The NZX has unveiled a new high-tech electronic ticker on the New Zealand Capital Markets Centre building at 45 Queen Street, Auckland.
The New Zealand Shareholders Association has welcomed former PGG Wrightson chair Lee Joo Hai’s decision to step down, but has concerns about the timeliness of the move.
On June 30, PGG Wrightson (PGW) told the NZX its directors had been informed that Lee had been charged in Singapore under securities regulations in respect to potential lapses in relevant disclosures related to Singapore-listed company Hyflux, of which he was a director.
On July 4, the board announced it was appointing director U Kean Seng as acting chair.
On Tuesday, Lee informed the board he would not be standing for re-election as a director at the upcoming annual meeting.
“Mr Lee noted that he was resigning in order to eliminate the ongoing distraction caused due to media and market attention regarding the securities regulation matters that he is defending in Singapore,” the company said in a release to the NZX.
Documents from Singapore’s national regulator, the Accounting and Corporate Regulatory Authority (ACRA), said Lee had been charged as far back as March 13.
“The charge relates to his negligence in connection with Hyflux’s intentional failure to disclose information relating to the Tuaspring Integrated Water and Power Project when such disclosure was required under the Singapore Exchange Listing Rules,” the ACRA said.
“Mr Lee left Singapore before investigations commenced and was arrested in Malaysia on March 12, 2023, with assistance from the Royal Malaysia Police.”
New Zealand Shareholders Association chief executive Oliver Mander welcomed Lee’s decision to step down.
“Had he not made that decision, then I suspect that shareholders would have had their say at the annual shareholders’ meeting,” Mander said.
“What it reiterates is the importance of shareholders meetings and the ability of shareholders to bring resolutions to the [annual meeting].
“Of course, it is a lot cleaner for the company if the right decisions are made earlier on than that.
“Shareholder activism around that sort of situation is very much the last resort. If the board or the person makes the decision, then that’s helpful for everyone as it provides clarity for the company to move forward without having the Sword of Damocles hanging over their head.
“The fact that it was not known for a couple of months in PGG’s case, then that is a concern. Yes.
“From a purist’s perspective, it probably was not subject to a continuous disclosure regime, because it would not have had much impact on the share price.
“But it is one of the reasons why we do advocate for better disclosure of events that relate to directors, and why we are encouraging of any moves that can hold directors accountable, as opposed to just companies.
“Timeliness is important, and anything that encourages personal accountability we are supportive of.”
A PGW spokesperson declined to comment on information already released to the NZX.
The NZX has unveiled a new high-tech electronic ticker on the New Zealand Capital Markets Centre building at 45 Queen Street, Auckland.
Provided by NZX’s long-term partner Eyemagnet, the new two-screen electronic ticker and latest digital software provides increased screen resolution and detail, with the ability to display real-time market information, higher-quality graphics and animations.
NZX chief executive Mark Peterson said the new ticker would give New Zealand’s capital markets an increased presence in the country’s commercial centre.
“The ticker will be about providing key information on what’s happening in our markets, as well as celebrating what makes New Zealand special,” Peterson said.
“This includes recognising public holidays, community events and events of national significance, including Matariki.”
The carbon price and units in the NZX-listed Carbon Fund have fallen sharply since the Government proposed far-reaching changes to the Emissions Trading Scheme (ETS).
The price of NZ Units (NZU), which polluters can buy to offset their carbon emissions, last traded at $38.50 a unit, down from nearly $89 late last year.
Meanwhile, listed Carbon Fund units, which give investors exposure to carbon prices here and around the world, last traded at $1.35, down from more than $2 a unit 12 months ago.
A key catalyst for the drop in NZU prices was the Government’s decision last December to decline the Climate Change Commission’s price control recommendations for 2023-27.
The commission had recommended auction settings that would have encouraged a strong NZU price.
The Government then surprised markets with auction settings that pushed down NZU prices.
There have been two failed carbon auctions since, and the Government’s announcement on June 19 of the details of the ETS consultation options further undermined market demand and sentiment.
