Forum Archive Index - March 2004

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Philip

>
>Earlier this year Hirequip was tipped as a big mover by several
>posters to this forum, however its shareprice has dropped back a bit
>in recent months. I see this announcement today: Hirequip New 
Zealand
>Limited ("the Company") advises that the industrial sites owned by 
the
>Company and which had been put up for sale last month subject to 
lease
>back have all been sold. The Wanaka property sold for $1.1 million
>(plus GST) at a yield of 5.45% to a private investor.  The properties
>at Stoke and New Plymouth sold to a joint venture in which the family
>interests of Stuart McKinlay, a director and substantial security
>holder of the company, has a 50% interest. The Stoke property sold 
for
>$2.4m (plus GST) at a yield of 7.23% p.a.  The New Plymouth 
property
>sold for $1.93m (plus GST) at a yield of 8.70% p.a.
> 
> What are your views on the stock now?
> 

Another dog selling the kennel?    Sorry Macdunk, couldn't resist!

Personally I do not have a problem with a company like Hirequip 
selling properties that it owns then leasing them back.  It reduces the 
headline company debt, although you have to watch those leaseback 
terms carefully.  If the leases are 'guaranteed' then there is a strong 
argument to be made that those pending lease payments are still debt.

Depreciation on the buildings will be eliminated from the Hirequip 
accounts too, as they no longer own them.  Still those yields indicate 
that Hirequip has got good prices for those properties.  I would say 

"Well done Mr Wong"

I wonder what Hirequip will do with the money?

SNOOPY



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