NZ Shareholders Association chief executive, Oliver Mander. Photo / Michael Craig
OPINION
If Oliver Mander didn’t have enough on his plate already, he certainly will now.
The chief executive of the New Zealand Shareholders’ Association will step in as managing director of the investor advocate for the next three months, as it regroups after the sudden exit of chair Andrew Reding to head Fletcher Building.
The appointment of Mander, who has been CEO since 2020, was voted in at a low-key annual meeting in Hamilton, attended by around 30 people.
Interim chair Joy Marslin said NZSA had to accelerate board renewal plans with Reding’s departure, as it seeks to broaden its shareholder representative base in a changing investing landscape.
Reding, in the chair’s commentary in the 2024 annual report, said the economic crunch had done little to dampen this pace of change, with continued growth in non-traditional, and non-DIY investment channels, such as discretionary investment management services, KiwiSaver providers, exchange-traded funds and micro-channels such as Sharesies and Hatch.
The change had introduced a whole new cohort of investors accessing capital markets, he said.
For the non-profit NZSA, it had accentuated the swing away from the traditional investor base, seat of its historic membership.
NZSA was chasing ways to support the new investors, including building new relationships with the institutions managing the funds of the new investors, the meeting heard.
One item currently in Mander’s in-tray is a meeting with Hatch concerning the online platform’s new partnership with Jarden Direct, which replaced Direct Broking - a legacy platform previously known as ANZ Securities.
There have been a few grumbles lately from investors because the NZX50 and ASX indices are no longer available under the market overview section of Jarden Direct’s website.
Stock Takes understands this is due to the costs involved in hosting the data.
Commenting on the Sharetrader website this week, Mander said he is keen to discuss how NZSA can make a positive impact on the transition. “We have a few other questions we would like clarified also.”
Also approved at the Hamilton meeting was the appointment of long-time Auckland branch committee member Chris Steptoe as a NZSA board director.
Questions from the floor were sparse throughout, to the extent that guest speaker Dame Joan Withers, chair of The Warehouse, was spared any queries about the recent unsuccessful $590 million takeover bid for the company by an Australian private equity firm backed by Warehouse founder Sir Stephen Tindall.
Forsyth Barr has upgraded its earnings forecasts and spot valuation for Tower after the insurer wrapped up its strategic review and announced plans for a $45 million capital return to shareholders.
Tower spent nine months working with Goldman Sachs to review its capital structure, ownership and risk profile. In the end, it decided to stick to its current setup while proposing the near 12c a share mandatory share buyback.
There are a few hurdles to overcome, including an Inland Revenue ruling and shareholder approval at the annual shareholders meeting in early 2025, but investors appreciated the announcement with the shares climbing to an eight-year high of $1.23 this week.
Forsyth Barr, in a research note, said the update represented progress on multiple fronts for Tower. That included the insurer reaffirming guidance for an underlying net profit of more than $45m and a final dividend of 5c per share.
The other highlight was news the Reserve Bank has removed its additional solvency margin requirement (previously $15m) that was initially set due to the Canterbury earthquakes. This recognises Tower’s now robust capital position, Forsyth Barr said.
“The removal of this solvency margin comes at a pivotal time when Tower has experienced a period of particularly benign large events and below-average business-as-usual (BAU) claims,” Forsyth Barr analysts James Lindsay and Will Twiss said in their report.
“This favourable claims environment has contributed substantially to profitability, prompting Tower to propose a substantial return of capital to its shareholders.”
The investment firm has increased its spot valuation on Tower shares by 26c to $1.70, while noting that the company’s current market valuation “remains very undemanding”, trading at 7.1 times FY25 PE (Price-to-Earnings).
“If execution continues as we expect, further capital returns are likely to occur in future years, alongside its already strong dividends, with a forecast FY25 gross yield of 11%,” said Lindsay and Twiss.
The capital return will be conducted as a scheme of arrangement and will likely be implemented in March next year, subject to High Court and shareholder approval and confirmation from Inland Revenue.
WasteCo has been a disappointing ride for investors who backed the company through a reverse listing on the NZX in December 2022 and poured in more money last year to support an ambitious acquisition strategy.
The South Island company joined the NZX following a $31 million deal with Goodwood Capital, which had been chaired and 18% owned by back-door listing specialist Sean Joyce.
The shares initially traded at 8c, 15.8% below the 9.5c price that Goodwood last traded before the takeover and have steadily declined since. This week they hit a low of 3.4c after the company told the market it had breached two of its banking covenants with primary lender Kiwibank.
