Wednesday, June 11, 2008

Sky City Assets: Buy, sell and hold

News out today that Sky City Entertainment[SKC.NZ] has sold a share in a the Christchurch Crowne Plaza Hotel and in turn received a larger stake in the Christchurch Casino that it owns with Skyline Enterprizes and cash in hand leaves this shareholder a happy man.

It adds to the news yesterday that the casino company will develop a "luxury resort" on the Little Mindal land it owns in front of the Darwin Casino.

The larger stake in the CHCH Casino takes the Sky City holding from 41% to a 46% holding.

The hotel was sold for $61.5 million, so one might presume that the Sky City share of the booty was $30.75 million. There was no breakdown of how much the extra 5% stake in the South Island Casino cost and therefore how much cash was left to disperse to debt pay downs or even a dividend to shareholders.

Shareholders in Sky City are entitled to know what the 5% cost.

The cash left over is more likely to be going towards subsidising Sky City Cinemas, a division that was on the block for a year but failed to sell as of last Friday because the buyer "failed to get financing", according to the Sky City Press release.

Any credible buyer interested in the cinema would only have to fork out about NZ$60 million and they would have known that was around the asking price when Sky City wrote down the assets of the division last year.

It is more likely that the deal fell through because the assets wouldn't have even got near the $60 million price tag rather than blaming the credit crunch for failing to sell a loss making business.

I'm naturally annoyed at management for not disposing with the cinemas, even for less than the asking price. It is going to be a continuing drain on capital expenditure and is never going to make any sort of decent return on assets or capital.

Cinemas as a business are on a par with the airline industry when it comes to losing money and track records for both show a history of company collapses, huge expense for owners and continued disappointment.

Nigel Morrison needs a boot in the head for that one.

Sky City @ Share Investor

Sky City Entertainment 2009 Interim Profit Review

Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
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Sky City Management: Blind, deaf and numb
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Opposition to takeover
Premium for control
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Setting the record straight
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Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

Discuss this topic @ Shareinvestor.net.nz

Related Links

Sky City Financial Data


Related Amazon Reading

Double or Nothing: How Two Friends Risked It All to Buy One of Las Vegas' Legendary Casinos

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c Share Investor 2008



JOHN BOSCAWEN: Freedom of Speech Trust Newsletter


Newsletter No.2 – Electoral Finance Act

By John Boscawen – Freedom of Speech Trust


10 June 2008


The Electoral Finance Act was passed by Parliament in December last year despite the objection of our Human Rights Commission, the New Zealand Law Society and all our major newspapers. The Act imposes restrictions on free speech far beyond what both the Human Rights Commission and the Electoral Commission considered reasonable. The Freedom of Speech Trust has been established to campaign for the Act’s repeal. Please feel free to circulate this newsletter to your friends and associates.

A tribute to Graham Stairmand

It is with great regret and sympathy that I acknowledge the very recent death of Graham Stairmand, President of the Grey Power Federation.

Graham was a strong opponent of the Electoral Finance Bill and he joined Garth McVicar, Rodney Hide and myself in a legal action against the Bill late last year. (See below).

His work for senior citizens was acknowledged by the presence at his funeral of the Minister for Senior Citizens Hon. Ruth Dyson, National’s spokesperson for Senior Citizens Sandra Goudie and MPs Peter Brown and Nicky Wagner.

I acknowledge his opposition to the Act, the support he gave me and the courage he showed in joining the legal challenge. I extend my deepest sympathy to his family.

Bill of Rights challenge against the Attorney General returned to High Court – 15 May

In the absence of a written constitution one of the most important protections we have to our democracy and to our rights to free speech is the New Zealand Bill of Rights Act 1990. This Act requires the Attorney General to notify parliament of any bill that comes before the House that is “inconsistent” with the Act.


Almost everyone (and certainly the Human Rights Commission and the New Zealand Law Society) agrees that the Electoral Finance Bill was inconsistent with the Bill of Rights Act when it was introduced last July, yet the Attorney General failed to notify the inconsistency. This is hard to comprehend given the Bill required every New Zealander to first sign a statutory declaration before they spent a single dollar expressing any political opinion in election year. Incredibly the Crown Law Office thought this was acceptable and not inconsistent with the Bill of Rights.


Late last year I, along with Garth McVicar, the late Graham Stairmand and Rodney Hide commenced legal proceedings in the High Court in Wellington seeking a declaration that the Attorney General failed in his duty. We sought urgency.

The Crown opposed urgency and sought to have the proceedings struck out – so, in the event they were successful we would have been denied the chance to argue our case.

Earlier this year we updated our Statement of Claim to argue that the Electoral Finance Act, (as passed) was also inconsistent with the Bill of Rights.


