Forum Archive Index - December 1999

["hugh webber" <hugh.webber@clear.net.nz>]

here is the text of the Cap Ppties statement which I have transcribed from
today's Press....followed by some important issues.

"Chch Press 18/12/99     Capital Properties Error               


Capital Properties has cut its October earnings forecast for its March year
by 4.8%, and by 14.6% for the following year, because of an error by its
accountants, the company says.

The need for the revision arose because of an error made by
PricewaterhouseCoopers in the income flows of the financial model they had
prepared for Capital Properties, the company said. The financial model had
been prepared to enable Capital Properties to consider the financial
outcome of its proposed takeover of Shortland  Properties.

The $227 million takeover was almost completed, with compulsory acquisition
of remaining minority holdings imminent.

Capital Properties, which warned last week of an impending revision, said
earnings per share for 1999/2000 were forecast to be about 10.7c, against
11.24cps in an October notice of special meeting. In its prospectus for its
November 1998 float, earnings were forecast at 9.47cps for this year.

For the 2000-2001 year earnings are cut from an October forecast of
14.87cps to a predicted 12.7cps.

Although forecast earnings had been cut they were still 35% above the
earnings forecast without taking the takeover into account, Capital
Properties said."

This raises a number of what should be interesting issues such as (a) are
PricewaterhouseCoopers really that incompetent (b) what compensation can
Cap Properties exact from them (c) what recourse do shareholders have who
bought Cap Properties shares relying on the earnings data.
(d) why is there such a deathly silence on these issues in the Sharechat
Forum since I first raised it? people seem more interested in the latest
successors to Judge Corp and Equiticorp than they are in the coy which
apparently has the highest sustainable yield of any on the NZSE. If this is
symptomatic of this forum which I joined recently I think I ought to
unsubscibe and find one more interested in Warren Buffett principles as
explained in Mary Buffett's Buffetology.


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