Blue Chip turns its back on NZ

Jock Irvine

Blue Chip Financial Solutions today repaid local investors for shunning the property and financial services company by announcing it would delist here and decamp to Australia.

The news came as the company announced a bumper June half year profit and indications of a strong full year result.

The company flagged it would quit in April when it listed in Australia and raised A$14 million ($16.8 million) in a secondary listing.

Chairman Jock Irvine said that while the majority of Blue Chip's business was in New Zealand, Australian investors had shown greater interest in trading and supporting its shares.

"On the back of this interest, and with our planned further expansion into the Australian market, the board of directors has resolved to make application to the NZX to de-list the company's shares from the NZSX Exchange," he said.

"It's not an indictment of the New Zealand exchange," he said. "It's to do with New Zealand investors, the way they look at some companies."

New Zealand investors had not recognised the full value of Blue Chip shares, whereas the Australian capital market had been more supportive, he said.

There was a belated recognition today when Blue Chip shares leapt 12c, or 19 per cent, to 78 cents. Shares closed up 7c at 73c. The stock has traded between 66 cents and $1.02 in the last year.

"There was a greater appetite for Blue Chip shares in the Australian market than there has been in New Zealand.

"By focusing on Australia, we believe we will do much better for our shareholders than we have done so far."

After having listed in Australia, the company found it onerous to meet the obligations of two separate jurisdictions.

It will quit the exchange in October.

The company reported its June half year net profit after tax jumped to $7.03 million from $2.41m.

Pre-tax profit rose $9.3m from $4.4m on trading revenue that was up 77 per cent to $42.4m.

Managing director Mark Bryers said he was confident the company would exceed forecast earnings for full year.

He said more than doubling net profit was particularly satisfying in view of the company's focus on the listing in Australia.

"Traditionally, the first half of the year represents about 35-40 per cent of our full year result, so we are comfortable on the back of this result that, providing the general economic climate doesn't alter significantly for the balance of 2006, we will exceed our prospectus forecasts."

A 39 per cent lift in the volume of transactions in a difficult economic climate was the most pleasing aspect of the result, he said.

The company planned to distribute half the annual net profit in dividends and a half-year dividend of 4 cents per share would be paid at the end of October.

Mr Irvine said chief executive Andrew Murray stepped down from the board yesterday so he could concentrate on the Australian move.

Mr Irvine said he was confident the Australian business would at least be at the same levels as the New Zealand business within two years.

- NZPA