Share Investor

Thursday, November 11, 2010

Xero Ltd: 2011 HY Loss looking promising

Xero Ltd [XRO.NZX] managed to surprise the market in general today in its 2011 HY profit release, with good numbers, in terms of revenue and customer numbers. The company had 27,000 paying business customers with revenue of $3.7m and a loss of $4.7m - an increase of 24% on the comparable 2009 period.

Xero management say that they expect this loss to be a peak and that they are on track to achieve a net profit for the same period in 2012.

They indicate that business costs have started to decrease as customer numbers increase - indicating economies of scale - and that their cost structure is competitive with their competition and their product offering outstrips that of the incumbents in the sector that Xero operates in.

In short Rod Drury and his board appear very bullish about company prospects now and for the rest of 2011 and of course that profit indication for the first half of 2012 must have current investors rubbing their hands with glee.

The share price has put on over 30% since October 21, pre today's announcement and today is up by 5.5% to trade at $1.92 slightly before close of play on the NZX.

Xero @ Share Investor

From Xero to Hero?
Stock of the Day: Xero Ltd
Rod Drury ready for the long-haul with Xero
Share Investor Interview: Xero's Rod Drury
Xero Ltd: Download full Company Analysis
Rod Drury on Xero and Growing Business
Xero set for surprise to the Market?
Love Xero?
Share Investor's 2010 Stock Picks
Stock of the Week: Xero Ltd

Discuss Xero @ Share Investor Forum
Download Xero Company Reports

Recommended Fishpond Reading

Buy The Intelligent Investor & more @ Fishpond.co.nz

c Share Investor 2010

Whats in a Name? ING changes to OnePath to Escape Dubious Past

Interesting the name change from the old ING financial services company to OnePath Ltd has come under the radar of most:

Australia & New Zealand Banking Group, the country's biggest lender, rose 0.2% to $30.55 after it said it was bringing the old ING New Zealand Ltd unit in-house a year after the Australian parent bank bought the remaining 51% of the trans-Tasman funds manager it didn't own.

OnePath Ltd, the new name for the ING unit, has been rolled into the bank's ANZ Wealth group, centralising the lender's insurance, funds management, private banking and investment arms under one umbrella.

As part of the deal, Helen Troup, who headed up the former ING units will leave the business after two years at the top. ANZ's John Body will take charge of the merged unit from next week.
TVNZ, Nov 9 2010

The name change happened back in August and I was reminded of it again yesterday when I saw their glossy new TV ad.

We must be reminded though that ING/ANZ investors were duped into buying into highly risky funds after being told by their teller at ANZ, their investment advisers or ING directly that they were getting low risk investments, and many investors in funds of the formerly named ING have lost millions as a result of that poor investment advice.

Changing its name from ING to OnePath Ltd doesn't change anything material. The same people - bar a bit of surface shuffling of management - are still there and their financial services training, if they have had any at all, is still sadly wanting. By implication you will get the same sort of poor advice from OnePath that you have been getting from ING.

All the glossy TV advertising and media PR will not hide the fact that 10s of millions of dollars of investor money has been lost and ANZ/ING/OnePath still refuse to admit fault and recompense customers for their incompetence.

Restitution should be made before "moving on" by changing its name and hoping the public is going to forget the past.

Unfortunately I think many will be sucked in, again.

Let this be a reminder.

ING/ANZ scam @ Share Investor

ING/ANZ Deadline not necessarily the end
ING & ANZ duped "investors" can take their own action
Scam Watch: Helpful Investor Tools

Discuss this Topic @ Share Investor Forum

Related Links

Citizens Advice Bureau
Disputes Tribunal
Fair Trading Act

c Share Investor 2010

Allan Hubbard Saga: Going Feral - Part 3, The Final Cut

Well, if you have following the sideshow to the Allan Hubbard Saga as a whole, the collapse of Paul Carruthers, the main supporter of Allan Hubbard, into a heap of his own paranoid delusional bile, we seem to have wrapped up the trilogy with news out this morning that Allan Hubbard has distanced himself from Paul and his support activities:

Paul Carruthers, a traveling salesman and the spokesman for the group Stand By Hubbard, has been outspoken in his defence of Mr Hubbard...

Mr Carruthers has frequently commented online that Mr Hubbard's financial downfall was the result of a government and media conspiracy.
Mr Hubbard has said while Mr Carruthers rings him "occasionally", he was not authorised by him to be his spokesman.
"He does have some odd views.
"He is doing this on his own account. He is not an investor; he is just someone that feels strongly about what has happened."
Mr Carruthers is also one of half a dozen regular commenters on the Leave Allan Hubbard Alone Facebook group.
"I said they rolled Allan to make way for the new Heartland Bank. History will prove me right," Mr Carruthers posted on Facebook on Sunday. Timaru Herald 11/11/10
Yes, he does have some "odd views" and clearly for the object of Paul's desire to come out and distance himself so forthrightly means Mr Carruthers needs to step down from his position and let a more moderate and capable person speak for Hubbard. At least get permission from the man to speak on his behalf.

Allan Hubbard can clearly speak for himself and it is best that the public get his side of the story directly from him rather than filtered though an individual with a conspiracy theory at the centre of his argument.

With that in mind, my offer to interview Allan is an open ended one and his rational supporters who are reading this should contact me at shareinvestornz@gmail.com if they want to put me in contact with the man and or let him know I would love it if he could speak to his supporters directly without the distractions from Mr Carruthers.

Related Share Investor Reading
Full SFO Statement on SCF Fraud Investigation
Download Grant Thornton Report 1
Download Grant Thornton Report 2
Download Grant Thornton Report 3
Download Grant Thornton Report 4

Join the Put Allan Hubbard Away Facebook Group

Allan Hubbard Saga: Going Feral - Part 2
Allan Hubbard Saga: Paul Carruthers Goes Feral... Again
Allan Hubbard: The Biography
Allan Hubbard Saga: On Forged Signatures and Uncharitable Trusts
Allan Hubbard Saga: Evidence of Fraud now Clear
Allan Hubbard Saga: NBR VS the SFO
Allan Hubbard Saga: South Canterbury Finance to be investigated by the SFO
Allan Hubbard Saga: Third Grant Thornton Report
Allan Hubbard Saga: Will He Walk?
Allan Hubbard Saga: No Longer Bothered by Botherway
Allan Hubbard Saga: 60 Minutes Interview, Sept 23 2010
Allan Hubbard Saga: Supporters head to the exit door
Allan Hubbard Saga: Threats & the Mysterious PWC Report
Allan Hubbard Supporters: Conflict of Interest
VW Veneer reveals BMW heart
VIDEO: Jenni McManus Explains Allan Hubbard Collapse
Allan Hubbard Statement on SCF Receivership
VIDEO: Sandy Maier - full news conference on SCF Receivership
Market Alert: South Canterbury Finance to be placed in Receivership
Allan Hubbard: Ignorant Supporters Blissfully Unaware
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report 1: Allan Hubbard's Aorangi Securities
Bothered by Simon Botherway

New From Fishpond.co.nz

c Share Investor 2010

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.

Share Investor

Thursday, November 11, 2010

Xero Ltd: 2011 HY Loss looking promising

Whats in a Name? ING changes to OnePath to Escape Dubious Past

Allan Hubbard Saga: Going Feral - Part 3, The Final Cut

Wednesday, November 10, 2010

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

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