The strike out application was heard in a full day open court hearing at the Wellington High Court on 15 May. Justice Clifford reserved his decision.

Tauranga Protest – 3 May

On Saturday 3 May between 600-800 people marched through downtown Tauranga opposing the Electoral Finance Act. The protest march was an outstanding success and was the largest protest seen in Tauranga for several years – certainly since the 1981 Springbok Tour, if not before.


The protest was widely covered in the Bay of Plenty with extensive coverage in the Bay of Plenty Times – which featured it as its main front page story on the Thursday before the march.


For their coverage, see
http://www.bayofplentytimes.co.nz/storydisplay.cfm?storyID=3771539&msg=email link.


TV3 also covered a full report of the protest on their main 6.00pm news bulletin.

Other Protest Actions

In addition to the Tauranga protest we have organized two recent protests. In the first, 35 opponents of the Act protested outside the Rendezvous Hotel in Auckland (formerly the Carlton Hotel) on 23 May where the Prime Minister was addressing a post Budget luncheon. Our placards called for a repeal of the Act and a restoration of free speech.


In the second protest, a small group distributed leaflets to the attendees of the Green Party Conference in Auckland over Queen’s Birthday weekend. We highlighted the fact that the Green Party was proposing a closer working relationship with the Maori Party. The irony was that the Maori Party had been a strong opponent of the Electoral Finance Act. In his speech to parliament on the third final reading of the Bill, Maori Party MP Hone Harawira said:

‘Yes folks, money talks, but nothing talks quite like the truth and the truth about this bill is that it’s nothing but an arrogant dismissal by this Labour-led government to deny the citizens of Aotearoa New Zealand the right to participate in one of the fundamental rights of any so-called democratic society: How you elect your government……. Money is not what drives people to vote. It is the truth’.

Our message to the Green Party MPs and their supporters was to show some leadership, acknowledge that parliament did not fully understand what it was doing when the Act was passed and move to repeal it.


More protests, particularly in provincial areas, are planned for later this year.


Uncertainty of our Electoral Law and the likelihood on legal challenges post election day

When I first began my campaign of opposition to the Electoral Finance Bill my focus was the impact of the Act on free speech and the right of ordinary citizens to participate in the electoral process. The recent ruling by the High Court that the Engineering, Printing Manufacturing Union people may be prohibited from registering as a third party because it is involved with the management of the Labour Party is just one example of the restrictions the Act imposed.


However an equally important issue has emerged over recent months and that is the application of the Act to the MPs, themselves. This is well illustrated by the Chief Electoral Officer ruling that Trevor Mallard’s car, painted red and emblazoned with his name and Labour Party logos is an “election advertisement”. While the trivial issue may be the car failed to carry the authorization of Trevor Mallard’s financial agent, the much more important issue is that the cost of his election advertisement must be included in his $20,000 expense allowance for his election campaign in the Hutt electorate.


The problem he faces, is how much and what cost does he include? Certainly the cost of the paintwork but what about the running costs of the car? - a form of depreciation allowance?

Trevor Mallard is now faced with the very real prospect of having to run a very conservative campaign, and spending well within his $20,000 allowance. The alternative is to spend close to the $20,000 allowance, and to run the risk, assuming he retains his electoral seat, of being challenged in court post election day on the ground he did not fully return the full cost of his car’s advertising. This highlights the point made by Professor Bill Hodge speaking at our Auckland protest in March that the Act is uncertain and is likely to lead to a number of legal challenges post election day with the final result of the election not known until well into next year.


Continuing Campaign

If you are concerned about the implications of the Electoral Finance Act on our democracy and on free speech I would be grateful for any support you can give to bring about repeal of the Act. In the first instance you can forward this email to your friends and family.


Financial contributions can be made to Trust at PO Box 42-267, Orakei, Auckland, or direct to the Trust’s bank account 12-3252-0039335-00.

Regards


John Boscawen

Trustee – Freedom of Speech Trust

Email: john@boscawen.co.nz



Political Animal Electoral Finance Act coverage

The purpose of the Bill is clear

c Political Animal 2008

Cartoon c Stan Blanch 2008


New grab by Labour at taxpayer funds comes with fakes included

The latest grab at taxpayer funds to prop up the coffers of the Labour Party election fund is reminiscent of the NZ $824,000.00 of taxpayer dollars stolen to buy the 2005 election by funding an illegal pledge card.

The juicy irony this time though is that the sanctimonious fools at Labour passed the Electoral Finance Act in 2007 to make this sort of sneaky rorting of taxpayer funds illegal although now this pack of thieves wont have to pay us back, taking a lead from Winston Peters when he refused to repay the $158,000,00 of taxpayer funds he stole to finance his 2005 election.

