Word of the day

November 18, 2013

Verbigeration – a constant or obsessive repetition of meaningless words and phrases, especially as a symptom of mental illness; continual repetition of stereotyped phrases.

Rural round-up

November 18, 2013

Silver Fern Farms makes second loss – Alan Williams:

Silver Fern Farms made a pre-tax loss of $36.5 million in the year ended September 30, on top of its $42m loss the previous year.

The company has negotiated a new debt package with its banks for a two-year period, with a first-year facility of up to $609m, chief executive Keith Cooper said.

The preliminary result did not disclose total assets at balance date, but at the same time in 2012 Silver Fern had $316.6m of borrowings funding total assets of $796m.

The latest loss was disappointing and unacceptable, outgoing chairman Eoin Garden said. . .

Silver Fern Farms FY loss narrows to $28.6 mln, mulling options for sector overhaul :

(BusinessDesk) – Silver Fern Farms, New Zealand’s biggest meat processor and marketer, narrowed its annual loss as it deals with the “collapse” of the sheep meat market last year, and is mulling options for a sector-wide overhaul to inject some life in the industry.

The net loss narrowed to $28.6 million in the 12 months ended Sept. 30 from a loss of $31.1 million a year earlier, the Dunedin-based company said in a statement. Sales slipped 1.5 percent to $2 billion. The company blamed last year’s sheep meat market spike and subsequent collapse for the two years of losses, and said it has completed a programme to work through the downturn.

“Market consumption and pricing continued to decrease in the first half of the 2012/13 year, resulting from further writedowns of balance date stocks,” chairman Eoin Garden said. “In reality, the market collapse dramatically impacted upon two financial years due to large stock positions over the September 2012 balance date.” . . .

Meat co-ops see obstacles to merger:

Silver Fern Farms and the Alliance Group, agree that further consolidation is needed in the meat industry.

But both big farmer-owned co-operatives see different obstacles in the way of the farmer campaign to merge the two co-ops as the starting point for forcing wider changes in the industry.

The Meat Industry Excellence group is frustrated at the failure of the major processors and exporters to agree on any reform measures after months of discussions. It is pushing a merger idea in co-op board elections currently underway.

However, Alliance Group chair Murray Taggart of Canterbury says it does not support the view that the co-operatives should be the main vehicle for consolidation and bear the costs. . .

Hopes scare a ‘turning point’ – Sally Rae:

Federated Farmers chief executive Conor English hopes Fonterra’s recent whey contamination scare is a ”turning point” for New Zealand.

Addressing the recent Global Food Safety Forum in Dunedin, Mr English likened the fiasco, which turned out to be a false alarm, to the earthquakes in Christchurch.

Christchurch now had a better city and he believed the incident should be like an earthquake for Fonterra and the dairy industry. . .

[I think it’s a bit premature to say Chirstchurch now has a better city, but it is getting better]

Fonterra Welcomes NZ Sri Lanka Dairy Cooperation Arrangement:

Fonterra today welcomed a new Dairy Cooperation Arrangement between the New Zealand Government and Sri Lankan Government signed by Sri Lankan Minister for External Affairs Gamini Lakshman Peiris and New Zealand Minister for Foreign Affairs Murray McCully on the sidelines of the Commonwealth Heads of Government meeting in Colombo yesterday.
Fonterra Director and farmer-shareholder John Monaghan, who was in Colombo representing Fonterra at the Commonwealth Business Forum earlier this week, said the agreement will help formalise and support further public and private sector dairy sector cooperation between the two countries.
“The New Zealand dairy industry and Fonterra have a long history working with the Sri Lankan dairy industry. . .

Fonterra gives $100,000 to typhoon relief

Fonterra has donated $100,000 to ChildFund New Zealand to support its relief and recovery efforts in the Philippines following the devastating Typhoon Haiyan.

The money will provide desperately needed food, water and essential hygiene items and help to establish safe spaces for children.

Fonterra chief executive Theo Spierings said the co-operative is encouraging its farmers and employees to donate. . .

Interest keen for Hawke’s Bay wines at Hong Kong fair:

Two Hawke’s Bay wineries represented the region at a huge wine fair in Hong Kong and report that there is keen interest in wines beyond those from Marlborough, with importers and distributors wanting to know more about local wines.

