KEY POINTS:
FLT
Shares in Flight Centre (FLT) have made an astounding recovery after crashing earlier in the year. Flight Centre, whose distinctive travel shops are everywhere, has had a tough couple of years as it struggled against the travel business moving online and away from its vast branch network. However, the company is still a powerful presence in travel with very strong brand value. Last month FLT released record profit and sales results for the 2006-7 financial year, indicating it's far from a spent force. The share started moving up after an aborted attempt at taking over the company. The bid by private equity was rejected by shareholders recently. The founders and major shareholders of Flight Centre sold some shares but reaffirmed their intentions to retain control of the company. The sale was in line with the founders' stated intentions to achieve liquidity to make FLT shares more tradeable.
PPG
Kathmandu founder Jan Cameron has bought an 8.6 per cent stake in clothing retailer Postie Plus (PPG), totalling 3.4 million shares. It is a surprising move as Postie Plus has been an unimpressive performer since it listed at $1, falling below the IPO and staying down. The company listed in August 2003 with 93 retail stores across four distinct businesses, namely, the retail chains of Postie Plus (a national casual family clothing chain), Rendells (an Auckland specialty department store chain), Babycity (baby care stores) and Arbuckle's, a national manchester chain. The group is erratic and for the six months to January 31, 2007, it reported a bottom-line loss of $488,000, compared with $735,000 profit previously. The loss was the result of heavy discounting of stock. It could be argued that Cameron has spotted value in the beaten down share price, particularly as PPG tends to pay a relatively high cash dividend.
* Views expressed in this article are those of IRG, not the Weekend Herald.