Tuesday, September 11, 2007

Labour's State Control out of control

In the latest grasp by Helen Clark and the sisterhood for full state control of every New Zealander we see the Government apparatus, the Children’s Commission and its head Cindy Caro make another play for the control of the nations children.

Caro has put forward a lunatic idea that every child from new-born to 15 years old will be "tracked" by the state. What that means is visits from state appointed workers who will check on the child’s "wellbeing" and make sure that you as a parent are doing what you "should be."

If the parents of a child refuse Government employee’s access to the child, the child can be removed and placed in State care!

The absurdity of the idea is a smack in the face for the majority of families who look after their children well. Targeted action on those who are actually at risk, Maori and Pacific peoples, and proper punishment for those who perpetrate crimes against children are good steps in trying to combat child violence.

State propaganda advertising other socialist nut bag legislation recently passed, the anti -smacking law has recently started. Various Z grade celebrities like Alison Mau and the lefty sniveling "I know better than you," Russell Brown, listed by himself as some kind of journalist, spank themselves silly in print on TV and radio, giving the great unwashed public the benefit of their superior knowledge on child rearing and telling you therefore that your way is wrong, wrong, wrong- insert image of a wagging finger here.

This latest attack on the family is merely the continuation of the state control that has been engineered from the inception of this socialist Labour Government when it took control of the countries finances in 1999.

The overriding focus for Labour in its 8 long years has been law passed to seize control, piece by piece of every individual’s ability to run their lives in an independent way, self sufficient and self reliant.

Labour wants us to rely on the state as much as possible.

The list of Government interference in our lives is a long one.

Labour has passed the anti-smacking bill, the thrust of this law is that parents no longer have the right to challenge or punish children for doing wrong in anyway. If they do their children will be taken away and the parents punished by child welfare agencies. Screwy huh?

Labour removed the choice of individuals to smoke in pubs and restaurants and at the same time private property rights and profits of business owners.

Labour has interfered with food in schools by making such treats as pies and chips, who all sensible people know should only be eaten sparingly.

Labour have interfered in child minding and pregnancy by introducing paid maternity leave, to be paid by taxpayers and employees thereby forcing those families who would pay for their own children’s upbringing to work longer hours to pay the increasing taxes for the scheme.

Labour’s “Working for Families” Welfare package have effectively put another 500,000 individuals on welfare and therefore at the mercy and control of those who hold the purse strings

Labour have brought Railways and Air New Zealand under the state flag and TVNZ has moved towards more state control and failed miserably.

Labour have started a State bank, “invested” millions of taxpayer dollars and have yet to get a return and never will.

I hate to “Labour” the point but the thirst for control by these individuals is monotonous in its regularity.

Along with the looney laws, we have had a mountain of Government propaganda and spin in all the media about what should: eat,smoke, read, drink and how to raise our children and what our families should look like. We are constantly bombarded with these messages to the point that the more gullible and moronic amongst us start to believe what they see, read and hear.

Stalin and Hitler used these same forms of Government spin to get their message across. We are not at this point yet but follow the story of the last 8 years to its logical end.

While all the energy by this government being put into making New Zealand a nanny state is wasted, this countries economy, education, health slides further and further towards oblivion.

The trouble with all this finger wagging and State control is that its logical conclusion would be a state employee following every individual around constantly telling them what to and what not to do. Think that this can’t happen?

The undercurrent and aim of this Socialist Labour Government is to have effective control of everything that an individual does. Private enterprise and self reliance is an anathema to them and not to be encouraged at all, we only have to look at their attack on John Key and his success in life to see where this filthy lot are coming from.

The ultimate in socialist control and for the reigns of power to be held in their hands in perpetuity, is the Electoral Finance Bill, which would, if passed, allow the incumbent to spend taxpayers money promoting government legislation to buy an election while opposing groups to government will be restricted to $60000.00 and not be allowed to criticize government in an election year.

These pigs in the taxpayer trough must be stopped before they end up in bed next to us.

That is a scary thought.


c Darren Rickard 2007

Monday, September 10, 2007

New Zealand Retailers ring up costs not Tills.

With a few noticeable exceptions, this seasons profit round has been flat to poor. Not a surprise though considering the state of the economy and increased business costs being lumbered onto business by this socialist, business hating Labour Government.

One industry that has fared particularly badly is the retail sector.

The countries largest retailer, The Warehouse(WHS) is likely to book a flat net profit of around NZ$96 million, up from $95.3 million last year.

Hallenstein Glasson(HLG) and Pumpkin Patch(PPL) are soon to report their profit results while Briscoe Group(BGR)reported a just over 12 % drop in half-year net profit to $10.53 million Friday 7 September.

Hallenstein Glasson and The Warehouse release profit figures Friday 14 September, and Pumpkin Patch is releasing its results on Monday 17 September. Pumpkin Patch's profit will be affected mostly by the weaker US dollar and stronger Kiwi as profits from foreign shores come back to New Zealand where the company is based.

Smaller retailers like Postie Plus Group (PPG) and the fast food operator Restaurant Brands (RBD) are likely to be similarly affected. RBD is likely to post an improved profit but coming from a loss last reporting season that wont be hard to achieve.