Elephant Hill Estate and Winery and Moana Park manned the Hawke’s Bay Winegrowers Inc. stand that was part of the Hong Kong International Wine and Spirit Fair held over three days earlier this month that attracted over 20,000 buyers. . . .

Services sector adds more good news

November 18, 2013

The services sector has joined others in reporting good news:

New Zealand’s services sector continued to push higher in terms of expansion, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

The PSI for October was 58.2.  This was up 1.8 points from September and the highest level of activity since November 2007 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).    Compared with previous October results, the 2013 value was the highest since 2007 when the survey began.  So far in 2013, the PSI has averaged 55.6.

BusinessNZ chief executive Phil O’Reilly said that a second expansion level over the 58.0 mark in the last four months is indicating how the sector is building further momentum after the first half of 2013.

“Nobody could complain about the levels of activity experienced during the first six months, which were very healthy and consistent at around 55.0.  However, the second half of 2013 is shaping up as another step above that, with new orders and activity/sales particularly strong.    

BNZ Senior Economist Craig Ebert said the new-orders component of the PSI was sending a strong signal that production would keep expanding briskly.

“This PSI result, like the latest PMI, gives further positive indication that GDP growth is picking up to an above-trend pace,” Mr Ebert said.

All five main sub-indices were in expansion during October, with none showing a decline for six consecutive months.  New orders/business (63.0) increased a further 1.7 points from the previous month to match its result in July, while activity/sales (60.9) also produced a post-60 value.  Stocks/inventories (54.8) increased after consecutive drops in expansion levels, while employment (52.8) experienced its highest result since May.  Supplier deliveries (51.4) was the only index to show lower expansion than September, falling 1.7 points.

Activity was positive across most parts of the country in October.  In the North Island, the Northern region (60.8) increased 3.5 points to reach its highest value since July.  The Central region (52.6) also increased from the previous month, rising 0.7 points.  In the South Island, the Canterbury/Westland region (54.9) experienced a slight dip in expansion levels from September, while the Otago/Southland region (46.8) continued to see-saw between expansion and decline.

The seasonally adjusted BNZ – BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) for October saw both options for measuring the PCI increase from September.  The GDP-Weighted Index (57.1) increased 1.4 points from September, while the Free-Weighted Index (56.0) rose 0.5 points.  The fact that both the manufacturing and services sector improved, but more so with the latter, meant the GDP-Weighted Index showed a greater improvement than the Free-Weighted one.

The services sector accounts for almost two-thirds of the economy.

Improved performance in that and the manufacturing sector, with agricultural also doing well is very good news.


Finding your own voice

November 18, 2013

Quote of the day:

. . . if the solution you’re trying to use over and over with a child isn’t working, then don’t presume the problem is with the child: Consider that the stumbling block lies in how we understand the problem in the first place, and that the first place to start to better understand the problem, is by letting the child find their own voice; in whatever manner or language that voice may take. We need not fear those other voices; just like learning a new language, those voices may even enhance the strength of our own. Autism and Oughtisms

This doesn’t just apply to children.

Alps 2 Ocean cycle trail already bringing business

November 18, 2013

The Alps 2 Ocean cycle trail isn’t even completed yet but is already bringing business to the area.

Existing businesses are reporting more customers and new ones have set up to supply, service and entertain cyclists.

A neighbour who runs an up-market B & B said they have had a lot of extra custom from people nearing the end of the ride and wanting to reward their efforts with a little luxury.

All of them have thoroughly enjoyed the ride and one who has done trails all over the world said it’s up with the best.

The trail is graded easy to intermediate and includes some steep hills. But those can’t be too challenging for bicycles when a team managed to complete the trail on penny farthings.

Despite penny-farthings having no gears, enthusiasts yesterday completed a ride of more than 300km from Aoraki/Mt Cook to Oamaru in just three days.

Oamaru Ordinary Cycle Club captain Graeme Simpson said 27 riders from the club set off from Aoraki/Mt Cook on November 10 – half of them on penny-farthings – to raise awareness of the Oamaru Victorian Heritage Celebrations by completing the Alps 2 Ocean cycle trail.

Mr Simpson said the 312km cycle trail had been ”challenging”, but ”doable on a penny-farthing”. . . .