Matt Goodson, managing director of Salt Funds - which manages the listed Carbon Fund - said there was clearly disquiet at the amount of radiata pine planting and the incentives to keep doing so at former carbon prices.
“However, by launching an ill-defined process with vague and unsatisfactory future options, the Government and bureaucrats have created uncertainty about property rights,” Goodson said.
“This has seen anyone with forestry-sourced carbon credits look to sell them, causing the carbon price to plunge and a gap open up between forestry carbon units and other ‘good’ ones,” he said.
“Forestry planting will fall to zero, investments in renewable energy projects may be jeopardised and the higher carbon price that is necessary for NZ to meet its Paris Treaty commitments has been sideswiped.
“Such are the perils of politicians and bureaucrats fiddling in what had been a well-functioning market.”
The industry itself is baulking at changes to the ETS. Lewis Tucker, an agriculture advisory firm, said in an open letter to Climate Change Minister James Shaw: “It is our view that no changes to the ETS are needed and that Government should explore alternative means to incentivise gross emission reductions and ensure responsible exotic rotation forestry.”
There’s still no word on what is likely to happen with Scott Technology, which has undertaken a strategic review of its ownership structure, but current chief executive John Kippenberger is no stranger to getting companies ready for sale.
Majority shareholder JBS of Brazil - the world’s biggest meat company - owns 53 per cent of the company. It has undertaken a strategic review of its ownership structure, “with a view to exploring options to maximise value for all shareholders”.
The review is expected to take several months, and there is no certainty that any transaction will result.
Kippenberger has a track record of getting companies shipshape for sale. He was managing director of Premier Beehive NZ for nine years before it was sold to private equity.
Later, he headed Mānuka Health - New Zealand’s second-biggest mānuka honey company - before it was sold to a southeast Asian company in September 2018.
Kippenberger was appointed to lead Scott Technology in November 2019, just months before Covid-19 broke out.
His first move was to restructure the company along simpler lines, cutting the global workforce by 20 per cent.
Clearly, JBS is going through a rough patch, earnings-wise. The first quarter of this year was the first ever in which the Brazilian company faced difficulties across all regions in which it operates.
JBS’ net loss came to 1.45 billion reals ($459m), with the company blaming high grain prices and an over-supplied meat market.
Movie theatre software maker Vista Group’s restructure and updated outlook has received a good review from Jarden’s Guy Hooper.
The analyst this week raised his 12-month target from $1.90 to $2.00 and maintained his overweight rating. Shares were recently trading at $1.77. The stock is now up 8 per cent for the year, but is still well off its pre-pandemic high of $5.84.
Another NZX-listed tech with a historically depressed share price, Eroad, said on June 11 that it was the subject of a buyout offer from Toronto-listed Constellation software at a 69 per cent premium.
But Hooper said that was not his take with Vista. Instead, he saw improving fundamentals, and an improving market - the worldwide box office has now recovered to 60 per cent of its pre-Covid level, and climbing - that were behind Vista’s rising share price.
“Recent performance has been supported by both a recovery across the sector and positive announcements from the company, including bringing its free cashflow positive timing forward,” he said.
Vista said on July 6 that as a result of the restructure, it now expects to be free cashflow positive during the fourth quarter of 2024, 12 months earlier than previous guidance - partly from new cloud products, and partly through simplifying its structure and laying off up to 8 per cent of its 600 or so staff.
The firm said it remains on target to achieve its long-term guidance of ARR (monthly recurring revenue extrapolated to an annual figure) of between $175m and $205m and ebidta margin above 15 per cent by the end of 2025.
Hooper said Vista’s “take rate” - a measure of a hospitality technology firm’s virtual clip-of-the-ticket on clients’ revenue - was 0.68 per cent, low compared to its listed peers.
With its dominant position in much of the global cinema market, and move into cloud software, the analyst sees Vista achieving its aim of generating 3-5x its previous on-premise maintenance fees per customer, equating to $270m in platform revenue.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
-additional reporting Chris Keall
The NZ sharemarket fell slightly with no apparent impact from Budget announcements.