28
ASHBURTON GUARDIAN, Saturday, February 16, 2013
Business
www.guardianONLINE.co.nz
Rebuild opportunities aplenty The Christchurch rebuild will offer opportunities for Ashburton businesses large and small says Grow Mid Canterbury chief executive Rob Brawley. Because of the size of the rebuild, the Collaborate Canterbury project has been developed and this will provide Ashburton companies and individuals in the construction sec-
tor an opportunity to find out how they can become involved in rebuild work. Working together was key in ensuring the rebuild happened in the right way and within the right time frame, Mr Brawley said. “Essentially, Collaborate Canterbury teams up local businesses with Christchurch based
construction businesses that have the contracts and the relationships in Christchurch. It’s a win-win for Mid Canterbury businesses who have services to offer.” The project would make it far easier for businesses in the district to become involved in a meaningful way, he said. “I’d urge Mid Canterbury busi-
nesses to register and make use of this valuable tool and connections. Christchurch has moved into a new business era, one where collaboration is essential to its recovery”. The Collaborate Canterbury website was a portal to connect companies and featured a database matching service that would help connect companies
who needed skilled labour and resource and companies that could provide these, Mr Brawley said. A series of presentations were planned around New Zealand to promote the project. A date has yet to be set for Ashburton, but businesses that wanted to participate can register on line at www. collaboratecanterbury.org.nz
Buffett in $23b Heinz buy A nice problem Billionaire investor Warren Buffett is dipping into the ketchup business as part of a $US23.3 billion deal to buy the Heinz ketchup company. H.J. Heinz Co. says it’s the largest deal ever in the food industry. The company, based in Pittsburgh, also makes Classico spaghetti sauces, Ore-Ida potatoes and Smart Ones frozen meals. Buffett’s Berkshire Hathaway and its partner on the deal 3G Capital, the investment firm that bought Burger King in 2010 say Heinz will remain headquartered in Pittsburgh. Heinz CEO William Johnson said in a statement that the company “will have an opportunity to drive further growth” as a private enterprise. “It’s our kind of company,” Buffett said in an interview on CNBC, noting its signature ketchup has been around for more than a century. “I’ve sampled it many times.” The company was founded by Henry John Heinz and his neighbour L. Clarence Noble in 1869. Their first product was grated horseradish, bottled in a clear glass to showcase its purity. The first ketchup was introduced in 1876; the company says it was the country’s first commercial grade ketchup. Last year, Heinz says it had sales of $11.6 billion, with ketchup and sauces accounting for just under half of that. Given the saturated North American market, the company has increasingly looked overseas for growth. In 2010, for example, the company bought
A
Photo ap
H. J. Heinz Co CEO William Johnson (left) and 3G Capital Managing Partner Alex Behring shake hands after announcing the $US23b deal. Foodstar, which makes Master brand soy sauce and fermented bean curd in China. Heinz expects emerging markets to account for a quarter of the company’s sales. Representatives for Heinz and the investment group weren’t able to immediately provide any further details on the deal, including whether there would be any management changes or layoffs. Buffett did not immediately respond to a message from The Associated Press on Thursday. But he has recently said that he’s been hunting for elephant-sized deals and at the end of September he had $47.8 billion cash on hand to finance any investments. Heinz has the type of brand equity that takes years to create and it has been able to raise prices even in the highly competitive grocery business, said Brian
Sozzi, chief equities analyst for NBG Productions. “There isn’t going to be another Heinz brand,” he said. “It has a durable competitive advantage.” Generally, Buffett prefers to buy entire companies for his Berkshire Hathaway conglomerate and then allow the businesses to continue operating much the way they were before. Berkshire has also helped finance deals before most recently during the financial crisis of 2008, when he made lucrative deals for Berkshire when few other companies had cash. Heinz shareholders will receive $72.50 in cash for each share of common stock they own. The transaction value includes the assumption of Heinz’s debt. Based on Heinz’s number of shares outstanding, the deal is worth $23.3 billion excluding debt. -AP
Hubbard Management Fund investors to get principal Investors in the frozen Hubbard Management Funds will get all of their capital back, though anyone who’s already been paid more than what they put in won’t get anything more. Statutory managers Graeme McGlinn, Richard Simpson and Trevor Thornton of Grant Thornton said 208 of the 300 investors who faced a potential loss will get 100 per cent of their principal, and were yesterday paid 10 cents in the dollar, or $2.1 million. The payment comes after the High Court determined how investors would be repaid in December in a decision that wasn’t appeal. An initial $9 million distribution was paid last year. “This will come as an enormous relief to investors, who have been uncertain about repayments since the fund was put into statutory management,” the statutory managers said. “Once all
