Few observations of presentation:
International Infrastructure Assets
- There is huge demand for new assets to be built around the world $1000 billion p.a I think was mentioned.
- Despite the falls in stock markets, they don't believe there has been any change in the of value infrastructure assets.
- There is a huge wall of institutional funds looking to make investments in infrastructure assets e.g. Canadian Teachers Pension Fund
- Listed infrastructure assets are very cheap and expect more privatisation as they are out of kilter with what the assets are changing hands for.
- Airports assets are changing hands at 24x EBITDA. eg If Wellington was put up for sale it would be worth several times the $600m it is in their books for.
Trustpower
- Very bullish on this company due to the renewable exposure and pointed out 50% of their assets are in this company.
- Higher prices of electricity expected in NZ due to world gas prices and carbon and TPW will reap the higher prices which will go straight to its bottom line
- TPW has had a 1 in 20 year season that has knocked $15m off its result for this year, yet $600m taken off the SP.
- Also lots of investment in new generation in latest year has held the current years result back, but will reap big returns in coing years.
- They see wind generators as big beneficiaries going forward
Inf Energy Aus
- Very upbeat on whats been achieved here and see the model being rolled out in all the other states in Aussie.
- Profits more longer term here as they are following a path of growing the business.
Airports
- See a continuation of the long term (40 year) trend continuing for deacdes of increasing traffic
- Air traffic growth historically runds at double GDP growths
- Despite current concerns of fuel and soft economic times at worst generally results in a temporary halt in the trand and it catches back up the following years
- They say analysts tend to only look at a very small window to make forecasts in this industry, however they are forecasting based on the huge growth in aircraft scheduled to come onstream etc.
- Wellington they are very pleased with.
- Europe airports they concede are a bit of a drag on profits, but will benefit from the long term trends eventually.
NZ Bus
- The investment has been frustrating for them due to the government which has meant the timeline to get increase value has lenthened
- Despite the above, the investment pays its way and is quite profitable
- Value will eventually be created once the government stops bungling
Auckland Air
- Believe this is a very undervalue investment, for reasons mentioned earlier with long term trends
- They wanted Dubai to be involved as they would have added value rather than just paid $.
- Cullen intervention has meant the cost of their investment is $40m more than it may have been.
- They can't believe the incompetence of Cullen in the way he created the airport fiasco.
Energy Developments
- Not mentioned - average results
Austral Pacific
- Conceded a bad investment
Funding
- Very Robust debt position.
Acquisitions
- Focussed mainly on new investement in subsidiaries. See buying their shares as one of the best investments for them.
All in all very positive but not reflected in share price