SKYCITY has signalled a probable legal fight with contractor Fletcher Construction over the delay to the completion of the New Zealand International Convention Centre (NZICC).
In its interim results released today, SKYCITY said the delivery date of mid-2019 of the NZICC and Hobson Street hotel projects would be six months after the contracted date of January that year. That is double the initial three month delay announced last year.
SKYCITY chief executive Graeme Stephens told the Ticker this morning his company was entitled to claim damages because of the delay, which he had always considered to be six months.
“We are flagging that now because we are getting to the phase of the construction where the end is in sight,” he said.
“Nothing is currently happening but we are flagging the liquidated damages that we are entitled to and, simultaneously, Fletchers, which would be likely to challenge our ability to claim them.”
In its interim results, SKYCITY said: “We remain comfortable with our contractual arrangements, which provide for liquidated damages that should mitigate our losses through delay, but legal challenges from Fletcher Construction are possible.”
Stephens added he wanted to be transparent about the possibility of legal action as “there is going to be some degree of claiming and counterclaiming when we get to the end”.
The delay followed ructions at Fletcher Construction last year, which saw its share price plunge in July after a profit downgrade and the immediate departure of its chief executive, Mark Adamson.
SKYCITY said today it had noted a “positive change” over the past six months in the construction of its two projects with Fletchers.
“The overall programme is well advanced with the core of the Hobson Street hotel now up to the eighth floor (of thirteen) and the slab for the final floor in the NZICC nearing completion,” said the company.
“Overall, we expect our investment in the projects to be in-line with our original budget. We continue to escalate our sales and marketing efforts to confirm the pipeline of convention bookings and, pleasingly, we have secured six major international conferences for 2020.”
The question is what do investors do in the face of impending doom when the Labour Party stumbles across the line to win the 2017 election. Well they've started it already. They have stopped buying Auckland International Airport Ltd[AIA.NZX] its moving backwards with a DIV coming, Auckland Airport growth is bound to stall under a Labour Govt. Labour's stated aim is to at least halve immigration and I think it will go completely the other way within 2 years - people will not want to stay. The other thing Labour is going to introduce, a $25 dollar new tax for travelers to this country is going to have a major impact on tourists. This will clearly impact further on Auckland Airport, it clearly has already. Uncertainty certainly plays a part in it, there's no doubt about that but reality plays a big part as well and Labour's focus of their extra spending is on the unproductive parts of the economy. That has been the way of the Labour Govt's from year one. But you don't get economic growth from putting taxpayer money into things like "higher wages for everyone" it is simply a blight on the taxpayer and business as a whole. You've got to be focused on what you as an individual can bring to the table rather than Labour's view that whats on the table is mine and that extending the table through extra taxes and more Govt borrowing is the way to go. Its not. You've got to wonder about those companies that have got a high component of transport costs, Like Freightways and Fletcher Building. These companies have come off recent highs and they are nervous about what will happen when Labour gets into power. Every company on the NZX is effected by the probable change of Govt. I'm not worried about my investments. I will take the time to look at each company in the Share Investor Portfolio and buy more when they get cheap enough. That's the thing with long-term investing in shares and changes in Govt. You make your serious money in times of gloom and (like we will be heading to under a Labour Govt) and make even more in times of boom (like we are just coming off now - under National). Either way I'm not disturbed. AIA @ Share Investor Auckland Airport: Look Before You Leap Auckland Airport: Its a Buy AIA: To Buy Now Or Not To ? Share Investor Q & A: Auckland Airport's Simon Moutter
Coming mid-way through the earnings period with about 3 months till the new reporting season kicks off there are 3 stocks in the Share Investor Portfolio that are worth a perusal because reporting for them kicks off on the 20th of this month with Ryman Healthcare RYM , Mainfreight MFT on the 26 th and Fisher & Paykel FPH on the 27 th.
Ryman is looking good for a slice of the retirement sector action, they started the listed sector, it is they continue to lead with units built, and of course they are by far the largest retirement sector group in New Zealand.
They could actually pull off a coup this May announce a share split. Something they did about 10 years ago. They needn't split in my humble opinion but there you go management seem to like that sort of thing.
If they don't split now they will do so in November.
Mainfreight could well transport some of Rymans tools of the trade like timber and concrete.