Photos from Alps to Ocean Facebook Page.
Photo: The group at Burnside Homestead.
Burnside Homestead
Photo: Left to right: Mitch, Bill Blair, David Wilson.
Oamaru Harbour

Some of the trail is still on roads. A trust has been set up to raise money to fund the work required to take the whole trail off-road.

#gigatownoamaru also enjoys the challenge of becoming the southern hemisphere’s first gigatown.

What happens when government controls prices?

November 18, 2013

Tweet of the day:

I don’t think any government here has ever had that much control on prices.

But it’s not that long ago that tariffs and subsidies meant the government here did influence how much we paid for a lot of basic necessities.

Govt selling down Air NZ shares

November 18, 2013

Speculation that the government was going to sell down some of its shareholding in Air New Zealand soon was confirmed yesterday.

The Government has today started the process to sell 20 per cent of Air New Zealand shares, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall say.

“A sale of shares to New Zealand brokers and to New Zealand and some offshore institutions will commence tomorrow, Monday 18 November, via a bookbuild process,” Mr English says. “We expect the transaction to be completed by Tuesday evening.

“New Zealanders will be at the front of the queue for shares and we are confident we will achieve the Government’s objective of at least 85 per cent New Zealand ownership.

“Air New Zealand is different from the other companies in the Government share offers programme in that it is already listed on the New Zealand and Australian sharemarkets. This means a different process will be used to reduce the Government’s shareholding.

“The Treasury sought proposals from its panel of financial advisers to carry out an off-market sell down via a bookbuild.  Craigs Investment Partners, together with Deutsche Bank and Goldman Sachs, have been appointed to undertake the transaction and work with New Zealand sharebrokers in particular to target widespread New Zealand ownership.

“Shares will be sold via a competitive bookbuild process to New Zealand sharebrokers for on-sale to New Zealanders, and to New Zealand and some overseas institutional investors.

“Shareholding sell downs of this type are typically conducted off-market when the company’s shares are not trading on a stock exchange, to ensure the company’s share price is not affected by speculative trading,” Mr English says.

“An off-market sell down is fast and efficient, which is important when working with a company that is already listed.

“Usually these types of sales are completed in less than one day. However, to target widespread New Zealand ownership, we are conducting the bookbuild over Monday and Tuesday to give New Zealand sharebrokers time to discuss the offer with retail investors.

“That is why the sell down process is being started today and we anticipate there will be a trading halt of Air New Zealand shares on the NZX and ASX when the markets open tomorrow.

“We expect Air New Zealand’s shares to resume trading on the NZX and ASX on Wednesday,” Mr English says.

Mr Ryall says Air New Zealand is currently trading at five-year highs, making it an opportune time to conduct the sell down.

“Air New Zealand is one of our most iconic global brands and has regularly been recognised on the world stage as a leading international airline. Its share price has been performing strongly.

“New Zealanders interested in purchasing Air New Zealand shares should talk to a sharebroker or authorised financial adviser.

“The Crown currently owns 73 per cent of Air New Zealand. Therefore, the sale of 20 per cent of Air New Zealand shares will leave the Government with a shareholding of around 53 per cent of the airline.

“There have been several successful similar off-market sell downs in recent times, involving other existing NZX listed companies such as Auckland Airport, Trade Me, Summerset and Sky TV.

“This sale approach will keep down transaction costs for taxpayers, maximising the proceeds that we can invest in other public assets like hospitals and schools.

“The Government’s share offer programme has raised $3.6 billion from the first two share offers.

“The proceeds of the programme have been allocated to the Future Investment Fund so the money can be reinvested in new assets and new infrastructure without the need to borrow money from overseas lenders,” Mr Ryall says.

Air New Zealand was listed with other SOEs National said it would partially float if it won the last election.

The sale of a few shares is simple because the company is already listed on the share market.

Ministers have been asked about the possible sale recently. They couldn’t confirm it before the announcement without breaching stock exchange rules.

The decision is already being criticised because the sell-down will take place before the upcoming referendum on the partial sale of a few state assets.

That criticism is just political posturing.

National was explicit about its intention to partially float some SOEs and the Opposition said the election would be a referendum on the issue.

They lost and the referendum is nothing but an expensive publicity exercise for them.

There’s no need to wait for the results. They’re non-binding and the government has made it quite clear it will ignore them, as it has the right to do.

%d bloggers like this: