Gould cashes in Vertex holding

By PAM GRAHAM

The country's only listed plastics company, Vertex, has a new cornerstone shareholder.

The Stewart family, of Christchurch, paid $2.05 a share for Gould Holdings' near 20 per cent stake in the Auckland plastics packaging company.

The deal was negotiated during the weekend.

The new cornerstone shareholder pioneered plastics in New Zealand before selling out of PDL Holdings.

The sale gives George Gould, also from a Christchurch business family, a profit of about $3.8 million on an investment held for 18 months.

The price, a 24 per cent premium to the $1.65 price the shares closed at on Friday, is the same investors paid in Vertex's initial public offering in mid-2002.

In the share float to list the company, Sydney-based private equity firm PEP received $60 million for a $12.8 million investment made two years earlier.

Gould entered the picture after Vertex made a shaky start to its new life as a listed company.

Vertex's shares fell 7.5 per cent on the first day they traded and dropped down an elevator shaft two months later when the company issued a profit downgrade.

Investors felt duped and the Securities Commission investigated.

Gould entered as an investor in February 2003, believing the company had good long-term prospects, strong market positions and good dividend paying capacity.

"I think Gould came in at the right time and assisted strongly with the turnaround of the company," said managing director Paddy Boyle.

"He brought stability to the company and encouraged managers to focus on the business and as a result of that we were able to produce good results."

The last annual profit of $5 million was up from $1.2 million the year before.

Boyle said he had enjoyed working with Gould and welcomed the new shareholder and its knowledge of the industry.

The Stewart family has a 40 per cent stake in Alto Plastics, which competes with Vertex.

Boyle said there was no talk of merging the businesses when the family's Mark Stewart visited the company yesterday.

Gould said the unsolicited offer had been for a good price and "we felt the shares were going to a good home".

"It is a great company with a great future," he said.

Gould has resigned as chairman and Kevin Arscott and Humphry Rolleston as directors. Mark Stewart, Warwick Webb and Warren Bell were named in their place with Bell becoming chairman.

Vertex manufactures and supplies plastic-based mouldings and packaging in New Zealand and has factories in Auckland, Hamilton, Wellington and Hastings.

It was once part of the Carter Holt Harvey group.

Its market capitalisation yesterday was $53.52 million after its shares rose 2c to $1.67.

Gould, whose great-great grandfather founded stock agent Pyne Gould Guinness, was not saying what he would do with the profit.

Vertex

Described as New Zealand's biggest plastics company.

Staff: 440.

Headquarters: Auckland.

Six factories in Auckland, Hamilton, Wellington and Hastings.

Annual sales: $90 million.

Founded 1941, later part of Carter Holt Harvey.

Listed on stock exchange: July 2002.