Political Animal Electoral Finance Act coverage



The 2008 breach involves an expensive foldout junk mail booklet that will be dropped in budget stretched households all across the nation bestoling their meagre personal tax cuts and large welfare handouts to the undeserved listed in May's 2008 Budget.

This is not the first time Labour have broken their own law, being the first to break it at the beginning of 2008 and now having several cases before the police and Electoral Commission for subsequent law breaking.

It goes to show, that Labour continues to have little concern with the conventions of democracy, law, respect for public money and full disclosure when it comes to electoral funding.

Lessons from Owengate from earlier this year were not learnt. Donations of money were secretly made from Owen Glenn to Labour Party coffers, again breaching the spirit of the Electoral Finance Act and other electoral laws.

The real kicker is that the photo used on the front cover was of a fake American Family, and taken from stock photos from a website. The photo has also been used by Rudd's Labour Party in Australia to spiel their propaganda.

Labour Party President Mike Smith is behind this latest scandal and he said as much when he last breached the EFA that he would do it again, and he has.

The fact that a fake family was used to advertise Labour Party budget policies, sneakily using taxpayer funds to do so, shows voters,especially Labour Party ones, that the content contained in them is just as one dimensional, and lacking in morals as the method of letting the voting public know.

Lesson not learnt from 1999 when Helen Clark signed her name to a picture she said she painted.

Pass me the bucket.


Related Political Animal reading

Owen Glenn: Snouts in the trough
The Owen Glenn story: Singing the same tune but hitting a bum note
Labour Party Election funding murky at best
Labour first to break Electoral Finance Act

c Political Animal 2008

Tuesday, June 10, 2008

Good opportunities exist for buying in current stockmarket

Everyday my portfolio takes another downwards trajectory. How about yours? Economic conditions in New Zealand and globally don't look good for the short to medium term.

There are more losses to hit markets in relation to the Sub Prime fallout, that initially revealed itself almost a year ago and the losses that have been crystalized in balance sheets around the world have had the consequent affect on credit markets, economic confidence and outlook. Future sub-prime losses will clearly continue this trend.

The added pressure of spiraling oil, food prices and every other good and service has left consumers pockets closed for business and those businesses are going to suffer as we all continue to prune costs.

Share prices have been reflecting this for more than six months but now we are set for more stockmarket revaluations as the economic gloom prepares to make itself at home.

Never fear though!

If like me you have been prepared for this you would have been squirreling away money while you could in anticipation of harder times then great. Some of our listed companies have hopefully been doing the same, unlike our present administration, and this is going to put you and them in good stead for a slow down.

It looks very likely that our stockmarket will be breaching the 3000 mark sometime this year and with that comes opportunity for buying.

The biggest opportunity for good wealth creation in the long term I would think would be US dollar sensitive stocks, all of which have been hammered over the last year because of the relative weakness of the US dollar.

It looks like the tide has turned for our dollar, with mutterings from Allan Bollard of interest rate cuts later in 2008 and the Fed talking up US interest rates.

Rakon[RAK.NZ], Fisher and Paykel Healthcare Ltd [FPH.NZ], Mainfreight Ltd[MFT.NZ], Sanford Ltd[SAN.NZ], Delegats Ltd[DLG.NZ], Pumpkin Patch Ltd[PPL.NZ] and Fletcher Building Ltd[FBU.NZ] will all benefit from the falling exchange rate while many of these companies are ready benefiting from the lower NZ/AU dollar cross, joined by the likes of Sky City Entertainment Group Ltd[SKC.NZ], Telecom NZ Ltd[TEL.NZ] and Michael Hill International[MHI.NZ] which have substantial operations in the West Island, Australia.

The biggest star that will benefit from this, which I conveniently hold, is Fisher and Paykel Health.

The company has profit sensitivity of approximately NZ$2.5 million, per one percentage point change in the value of the NZ dollar and as our exchange rate is off its recent high of .82c and is currently less than .76c then there is significant upside as the dollar retreats towards its historical levels of below 60c to the US dollar.

Its sales are also increasing strongly, so its upside in the medium to long term looks very good.

Apart from the opportunities related to a falling NZ currency there are also some very good companies ripe for bargain hunters flush with cash from better days and investors would be mad not to do some spending instead of getting those brokers and financial advisors wealthier by selling stocks and getting into gold, commodities, fixed interest, cash or some other over valued asset class.

Disc I own MFT, FPH, SKC, MHI, PPL, and FBU shares in the Share Investor Portfolio


Related Share Investor Reading

"Mr Market" gets his groove on
A sensible approach to global market volatility
Global Market's dropping and your portfolio

From Fishpond.co.nz - 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 2008