Overview: The exit of Chevron from the NZ fuel market was flagged last week when the company sold their holding in the New Zealand Refining in a block sale to institutions and broking firms. This complete exit was confirmed when Z Energy announced an agreement to purchase Chevron’s downstream fuel business, principally the Caltex brand and the associated assets. Pros: The $785 million acquisition will be earning accretive from the get go, with earnings per share expected to rise by...
Overview: SkyCity is rolling the dice with approximately $1 billion of investment over the next few years. This includes the controversial New Zealand International Convention Centre (NZICC), the associated hotel and carpark, and a major redevelopment of their Adelaide property. The Company has also allowed $50 million for “internal building works and the purchase of additional gaming product.” Pros: The additional gaming product noted includes 230 gaming machines and 40 tables which were part of the deal made with the...
Introduction The Health and Safety Reform Bill (The Bill) is expected to come into power in the second half of this year (2015). The Bill is a result of the Pike River disaster (2010) and is the “biggest change to health and safety in 20 years” Hon. Simon Bridges (MP). Mr Bridges claims in his press release “Good health and safety is good for business. It is an investment in improved productivity.” In this essay I will critically analyse the topic...
CHINA: PAST, PRESENT & FUTURE by Jeremy Sullivan The rapid progression of the Chinese economy over the last 30 years has turned the nation into a world superpower, with a population of 1.39bn (2013) and GDP of 8.2tn USD (2012) which is still growing at a rate of 7.7% p.a. (2014). The future of China will have ramifications for not only wider Asia; but the world economy as a whole. In this essay I will firstly look at the rise of...
Make hay while the sun shines, is a saying well known to many New Zealanders; unfortunately the dairy industry is caught in a supply and demand storm. The Dairy industry has been suffering from depressed milk prices since the boom of 2013/2014 when a kg of milk solids (kgMS) was selling for $8.40, with a 10 cent dividend. There are a number of factors that have led to the fall in dairy prices; these include political events, geographic factors, and...
Written by Jeremy Sullivan for the University of Canterbury Executive Development Programme. Jeremy Sullivan|Free Ph: 0800 10 40 50|DDI: (03) 353 0797| Investment Advisor (AFA) | BCom. Finance. Mgmt. NZX Dip| Level 1, 83 Victoria Street, CBD, Christchurch, 8013 E-mail: jeremy@hhg.co.nz Unless we collectively focus more capital on disruptive innovation, efficiency gains will lead to higher unemployment and stagnant or negative economic growth (Christensen, 2013). In this essay I will be addressing the topic question "What is technology disruption and...
Investors are punishing Fonterra for a disaappointing balance sheet and dividend payments to farmers, a Canterbury-based share advisor says. The value of Fonterra's listed investment units has dropped up to 20 per cent since the co-op's interim result two months ago. The sharemarket "wasn't too happy" with Fonterra's interim financial result on March 25 and the feeling had contributed to the unit price in the Fonterra Shareholders Fund falling from about $6 per unit to $4.80, Hamilton Hindin Green authorised...
Overview: How does an 18.4 percent per annum after tax compound return sound? Most would be pretty pleased to achieve that on any given year, however early Infratil investors have enjoyed this compounded annual return over the company’s 21 year existence. This makes Infratil the best performer on the NZX over this period. Pros: This strong performance can only be achieved through astute investing. Infratil seem to have this down to a fine art, having recently sold their Australian energy...
GrainCorp released their 2015 half year result today with a disappointing performance. GrainCorp is Australia's largest agribusiness, operating a range of integrated businesses: Storage & Logistics, Marketing, Malt and Oils. Operations span across Australia, NZ, USA, Canada, Singapore, China, the UK and Europe, providing an increasingly important service across the food supply chain. GrainCorp’s strategy is focused on 3 principal areas: - Three core grains: Wheat, barley and canola; described as “drier climate” grains. - Three integrated grain activities: Storage...
Overview: If there are two certainties in NZ at the moment, it is that Auckland house prices will dominate the headlines and our population will get older. Metlifecare has unique exposure to both these certainties with approximately 60 percent of their retirement facilities in the Auckland region. Pros: In April, Metlifecare acquired another Auckland development site, a 5.5 hectare property within Manukau Golf Course in Manurewa. This will be Metlifecare’s 16th village in the wider Auckland region, and 27th overall....
