Vertex shares list at 4pc discount

10.45am

Vertex, Carter Holt Harvey's spin-off plastics packaging business, listed today at $1.97 compared with its issue price of $2.05.

Vertex raised $61 million in just the second main board float of the year after Skellmax. The company had been 93 per cent owned by investment companies Pacific Equity, Bain Capital and their associates, who purchased it from Carter Holt.

It has forecast a 24 per cent rise in operating earnings for its initial public offer to $12 million, from $9.7 million in 2002.

Gross dividend yield for 2003 is forecast at 10.3 per cent, with Vertex expecting to pay out dividends at around 70 per cent of net profits after tax in future.

Vertex has moved from a centralised structure under Carter Holt Harvey to numerous divisions manufacturing a range of plastic food containers, moulded components and industrial goods,.

As a result, the company has factories in Wellington, Hamilton. It is New Zealand's largest rigid plastics packaging manufacturer.

Vertex's diverse products range from packaging for dairy consumables such as yoghurt, bottles for household products, trays, industrial containers, and Securefresh (supplying machinery to companies to produce longlife packaging of fresh meat).

Its most recognisable products include containers for Tip Top brand ice cream and Fresh 'N Fruity yoghurt. The company also makes recycling bins, foam meat packing trays for supermarkets and butchers, and containers for household items such as Comfort brand fabric softener.

A large part of Vertex's forecast growth will be on the back of cost-cutting.

Around 20 per cent of Vertex's 2002 revenues totalling $85.9 million came from exports, mainly to Australia, the Pacific Islands and the United States.

The first IPO of the year, agricultural equipment manufacturer Skellmax Industries, is clinging to a small premium to its $1.15-a-share offer price. The stock has traded in a range of $1.06 to $1.20 since listing June 19.

- NZPA