Wilson Neill in search of former glory

By Mark Reynolds

Wilson Neill - one-time darling of sharemarket investors - wants to tidy itself up for a possible comeback on the main board of the stock exchange.

The company plans to purge its registry of small shareholders and has increased its investment in the hospitality industry through the purchase of a hotel operation and some apartments in Christchurch.

Wilson Neill also plans to expand its Cobb & Co family restaurant franchise business.

But while the company says it is in expansionary mood, the latest annual report shows its finances have plenty of room for improvement.

The company recorded an after-tax profit of $364,333 in its March financial year, turning around from a $188,428 loss a year earlier. But its balance sheet showed total assets of $4.25 million were funded by debt of $2.8 million, a ratio of 63 per cent.

A big portion of the debt - $1.2 million - was money that was still owed on recent asset acquisitions.

The Business Herald tried to speak to company chairman Trevor Mason to clarify the company's outlook, but a promised return telephone call did not eventuate.

In the annual report he described Wilson Neill's financial affairs as "satisfactory."

Mr Mason is a director of Micada Holdings, a major shareholder in Wilson Neill with 12.5 per cent. Mr Mason is also the principal of Dunedin accounting firm TJ Mason & Co which, according to the Wilson Neill report, is owed $100,000 for accrued secretarial fees.

Mr Mason said in the report that the company expected business conditions to be sluggish in the short term, but forecasts indicated the company was about to enter a period of steady growth.

During the March financial year the company's only operating businesses were the management of the Camelot Cathedral Square Hotel in Christchurch and Wains Hotel in Dunedin. It also operated the Cobb & Co chain for five months of the financial year.

That is a far cry from the late 1980s when Wilson Neill had brewing, commercial property and hotel operations throughout Australasia. Its empire came crashing down after the 1987 share market and property collapses - most of the company's assets had to be sold and its shares were delisted from the stock exchange. They now trade on the unregulated ShareMart for about 2c each.

There are still more than 12,000 shareholders in Wilson Neill, but most of those people hold less than a marketable parcel of 2000 shares. The company has introduced a plan that will see those small shareholders forced to sell or increase their holdings to at least 2000 shares by the end of the year.

"This move is to assist in reducing the size of the share register and minimise administration costs," Mr Mason said in the report.

The company would concentrate on investments in the hospitality industry. It had agreements to buy the business of the Avonhead Tavern in Christchurch and seven apartments next to the Camelot Hotel. It also had a marketing agreement to sell America's Cup memorabilia.

The report did not mention if the agreements constituted major transactions requiring shareholder approval. But they are likely to be discussed at the company's annual meeting in Dunedin next week.