The week in review

Friday 18th January 2002

COMPANIES

Shares in fast food franchisor Restaurant Brands rose to a four-year high after the company returned to form with a bottom-line profit of $12.2 million. The result for the year ended November was a 24% increase on the previous year's $9.8 million, although the previous result included a $2.8 million after-tax charge for costs associated with the purchase of the Eagle Boys chain. The latest effort remained $800,000 shy of 1999's $13 million net profit. Total sales for the year stood at $258.8 million, up 12.7% on the previous year, with KFC sales growing 1.5%, Pizza Hut 44.6% and Starbucks 55.6%. Earnings before interest, tax, depreciation and amortisation was $46 million, up 14.8%.

Genesis Research & Development and state-owned Landcare Research are joining forces to figure out ways to control botrytis, the parasitic "grey mould" fungus that attacks grapes and other fruit and flower crops. They plan to focus on the genetics of Botrytis cineream, making use of Genesis' genomic capabilities and Landcare's expertise in fungal biology to discover a range of controls for botrytis and, potentially, other fungi. Genesis and Landcare will jointly own the intellectual property developed through the 50:50 partnership. Another New Zealand company already established to tackle Botrytis ceneria is Dunedin-based secondary listing Botry-zen, which has developed an organic pesticide against the pathogen.

Air New Zealand will close its international English-speaking reservations call centres in London, Vancouver and Los Angeles and transfer the work back to New Zealand. The airline says centralisation also means it can provide an improved 24-hour, seven-days-a-week service and better manage market specific peaks and troughs.

Hellaby Holdings will buy back 1.5-2 million shares over the next 12 months, representing up to 4% of its capital, in a bid to boost its share price, which the directors consider undervalued in light of its strengthened balance sheet after selling $30 million worth of investments over the past two years.

Listed Australian dairy company National Foods confirmed it was looking across the Tasman for further growth and was sizing up the New Zealand Dairy Foods milk, cheese and yoghurt business. National Foods has been rebuffed by major domestic Australian co-ops over the past 18 months and has turned to New Zealand seeking some scale. Three other players are also believed to be in the market for NZ Dairy Foods, which is being sold off as part of the merger to form Fonterra Group. In November National Foods launched a friendly takeover bid for specialty cheese and gourmet food group King Island. Acceptances so far for the offer at $A3.25 a share were believed to be well over 80%.

AGRIBUSINESS

Trade Minister Jim Sutton expressed concern at the lack of comprehensiveness in Japan's free-trade agreement with Singapore. Agriculture had not been fully covered in the agreement, Mr Sutton said, and further details were being sought.

The European Union removed the tariff on imports of the country's frozen boysenberries. Trade Negotiations Minister Jim Sutton said it was possible the EU would also remove the tonnage restriction by July, so the fruit could enter Europe duty free and in unlimited volumes.

BUSINESS

ANZ Bank introduced a new low-fee account in another response from existing banks to the forthcoming launch of state-owned Kiwibank, which has pledged lower fees than those offered by competitors. Already some trading banks have cut fees to certain customers or have offered similar low-cost accounts aimed at heavy users of electronic transactions

Legal publishing company Butterworths of New Zealand announced the change of its company name to LexisNexis Butterworths as part of an internal rebranding strategy to align the various divisions of the LexisNexis Group under one brand globally.

Christchurch-based General Cable bought out Australian data and telecom cable distributor Brand Rex from UK-based Novar Plc. The acquisition will give General Cable a major distribution presence in the Australian market and will increase sales by $A30 million. The company's total sales are $150 million, with half of it coming from exports.

ECONOMY

The consumers price index rose 0.6% in the December 2001 quarter, latest figures from Statistics New Zealand show. This reflects higher food, housing and health care prices. A 2% increase in grocery foods and a 4.2% increase in meat, poultry and fish prices drove the food price increase. Petrol prices in the December 2001 quarter were 15.4% lower than the same period last year, with transportation prices falling 0.6%. The CPI was 1.8% higher than a year ago but was the lowest annual rate for two years.

The Reserve Bank is expected to leave its official rate unchanged at 1.75% after next week's official cash rate review, a majority of economists said in a poll.

