Tamsyn Parker 's Opinion

Money Editor for NZ Herald

Stock takes: Fat prophets hits NZ

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Angus Geddes co-founded Fat Prophets with university buddy Greg Smith in 2000. File photo / Greg Bowker
Angus Geddes co-founded Fat Prophets with university buddy Greg Smith in 2000. File photo / Greg Bowker

Two Kiwis who founded an investment research and wealth management company in the United Kingdom 12 years ago are bringing the business to New Zealand.

Otago University buddies, Angus Geddes and Greg Smith set up Fat Prophets in 2000 and have since expanded it to Australia, America and Indonesia.

In January Smith came back to Auckland to open a New Zealand office and they plan to officially launch into the market next month with a website and a licence to operate in New Zealand.

"We have always wanted to launch our business in the New Zealand market. It's just really been a question of lining up the timing in terms of products and management," says Geddes, who is chief executive and works out of the Sydney office.

"We see a really good opportunity in the wealth management space."

Geddes said other Australian managers such as Platinum and Hunter Hall had done well with forays into New Zealand.

"We can build on what they have already achieved."

He said the company already had a large New Zealand subscriber base for its research, at around 5 to 10 per cent of total subscribers.

The company would offer a discretionary portfolio management service as well as research on around 10 to 15 New Zealand companies as part of its Australasian research business which covers some 70 businesses.

They aim to reach $1 billion under management within 10 years. While he admits that is "probably" quite ambitious, Geddes said he believed the company had an edge as it already had high brand recognition and a Kiwi subscriber base which gave it distribution.

Geddes said the firm hoped to eventually offer financial advice and broking.

But the wealth management service won't be for those with a bit of spare change.

The service targets those with $300,000 to $400,000 to invest although a lower-cost model could become available to those with around $50,000 to invest.

A COINCIDENCE?

Stock Takes notes that two companies chose to release major news to the market yesterday despite plenty of advance warning that it was Budget Day.

Finance Minister Bill English announced May 24 would be B-day back on February 29 but that didn't deter Guinness Peat Group from holding its annual general meeting or Fisher & Paykel Appliances from releasing its result for the year to March.

Appliances announced its result date on May 9 but could have had plenty of wiggle room.

Under NZX listing rules full-year results must be announced 60 days after a company's financial year end, which was March 31 for Appliances.

Last year the company released its result on May 28.

While GPG set its AGM date on March 30. It had even more room to set a date other than Budget day.

Under the Companies Act an annual meeting must be held within six months of its financial year end.

In the case of GPG this was December 31 so the meeting could have been held any time up to June 30.

Last year it was held on June 8.

Still, mustn't grumble; it's only the second time in its history that the investment company has held its annual general meeting in New Zealand.

Shares in Appliances closed up 1.5c yesterday at 55.5c while GPG shares closed up 1c at 49.5c.

STICKY SITUATION

Comvita dug itself out of a sticky situation on Wednesday as it delivered on results promised during a spurned takeover offer last October.

Singapore-based Cerebos tried a $2.50 per share takeover bid but Comvita fought it off, forecasting a normalised net profit of $7.3 million to $8.2 million and sales of $91 million to $95 million.

On Wednesday shares rose 35c or around 8.6 per cent to $3.15 after it announced sales of $95.9 million and an after tax net profit of $8.2 million.

But the share price is still a bit short of where Grant Samuel put the value, in a range of $3.40 to $4.

Shares in the manuka honey company closed unchanged on $3.15 yesterday.

EARLY CALL

The Bank of New Zealand will pay back investors in its NZX debt market listed subordinated bond at the first available call date on June 15.

It's probably no surprise the bank wants to pay back the $350 million as soon as it can - the bond, which was issued in 2007, is currently paying interest of 9.89 per cent per annum - a pretty high rate in the current market.

The bank could have reset the rate and kept the bonds going for another five years but under new Reserve Bank rules the bond is expected to be regarded as debt rather than capital under Basel III capital adequacy requirements.

A spokeswoman for BNZ said the bank was considering a retail bond offer to coincide with the early repayment of the subordinated bonds.

BNZ isn't the first to call a bond at the first opportunity.

In March, investors in ANZ National's $250 million bond were called and Kiwibank's $75 million 10-year bonds were paid back five years early.

And it seems likely more will follow suit.

ANZ National has $350 million in July 2017, 8.23 per cent bonds, callable on July 23, and ASB Bank has $370 million of December 2017, 8.77 per cent bonds, callable on November 15.

HEALTHY INTEREST

Morningstar has lifted its recommendation on Ryman Healthcare to a "buy" after the company's strong result.

Analyst Nachi Moghe said the retirement village owner and operator had delivered a solid result which was slightly ahead of his forecast.

Moghe raised his forecast for net profit after tax for the 2013 financial year from $94.8 million to $96.8 million and forecast $112 million for the 2014 financial year.

He said a step up in the build rate and growth in re-sales had prompted it to lift its fair value for the company from $2.70 to $4.

Ryman Healthcare shares closed up up 2c at $3.40 yesterday.

- NZ Herald

Tamsyn Parker

Money Editor for NZ Herald

Tamsyn Parker is the NZ Herald's Money Editor. A business journalist for ten years, she has worked in the UK and NZ for the New Zealand Herald, the National Business Review and a specialist publication on investment products for financial advisors. She is passionate about helping readers learn more about to make their money work for them.

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