The worst performer has been Hellaby Holdings, they booked a loss of more than $9 million recently. This has been mainly due to poor results from their BBQ Factory chain which they overpaid for 2 years ago and are about to start litigation against former owners the ASB Bank.

Micheal Hill(MHI) the Jeweller has done well this last year, with increased sales and profit. They have benefited from expansion but they have also been one of the few retailers that have done well out of the lower $US dollar , making their core cost, gold, considerably cheaper.

The retail sector has had pressure in general from a multiple shot at the bottom line from increased operating costs. Labour's raising of the minimum wage, parental leave costs, increased holidays and a myriad of other central and local government compliance's have hit retailers and other business sectors with a whiplash effect and it is not about to end soon.

Kiwisaver compliance and the removal of youth rates will hit this sector again in the coming year/s.

Retailers have also been hit by petrol, power and interest rate rises, directly on their business operating side and again with consumers having less to spend on their goods and services because of the rises in these costs.

This slump isn't going to go away anytime soon but it is not terminal for the strong retailers.

A good opportunity exists now for those long term investors to buy stock in those companies that you have had your eyes on but were maybe too expensive to warrant a buy for now their stocks have been beaten down to a level that looks a lot more attractive.

Disclosure: I own PPL shares


c Share Investor 2007



Friday, September 7, 2007

Share Investor's Friday Free for all: Edition 2

Xmas comes early for Warehouse Shareholders

An announcement today from The Warehouse(WHS) New Zealand's Largest retailer, that they will be paying a large special dividend of $NZ 35c imputed per share along with a 5.5c normal dividend will have shareholders running to the bank.

It seems the proceeds from sale of their Australian unit plus some other property sales sees the company flush with some $109 million in cash and owners are going to benefit. The share price was up 14c on modest volume today possibly reflecting the markets lack of faith in the retailing sector given Bricoes (BGR) 16% fall in profit announced today.

It is a shame more companies don't have good capital management such that The Warehouse is operating. Many would have the 109M burning a hole in their pockets looking for a place to spend it.

Sky City(SKC) Entertainment take note when considering what to do with proceeds from mooted asset sales late in 2007 and early 2008.

Auckland Airport Merger Crashes and Burns

The original Dubai Aerospace, DAE, merger with Auckland International Airport(AIA) took a nosedive this week.

In the face of rampant idealist pressure from leftist councils and Central Government the proposal was dead in the water. It was never a flyer to begin with for manifold reasons, mainly due to the fact that the company was a foreign one.

DAE is rumored to be stitching together another more politically palatable deal and a Canadian pension fund is said to be about to launch a concrete bid soon.

Any deal is going to be almost impossible considering there are politicians with big egos and tiny reproductive parts involved.

My speculation would be if Dick Hubbard from Auckland City Council gets re-elected(god help us!) and Manukau Council continues to lean left after October this year then we could see councils combining to re-purchase the airport. Perhaps not a likely scenario but I think the most likely in the face of other proposals.

Finance Company woes Hound Investors

Two more Finance companies went up in smoke this week, bringing the grand total over the last 16 months to 9 and well over NZ$ 1 Billion at risk of being lost.

Fingers continue to be pointed at everyone but those most to blame. Directors of such companies and those that "invested" in them.

A curious excuse was given by the liquidator of Nelson based LDC Finance for its collapse. It seems said liquidator blamed investors for pulling out funds because of market nervousness over finance company collapses.

He conveniently forgot to mention that the company he was in the process of liquidating took call deposits and used them to invest in long term situations. Well duh., it was bound to come unstuck sooner or latter.

Blue Chip Debt fails the risk test

Following in the rumblings of the sub prime meltdown in the United States, New Zealand companies issuing debt securities to pay for business expansion have been left high and dry by fed up Kiwi investors. The Canadian School Teachers Pension Fund, who bought Telecom NZ's Yellow Pages unit this year for NZ$ 2.2 Billion were initially after $300 Million from Kiwi investors at 11% then scaled back twice before being scrapped earlier this week.

I suspect the fund wanted more than the original amount but market sentiment propelled them to scale it back. When they purchased Yellow Pages, market appetite for such debt was at an all-time high. They would have been counting on that appetite to continue when it came for them to fund their purchase.

A hint of desperation also surrounds the issue by Origin Energy, Contact Energy's(CEN) main shareholder, of preference shares with an initial 10% yield.

I have been called twice and offered to buy into this issue. Once by my Broker, ASB Securities and once by the bank that owns the broker ASB Bank. Never before have I been "hounded" in this way. I said no.

Power to the People

Not to let any opportunity go by to bash Helen Clark and her sisters in power or without power in this case.

The case for New Zealand to have nuclear power has never been stronger.

The ideological bent by the New Zealand Labour Party for the country not to use its coal and hydro assets to produce much needed electricity is only matched in stupidity by the same collective ideology that would have them oppose nuclear energy.

Labour's answer to New Zealand's power crisis is to use windmills and solar power, forgetting of course that wind the doesn't always blow (unless you are a parliamentarian) and the sun doesn't always shine(unless you are a Green Party member after your daily spliff)

Kiwi business needs cheap, reliable and plentiful supplies of power to push the economy ahead and for business to have the confidence that they are able to expand with the knowledge that the extra power is there when it is needed.

Slow food

The listed fast food company Restaurant Brands(RBD) is still looking for a leader after more than six months without one.

With news this week that one will be appointed sometime next month share investor wonders-with tongue firmly planted in cheek- whether the ex-chief of Telecom New Zealand(TEL) might be one of the contenders shortlisted.

On second thoughts, perhaps even RBD do not deserve someone so lacking in business acumen and forward planning.

I'm still available.

Burger Fuel(BFW) the listed gourmet burger wrangler, has failed to have its shares trade at all this week.

Watching the share price of this company could get more exciting next week. Yeah right!

Seriously though,this is going to be a market announcement driven stock price in the absence of any material facts and figures about how the business is doing.

Capital would have dried up though and their initial plans would have had to change.

Meanwhile the owners of Hell Pizza and Burger King, one of RBD's competitors for their Pizza Hut brand , have had a stoush with their ad company.

Cinderella Marketing, the advertising company that pursues guerrilla-style marketing promotions - including a condom letterbox drop depicting Hitler and a brazen magazine called Hell-o - are credited with making the brand stand out from bigger fast food competitors.

It seems the brazen advertising has finally got too much for Hell's owners. Was it the condoms or the Hitler references and why did it take so long for the owner of Hell to reject the brazen ad placements?

Market Wrap up

The benchmark NZSX-50 index closed up 11.88 points, or 0.3 per cent, at 4151.98, on turnover totalling $101.8 million.

The big mover today was The Warehouse(WHS) which jumped 2 per cent to 588 on the news of a special dividend of 35c a share totalling $109 million.

Auckland Airport(AIA) was still in play, as suitors such as the Canada Pension Plan Investment Board have been rumored to be making a bid soon.

Auckland Airport shares closed up 2c at 309.

Telecom (TEL)was up a cent at 438, Fletcher Building(FBU) gained 6c to 1191, Contact Energy(CEN) rose 14c to 915, Fisher & Paykel Healthcare (FPH)was up 5c at 355 after announcing new sleep apnoea products this week, and F&P Appliances(FPA) was flat at 367.

Briscoe Group(BGR) was flat at 151, reflecting consideration by the market that their profit drop announcement today was already priced in after reporting a 12 per cent fall in half-year net profit to $10.5m, as competition hit margins.

Among rising stocks, Cavalier Carpets(CAV) was up 9c at 321, Nuplex(NPX) gained 11c to 700, PGG Wrightson(PGG) was up 9c at 193, and Michael Hill(MHI) rose 15c to 1015.

Air New Zealand(AIR) lost 2c to 215 after earlier this week announcing a large special dividend, Sky City(SKC) fell 2c to 441, Vector(VCT) was down 4c at 241, and NZX (NZX)fell 5c to 975.

Lion Nathan(LNN) 5c lower at 1100, and Goodman Fielder(GFF) down 12c at 308.


Disclosure: I own SKC, GFF, FPH ,AIA shares


c Share Investor 2007








Thursday, September 6, 2007

Telecom NZ rewards ex Chief for Mediocrity

The smack in the face to investors that is the Teresa Gattung payout brings more questions than answers. Gattung was paid $5.4 million during her final year with the company, which has just been released in the 2007 Annual report.

Gattung ran Telecom New Zealand [TEL.NZ] for almost ten years and in that time was responsible for more destruction of wealth for New Zealand public shareholders in any one single listed company in this countries history.

When she took the helm in the late 90s the TEL share price had reached almost $10 and profit peaked at NZ$820 Million dollars in 1998 . Since then profit has struggled to grow and has remained basically flat until 2007 profit of just north of $900 million. Next year the company will struggle to make $650 million because of the sale of one of the companies core assets, the Yellow Pages, a decision arrived at while Gattung was at the helm.

When Gattung left the share price was barely over $4 and the company has been left with problems surrounding decaying infrastructure and obsolete technology like their 027 mobile network ,which was redundant technology even before it was introduced not so long ago.

I cant work out whether Gattung didn't get much criticism for her truly awful reign at the top of Telecom because she is a woman or because brokers and large institutions had so much money invested in the company that there wasn't that much critical opinion to be written about by our mainstream business media writers. It was probably a little of both.

Teresa Gattung was a short term thinker in business and wasn't able to grasp where the company would be in 10 years. Under-investing in the business, reactive rather than proactive, marketing spin and poor service were the hallmarks of her time at the top and the position she had the company in when she left has the company directionless, treading water and fearful of competition.

Clearly she left the company in a worse state than when she started and the $5.4 million she was paid out before she left, including over $2 million in "incentives," was a kick in the collective teeth of Telecom shareholders who had to suffer through what was one of the biggest losses in New Zealand corporate history last year.

The news that Ms Gattung has had "several job offers" from companies should leave those that have offered shaking in their boots were they to read the last 9 years of Telecom balance sheets.


Telecom NZ @ Share Investor

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Download every available TEL Annual Report Free


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