Goodman gets approval to sell gelatin business

By ELLEN READ AND AGENCIES

Goodman Fielder will sell its Christchurch gelatin factory after getting approval from United States regulators to divest most of its gelatin business.

The US Federal Trade Commission blocked Germany's global gelatin giant, Deutsche Gelatine-Fabriken Stoess, from buying all of Goodman Fielder's gelatin business, as it had originally intended.

Instead, Goodman Fielder's subsidiary Leiner Davis Gelatin will sell most of its gelatin business to DGF Stoess for US$112.5 million ($261.7 million) but retain a pork skin gelatin plant in Iowa and a beef skin gelatin plant in Argentina, to satisfy the regulators.

The Christchurch plant - Goodman Fielder's smallest and oldest - produces edible gelatine from beef skins. It is used mainly for confectionery and dairy desserts.

The plant exports two-thirds of its production.

Part of the proceeds from sale of the gelatin business will be used to fund Goodman Fielder's proposed A$100 million second tranche of an already announced share buyback.

Alongside the sale, Goodman Fielder reported a first half net profit of A$98.4 million, up from A$37.5 million in the previous corresponding period.

The net profit was boosted by an A$30 million one-time gain on asset sales. The overall result matched analysts' expectations.

Earnings per share rose 0.8Ac to 5.3Ac a share and the dividend was maintained at 3.5Ac a share.

Revenue for the six months was steady at A$1.529 billion, following the previous corresponding period's A$1.533 billion.

The New Zealand operations contributed A$256.9 million in sales, up from A$242.3 million.

Chief executive Tom Park said Goodman Fielder expected to deliver solid growth in net operating profit this year in line with consensus forecasts.

"However, our core businesses are not sufficiently robust and we must invest in effective support to deliver on our short and long-term goals," he said.

* Submarines Australasia, which operates the Antipodes five-man submersible in Milford Sound, yesterday reported a half-year net loss of $521,000, compared to a loss of $58,000 a year earlier.

The company will stop its deep-diving tours just three months after they began, citing poor weather and a downturn in wealthy American tourists visiting New Zealand.

It said it was investigating a deep-dive operation in Lake Wakatipu.

The company already has consent to operate up to three submersibles carrying four to eight passengers in the lake.

* Blue Star Print Group has reported a $2.5 million net profit for its first six months of operation.

The company's operating revenue for the six months to December 31 was $149.4 million.

The Auckland-based commercial printer, which has operations on both sides of the Tasman, said demand for print was steady in most of its markets and sales and earnings had exceeded expectations.

But in the sheetfed sector, especially in Auckland and Melbourne, industry over-capacity weighed on margins.

The company said it expected to meet annual targets given a successful start and reasonable economic projections for Australia and New Zealand for the next six months.

Blue Star Print management paid $165 million for the company when it was peeled off Blue Star Group after its US parent, US Office Products, filed for bankruptcy protection.