Ports of Auckland put a shot over competitor's bow

The news on Wednesday that Ports of Auckland have an interest in Port of Tauranga Ltd [POT.NZ] "container business" brings to mind this quote by Warren Buffett:

"Buy a business that an idiot can run, because sooner or latter an idiot will run it"

In this case the idiot or idiots are management at Ports of Auckland.

They fit the idiot moniker simply because they had a chance to merge with POT in 2006-07 and after much posturing by both sides, but mostly from Ports of Auckland, POA simply walked away from a possible deal because management couldn't deal with the fact that Port of Tauranga was worth more than Ports of Auckland and wouldn't budge from that stance because of petty local politics.

The Auckland port company like the look of Port of Tauranga's container facilities at Onehunga on the Manukau Harbour which is south of Ports of Auckland's main port on the Waitemata.

Unlike Auckland's big port in Auckland's CBD, POT's Onehunga container hub has scope for expansion and is in a area of high industrial growth and also close to Auckland Airport [AIA].

Port of Tauranga chief executive Mark Cairns wasn't keen on the idea of Ports of Auckland buying the Port of Tauranga container business but had this to say about a marriage between the two port companies.

"...always held the view that a full merger of Port of Tauranga and Ports of Auckland makes very good sense. That view has not changed"

Cairns is clearly right.

New Zealand is a very small market and it would make financial and logistical sense to merge the two businesses.

The capital expenses of expansion to encompass the much larger ships that shipping lines want to use would make the merger of these two ports sensible to say the least.

Port of Tauranga are in the box seat though. Their company has more geographical space for expansion at their locations and that is one reason why POA want them. The company is leaner and better managed and last but by no means least they are unencumbered by the politics that surround the ratepayer owned Ports of Auckland.

Port of Tauranga shareholders shouldn't lose all hope though and shouldn't think of selling their shares, yet.

It looks like the shots across the bow have just started, Ports of Auckland new managing director Jens Madsen says he wants to "buy POT's container business" and Port of Tauranga chief executive Mark Cairns reckons that portion of his business is "...worth substantially more than Ports of Auckland's container business".

Whatever the case it looks like this is the beginning of some sort of marriage process and it will no doubt send the POT share price in a northerly direction.

Lets hope the dropkicks at Ports of Auckland can let politics take a back seat to business acumen this time.


POT @ Share Investor

Long Term View: Port Of Tauranga Ltd
Port in a storm
Ports of Auckland put a shot over competitor's bow

Discuss POT @ Share Investor Forum





c Share Investor 2008

Condoms VS Herceptin

An appallingly bad decision by a politically correct New Zealand drug funding body, pharmac has led to the bizarre situation whereby the body is funding garbage like flavoured condoms instead of top notch life saving and life improving drugs like the anti cancer drug Herceptin and the best drugs for heart, arthritis and all sorts of other ailments.

The Labour Party and their zeal for "diversity" has reached ridiculous proportions even large a ribbed , banana flavoured condom wont cover

Pharmac's defence that the decision makes sense because their deal with the condom supplier gives more choice and therefore increases sexual health through increased usage of condoms, smacks of a stupidly that even a five year old born because dad didn't wear a condom can see through.

There is no evidence to back up increased sexual health because of condom use, in fact all good research shows the opposite:

GOVERNMENT attempts to reduce high-risk sexual behaviour among teenagers have had exactly the opposite effect, according to an authoritative new study.

Expanding contraceptive services and providing the morning-after pill free to teenagers have encouraged sexual behaviour rather than reducing it, according to economists at Nottingham University.

“The method which the Government’s teenage pregnancy strategy relies upon is almost guaranteed to produce these results. They have always promoted condom use, but have never contemplated the possibility of teaching young people abstinence.”

Timesonline.co.uk

In conjunction with a relaxed attitude by schools to to sex, including teaching students that anal sex is an acceptable alternative to typical intercourse- because pregnancy is clearly not on the cards-and Labour Government moves to make the morning after pill more widely available, Pharmac's move is another nail in the coffin for reversing the increased promiscuity that is ruining young peoples lives.

The aids foundation was canvassed before the introduction of the flavoured condoms by Pharmac and they advocated the use of the range of condoms.

Curbing pregnancy rates was another indicator for Pharmac to introduce the rainbow of coloured,ribbed and flavour rubbers. Most of us know though that flavoured condoms are used for oral sex and not intercourse so that puts Pharmac's assertions to bed, so to speak.

Instead of denying the best drugs and new drugs to New Zealanders because of "lack of funding" Helen Clark's Labour Party should be instructing Pharmac to cut back on politically correct funding of such things as pretty looking condoms.

They will be just the tip of the flavoured condom.

Related Political Animal reading

Labour will flip flop on Herceptin

c Political Animal 2008

Domino's Australia dominant in Australasia

Domino’s Pizza [DMP.AX] is the largest pizza chain in Australia, in terms of both store numbers and sales. It is also the largest franchisee for the Domino’s Pizza brand in the world.

Domino’s Pizza Australia now encompasses five countries, with more than 720 stores employing approximately 14,000 people and making more than 60 million pizzas a year.

The Domino's brand is owned by Domino's Pizza, Inc [DPZ.NYSE] a listed US company.






