

Head of the Allan Hubbard Supporters Group, Paul Carruthers, has been busy sending out emails about me to his loyal followers. Of course he is entitled to do that, I have been giving his hero Allan Hubbard a bit of shtick over his shell games with other people's moola so he will have strong opinions about me. Bring it on I say but at least be honest and attack the message rather than the messenger.

Paul's Email, not publicly released, leaked to me by a fan of mine:

Update for investors & supporters - the lies just keep getting bigger.....

Hello everyone,

As some of you know, Allan's autobiography is hitting the bookstores this week.

Darren Rickard - Allan's self-appointed public executioner, has referred to it in his latest call for his version of Sharia law to apply to Allan and his supporters.

His article can be viewed here: http://shareinvestornz.blogspot.com/2010/11/allan-hubbard-biography.html

As you can see - he has started by trying to convince people that Allan's supporters somehow managed to convince Random House and an author in the United States (Virginia Green) to write this book quickly since 20th June.

It was pointed out to me last night that Darren Rickard is being paid to drum up this kind of rubbish, but either way, it has to be one of the more desperate attempts to twist the facts to suit his 'story' that I have seen him come up with yet.

Sadly, the fact that Darren Rickard is allowed into the community is a consequence of the government's cuts to mental health funding.

Regards,

Paul Carruthers.
Stand by Hubbard
Support Team

My reply to Paul & his supporters:

I know most of his supporters read what I have to say so lets just get things straight.

1: The Book, tentatively titled, Allan Hubbard: The Life & Times of a Kiwi Legend, By Virginia Green, which you can buy from me here, (As a taxpayer I have to get my money back somehow and how delicious it will be to do that by selling this book) is not coming out this week, it will be released on Novemeber 15.

2: The book is a Biography, not an Autobiography. It has been written by Virginia Green and not Allan Hubbard.

3: I am not getting paid for this but I will be getting a free copy of the book to review from publisher Random House, so that is a clear lie but Mr Carruthers has a history of being adept at lying. These are merely my opinions based on the facts as I see them.

4: I have had minor mental health problems in the distant past, as many of us have, and I will let readers decide if I am mentally impaired or otherwise. I know some interesting things about Mr Carruther's personal life but I do not think it is my place to divulge them here or relevant to do so.

5: I never intimated the whole book was rushed but the last 2 chapters have been because they include the whole saga over Mr Hubbard's collapsed business empire. This is one reason why the book has been delayed for 10 days.

6: Sharia Law I would normally be disdainful of but the punishment for lying is the cutting out of the tongue but clearly Mr Carruthers still has his fingers so cant be stopped from writing rubbish like the above but the former nonetheless is still worth considering.

Should I have ignored this? Probably, but you Hubbard supporters and my dear readers need to know where this individual is coming from.

Cheers Deepthroat, Darren

Share Investor

Wednesday, November 10, 2010

Sky City Entertainment Group Ltd: Christchurch Casino purchase would fall short of company investment criteria

Allan Hubbard Saga: Going Feral - Part 2

Monday, November 8, 2010

From Xero to Hero?

Allan Hubbard Saga: Paul Carruthers Goes Feral... Again

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