capital return pool payments are completed, we will reassess the value of the remaining assets and confirm the entitlement calculation for each investor to the surplus pool assets.” The fund’s portfolio was valued at $40.75 million as at December 31, and the managers decided to reduce and realign larger holdings in that month. Last year the statutory managers decided against seeking repayments from investors who were overpaid, and the courtordered claw-back of overpayments in the interim distribution has been removed. Former Commerce Minister Simon Power appointed the statutory managers of deceased Timaru financier Allan Hubbard and his wife Jean, and various entities, in mid-2010. The HMF entity emerged from their investigations into Aorangi Securities, another Hubbard vehicle. The appointment controver-
sially left out Hubbard’s primary entity, South Canterbury Finance, which ultimately cost the taxpayer an upfront bill of $1.7 billion when it failed and called on the government deposit guarantee scheme. The managers’ acrimonious relations with Jean Hubbard, the executor of Allan Hubbard’s estate, extend into their oversight of HMF, with legal battles brewing over investments in Merger Group and South American Ferro Metals. Grant Thornton has racked up $2.64 million in fees and disbursements on the HMF investigation, with total costs of $5.83 million since June 2010. The managers’ report on Aorangi Securities and several charitable trusts was released earlier this month, showing their fees rose to $3.6 million as at Dec. 21, bringing total costs to $7.1 million including legal advice. -APNZ
financial windfall can come from many sources be it an inheritance, the sale of a business, a lottery win or a bonus. With property prices still relatively high, particularly in Auckland, the realisation of estates can often yield substantial sums of money. Whatever the source, it’s worth taking a deep breath before you decide what to do next. What might seem like a lot of money might not actually be “enough” in reality. Which begs the question; how much is “enough”? One million might seem like a lot, but if it sat at the bank earning interest of say 3.5%, that’s $35,000 in interest per year - hardly worth giving up your day job for. “How much is enough” will depend on a number of factors such as your lifestyle, your age, your health and how many dependents you have. Often people’s lifestyles change when they come into some money. It’s a matter of maintaining that lifestyle over the long-term. If you do come into some money, it’s a sensible idea to not tell everybody. This seldom ends well for those who do so. Next you should take a well deserved break. Enjoy a small portion of the money, treat yourself, but do use the time to make a plan. When you return all tanned and relaxed, the next thing you should do is seek some independent advice from a good accountant, lawyer and an authorised financial adviser. They’ll help you put things into perspective,
By Ian Lennie and Selwyn Sloan MONEY MATTERS
guiding you through a process that can change your life for the better in the long-term. Look at paying down your debts before you go out and spend too much. If you have dependents or are planning for them, then you may want to put some funds aside for their future. You probably shouldn’t hand in your notice to your employer straight away. Even the rich have to do something and you might actually enjoy your job. The way you do it might change, you might change your hours or set up on your own, but don’t make the rash decision of quitting. Whilst you don’t want to be the richest person in the graveyard, neither do you want to spend it all in Vegas. But with some careful planning you can have ‘the money’ and ‘the bag’. Ian Lennie and Selwyn Sloan are Authorised Financial Advisers with Forsyth Barr in Ashburton. To arrange a meeting to discuss your investment objectives in confidence, please call (03) 307 9540 or e-mail ian.lennie@ forsythbarr.co.nz or selwyn. sloan@forsythbarr.co.nz. To find out more about Forsyth Barr visit www. forsythbarr.co.nz. This column is general in nature and should not be regarded as personalised investment advice. Disclosure Statements are available on request and free of charge.
NZ retail sales up 2.1% New Zealand retail sales recorded the fastest growth in six years in the fourth quarter, adding to signs of a rebound in consumer spending and sentiment, and sending the trade-weighted index to a post-float high. The total volume of retail sales rose 2.1 per cent, seasonally adjusted, in the final three months of 2012 and rose 2.9 per cent from the same period a year earlier, according to Statistics New Zealand. Quarterly sales beat economist estimates of 1.4 per cent growth. The trade-weighted index jumped to as much as 77.43 after the report was released, from 76.90 immediately before. That’s the highest since the kiwi dollar was allowed to trade freely in 1985. The currency rose to
85.33 US cents, the highest since September 2011. Two-year swaps jumped 6 basis points to 3.05 per cent. The data follows a survey on Thursday showing consumer confidence rose to a 32-month high this month in the face of low interest rates and rising house prices. Retail sales have continued to grow this year, with electronic card transactions rising for a fourth straight month in January. “There’s pretty consistent evidence that activity picked up in late 2012 in a number of areas,” said Michael Gordon, economist at Westpac Banking Corp. “People are taking a bit more notice of the relative growth story for New Zealand. We stack up well to the likes of the US and Europe and even with Australia.” -APNZ