$660m man sets sights on new targets

With a cool $660 million in his back pocket, Brendan Lindsay was a popular guy.

First, there was the seemingly endless stream of investment banking types turning up on his doorstep with the refrain: "Have I got a deal for you".

Then there was the procession of charitable organisations and fundraisers in search of a donation.

In the end, it got to the point where he stopped answering phone calls from numbers he didn't know.

It's all been part of the adjustment process since the sale of his baby, plastic container maker Sistema, to the Fortune 500 company Newell last December.

Since the $660m sale, Lindsay and wife Jo have set up an office with the nameplate "Lindsay Investments" in the Viaduct Basin.

As the fitter, and more relaxed Lindsay puts it, working from home was never going to work.

Lindsay, who started in business by making plastic coathangers in a garage in Cambridge, says he still hasn't completely left the company.

Even now, he remains involved - helping to "knit" the two organisations together.
He still gets the sales reports - they are improving - and Newell is looking at putting in new machinery.

Lindsay talks to new chief executive Drew Muirhead - who started on the shop floor as a die setter - two or three times a week.

"To be honest, the big thing was that I was just so tired and I did not realise what a drain Sistema, and the deal, had been on me and on my personal life," Lindsay says.

"It had dominated family life for such a long time. When it was no longer there, I realised that I needed to put some time back into the family."

Post sale, Lindsay took his extended family of 15 on a cruise around Europe.
On their return came the inevitable question: What next?

"So a floodgate opens up and in through the floodgates come people ranging from a first XV rugby team wanting to go to Canada to play footie, to lots of charities.

"They were easy to deal with. It was the investment bankers, the investment brokers, the real estate agents and the number of people who have got deals that are 'so good' that has been the hard thing," he says. "There have been a lot of them come along."

"Then we made the decision that we did not want to get involved with anyone who [had] a less than 100 per cent [success] record.

"It's got to the stage now where I don't answer the phone unless I recognise the number."

Then came Lindsay's prominent inclusion on the National Business Review Rich List. After its publication, he was relieved not to get any stick from family, friends and business associates.

"No one said a word. I was so pleased about that."

Looking back over his experience with Sistema, Lindsay says not being a publicly listed company had its benefits, particularly when it came to not having to explain earnings fluctuations to the shareholders and the market. Being a private company had made things like foreign exchange exposure easier to handle.

"It just meant that there would be some fluctuations in the kiwi -- sometimes to Sistema's benefit, sometimes not."

Since the sale, Lindsay has invested in a sheep milking venture and has big plans for his own brand of manuka honey.

At the time of the sale to Newell, Sistema was selling its range of plastic storage containers in more than 90 countries. It had offices in Australia, the UK, France, Scandinavia and the US, and has an extensive distribution network.

Since leaving Sistema, Lindsay has made a number of investments, the most public of which has been a 13.4 per cent stake in tap and showerware maker Methven.

Lindsay says he also made smaller investments in listed public companies such as Tourism Holdings, Genesis, Mercury Energy, PGG Wrightson and Skellerup.

He has also invested in a foundry, and sees the manuka honey sector as having potential.

"The honey business is extremely exciting and I plan build my own brand and to release that to the market," he says.

"I see that as a great opportunity for us personally, but also for us to build another brand.

"Manuka honey is New Zealand gold and we have to keep the management of that in New Zealand."

He and Jo have been active philanthropists and also have interests in the horse racing industry.

They have spent $3m on Riding for the Disabled, an organisation that introduces people with disabilities to horse riding as a form a therapy.

Lindsay says he has underwritten the running of the organisation's office for three years and has set up a department to form long-term relationships with corporate and individual sponsors.

He hopes what they have done for Riding for the Disabled could be applied as a template for the way other charitable organisations are organised and funded. He is also in talks with the University of Auckland to set up a design school at the university.

When interviewed by the Herald in December, Lindsay said he was never good at school work, although he was always good with numbers.

He grew up in Pukerua Bay, near Wellington, in a family of five.

"I was regarded as the dunce of family and was treated accordingly," he said then.

These days, he gets singled out for mentoring, and has given a few talks to budding exporters about the lessons he picked up along the way.

"The public profile that Sistema has given me, has given my voice a lot more clarity," says Lindsay. A part of his message is that manufacturers heavily play up the "Made In New Zealand" message, as he did with Sistema.

Having come from humble beginnings - including that factory-garage in Cambridge - Lindsay says his message has been about sticking with it.

"With adversity in business - whether it from currency fluctuations or from losing a customer - you have just got to believe.

"That's the thing about exporting and about being in New Zealand - you have got to believe that you are in God's own country.

"You have got to believe that you can make a difference.

"Don't give up," he says. "You can only own your dream yourself."

Takeover not part of Methven plan

Brendan Lindsay has no plans to take over Methven, after taking a 13.37 per cent stake for $10.7 million in April, but would like greater involvement with the NZX-listed tap and showerware company.

Lindsay has made several investments after selling the company he founded - Sistema - to America's Newell for $660m last year.

To date, the Methven stake has been the most visible. "We see Methven as an extremely good company," he says.

"The problem is that Methven is probably a bit overvalued because of its dividend payment, but we feel that it needs money invested into the business to grow it.

"Because of the high dividend payout, it's difficult to get that reinvestment but I think that they have a very capable board and a very capable management team.

"We would like to help out in some way, or in some form. Are we looking at the moment at some sort of takeover? The answer to that is no," says Lindsay.

"But we see it as a long term investment where we can add some value."

Lindsay says management has been receptive to suggestions. "But we would like to get a bit more involved as time wears on," he says. "We are comfortable, and we see it as a long term investment."

In August, Methven reported a net profit of $5.8m, down 24.5 per cent on the previous year.

At the time, group chief executive David Banfield it had been a disappointing year, with top and bottom line performance below its expectations.

"We intend to invest in our business model transformation plan named Fit 4 the Future, which is expected to take two years to implement," he said then.

The company's share price has been soft over the past year. Methven shares last traded at $1.01, down almost 20 per cent over the past 12 months.

Methven's market capitalisation is $74.2 million.

At this week's annual meeting, Banfield said the company's first quarter profit rose by 32 per cent on a constant currency basis, although tapware continued to underperform.

Tapware sales are forecast to persist at current levels until Methven begins new activity in the third quarter of next year, and starts selling new products in the following quarter.

"Despite there being a number of one-off impacts in the year, we recognise that tapware performance across Australia and New Zealand was poor and that our focus on showering has left room for private label and smaller brands to win some share from us in the tapware market," Banfield said.