WasteCo said the breaches to quarterly interest cover and leverage ratios came as a result of weaker quarterly trading, with revenue down against budget, particularly from some of its larger customers.
As at March 31 this year, the company had $33m in total borrowings, $10.6m of which were listed as current liabilities. It made a net loss of $4.1m for the 2024 financial year, worse than the $1.9m reported for 2023.
WasteCo provides waste collection services throughout the South Island in Christchurch, Ashburton, Timaru, Ōamaru, Dunedin and Balclutha and employs about 300 staff.
Co-founder Carl Storm resigned from the executive team in July last year and a month later as a director of the business.
The company has pinned its future on expanding its business through organic growth and acquisitions. Recently it bought Nelson-based Central Suction Cleaners, Wastech Services in Central Otago and Enviro South.
The company said its management was having “constructive discussions” with Kiwibank and was providing further information to seek the bank’s agreement on either a waiver or a variation.
The closure of Winstone Pulp’s timber mills is a big blow for the workers left unemployed but it will also have a flow effect to other businesses. The mills are one of Napier Port’s largest customers.
The port has said the mills contribute to earnings of around $4 million a year.
Forsyth Barr analysts Andy Bowley and Hugh Lockwood downgraded their target price on the port from $3.05 to $2.90 this week on the closure news and predicted earnings would be 6% lower in both FY25 and FY25.
“The volume hit from Winstone Pulp International is not immediately replaceable, albeit Napier Port Holdings may be able to partially offset the lost income from exporting logs that would have otherwise been processed.”
Winstone is owned by Malaysia-controlled investment company Oregon Group which also owns Earnslaw One - the fourth-largest forestry owner in New Zealand. It is now seeking to sell its assets which the analysts said could allow some scope for the port to recover its lost containerised export volume.
“However, we view this as unlikely. More likely (perhaps) is Napier Port benefiting from wood that will now be diverted by Earnslaw One to log exports.”
But the analysts remain upbeat on the port with expectations that the loss of volume will be mitigated by pricing gains. “Like with other listed ports, we expect pricing to be a key driver of returns enhancement over the medium term.”
They retain an outperform rating on the stock. Napier Port opened at $2.28 on Thursday.
Once upon a time, Robinhood was the broker for renegade first-time investors who wanted to stick it to Wall Street. Three years on from the height of meme stock mania, the company wants to reclaim the disrupter crown for itself. That’s a far more interesting investment story, particularly if it figures out where its troublemaking can be best deployed.
Three consecutive quarters of net profitability have helped boost Robinhood’s shares by more than 50 per cent this year. It has been helped by market tailwinds too, notably from its crypto operations as trading in bitcoin has surged. In fact, its shares have tracked the crypto drama closely. Higher interest rates have also helped, with net interest revenues offsetting a slide in income from the rebates and payment for order flow that make up its trading core.
So far, so simple. But what does founder Vlad Tenev want Robinhood to be seen as? The place where the kids trade Nvidia while mom and pop sort their 401(k) retirement funds? A crypto hub with the air of an outlaw yet safe onshore US rules? Or some combination of the above in a superapp that combines more businesses such as payments and savings?
This year Tenev has made moves that fit all three. In June Robinhood bought crypto exchange Bitstamp — even as it faces an expected lawsuit over alleged violations of securities laws linked to crypto. By year-end, customers will have a web platform that should increase its appeal beyond smartphone-obsessed youngsters. In July it bought Pluto, an AI-based research platform. Back in March, meanwhile, it launched a credit card as part of its “gold” subscription service. Bitstamp also gives it an entrée with institutional investors, potentially opening up a different trading market entirely.
Tenev has said that the credit card was “just the beginning”. That sounds like a superapp in the making, and those stories can rapidly become complicated.
Robinhood’s shares trade at 27 times forecast earnings, on the back of its straightforward growth tale. That is a premium to broking rivals. Interactive Brokers — serving institutional traders as well as retail — and Charles Schwab, which has a bank, trade on multiples of 18 and 17 respectively. Crypto exchange Coinbase, in contrast, is on 37 times.
Next month in Miami the broker is hosting its first customer conference with promises of “awesome” new products. After three years of association with a brief and ill-fated market mania, long-term investors should be looking for a clearer sense of the next chapter in Robinhood’s tale. - Financial Times
- Additional reporting by Tamsyn Parker
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