Domino's shares were down by 29c or 8.29% to AU$3.21 on the ASX today. Probably due to a slump in sales for the year. Profit however, was up by almost 30% compared to the previous year.


While Australian based Domino's dominate the New Zealand and Australian pizza market, it is leaving its competition in the dust.

Domino's total same-store sales grew 4.1 per cent over the last year, while its main competitor in New Zealand-Restaurant Brand's [RBD.NZ] run Pizza Hut-same store sales declined 7.1% for the 12 weeks ending 19 May 2008. That quarters total sales were $15.2 million, a decrease of 13.3% over the prior period.

As a customer one can tell the different immediately from the Domino's vs Pizza Hut experience.

Domino's generally has fast efficient friendly service, excellent pricing and a good line of pizza offerings and toppings Their pizzas and marketing are well excecuted.

It is the opposite at Pizza Hut; slow, rubbish service, unfriendly, extremely bad marketing and a disappointing menu and quality of food.

Apart from the differences above Restaurant Brands manage its pizza brand badly. I suspect much direction is from head office and the local input from sub par managers to bolster young uninterested staff to treat customers better is clearly missing.

Domino's New Zealand stores, which number 72 and will max out at 85, are franchisee run while Pizza Hut are company managed in NZ with a parent franchiser YUM! Brands Inc [YUM], based out of the US.

Having the owner running the business at store level is the important difference and another reason why Domino's will continue to kick Pizza Hut around in the coming years

The ASX-listed company yesterday announced net profit after tax for the year ending June 29 was A$11.8 million ($14.42 million), up from A$9.1 million last year.

The Australia-New Zealand market revenue for the group - which has outlets in New Zealand, Australia, France, Belgium and the Netherlands - fell from A$180.4 million to A$160.7 million.

Chief executive Don Meij said he was confident New Zealand operations would continue to perform strongly, regardless of the current recession.

"Pizza's very resilient in economic downturns. We think we're going to ride through whatever economic challenges are out there."

Domino's Australia is a well run company and a must for investors who want exposure to a listed Australasian fast food company but don't have the patience for the slack management at Restaurant Brands to get things right.

Related Share Investor reading

Restaurant Brands Pizza Hut faces further competition

The dots get the hots

Related Amazon reading

Pizza franchise operator seeks shelter of Chapter 11 bankruptcy. (Karam Enterprises Inc., Domino's Pizza franchisee) (company profile): An article from: Fairfield County Business Journal by Joan Stableford
Buy new: $5.95
Available for download now

c Share Investor 2008

Winston's $40,000,00 question

In the latest in the Winston Peter's payola scandal, a revelation made on Monday at the privileges committee hearing into Peters secret $100,000.00 donation from Owen Glenn, by Winston Peter's Lawyer Brian Henry, that he paid a $40000.00 debt owed for court costs to Tauranga MP Bob Clarkson and a subsequent statement made by Peters that he had paid the $40000 has today taken a bizarre twist.

Peters has come out this afternoon, as reported in the NBR with this statement:

"Mr Henry paid the money to ensure the bill was paid in time -- and he was later reimbursed by myself," he said in notes for a speech to members of Grey Power's Upper Hutt Branch.
"He checked his records yesterday and found this was indeed the case."

Mr Henry intended to notify the committee, which would effectively debunk claims he had broken Parliament's rules, he said.

"This issue is the last one my opponents had to go on."


This causes Peters an even bigger problem than the initial statement made by Mr Henry on Monday at the hearing, because Peters and Henry had both claimed that for 15 years Peters had a monkey no see, no hear or no listen approach to funding of Peters, and his NZ First Party. Peters claimed that this approach meant he didn't know who gave him money and in addition no bills were ever sent to Peters for legal services rendered.

Apparently records were kept of such a $40000.00 transaction, where no bills were sent and Peters paid this debt himself.

That contradicts Peters and Henry's claim made on Monday that Peters didn't know where money was coming from, where it was going to and that a distance was kept by him in financial transactions between him and his lawyer.

Just an acceptation is this case Winston, or another lie?

Mr Peters was either lying on Monday or lying today to cover up the former one.

The trouble is he has told so many fibs he probably doesn't know himself anymore.

The problem is if you live your life by constantly lying, you have to keep lying to keep the initial lie perpetuated as the perceived truth.

Winston Peters isn't as perfect as he thinks he is and he has now been nakedly caught out.

Unfortunately Both Helen Clark and John Key seem unwilling to come out and lay the political sword into his back, up to the hilt.

New Zealand voters deserve much better.


Winston Peters payola scandal @ Political Animal

Planned ignorance no defence in Peter's case
VIDEO: Winston Goes to Wonderland in Parliament
Don't let the bastard go
Dompost reels in another Peter's Payment
Winston isn't a conspiracy theorist: Yeah right!
Winston Peters lost in Wonderland
Winston Circus hangover continues
Discretion was the essential part of Vela Donation
Winston Peter's Glenn donation scandal: But wait, there is more!
Peter's hangs himself in February Paul Henry Interview
Peter's admits lying about Glenn donation
Winston's silence is telling
Labour gets tangled in Peter's lies
Leaked Glenn Email
Winston got secret donations from Owen Glenn
The Owen Glenn Story: Singing the same tune but hitting a bum note

Donations saga impacts Peters (02:00) -Related Video

c Political Animal 2008