Williams and Kettle share buy-back approved

By NZPA

Thursday 28th November 2002

Shareholders have overwhelmingly approved a proposal for the Hawke's Bay-based rural service company Williams and Kettle to buy back its shares.

The proposal, adopted by a 91.8 percent majority at the company's annual meeting in Napier today, gives the company the power to buy back 1.47 million shares, up to 10 percent of shares on issue.

Director Murray Gough said the value of the company's shares had risen steadily until February, and in June-July the share value had dropped.

The company knew of no reason why the value of its shares had dropped below what directors considered a realistic value.

The board was keen to close value gaps quickly, and a buy-back might be the best use of the company's cash, he said.

During each of the last two years an average of only 1.2 million shares were traded.

Mr Gough said the company would fund any buy-back by further borrowing under its existing bank borrowing facilities.

In a report to shareholders, financial consultant Elizabeth Hickey said a buy-back would increase the interest of the company's largest single shareholder, H and G Ltd and its associates, owned by the Cushing family interests, to 40.96 percent from 36.86 percent.

Ms Hickey said the Cushing interests usually represented more than 50 percent of the votes actually cast at any general meeting and any increase in its holding "in my opinion does not markedly affect the control position".

Chairman John Bayly said Sir Selwyn Cushing and fellow director David Cushing "put their money on the line through their share ownership and are going to protect their interests".

Mr Bayly told shareholders that for the first three months of the year trading had been sound and results, though a little down on last year, were above budget.

The company appeared to be on track for another reasonable year if there is no material downturn in the rural sector.

Chief executive Gerald Weenik said the weather was a potential problem because New Zealand was on the edge of El Nino weather pattern, which was causing drought in Australia and affecting American weather.

However, he was cautiously optimistic as far as trading conditions were concerned.

Three directors Roger Bonifant, David Cushing and Mr Bayly, all of whom retired by rotation, were elected unopposed.

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