It is also finished at an all-time high of $16.77 on Friday, a barometer for the economy as a whole Mainfreights share price tends to reflect what is happening in the economy right now and right now the economy is hot.
All signs are pointing to a record profit, with a spread of global investments paying off, Mainfreight is ready to expand without spending anymore but guess what they are spending more and that is again going to lead to more expansion along the way.
Fisher & Paykel is a stock now that is ranked either one or two depending on what the market is doing on a day to day basis. At present it is ranked number two with Fletcher Building number one. This will of course all change over the next couple of years as the price of Fisher outpaces Fletchers with Fisher about $1.80 in 2012 and Fletcher's around $5.50 vs today's price of around $8.40 from memory.
Fishers is headed to a record profit this May and its share price will doubtless head up past the $10 mark and above and one wonders why the hell nobody has yet held out $ US10 billion or so to take this company within their fold.
Good.
These little 3 shares in my portfolio are among the best performing of the 9 that make up the Share Investor Portfolio.
I cant wait until the 20th.
P.S. Anyone who wants to train for the Auckland Marathon this October can! Train with me. If you are interested and hopefully live in the Albany Auckland area. Give me a buzz @ shareinvestornz@gmail.com
Superstar Xero a surprising omission from list for investors to add to their portfolios
Mainfreight is a popular pick for a strong performance in 2014 due to its increasing international exposure. Photo / Sarah Ivey
Air New Zealand is the most popular pick by brokers for 2014 riding on the back of strong expectations for profit growth at the national carrier.
Three out of seven brokers chose the airline, whose shares have already risen more than 25 per cent this year.
Rob Mercer, an analyst at Forsyth Barr, said Air New Zealand was heading into 2014 in great shape with earnings expected to increase from those already seen in 2013.
"Air New Zealand (is) poised to deliver several years of strong profit performance."
Mercer said the drivers behind that were improved demand, cost cutting, changes to loss-making long-haul routes and stable fuel prices.
Macquarie analyst Brad Gordon said Air New Zealand had outperformed its airline peers yet it was trading at a cheaper price.
"Air New Zealand's return on equity is around 11 per cent, Qantas is basically zero."
Gordon said that in the past Air New Zealand's value had traded at a discount because of the Government's high level of ownership.
The 20 per cent sold down by the Government in 2013 reduced the overhang issue and increased liquidity in the stock. Trade volumes had been boosted from around half a million dollars a day to around $1.5 million to $2 million.
Gordon said the nature of the New Zealand market meant Air New Zealand stood to benefit from the country's strong economic growth and flow-on effects from the Christchurch rebuild with more people travelling up and down the country.
Outside of Air New Zealand, Diligent, Chorus, Fisher & Paykel Healthcare, Contact Energy, Infratil and Mainfreight received two picks each.
Diligent, a software providers of corporate board documents, was a top performer in 2012 but this year it has struggled with governance issues and delays in restating its accounts. Its shares have fallen more than 25 per cent.
Gordon was not worried about Diligent having to restate its accounts.
"It's not entirely unusual for new software companies to go through restatements globally."
The big question mark was whether the issue had distracted management and impacted sales for the company. He would be looking closely at quarterly sales figures due out early next year.
Diligent was a top pick for brokers in 2013 but remarkably none of the brokers have picked Xero either this year or for 2014, despite its stellar performance.
Gordon believed that was down to a lack of understanding over Xero's valuation. "The last $15 the company put on really there has been no news. On the face of it it's the most expensive SAAS (software as a service) company on valuation."
Others have zeroed in on companies with strong global growth prospects.
Mark Lister, head of research at Craigs Investment Partners, said he picked Fisher & Paykel Healthcare because the business is growing strongly offshore and was well positioned to continue to deliver over the medium term. "If we see any currency weakness emerge, this would serve to enhance the investment proposition even more," he said.
Lister also picked Mainfreight for its increasing international exposure.
"Mainfreight has a strong brand and market position in Australasia but over recent years, an increasing portion of revenues and earnings have come from international operations including those in Europe and the US.
"A recovery in some of these regions, as well as any strength in the currency, would benefit Mainfreight."
Forsyth Barr's Mercer said he backed Mainfreight because it had a high marginal return on equity, it was beating peers on earnings growth and had a proactive executive team.
"Mainfreight has substantial global growth prospects."
