Forum Archive Index - November 2001

["Ian Andrews" <iandrews@ihug.co.nz>]

The recent "profit announcement" is just a repeat of the estimate delivered by the company on March 6, so if anything it is already factored in the price.  7 months have  elapsed since March 31 but the figure in the press last week is still not audited. Rather, the Wilson Neill board, without any fanfare, pushed the Balance Date back to 30 June. Is delay in reporting audited results ever designed to benefit shareholders? I think there is more likely to be unpleasant news coming when the audited 15 month result is delivered; with losses being booked on NZ Business Times, Flying Pig, Yipee , Estar & Radionet to name a few. The Company admitted in the ODT article that WECU is 5 months behind already in settling on the Radionet purchase.

 

A charge was placed on the full Wilson Neill group of companies on 11 October. This points to either additional indebtedness or scared existing creditors.I'm not aware of any business acquisitions. Could it  be that Wecu ( a Carribean-based company which nobody can find much about) have secured their own debts over WNC?  

 

Small investors should look for companies with reliable management, good governance & at least one independent director. Tim Connell promised all of these in February, but since Wecu ousted him in July he has gone to ground, & his role in the Wecu takeover has never been explained.

 

There is still no independent director on the Board; but then  I couldn't see anyone worthwhile wanting to become asociated with the this level of secrecy.

 

Certainly, the same people are running the company, including Chairman Mason, convicted & fined $20,000 in the Dunedin Court in June for not disclosing several massive share issues & who has just been censured & fined for the second time by the Institute of Chartered Accountants over his handling of Wilson Neill affairs.

 

Forms continue to be filed late at the Companies Office. The imminent letter to shareholders promised 6 weeks ago has still to materialise. Ditto for the announcement from Wecu of 4 months ago.

 

The only business worth serious mention is Cobb & Co, which succeeds because the restaurants are managed by owner-operators who know their business  - WNC merely clips the ticket. IT Media's Rugby, Fishing & Boating titles seem to be popular, but they seem to be carrying a disproportionate number of losers. 

The rest of the group is hot air.

 

Brokers have been trying to sell large blocks of WNC shares offmarket at 1.8 cents recently, so the current price is no surprise. It seems to have now dropped out of the descending triangle which saw the price bounce of crucial support at 2 cents. 2 cents, by the way, was the price at which shares were issued when the company recapitalised 3 years ago.The next meaningful support level would probably be 1 cent, making it a high risk trade. It might reach Cavill White's 30 cent price target of a year ago; but I would expect to see pigs flying first.   

 

 

 

 

Disc: Own 2200 shares.