Wilson Neill buy lifts stock exchange hopes

By CHRIS BARTON

The hospitality company Wilson Neill is on the comeback trail to a full stock exchange listing following its purchase of internet companies Radionet and Onthenet for 75 million shares.

Yesterday Wilson Neill shares, traded on New Zealand's unlisted market since 1996, were at 14.8c, putting the value of the deal at $11.1 million. The purchase is new territory for Wilson Neill, which owns Cobb & Co restaurant franchises and recently bought Parnell restaurant Iguacu for $6.5 million.

"We believe this sector has a tremendous future," said Wilson Neill chairman Trevor Mason.

"We've bought a profitable IT company with good growth prospects. We're in IT to make money and add value to our shareholders," said Auckland director Paul Hyslop.

Internet provider Onthenet and its wireless access affiliate, Radionet, are owned by Leicester Chatfield and Mike Conner and their family trusts. The company focuses on providing fast internet access to large businesses and organisations and boasts clients including ASB Bank, McDonald's, Sony and Auckland Grammar.

Through offshoot Radionet it recently began offering high-speed wireless access in Auckland using Lucent equipment and spread spectrum radio frequencies.

Both Mr Chatfield and Mr Conner will continue to run the companies.

Details of the share transaction have not been released but it is staggered over time and tied to performance achievements.

Mr Chatfield said the deal gives access to working capital from Wilson Neill for expansion.

Mr Conner said Radionet would be bringing forward the expansion of its wireless network through the installation of more "micro cell" transmission equipment on the top of high buildings to complete the Auckland network.

It would also have towers in Wellington, Christchurch and Dunedin within the next six months - as well as continuing its rollout in Hamilton, Tauranga and Whangarei.

Radionet competes with Walker Datavision's Walker Wireless division which is also deploying a nationwide wireless data network, and announced late last year it would be seeking $20 million capital for expansion.

Wilson Neill's Mr Mason said Radionet and Onthenet would add a significant contribution to the company's bottom line.

"It is forecast in the first full year of operation the two companies will contribute in excess of $1 million net profit," he said.

Mr Mason said Wilson Neill now met NZSE listing requirements in terms of its market capitalisation (currently at $59.2 million including the newly issued shares) and he anticipated the company would regain a main board listing by the middle of the year.

The original Wilson Neill company was last listed on the primary board in 1996 before going into liquidation.

Shares in a subsidiary of the former company were distributed to shareholders and from that Saudi Corp, later renamed Wilson Neill Corp, was born.

In preparation for the company's vault back on to the main board was a recently completed small shareholder plan that pared down the company's 12,700 shareholders to 6629.

Wilson Neill has an approximate group-wide turnover of around $30 million, and is projecting profits of around $1.5 million in the current year to March.

Iguacu business will add around $800,000 after tax and management to the company's bottom line, says Mr Hyslop.

The company has also announced participation in an agreement to lease a vacant space at the end of Eastridge shopping centre in Kepa Rd, Kohimarama, for conversion into what Mr Hyslop described as a "new look" Cobb & Co to add to the chain's other newlook outlets in Whangarei and New Plymouth.