Originally Posted by
Unicorn
We live in uncertain times. All shares should be expected to be at a larger discount than in more settled times. NZO have just completed the largest fund raising on the NZX this year, which should be expected to force the share price towards the issue price for a while.
Management appear to have delivered an underlying operating profit well in excess of $100M, and the Pike holding is currently worth more than $100M above book value. Kupe appears to be progressing well for such a large project. I think management has done very, very well for their shareholders this year.
If you invest on NZX you need to accept that your shareholding will be at a discount to the underlying value, at least until an overseas buyer decides to take your company over. This is a legacy of the 1987 crash, a fixation with property, and a widespread preference for borrowing rather than investing. I don't think we can blame NZO management for that.
I am pleased to see that NZO is clearly not just resting on its Tui laurels. There are already things happening to grow the company further, and clear attention being paid to more growth into the future. Many of these things can't be rushed, so we should be pleased that there have been no hasty decisions made.
I am happy that short term panaceas like throwing dividends at shareholders are taking second place to the more important issues of sound financial management going forward. NZO shareholders have had a great year, and have a lot to look forward to in the year ahead. Can't ask for much more than that.