Amalgamated Dairies' trade finance operation expands

By Venkat Raman

Friday 16th August 2002

Amalgamated Dairies' purchase of S H Lock (NZ) ends several months of speculation and uncertainty for the trade financing and factoring firm.

Market sources say ASB Group will receive about $10 million in the protracted deal, which was signed last week. While a number of other buyers were considered, the Amalgamated option was considered the best for financial and administrative reasons.

The move will see managing director Leslie Jaques stepping down after 14 years, ending a 32-year career with S H Lock that began in London in 1970. He will remain a consultant until November. S H Lock employs 15 people.

The Goodfellow family-owned Amalgamated has been on an expansion and diversification spree. It acquired Ezi Factors International in April but it is not known if those operations will be merged with S H Lock.

Amalgamated executive financial services manager Peter Goodfellow said the intention was to develop the company's activities with a special emphasis on small and medium enterprises.

"Amalgamated's acquisition signals a new focus on growth through investments in the financial services industry. S H Lock has a strong brand and a proud history in New Zealand. We are committed to building it into a world-class trade finance business," he said.

The reasons for the sale of the profitable company are unclear but ASB Group managing director Hugh Burrett said it could better fulfil its potential under other ownership.

"It operates in a specialist area of finance that is also fully serviced by ASB Bank through its business banking division," he said.

ASB Group acquired S H Lock with the purchase of Sovereign in 1998 and during the same year established the factoring division. The company has 22% of the factoring market and a turnover in 2001 of $322 million, up from $100 million in 1996. It posted a record after-tax profit of $1.35 million in the year to June 2001, 45.8% up on the previous year.

Mr Jaques said this year's results were expected to be at least 10% above budget "within a 20% growth factor.

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