The Business Herald’s markets and banking reporter.

Stock Takes: Rod Drury bites the hand that feeds

CEO forgets positive reports by local media
Xero chief executive Rod Drury could be in for a shock if he expects a more pleasant experience with Australian news outlets. Photo / Dean Purcell
Xero chief executive Rod Drury could be in for a shock if he expects a more pleasant experience with Australian news outlets. Photo / Dean Purcell

Is Rod Drury going out of his way to bite the hand that feeds him?

A recent series of tweets from the Xero boss gave insights into how he views the local media.

After being irked by a National Business Review article that compared the accounting software provider's customer growth in the United States and share price performance with its main US rival, Intuit, Drury wrote on Twitter to express his frustration.


"NBR Playbook: A - one-sided story on old numbers, no analysis, no call for balance. B - Tweet incendiary link. C - Use response to create story two," he tweeted.

Drury also said "unnecessary work" created by "linkbait" articles was a reason for companies not wanting to list in this country, a likely reference to a number of local technology firms skipping the NZX recently to float in Australia.

He then suggested Xero was shifting events across the Tasman to avoid what he sees as unreasonable domestic media coverage, which is quite a remarkable step to take.

"Local rubbish pollutes news alerts and creates work," he tweeted.

The company held its annual meeting in Sydney on Wednesday - a move that required a dispensation from the NZX.

Stock Takes reckons, though, that Xero has done well out of New Zealand media coverage, by and large. Local reports will have contributed to the hype that has driven the firm's shares to their current levels and much higher.

The stock, which has gained 8.5 per cent over the past year, closed at $19.47 last night.

Fouling the nest

Local equity analysts have also copped criticism from Drury in the past.

"We don't expect New Zealand-based analysts to understand our business as well as we do," he told Stock Takes in 2014 after a number of brokers questioned the firm's ability to take on Intuit.

Drury is a true believer in Xero, as he should be. But you have to wonder whether fouling his own nest through alienating local business reporters and analysts is the best approach.

And he could be in for a nasty surprise if the Aussie media, which has a reputation for rabidity, starts taking a negative view.

Waiting, waiting

Josef Roberts chief Executive of Burger Fuel pictured at their head office in Auckland. Picture / Richard Robinson
Josef Roberts chief Executive of Burger Fuel pictured at their head office in Auckland. Picture / Richard Robinson

It's been a few weeks since BurgerFuel said it would give an update on its United States expansion plans in a few weeks.

But it looks as if several more may pass before investors receive more information on the move.

On June 14, while reporting its full-year financial result, the restaurant operator revealed its much-awaited US entry, leveraging a partnership with Subway-linked Franchise Brands, was facing further delays.

"At this stage we have not had confirmation from Franchise Brands as to their further involvement in [BurgerFuel] or not," the company said. "We will update the market as soon as this is confirmed, which we expect to happen in the next few weeks."

On Tuesday, a BurgerFuel spokeswoman said the process "at Subway's end" was taking longer than expected. "It's important to note that we are not viewing this as a negative. We hope to have an update for the market in a few weeks."

BurgerFuel shares - which hit a record close of $3.79 in November 2014, up from $1.50 before the US announcement - closed at $1.55 last night.

Local impact

Law firm Chapman Tripp says a regulatory review into 12 Australian initial public offerings could have ramifications in New Zealand.

The Australian Securities and Investments Commission (ASIC) identified some concerns, including poor due diligence (particularly from small and mid-sized issuers), substandard board engagement and inadequate legal advice.

The regulator also noted a box-ticking approach was often used that valued form over substance.

Chapman Tripp said ASIC had informed Australia's legal community that it would consider "targeted reviews" of offers prepared with the support of legal advisers it had concerns about.

"There is nothing to prevent the Financial Markets Authority undertaking a similar investigation in New Zealand."

- NZ Herald

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The Business Herald’s markets and banking reporter.

A business journalist for more than four years, he also writes the weekly Stock Takes column.Christopher’s main focus is the local sharemarket and issues facing Kiwi investors. He covered manufacturing and retail in his previous Herald role and maintains a special interest in New Zealand’s growing trade relationship with China.

Read more by Christopher Adams

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