Delegat Group's earnings upgrade has inspired one analyst to label it a "good drop". Photo / File
Delegat Group's earnings upgrade has inspired one analyst to label it a "good drop". Photo / File
Golden run
Financial results for Goldman Sachs' New Zealand arm show the investment bank had a golden run last year.
The firm made a profit of $5.176 million in the year ending December 2019, well up on its 2018 profit of $530,000.
Its investment banking income rose from $13m to$22.2m while its service fee income was up from $1.23m to $1.46m. Operating expenses also rose from $13.95m to $16.51m.
That allowed it to pay a dividend of $1.592m for the year to parent company Goldman Sachs Holdings ANZ Pty, compared to the zero dividend it paid in 2018.
It's unclear what this year will hold for the investment bank.
Since the end of its financial year, the directors noted the global outbreak of Covid-19 causing "widespread disruption" to financial markets and normal patterns of business activity.
"In view of its currently evolving nature, it is not currently possible to estimate the financial effect of Covid-19 on the company."
New boss
New York-based Goldman Sachs banker Ian Taylor is said to be the favourite in the running to be the new Goldman Australia and New Zealand head of equity capital markets.
According to The Australian, Taylor could replace Sarah Rennie, who left Goldman to join New Zealand investment bank Jarden, which announced it would set up an Australian arm last month.
Jarden also announced it had hired Ben Gilbert, from UBS, this week to run its Australian research arm.
Goldman Sachs' New Zealand arm had a bumper year in 2019 but could be facing a more uncertain time this year. Photo / Getty Images
Laybuy float back
Kiwi buy now, pay later company Laybuy is set to proceed with its plans for an initial public offer on the ASX.
Laybuy was initially said to be targeting a May listing, with a plan to raise about A$45m in a move that would value the company at $200m.
But in April it decided to delay that plan until the end of the year as markets took a turn for the worse and the retail sector was hit by the initial lockdown period.
Now, however, Laybuy managing director Gary Rohloff says it is back on track to list by the end of September.
"While we had initially considered postponing the listing due to the impact of Covid-19, the market conditions have now improved and on advice we have made the decision to proceed."
Rohloff said the company was in the process of developing a prospectus.
"Until this prospectus is finalised and lodged we are unable to provide any specific details around the capital raise."
The Australian Financial Review Street Talk column noted last week that Laybuy could look to raise up to A$60m now, with a listing date targeted for July.
It will target global investors in the proposed capital raise.
Rohloff said given that Laybuy was an international business in an attractive sector, there was strong interest from many global institutional investors.
"As was always part of the original listing plans, our brokers will be facilitating meetings with institutional investors in a number of countries around the world, including New Zealand and Australia.
"We hope to have Laybuy trading on the ASX by the end of the third quarter of this calendar year."
Laybuy's business operates in New Zealand, Australia and the UK.
Buy now pay later company LayBuy hopes to take advantage of the rise in online shopping. Photo / File
Good drop
Delegat Group has upgraded its 2020 financial year earnings guidance by 13 per cent, prompting one analyst to label his research note "a good drop".
Forsyth Barr's Guy Hooper said that although the outlook appeared uncertain for alcohol consumption, it believed Delegat was well positioned with a high level of exposure to off-premises consumption.
"The economic backdrop remains uncertain, with expectations that global wine consumption declines in the near-term due to the disruption of the food service channel, more than offsetting an increase in at-home consumption.
"DGL, however, appears comparatively well positioned in our view, with its sales predominantly exposed to the off-premise channel."
Hooper has lifted his forecast on the stock, to a net profit after tax up 11 per cent to $59.3 million, based on higher sales and reduced costs.
Meanwhile, Craigs Investment Partners analyst Chris Byrne also came up with the witty title of "grape expectations exceeded" to describe the stock's upgrade.
Byrne said with anecdotal evidence that liquor sales surged under global lockdowns and a lower dollar, it was not overly surprising Delegat had lifted its profit guidance.
And he believes the stock's value isn't being fully reflected in its share price.
"We do not believe DGL's attractive growth outlook and execution track record are captured in its share price."
Byrne has an overweight rating on the stock and a target price of $13.90. The shares were trading around $12.30 late Thursday.
Going long
NZ Debt Management - part of the Treasury - says it will launch a new May 2041 bond next month - making it the longest bond on offer.
NZDM said the new bond would be launched through a syndication on the week starting July 13.
If it occurs, the scheduled bond tender for that week would be cancelled, it said in a statement.
Subject to market conditions, it was expected another syndicated offer for an existing bond - for April 2027 - would be undertaken in August, NZDM said.
ANZ strategist David Croy said the new 2041 was in line with his expectations.
"As we roll into 2021, this will become the new 20-year bond," he said.
Earlier this month, the Treasury successfully raised $7 billion in what was understood to be the biggest-ever capital raising in New Zealand history.
