KEY POINTS:
It's all been fairly quiet from Tower New Zealand lately. After a very rocky start to the decade, the company's shareholders are probably relieved that various fires have been extinguished and dividend payments have begun again.
However, speculation when Tower split into separate New Zealand and Australian operations almost two years ago that the New Zealand business was being readied for sale has resurfaced.
Talk is that new Tower Investments boss and former Hanover Group chief executive Sam Stubbs has been hired to move the investment team from Wellington to Auckland as part of sale preparations.
"I have no intention of doing that whatsoever," Stubbs said yesterday.
Tower Investments would operate a "dual office" structure to serve Auckland clients but would keep the bulk of its staff in Wellington, currently about 100 against five in Auckland.
Stubbs said he was "not at all" aware of any plans to sell Tower NZ or its investment arm.
"Conversations with the board have always been about the long term future."
Tower shares closed yesterday at $1.94, up 3c.
DORCHESTER SLAMMED
Shares in listed finance company Dorchester Pacific have continued to take a hiding, yesterday closing untraded at 57c, their lowest point in a decade.
They've now lost almost a third of their value since the company announced its annual profit was likely to be between $3 million and $4 million against $6 million last year due to reduced lending volumes, lower fee income and increased provisioning.
One market commentator pointed out recently that Dorchester's current price is well south of its net asset value, but given the current environment for all but the top tier finance companies it's hardly surprising investors are still giving the company the swerve.
Comments from chief executive Andrew Walker last week were admirable for their honesty but unlikely to fire investor enthusiasm.
He said Dorchester's debenture reinvestment rate was running at the comparatively low level of about 30 per cent and the company was finding it difficult to secure alternate funding, which is seen as almost a prerequisite for survival for finance companies in the current market.
ON THE PLUS SIDE
Sick of seeing your shares in sound companies with solid earnings get pummelled as the gloomy sentiment from overseas grinds down the NZX?
Want to find out how to make money in a falling market?
How about an 87.5 per cent return in less than 14 days?
Take a look at this then. No, it's not Optionetics, it's a little something called Plus SMS.
Plus SMS's NZAX listed shares have almost doubled in value in the last two weeks, rocketing up from 8c on February 28 to 15c yesterday.
That got NZX interested and prompted a please explain letter from the market operator's market surveillance team.
Plus SMS responded by saying it was indeed complying with disclosure rules, in a notice released last Friday.
This week the company announced a new deal involving its subsidiary CRE8, Microsoft, and the largest telco in the Southern Hemisphere, Brazil's VIVO.
VIVO will use CRE8's software to enable Brazilians to use Windows Live Messenger, Live Mail and Live Spaces on their mobiles.
That sounds like a big deal, and Stock Takes wishes Plus SMS well, but readers will have to forgive our scepticism which is founded on the fact the company's history has at times been less than confidence inspiring.
Once upon a time it stood astride the NZAX in a way even Telecom never managed on the NZSX main board, with its shares at 80c. Its market value peaked at $262 million in November 2005. At that time the NZAX's entire market cap was $632 million.
However, Plus SMS' value collapsed in September 2006 after it admitted making incorrect statements to the market. That prompted a Securities Commission inquiry which has yet to see the light of day.
The commission has also for some time been taking an "in depth" look at the NZAX which chairwoman Jane Diplock said was "not particularly" related to Plus SMS.
GAS GALORE
Remember the big Maui gas shock in 2003 when, suddenly, an independent report found the big field was in danger of running out of puff two years earlier than expected in 2007?
Then-Energy Minister Pete Hodgson issued dire warnings that retail electricity prices could rise by as much as 8 per cent as a result.
In fact "dwindling Maui gas reserves" became something of a catchphrase as the report kickstarted a period of retail price rises well in excess of Hodgson's prediction. The potential to ratchet prices higher was explicitly mentioned by Australia's Origin Energy as one of Contact's attractions when it bought into the company.
These days, the cost of new renewable generation has replaced dwindling gas reserves as energy consumers' bete noir.
As it happens, Maui is still going and while some industry figures believe it could "water out", and effectively cease production at any time, Todd Energy senior executive Chris Hall this week said it could keep producing well into the next decade.
Commenting at the sidelines of an energy conference in Auckland, Hall said New Zealand may well have sufficient reserves to see it through possibly until 2030.
"There's very substantial scope for incremental development and production at existing producing fields," he told Radio New Zealand. Substantial enough, he said, to effectively double the current supply position of 2000 petajoules.
To be fair, Todd Energy have been saying this for some time, and estimating gas reserves is clearly an inexact science. The Kapuni field, discovered in 1959 and initially estimated to contain 200PJ, has to date produced 800PJ and may well squeeze out another 400.
Still, you have to wonder to what extent, if indeed any, the gas production industry keeps its cards close to its chest in order to keep upward pressure on prices. A wry aside from Contact Energy's chief executive David Baldwin at the company's half-year results briefing several weeks ago suggested it was something he wonders about too.
Associate Energy Minister Harry Duynhoven said there was "clearly a difference of opinion" between the official gas reserves figures he gets from the Ministry of Economic Development and what oil and gas explorers were now saying. "What it does tell us is that we need to have better information from industry."
SWIPED AWAY
Following Provenco's disappointing half-year result a couple of weeks ago, research house Aspect Huntley is forecasting another full-year loss, albeit a narrower one, for the eftpos company.
Provenco's shares have lost 4c since it reported a December half net loss of $4.6 million from $1.8 million a year earlier, as revenue declined 5.9 per cent to $82.9 million. Aspect Huntley says the company, which plans to merge with rival Cadmus Technology, shows promise and has appealing features including good local market share and a niche product for the overseas oil industry. "But earnings are likely to be bumpy and unpredictable. The company is likely to soak up an awful lot of cash in an attempt to fulfil its growth aspirations."
Management says the soft first half performance was down to a lack of new contracts. While ongoing talks with big Asian oil companies could yield results which would see Provenco "strike it big", Aspect Huntley sees the company posting a full year loss of $500,000 against last year's loss of $1.8 million. Provenco shares closed untraded at 37c yesterday.
