NBR L.E.K Shareholder Scorecard: Smaller companies lead the way for shareholders

Friday 14th December 2001

Small capitalisation companies have taken the honours in this year's NBR L.E.K Shareholder Scorecard, outdoing all of New Zealand's top 40 companies.

Cavalier Corporation, Mr Chips Holdings and Cedenco Foods enter the Hall of Fame this year with Silver Awards for consistently delivering superior returns to shareholders over the past three years. Horizon Energy Distribution wins a Bronze Award. For the first time, no company has met the criteria for a Gold Award.

Last year's Hall of Fame entrants, Top 40 companies Baycorp Holdings and The Warehouse Group, were not able to retain their place this year.

The Hall of Fame honours those companies that have consistently generated superior returns for their shareholders in each of the past three years. The Hall of Fame tracks one year returns to shareholders in all New Zealand listed companies, as measured by the NBR L.E.K. Shareholder Scorecard. Companies earning returns in the top 20% of the New Zealand market earn an A rating, while companies earning returns in the next 20% of the market score a rating of B.

The most prized rating for top 40 companies, the Gold Award, reflects three consecutive years of returns in the top 20% of the New Zealand market. Silver awards are bestowed on companies that have scored two As and a B in the last three years, while Bronze awards result from two Bs and an A. No company which slips below a B rating in the Scorecard during the three-year period is eligible for a place in the Hall of Fame.

The absence of previous Hall of Fame regulars such as Baycorp and The Warehouse reflects the challenges that successful companies face in creating year -on-year shareholder value and consistently beating market expectations. Similar results were seen in the Australian Scorecard this year, where three out of four of the companies that had previously delivered consistently high returns, Computershare, Brambles and PBL, also failed to make the Hall of Fame this year.

To reflect the continued move toward a transtasman capital market, and the trend to more global investor orientation, this survey includes the 52 New Zealand companies with a market capitalisation of more than $100 million at June 30 2001, plus the Australian Top 50 companies by market capitalisation. Tables for the full Australian and New Zealand markets are available from the L.E.K. Consulting website www.lek.com.

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