Chief executive still under eye of regulator
AUCKLAND: More than six months after the complaint was reported, the Financial Markets Authority is still looking into whether the chief executive of an NZXlisted firm commented anonymously about the company in a sharemarket chatroom.
In July, New Talisman Gold Mines chief executive Matt Hill was banned from the Sharetrader internet chatroom for not declaring his position with the company, a listed gold exporter, according to the website’s administrator.
The administrator of the popular investment web forum alleged Mr Hill had been commenting under pseudonyms ‘‘Bullish’’ and ‘‘Epithermal’’ for several years despite the site’s terms clearly stating that persons working for a listed company must clearly identify themselves as such.
This week, an authority spokesman said it expected to conclude its inquiries soon but would not give further explanation on when that might be or why it had taken so long to look into the complaint.
Asked about its own investigations, New Talisman secretary Jane Bell referred to its June 30 quarterly activities report, published on July 31.
‘‘Following on from the company’s announcement on 6 July 2020, the New Talisman chairman arranged for a third party to review the comments publicly available, alleged by sharetrader. co.nz as being made by the company’s CEO on the sharetrader. co.nz site,’’ the report said.
‘‘Following that review, the company is satisfied that the poster has not disclosed any material information not already generally available to the market.’’
Ms Bell said the company had no further comment.
New Talisman Gold Mines is developing the historic Talisman Mine near Waihi.
Powering up
Three of the four power generator/retailers are expected to announce higher earnings this results season, but dividends are predicted to be more mixed.
Forsyth Barr analysts are forecasting Genesis Energy to have the biggest rise in its earnings before interest, tax, depreciation, amortisation and fair value adjustments (ebitdaf), with a rise of 24% to $207 million.
Contact Energy, which is the first major company to begin the New Zealand earnings season on Monday, is expected to have a rise of 11% to $246 million, while Mercury is forecast to have a 5% earnings rise to $268 million.
Meridian Energy, the biggest of the four, is expected to have lower earnings at $422 million, down 9% on its 2020 first half.
Forsyth Barr analysts Andrew HarveyGreen and Scott Anderson said given its track record of strong earnings growth, it was unusual for Meridian to be the only one of the four which expected lower earnings.
‘‘That said, Meridian Energy is lapping a record 1H20 result and our 1H21 ebitdaf forecast is the second highest on record, +8% better than 1H19.’’
Across the sector, earnings are expected to be up 3.2% to $1.143 billion, driven by increased retail margins thanks to ongoing elevated wholesale electricity prices.
The sector has been bolstered in recent weeks by news of an agreement to extend the Tiwai aluminium smelter’s operations and by the Climate Change Commission’s emphasis on the need for more electricity use to decarbonise the country.
However, Mr HarveyGreen and Mr Anderson warned that one consequence of the New Zealand’s Aluminium Smelter agreement was a discounted electricity price and likely decline in dividends.
Across the sector they were forecasting a dividend fall of 13% — mainly due to Meridian Energy no longer paying a special dividend.
‘‘Special dividends have been a feature of generator/retailers’ shareholder returns in recent years, as the companies return surplus capital to shareholders.
‘‘Looking ahead, we do not foresee special dividends being common as the generator/ retailers look to reinvest capital into new generation projects.’’
New projects
The Forsyth Barr analysts expected at least two projects would get the goahead from the gentailers, Contact Energy’s Tauhara geothermal project the most likely to be approved.
Meridian’s Harapaki wind farm had a strong chance, they said, and Genesis might also announce a new project, given that it needed to build 1350GWh of renewable energy to meet its 2025 pledge.
The analysts expected Meridian to cut its dividend 30% from 8.14cps to 5.7cps for the half, while they forecast Contact’s to be cut from 16cps to 15cps.
For Genesis, they expected it to rise from 8.525cps to 8.65cps, and for Mercury from 6.4cps to 6.8cps.
Takeover over
United States investment manager Ares Management has dropped its takeover bid for AMP, the duallisted Australasian financial service company which is a major KiwiSaver provider.
Ares told AMP on Wednesday night that it no longer wanted to proceed with its $A1.85 ($NZ1.98) per share offer, but was still interested in AMP Capital, AMP’s investment arm.
That will not go down well with AMP shareholders, who had been hoping for a white knight after struggling with fallout from the Australian Royal Commission into misconduct in the banking and financial services industry.
AMP also confirmed that it had concluded the strategic review of AMP Australia and its New Zealand Wealth Management arm. The New Zealand business has been on and off the market for some time and a separate listing was touted at one point.
Instead, the New Zealand arm has wound down two legacy products and will cut costs by moving to lowfee investment manager BlackRock Investment Management by midway through this year.
AMP’s underlying net profit dropped by nearly a third (32.8%) in its 2020 financial year, falling from $A439 million to $A295 million. The New Zealand wealth management arm’s underlying net profit after tax dropped 18.2% from $A44 million to $A36 million.
AMP New Zealand Wealth Management chief executive Blair Vernon described the result as a ‘‘solid performance’’.
The drop in earnings was put down to the closure of two legacy schemes and softer investment markets in the first half of 2020 due to Covid19.
Assets under management increased 4% to $13.3 billion.
Third Age’s NZX debut
NZX debutant Third Age Health, a medical service provider for the aged residential care sector, plans to use its compliance listing this week to fund future acquisitions.
While the listing did not involve raising fresh capital, chief executive Michael Haskell said the move would open the door to raise funds for future purchases, although the company does not have an acquisition immediately in mind.
Third Age, which serves the aged residential care sector, including private geriatric hospitals and secure dementia facilities, has a reference price of $2.15.
Mr Haskell and chairman and founder Bevan Walsh, have a majority shareholding in the company.