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airedale
05-05-2004, 08:02 PM
I wonder if there is something going on at Lyttelton Port Coy.The place is shut down by a strike and yet today 116,520 shares changed hands and the price rose by two cents. Hmm, very odd.

bransm
12-07-2004, 12:13 PM
I've been looking into this coy for a little while,mainly for yield...
some research I found says it has no growth earnings expected,may need to review divvie policy for finance port development,and face's potential strike action...
I saw somewhere else they paid $2.9m to settle to strike?..or is it still going on(not the strike itself but the hassles behind it)

any ideas/thoughts would be helpfull...

Cheers,
Bryan

COLIN
12-07-2004, 08:50 PM
quote:Originally posted by bransm

I've been looking into this coy for a little while,mainly for yield...
some research I found says it has no growth earnings expected,may need to review divvie policy for finance port development,and face's potential strike action...
I saw somewhere else they paid $2.9m to settle to strike?..or is it still going on(not the strike itself but the hassles behind it)

any ideas/thoughts would be helpfull...

Cheers,
Bryan


Bransm: Refer to thread "PORTS".
I held LPC for a while, also mainly for yield reasons, but came increasingly to the realisation that the potential for capital growth was limited, largely because of the "Peoples Democratic Republic of Christchurch" control.

bransm
13-07-2004, 07:59 AM
cheers,Colin,
I did a search under LPC,thou didnt think about ports...

foodee
13-07-2004, 08:09 AM
Bransm
Am a holder for yield. Some suggestions of price movement
recently.[:p]
Forecast yield for 2005 is same at 10% gross - good for paying the bills. For quick growth you'll have to look elsewhere.
cheers

bransm
13-07-2004, 08:16 AM
yip,cheers foodee,

with this coy,I'm looking for yield...

airedale
13-07-2004, 06:46 PM
Hi Bransm, the LPC balance sheet is strong [as you would expect for a utility], and should be able to withstand expenditure on infrastructure, and wharf maintenance. I would be surprised if they reduced the dividend.
Noticed heavy volume on the 6th July of 500,000 which sent the price up 2 cents.
I don,t take any notice when there is anything negative about the employees, except to buy more shares if the price drops substantially. Knocking wharfies is a national pastime and just background noise which gives buying opportunities.

foodee
16-07-2004, 11:16 AM
positive announcement on NZX.

Capitalist Pig
17-07-2004, 04:40 PM
I agree Airedale.

The union issue is something that just needs to be worked out (i.e. flush the communists out on the street) and LPC can be compared to the other other ports -> increased valuation and share price.

I have 20K in them and are still adding.

troyvdh
18-07-2004, 12:06 PM
The share price will ultimately be determined by how much cash is spewed out to its majority shareholder (CCC) -surely.
Not that Im complaining, mind.

glennj
18-07-2004, 02:12 PM
Port Marlborough possibly with POT assistance are looking to take some of the coal trade from LPC. (current state of rail can't handle the projected tonnages from West Coast/Buller anyway)

LPC & rail need to get their act together or they will both lose some of their current tonnages & miss out on heaps of potential extra coal trade business.

duncan macgregor
18-07-2004, 03:14 PM
POT leapfrogged POA Into northland deepwater port. It looks like they are doing the same to LPC. By the time they wake up POT will have effective control of New Zealands only other natural deep water port. LPC Is to shallow a port to accomodate large coal ships.
Port of marlborough will end up controled by POT. LPC If they dont wake up will be an also ran. Dont know about you guys but macdunk likes winners know where my money is.
cheers macdunk

skinny
19-07-2004, 07:57 PM
I used to hold LPC as it its cheapest of the larger ports on conventional measures. I sold partly because of the industrial relations side of it, but mainly to buy elsewhere. Even so, it holds a near monopoply on the upper south Island port traffic and its a great yeild so I tend to agree with those who think its still a good buy for a long term income hold.

However, if POT does clear the hurdles to run coal out of Malborough perhaps this could be serious for LPC? A fair chunk of their recent capex has been in anticipation of increased coal handling business - only some of which (if I recall correctly) is secured by long term contracts? A really naive question to end - does anyone know whether it would be economic to dredge Lyttelton so deeper draught boats could get in?