Newspaper job ads rose 0.7% month on month in December but was 6.6% lower than for the same time last year, the ANZ Job Ads Survey showed. The number of internet job ads was 17% lower than last year.

The government said it would inject about $5 million into new tourism initiatives this year, with $2.5 million going toward improving the Qualmark tourism accommodation and retail rating system.

TECHNOLOGY

Fonterra Group is ready to open up a tender process for its private network that will provide farmers with at least 64K connections. Telecom is committed only to providing 9.6K and 14.4K connections in its upgrade to the national infrastructure. Vendors under consideration at this stage have advanced wireless and satellite solutions, say sources, as well as more conventional options.

Electricity company Trustpower said it would start charging customers for using New Zealand Post's billing service. About 60 companies use the service, and other utility services are predicted to follow suit.

Oracle announced it would cut its global workforce by up to 850 employees. Oracle New Zealand's managing director Leigh Warren said the layoffs, expected to be mainly in consultancy, should not affect this country, but an Australian spokesman was unwilling to deny local and regional job cuts.

The Internet Advertising Bureau released a new set of advertising standards covering ad and page impressions, clicks, visits and unique audience measurements.

Fisher & Paykel Finance will trial a chip credit card from Eftpos New Zealand in the next few weeks, with a full rollout of 30,000 planned for March. The chip follows the release of ANZ's Zed card last year.

Well-known internet brand Iconz re-launched on to the New Zealand market under new owner Michael Spencer.

PEOPLE

Robert Le Brun has been appointed director, corporate strategic initiatives at Fonterra Co-operative Group. He will be responsible for supporting Fonterra's senior executive team in developing the organisation's strategies, values and aspirations. He will also play a leading role in structuring and leading strategic initiatives that cut across our various businesses. Mr Le Brun was previously an associate principal with McKinsey & Co, working in Latin America and New Zealand for four years. Before that he worked for Sedac, a non-profit NGO in Mexico as an economic development consultant where he designed and implemented a dairy production program to foster economic development. He has an MBA from the University of Chicago, an MA in economics from Louvain-la-Neuve, Belgium, and a physics qualification from the Worchester Polytechnic Institute, Massachusetts, USA. He is fluent in Spanish, French, English and Italian. He is married with one child.

NZSE managing director Bill Foster will step down this year once the exchange has completed its demutualisation and the board has appointed a suitable replacement. Mr Foster has held the position for 13 years. He will remain the NZSE's representative on the World Federation of Exchanges, where he chairs the working committee and is a member of the governing board.

TVNZ has beefed up the top of its news division with the appointment of Trish Carter to the new position of deputy head of news and current affairs. She will oversee the network's primary daily focus, One News and Holmes, and have the regional bureau editors as well as the political editor, the foreign editor and the sports editor as reports.

AUSTRALIA

American food giant Kraft Foods has gobbled up Australian biscuit maker Lanes Food Group, gaining control of key Nabisco-licensed brands such as Chips Ahoy! Ritz and Premium biscuits. Kraft already has a small presence in the Australian biscuit market through the Oreo brand, but about 80% of the market is still served by Arnott's, owned by Campbell Soup. Kraft would not reveal the price it paid for the business, which achieved around $A100 million in sales in 2001. Outside the biscuit business, Kraft's other major food products in Australia include Vegemite, Kraft Singles, Philadelphia cream cheese, Kraft peanut butter, Toblerone chocolates and Maxwell House coffee.

Australia's largest food company Goodman Fielder will push on with the $A310 million sale of its Leiner David gelatin business despite an anti-trust challenge from the US Federal Trade Commission. The FTC is seeking a preliminary injunction to block the sale to German company DGF Stoess, claiming the deal would eliminate strong head-to-head competition between DGF Stoess and Leiner Davis. The FTC said the two firms combined accounted for more than 50% of the US market for pigskin and beef hide gelatin.

A radical new pricing scheme from a second-tier Australian internet service provider XiS may finally crack Telstra's broadband pricing regime in Australia. DSL (digital subscriber line) - which provides high-speed internet over a telephone line - is often the broadband technology of choice in countries such as Australia and New Zealand where fixed-line copper networks reach virtually every home.

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