Long Term View: Trustpower 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.

Trustpower Ltd [TPW.NZX] has been a n excellent investment for shareholders since its April 1994 listing* at 75c per share . With $2.29 in net dividends, 30% more in tax credits (see NZX chart above) a 2:7 share buy back in 2003 and a 2:1 share split in 2004 gives TPW a 1220% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 16 year listing of TPW an annual net return of 76.25%**.

This compares to an annual return from the average of all NZX indexes of 12.5%

* Adjust fig
** Returns exclude dividends from 1994-1998





Long Term View Series

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Air New Zealand
AMP Ltd
ANZ Banking Group Ltd
Briscoe Group Ltd
Cavalier Corporation Ltd
Comvita Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Infratil Ltd
Kirkcaldie & Stains Ltd
Kiwi Income Property Trust Ltd
Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
Methven Ltd
New Zealand Refining Ltd
New Zealand Stock Exchange Ltd
Nuplex Industries Ltd
PGG Wrightson Ltd
Port Of Tauranga Ltd
Postie Plus Group Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Skellerup Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Steel & Tube Ltd
Telecom NZ Ltd
Telstra Corp Ltd
Tourism Holdings Ltd
Turners Auctions Ltd
Turners & Growers Ltd
The Warehouse Group Ltd
Wakefield Health Ltd


Trustpower @ Share Investor

Discuss TPW @ Share Investor Forum
Download TPW Company Reports




c Share Investor 2010

Michael Hill International Ltd: 2010 Full Year Profit Analysis

Michael Hill International Ltd [MHI.NZX] delivered a strong 2010 full year profit today.

Underlying net profit of $26. 5 million was up by approx 60% on the 2009 full year profit of approx $16.5 million (excluding the one-off tax gain from 2009 for comparison to the 2010 figure) Significantly though the 2010 profit was just 0.7 million short of the 2008 full year net profit of $25.2 million.

Revenue was up 7.6% to $443,710 million on 2009 revenue of $411.999 million . Significantly half of this increase was from US stores which sales for were not included in 2009 sales figures.

Key Points

- Operating revenue of $443.331m up 7.6% on same period last year
- Same store sales 5.2% up on same period last year
- Net profit after tax of $26.509m. Last year's net profit of $66.788m included a deferred tax credit of $50.197m.
- Net debt of $45.437m at 30 June 2010
- 5 new stores opened during the twelve months and 12 closed including 8 in the US
- Final dividend of 2.5 cents per share up 66.7%


New Zealand and Australian stores did exceptionally well while Canada and the North American units continued to drag on the whole group.

Big losses were incurred in the United States while the Canadian stores increased losses from 2009.

Net debt increased by nearly $10 million to $45.4 million indicating costs involved in the North American market were still making a negative impact on the bottomline.

All important retail margins were under pressure but significantly same stores sales were up by over 5% which in this economic and retail climate is exceptional.

Management at MHI seem a little vague about the coming year for the company - just like most NZX listed companies have been over the reporting season - but what they have indicated is that they are "confident in the continued growth and profitability of the Group".

I am positive too but the reality is that 2011 is going to be just as tough as 2010 (and maybe even tougher) and their North American operations are going to continue to lose money in an otherwise solid Australasian business.

Disc I own MHI shares in the Share Investor Portfolio


Michael Hill International @ Share Investor

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Buy Toughen Up: What I've Learned About Surviving Tough Times



Toughen Up - Fishpond.co.nz


c Share Investor 2010

Financial Adviser Alert: Murray Weatherstone

The loss of money in general for people investing in finance companies that have collapsed over the last 3 years pisses me off, especially when those people have been advised by supposed experts to invest in such rubbish.

When you know people who have been put in this situation - and I think most people do - then the vitriol that I feel starts to unsettle my stomach, make my heart tighten and leaves a bad taste in the mouth.

It gets bloody personal.

I have such a case to relay to you dear reader about a "financial adviser" and friend of mine who has lost a considerable sum of his or her life savings thanks to this persons advice.

I gave this person an opportunity to redeem himself before outing him but he wanted to hide behind the privacy act.

The advisers name is Murray Weatherston from Financial Focus (NZ) Ltd.

He advised my friend who is in his/her 70s to invest in dodgy companies (and they have always been dodgy) Hanover, St Lawerence, Dominion Finance and a couple of other finance companies.

All have gone bust.

We are talking about $50,000 per finance company and my friend has lost most of it.

He even advised him/her not to sell his/her Allied Farmers Ltd [ALF.NZX] shares when Hanover was subsumed into that company and the shares were trading at about 15c. He/She would have got back $20000.00 of his/her money then but the shareholding is now worth about $3500 and ALF is likely to go belly up before year end.

I warn anyone who is looking at investing money to do their own research and if they are looking for an adviser try and get a reputable reference from a friend and do your own checking on them.

Mr Weathersone should be avoided at all costs for his track record lacks credibility. My friend is not the only person that he has given similar advice.

You have been warned.


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Discuss this topic @ Share Investor Forum







c Share Investor 2010

Mainfreight Ltd: 2011 1st quarter profit Analysis

2011 1st quarter results for Mainfreight Ltd [MFT.NZX] out yesterday were significantly higher than the comparable 2009 figures.

Excluding abnormals the result was a net profit of $6.82 million for the first three months of the 2011 financial year; an increase of 148.2% on the previous year’s result of $2.75 million (excluding abnormals the increase was 69.5%).


Key Points

* Net profit of $6.82 million for the first three months of the 2011. An increase of 148.2% on the previous year’s result of $2.75 million (excluding abnormals the increase was 69.5%).

*Revenue increased by 20.5% to $315.25 million, from $261.67 million in the comparative period last year (excluding foreign exchange, this represents an increase of 27.8%).

* With the exception of Australasia Mainfreight has experienced growth momentum for all their business operations.

* Large profit upswing for first quarter of 2011 financial year are compared to 2009 figures which were well down on 2008.


This must be put in perspective though that the comparable 2009 figure was down more than 50% on the 2008 results. Having said that the 2010 first quarter shows a nearly 20% increase in net profit on the more relevant 2008 figures.

All important revenue figures were up by 20.5% to $315.25 million, from $261.67 million in the comparative period last year (excluding foreign exchange, this represents an increase of 27.8%).

The comparable 2009 revenue figures were down 17.2% on 2008 figures (after foreign exchange adjustments) so the company has lifted revenue back to around where it was in 2008.

Much of this quarters profit rise then came from cost savings.

All their divisions; New Zealand, Australia, China and The United States showed an improvement in operating performance.

July and August management say has also continued an upward trend.

Once again the outlook for the company is cautious and management expect to see a continuation of the current upward trend with a continuation of their focus on the costs savings that have made management of their business over the last 2 years of recession one of the best on the New Zealand stock exchange.

As the global economy is in quite a fragile state, this quarter must be put in the context of the next 3 quarters for the company and then we can give a true judgement of the 2011 performance of the company.

10 out of 10.


Disc I own MFT shares in the Share Investor Portfolio 

Mainfreight @ Share Investor


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Download Mainfreight Company Reports



c Share Investor 2010