Steve
19-07-2004, 09:28 PM
From memory, they have done periodic dredging of both Auckland & Otago in the past.

foodee
19-07-2004, 09:35 PM
Skinny
It will be interesting to see how the POT proposal is played out.
LPC April 04 anouncement regard coal is somewhat reassuring in the mean time.

cruisader
20-07-2004, 12:37 PM
I dont think the problem of getting more coal out is related to how deep the harbour is, it is limited by the number of trains that can bring it from the West Coast. How would they get the coal from the coast to Marlborouh?

Steve
20-07-2004, 02:13 PM
By putting more LARGE trucks on the road, of course!:D

Good for MFT & OWN?!

duncan macgregor
20-07-2004, 02:43 PM
Remember guys POT has already done a deal on rail south Auckland to Tauranga I expect the homework to be well underway on this. Keep In mind what costs more transport or digging the ditch. Regardless of the outcome with ships Increasing In size the end result Is who runs the deep water ports. POT Is bleeding the profits from POA LPC Is next In line. LPC Is shackled by a stupid union and a city council easy beats for a switched on company. Take a look at the fundamentals LPC are easy beats the TA will prove me right shortly.
cheers macdunk

bermuda
20-07-2004, 03:30 PM
LPC coal business is under threat due to the state of the West Coast -Lyttelton railway line which cannot cope with any more coal traffic and urgently needs a $70million upgrade.Indeed Solid Energy had to barge about 80000 tonne of coal round to Lyttelton to meet targets.With Solid Energy about to expand production and with Pike River Coal about to mine 1 million tons there has to be another solution and that solution is Shakespeare Bay Picton.When that gets developed I would bet that a lot of Solid Energy coal gets barged there instead of going to Lyttelton.

Steve
20-07-2004, 04:30 PM
Who knows off the top of their heads how much of the total volume through the port is coal?

foodee
20-07-2004, 07:42 PM
Hi Steve
Hope these bits are of use:-
Coal is about 25% of bulk weight of through put.
Present year of coal about 2.3m ton and forecast to be no less for 05.
LPC contract with solid energy has about 13 years to run.
Solid energy hope to increase production to 4.0mt.
Unclear arrangement between solid energy and rails to get coal to LPC

cheers

Steve
20-07-2004, 08:44 PM
Thanks for the info Foodee.

Do you know if the increase in production has already been committed to go thru LPC?

foodee
20-07-2004, 09:05 PM
Steve
Unsure, will have to look at the 2002 announcement when I have sometime tomorrow - won't do any harm to refresh my memory in any case.
As a guess LPC(? and others) won't spend 30millon to complete an upgrade in April 04, without ensuring capabilities and continuity of throughput.
cheers

foodee
21-07-2004, 12:55 PM
Had a look at the 2002 contract announcement.
There is no exclusive bind from solid energy.
There is a 'buffer' for LPC which I take to mean a 'guaranttee minimum'.
Solid energy has an 'out' in 2009 if coal production is not econimical - unlikely, unless the good stuff has/is running out!

In todays news the govt is to spend 25mill on upgrading the 'coal track'. Estimated requirement 75mil.

My understanding is that all the coal (including Pike) in the region will have to come to the Westcoast first.

Now, imagine if all this coal were to............[:p]

cheers

ps LPC sp seems to be inching up, picked some more up at 1.67 the other day

Steve
21-07-2004, 10:05 PM
Thanks for looking into that Foodee. Well worth thinking about.

foodee
04-09-2004, 12:16 PM
Another boring week for LPC-bored through 1.80 with healthy volume.;)

Stock Man
04-09-2004, 06:20 PM
Hi,

Yep, the quiet achiever! LPC is quite a thinly traded stock, so it doesn't take much to push/drop the price. I have captured the last 7 months of LPC.

This is a perfect example of 2 trends: the first, a sideways trend (captured between the 2 magenta lines) lasting until mid july. The second, LPC starting to trend, after the break out in mid July.

Incidently, the mid july breakout had plenty of warning for those who follow LPC. The adx jumped from below 14 to over 30 well before the 21 July breakout! Also was a fair amount of positive volume action. LPC was just screaming for attention!