Brokers top picks:
Macquarie Securities
Summerset Group
Diligent
Pumpkin Patch
Air New Zealand
Chorus
First NZ Capital
Fisher and Paykel Healthcare
Hellaby Holdings
Airwork Holdings
Z Energy
Contact Energy
Goldman Sachs
Trade Me
Tower
Air New Zealand
Infratil
Nuplex
Craigs Investment Partners
Fisher & Paykel Healthcare
Fletcher Building
Meridian Energy
Mainfreight
Australian Foundation Investment Company
Forsyth Barr
Air New Zealand
Contact Energy
Sky Television.
Mainfreight
Opus International Consultants
McDouall Stuart
Telecom
Diligent
Infratil
Heartland Bank
VMob
*Disclaimer - Before using the Business Herald survey to choose a broker or stocks, readers should recognise that the results are skewed by some features. The figures exclude brokers fees. Brokers are asked to choose the securities that will give the best short-term performance. If they had been asked to choose, for example, a five year term, the results might be different. The survey does not allow brokers to review choices during the year. The survey implies a one-size-fits-all approach. It takes no account of individual circumstances such as an investor's appetite for risk, need for income or tax circumstances. The views expressed do not constitute personalised financial advice and are not directed at any person. Finally, past performance is no guarantee of future performance.
Because the value of my portfolio keeps rising - I'm what you call a slightly negative investor.
The value of the portfolio is just over $ 509,000.00 and has climbed steadily since my incarceration ended at the end of May - from around $ 390,000.00.
It reached the half million mark at the beginning of the week and has put on nearly 20% in 2.5 months.
My finger is poised to sell but I just cant, yet, because nobody has been crazy enough to give me what I want.
I want to ditch the 10000 ASBPB shares I hold and FBU but think I can get more for these if I wait, and for some smaller holdings of others, BGR and HLG have done really well...350 plus %.
Starting to do well is FPH, well duh the dollar wasn't going to stay at that rate forever, it is the reason the stock is performing, not that the company is actually performing, as it has been for years.
Contact energy looks about to break of of its trading range of $5.30 - $5.50 and bout time to since it will be doing some sort of fine business in the countries heatwave/drought and this coming profit result should be a doozy - and it may be taken over by someone.
The WHS dropped into the green this week as I stepped back into the country after holiday - oh ditch the holiday moniker, seriously but it was up and I had one guy who took my advice to buy some last week, who did and he scored about 8 k - beat my 3k after about 5 years.
SKC is going up and up and up - notice a pattern there. Well it keeps reaching for the limit of the tower but it is one that apart from being up about 150% after 10 years and almost now practically free still owes me about 2 bucks per share.
Then there is FRE which has gone up about 90% but still bugs me that it has not gone further - it will one day.
Then MFT always end with the good ones North of 120% and still looking like a winner.
Keep in mind, just like me they will have their biases and they may or may not indicate as to whether they own the stock they are picking - they should.
Some interesting picks that I will comment on latter in this spot. 2013 Picks
Pumpkin Patch Ltd [PPL.NZX] had a reversal of sorts this year. From a penny dreadful to above a buck it changed its fortune when it put global dominance behind them and concentrated on this part of the world. It still is overseas but through different channels such as 3rd parties which the patch gets its fair share of. They managed a decent profit this half year and all the reorganization has thus far had the required impetus, so much so that there is talk of paying a divided next year. Look forward to new stores and some exciting new clothes for the coming season. Pumpkin Patch @ Share Investor Share Price Alert: Pumpkin Patch Ltd 4
Mainfreight is a dominant player in the logistics sector in Australasia
and has businesses in North America and Asia. It has designs on becoming
a global logistics player and is well on the way to acheiving its own stated aim of 2 billion in revenue. It has a stated aim of doubling in size over the next 3-5 years. It is one of the best managed companies listed on the NZX. There has been a few hiccups along the way, Win Bosman on sale to MFT, is a black spot thus far but you cannot undermine MFT management of this situation and some patchy performance in Asia. There is no doubt that MFT will manage its way out of it, they have managed thus far this yearand Im picking they will manage their way out this year.
Buy on weakness.
