Executive Summary: October 23, 2009
By Scott Rochfort | smh.com.au | 23 October
Trevor Rowe ... make it short and snappy. Illustration: Shakespeare
CBD
Name change hopes for initial success
United Group Limited's chairman, Trevor Rowe, finally seems to have found a winning formula on how to put a rocket under a company's share price.
After shareholders of the engineering and property services concern voted in favour of the group's name change to its acronym, UGL, yesterday, Rowe was excited.
The outgoing ASX director said it had "become fairly obvious that we may follow in the footsteps" of larger companies that also trade on their acronyms, such as GE, BHP and ASX.
UGL shares fell 19c to $14.04. Aside from the added bonus of no longer being confused with an American airline, Rowe (aka TR) explained UGL now had its own unique identity.
"The word United is used by a lot of companies in a lot of countries," he reasoned. "It will be relatively painless," he said of the adoption of the UGL name.
The other listed company Rowe chairs, BrisConnections (aka BCS), has yet to put forward any plans to come up with an acronym to help it with its flagging share price.
Its securities are trading more than 90 per cent below their issue price. But Rowe was vague when one shareholder asked how much the UGL name change would cost.
UGL's chief executive, Richard Leupen (aka RL), had to chip in, saying it would cost up to $10 million. Rowe re-entered the fray.
"It's a very cost-effective way of going about it, given some other exercises I have seen," he said. CBD wishes Rowe had explained what exercises he had seen.
Man of property
The property group headed by the son-in-law of the now departed Westfield co-founder John Saunders has pooh-poohed rumours that troubles could be brewing within its ranks.
Fenix Real Estate's managing director, Richard Weinberg, was too busy to get hold of yesterday. But Fenix's numbers man, Bradley Goodman, said there was nothing suspicious about the exodus of staff from the property manager.
Nor the sudden departure of Fenix's (aka Ticor) founder and owner, Steven Moss, from the company's website. "He's no longer involved in the day-to-day running of the Fenix business," explained Goodman of Moss.
"It's pretty much Richard and myself." As for the job losses, Goodman said they were mainly in the "development and leasing area" and related to the group winding down its development pipeline.
Goodman said Fenix also had "no problems" with its bankers, despite talk its newly redeveloped Marina Mirage (opposite the Chris Skase-built hotel of the same name) and the yet-to-be-built $120 million Nerang Centre on the Gold Coast were struggling.
Fenix's Armidale Plaza in country NSW has also struggled to find tenants. It is believed doubts surfaced sometime ago over Weinberg's idea to build a $70 million shopping centre in Armidale, a country town of 25,000 which already has a grand spanking new Centro shopping centre.
The Fenix-run centre has been dubbed by some in the property industry as "Weinberg's Wonder" or something like that. Fenix also manages the bulky goods property portfolio of the Terrace Tower Group, of which Weinberg's wife, Monica, is the joint heiress.
The 32-year-old Weinberg, Monica and her sister Betty all sit on the Terrace Tower board. The Saunders family, according to BRW, is worth $900 million.
The Terrace Tower assets not managed by Fenix include the building where it is based, at 80 William Street, the Westfield-managed Eastgardens shopping centre, a business park in Tuggerah and three office buildings in the US. John Saunders, who died in 1997, started Terrace Tower in 1985 after leaving Westfield.
The renaming of Fenix from Ticor this year seems to have been an attempt to reinvigorate the group, which on its website describes itself as "structured for action".
On the website, Weinberg says: "People find dealing with Fenix a fluid and dynamic experience."
Feel the pain
Myer's poster girl Jennifer Hawkins-led float parade is set to be joined by arguably one of the most arthritic listings in recent memory.
A Brisbane-based bio-tech that is working on a cure for rheumatoid arthritis is expected to release its prospectus for its planned initial public offering at the start of next month.
It hopes to raise up to $30 million after already raising $13 million in recent weeks from its shareholders. CBio Limited argues its yet-to-be developed treatment for rheumatoid arthritis is "potentially a very valuable asset".
Chaired by the former Greyhound Pioneer chairman Stephen Jones, CBio continues to hobble along after accumulating $75 million in losses since it was founded in 2000.
CBio had to suspend the "recruitment" of new patients into its trial of XToll treatment due to "an impaired manufacturing capacity".
"While this has and will cause a delay in the completion of the trial, CBio is investigating the feasibility of utilising additional overseas clinical trial sites once recruitment is able to recommence as a means of minimising and delay to the completion of the trail," CBio says in its recent accounts.
Sounds promising. The main positive is the company's licence agreement with the Norwegian pharmaceutical Novo Nordisk.
One major cash drain on top of the $7.3 million in research costs last year appears to be CBio's $5 million administration bill. Aside from Stephen Jones pocketing $400,000, CBio paid $300,000 to its managing director, Jason Yeates, and $220,000 to its chief financial officer, James Greig.
At least it has been going easy on the cash burn by issuing options instead. The executives and directors of the arthritic concern are sitting on 9.9 million already vested options that are priced at the planned $1.
It is unclear if the listing will be priced at the $3 to $5 of some of its more recent raisings.
Twiggy tales
The Sydney Mining Club has offered a moving blurb on one of its upcoming speakers, the Fortescue chief Andrew "Twiggy" Forrest.
Ahead of Twiggy's address on November 12, the club's mini-biography focused on a fascinating story from his schooldays.
"Twiggy was training with his school's Second XV team on the same oval as the visiting England U-19 team that happened to be on tour in the former colonial backwater," it says.
"History doesn't record if he was successful." Then, aside from spruiking his mining projects, the club also highlights that Twiggy's influence goes beyond our shores.
"Forrest is now increasingly playing in the world of geopolitics, with Japanese and Korean parties potentially being brought into the fray after FMG's [Fortescue's] recent setback with mooted Chinese financing [of] its aggressive growth plans.
"It is hard to imagine the BHP [Billiton] and Rio Pilbara iron [joint venture] taking place without FMG now in play as the monopoly breaker," it adds.
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Briefs
Super
AMP flow shrinks Australia's biggest super provider, AMP, reported lower net inflows in the third quarter, reflecting subdued investor confidence following the global financial crisis. Net cash flows into AMP's asset management business fell to $103 million in the September quarter, from $414 million in the same period last year.
Vitamins
Blackmores ahead The vitamin company Blackmores reported first quarter sales were up 17pc on the corresponding period to $54.7 million but profits were down due to the costs of a new facility.
Paper
Pick-up not sighted The paper merchant PaperlinX said an upturn in market sentiment in its main markets had not yet translated into a significant lift in print demand. The weakness faced earlier this year had carried into the seasonally slow northern hemisphere summer period, its chairman, David Meiklejohn, said.
Food
Pizzas on the go Sales at Eagle Boys Pizza grew 16.4pc in the June year and it is expecting double-digit rises to continue this financial year.
Credit
Fly and drive American Express and BP have issued the first Australian corporate card offering fuel and air travel rebates for small- and medium-sized businesses.
Finance
Hunt's new role The former Bendigo and Adelaide Bank chief Rob Hunt has been appointed chairman of the Treasury Corporation of Victoria.
First published by Smh.com.au on October 23 2009
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