LPC has acted quite normally since July's breakout. First a symetrical triangle formed (shown), before LPC gapped up and formed an ascending triangle.

Is the break above the ascending triangle valid.....who knows. However, given all the evidence, it could be a good trade. However, as I mentioned in the very first line....LPC is a reasonably thinly traded stock!

http://img.photobucket.com/albums/v292/investornz/lpc_daily_3_9_04a.gif

pls do your own research first.

foodee
04-09-2004, 08:39 PM
SM
The nice picture tells all - appreciatd.
Incidently my topup in July was not based on TA which I neither have the skill nor the tool.

cheers

airedale
05-09-2004, 02:19 PM
Interesting to look back on the weekly charts. This time last year it was $1.85 and on the 10th Oct it nudged over $2.00, Then some nervousness about capital expenditure on new wharves sent it back to the $1.60 buy zone.
Heavier than usual volume recently,wonder if there is something brewing?

foodee
10-01-2005, 09:20 PM
There is a report out from ABN that Solid energy & Toll have made an agreement to increase coal from 2.4 to 3.8mt over the next 3 years to LPC. Evidently SE has taken all the capacity provided by Toll thereby shutting out PRCC. This would probably explain LPC sp increase the last few days.

cheers

disc: hold LPC

Snow Leopard
11-01-2005, 10:00 AM
LPC has risen from 1.77 to 1.90 this morning, on the back of the Herald etc publishing ABN recommendation presumably.

rmbbrave
11-01-2005, 10:50 AM
Little port is biggest winner in value report

11.01.05
by Georgina Bond


And the winner is ... the minnow.

Institutional sharebroker ABN Amro has lifted its valuation of Lyttelton Port and upgraded the stock to "buy" after researching Solid Energy's 13-year deal to move coal through the port.

Lyttelton is a minnow among listed port companies, with a market capitalisation of $181 million compared with the $750 million of Ports of Auckland and Port of Tauranga.

ABN Amro has lifted its per share valuation of the company from $1.66 to $1.98. The shares closed yesterday at $1.77.

The broker says Lyttelton is better value for investors than the two bigger listed port companies.

The upgrade from a hold came after analysis of last year's deal between rail company Toll and Solid Energy to transport coal to the port.

Solid Energy will freight 2.4 million tonnes of coal to the port this year, increasing to 3.8 million tonnes from 2007/08.

ABN Amro said the company had the highest gross yield of four listed port companies - 9.4 per cent - and the lowest price-to-earnings ratio.

The two bigger listed ports could be affected this year by a review of the hundreds of millions of dollars New Zealand's biggest exporter, Fonterra, spends on ocean freight.

Construction on a new hub for the dairy company's dry goods exports from the Waikato begins this year.

Ports of Auckland is competing with the Port of Tauranga for the business.

ABN Amro's report says this raises the spectre of a price war.

The broker said it was taking "an increasingly conservative approach" to the ports because of that possibility.

rmbbrave
11-01-2005, 10:52 AM
Is Duncan there?

You have been a big supporter of POT over POA. What do you think of ABN Amro's evaluation of LPC as the port with the most value?

Steve
11-01-2005, 07:28 PM
quote:Originally posted by rmbbrave

Is Duncan there?

You have been a big supporter of POT over POA. What do you think of ABN Amro's evaluation of LPC as the port with the most value?


No, he is not here as he is onhis way down to LPC to get the inside info from the tea lady...;)

duncan macgregor
11-01-2005, 07:42 PM
Sorry guys this share wallows about below my expectation level. Havent given it much thought. Have been with POA and POT in the past both treated me well. I only get interested in a share on a high trend. POT is the best PORT company. LPC to much pomme union troubles for me.
GOOD LUCK MACDUNK

Steve
12-01-2005, 09:56 AM
quote:Originally posted by duncan macgregor

Sorry guys this share wallows about below my expectation level. Havent given it much thought. Have been with POA and POT in the past both treated me well. I only get interested in a share on a high trend. POT is the best PORT company. LPC to much pomme union troubles for me.
GOOD LUCK MACDUNK

