By NZPA
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Monday 9th September 2002 |
Text too small? |
The good news is, it plans to do so over the next 20 years.
Baycorp has been through a "very challenging" six months, managing director Keith McLaughlin told NZPA today. That was no news to the market, which sliced 14 percent off the stock following its result last week.
Baycorp's loss for the June year of $A299.9 million included a writedown of goodwill ($A228 million) and a writedown of its New Zealand databases ($A65.6 million).
"There's still some goodwill on the balance sheet to be amortised over a period of time, but it's less than it was -- around $A200 million," Mr McLaughlin said.
"Effectively that means the amortisation is about $A11 million a year, as opposed to $A25 million a year prior to that. It gets it down to what's more appropriate for the size of the company, written off over 15 to 20 years."
Feedback since announcing the annual results for the company, the result of a merger in December between Baycorp and Australia's Data Advantage, has been "a little mixed", he said.
"The initial headlines with the writedowns caught some people by surprise.
"I think it was a very complicated announcement and quite confusing...but a few (analysts) have upgraded the company."
Until shortly before the results were announced the company was unaware of the size of the write down -- based on goodwill calculated at the time Baycorp's stocks were priced at $7.
They were trading today at $3.82.
Brokerages to recommend investors accumulate the stock included ABN Amro Morgan in Australia, which rated the stock at $A4 where it is currently trading at $A3.27, and Macquarie Equities New Zealand.
David Cleal of Macquarie said the stock was good value at current levels.
The result had shown the merger was producing the benefits the company had predicted, and strong competition had yet to show itself, despite the dampening effect speculation had had on the share price this year, Mr Cleal said.
Mr McLaughlin said growth in operating profit of 17 percent was close to expectations. It was down slightly on last year's 20 percent growth largely because of the effort involved in merging the two companies.
At an operating level, the pre-abnormal profit of $A55 million was up on $A47 million last year, using figures that assumed the merger had happened on July 1.
Trading so far this financial year has been good, he said.
The debt acquisition arm of Baycorp's business will rise to about 14 percent this year, from 8 percent currently, as the effects filter onto the balance sheet from the company's purchase of the Telstra portfolio in June.
"We don't see in our current business it growing any more than that. Our forecasts aren't predicated on any more significant growth in debt acquisition," he said.
Some analysts have expressed concern that the company's growth will be hampered by the drive for acquiring debt, rather than its core area of business information.
"Business information grew 10 percent in revenue and earnings last year," Mr McLaughlin said.
"I think there's definitely room to improve the margin going forward, but we would anticipate sustaining this sort of growth going into 2003."
Baycorp is hoping to avoid the jinx suffered by many New Zealand companies on setting up shop across the ditch.
There was no significant difference in culture between the longer listed Baycorp and its Australian counterpart Data Advantage, which had been a mutual until about three years ago when it listed on the Australian Stock Exchange, Mr McLaughlin said.
"The key difference was the way we did it -- I agree that for a company to open up an office in Australia and compete is quite difficult. But we actually took the best of the Australian company and the best of the New Zealand company, so it wasn't as if we were doing anything different or new.
"We're in a stronger position now to compete with anybody than we ever were in the past."
Baycorp has staved off threats from Eric Watson's RMG, launched several years ago, and more recently the announced intention of Dun & Bradstreet and Collection House to cross the Tasman to New Zealand.
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