With
low refining rates, massive capital expenditure and plant shutdowns
largely behind them and a rising global oil prices, 2013 looks to be a
resurgent year for New Zealand Refining Ltd. Those higher oil
prices will see this stock rise and it has already and the oil price
rise has been a significant one. It has been mainly due to a very cold
Northern Winter bumping up all sorts of petrochemical products so it is
unclear just how sustainable the oil price rise will be. Having said
that the recent rise is bound to gain some traction even when the
Northern ice melts away and 2013 rolls along.
Their mid 2012 profit was horrible but that should be the last of that, it can only go down so far.
Look for an increased dividend in 2013 as profit increases that will underpin a good share price rise from current levels.
Nasdaq YUM! Brands Inc [YUM.NASDAQ] A pick from 2010, 2011 & 2012 Yum ! Brands Inc achieved a billion plus in sales growth for 2012 and with more tasty growth to come in 2013 and beyond from China & India still make this company a Finger Lickin proposition. It will never be cheaper. ASX Coca Cola Amatil [CCL.AX] Coca Cola Amatil
is the dominant player in the carbonated drinks market in Australasia.
It sells its iconic Coca Cola brand as well as a large number of other
well known brands in New Zealand, Australia, Indonesia, Fiji and a
number of other markets in this part of the world. Their latest 2012 result shows a good profit. A strong history of profits can be a good sign that there is more to
come in the future and the fact that its customers are largely addicted
to its products makes this company a great long term bet. I have
always liked this company because it keeps managing to grow its business
with clever marketing and product placement at sales outlets. Buy on any weakness for superior long-term returns. Coca Cola @ Share Investor Coke is it! Caltex Australia Ltd [CTX.AX] Caltex
Australia Ltd is Australia's largest refiner of oil and oil based
products and has one of Australia's largest networks of filling
stations. Its share price has done well over 2012 and is likely to do so in 2013 because the company
still remains a dominant player in its sector with good long term
potential. The retail sector for petrol in Australia
is undergoing consolidation at the moment and Caltex could be set to
benefit. Buy on weakness for good long term gains. Other notable quotables NZX Auckland International Airport [AIA.NZ] A good monopoly at historically cheap prices. Kathmandu Holdings Ltd [KMD.NZ] A listing that I may have been wrong about, well see. Value below NZ$1.80. New Zealand Refining [NZR.NZ]
The country's only refiner of oil products. The share price should recover on a lower Kiwi
dollar and therefore better margins, an increased global demand for oil
and refurbished, expanded plant which will be ready soon. Port of Tauranga [POT.NZ] New Zealand's leading port company with good upside on increased exports. Michael Hill International [MHI.NZ] A very well managed jewelry chain poised for global expansion just waiting for that all-important US market to come to the party. Conclusion& Outlook for 2013 2013 may well be a year of some severe downward corrections on global
stock markets. As uncertainty surrounds the fragile state of many
economies and the precarious state of Europe's debt yoke and more pain
and drama to come in the United States as politicians argue over
spending cuts to stop the country from defaulting. Gains made on
stock markets in 2012 could materialize for some as nervousness over the
aforementioned leaves them to take cash off the table. It is clear that
there is much more bad news in relation to the global economy to come
and the consequences of this bad news one can only guess at but it will
not be pretty at all. That aside if you can, most listed companies have done well in 2012,
and will continue to do so in 2013 but others will find the going
tough as cash flow dries up, debt mounts and interest rates bite.
I got rid of PPG, GFF and STU this year cause they irritated the hell
out of me and they will never go anywhere. Why did I keep them? Well
god only knows its been a year of changes. Remember, the stocks I have picked above are based on my investment
criteria and may not fit yours and of course you could have a
different opinion. I would love to hear your opinion and any picks you may have. Have a look at what I have to say, take it on board or not and then do your own research to see if you might agree with me. Lastly, I wish you all good luck and a prosperous 2013.
*Just an added
footnote. Please feel free to post your own stock picks for 2013. The
only requirement is that you say why and declare any financial
interest. Post them below at the bottom of this piece or click here. Disclosure : I own SKC, FBU, WHS, FPH, MFT, PPL, MHI, AIA, CEN shares in the Share Investor Portfolio. Share Investor's Annual Stock Picks Share Investor's 2013 Stock Picks Share Investor's 2012 Stock Picks Share Investor's 2011 Stock Picks Share Investor's 2010 Stock Picks Share Investor's 2009 Stock Picks Share Investor's 2008 Stock picks Broker Picks Brokers 2012 Stock Picks Brokers 2011 Stock Picks