In any event, LPC would have been 'timed-out' if you had been holding it last year?! *Assuming that I am finally understanding your TIME criteria*

winner69
27-01-2005, 06:00 AM
ABN Amro do some sums nad everybody falls overthemselves to get a piece of the action ... up to 195n odd .... leemings

Macdunk says watch these pommie unions

He must have foresaw what was going to happen ... overtime ban all that union stuff ... again ... no doubt more pickets ... hope nobody gets killed this time around

And the price falls accordingly .. but not quite back to where it was ..yet

duncan macgregor
27-01-2005, 07:17 AM
WINNER69, Talk to the workers for the truth. Notice how it happens in the middle of summer every time. macdunk

Stock Man
31-01-2005, 07:14 AM
LPC seems range bound between $1.60 and $1.90.[:0] Seems to be retreating again.[^]

Steve
31-01-2005, 10:58 PM
Did I read somewhere that some German workers are being housed in a container on the port? And the union is not happy about it?

rmbbrave
01-02-2005, 01:19 AM
I find it highly unlikely that German workers, who have some of the highest wages, some of the strongest unions and and one of the best standards of living in the world are going to put up with being housed in a container.

airedale
01-02-2005, 08:35 AM
Ah, but it wasn't an ordinary 20 foot container [one teu]. It was one of the larger 40 foot boxes [two teus]. Quite teutonic enough for the Germans.

Steve
01-02-2005, 06:48 PM
And it didn't look too bad on the tv3 news tonight either...

I think the union guy may be over-reacting to suggest that it could lower the standards to NZ port workers.

Sideshow Bob
01-02-2005, 07:58 PM
quote: Originally posted by rmbbrave

I find it highly unlikely that German workers, who have some of the highest wages, some of the strongest unions and and one of the best standards of living in the world are going to put up with being housed in a container.

Actually rmbbrave, they weren't actually Germans - they were Lithuanians.

If not high enough quality digs, then could always chuck on a ship down to Dunners, and use for scarfie accommodation.

Think most Dun-Vegas slumlords were looking at those things enviously, thinking they could fit 4-6 bedrooms in each, and then charge $90 a week. Stack 2 or 3 high, sturdy, hard-wearing, low maintenence etc etc :D[:p]

Steve
04-02-2005, 08:53 PM
On the news tonight, the "houses" have been relocated, but the workers may now loose their jobs and face deportation...

Life is tough for some.

rmbbrave
04-02-2005, 10:09 PM
quote:Originally posted by Sideshow Bob


quote: Originally posted by rmbbrave

I find it highly unlikely that German workers, who have some of the highest wages, some of the strongest unions and and one of the best standards of living in the world are going to put up with being housed in a container.

Actually rmbbrave, they weren't actually Germans - they were Lithuanians.

If not high enough quality digs, then could always chuck on a ship down to Dunners, and use for scarfie accommodation.

Think most Dun-Vegas slumlords were looking at those things enviously, thinking they could fit 4-6 bedrooms in each, and then charge $90 a week. Stack 2 or 3 high, sturdy, hard-wearing, low maintenence etc etc :D[:p]


There you go. I knew Germans wouldn't put up with this excrement.

AshMayo
05-02-2005, 01:22 PM
The problem is these guys were in ChCh on visitors permits, not work ones so unions have scored one here!

foodee
14-04-2005, 04:48 PM
Agreement reached with union for the next three years appears to be mundane news. Have topped up more on this 'defensive stock'

Snoopy
22-04-2005, 08:30 PM
quote:Originally posted by foodee

Agreement reached with union for the next three years appears to be mundane news. Have topped up more on this 'defensive stock'


Have considered topping up on this one myself, but so far I have resisted. The 'value chart' below might explain why.

http://img.villagephotos.com/p/2005-3/963787/LPC04040405.gif'

For those who haven't seemn this kind of chart before it is very simple. If the share price is below the value line then you buy. If the share price is above you don't buy. It works best on a share that pays out all of its earnings as dividends. That is the history of LPC. If a share pays out all of its earnings as dividends that means you can think of it as a kind of 'perpetual bond' with the dividends being equivalent to the 'bond interest paid'.

A bond is issued with some headline interest rate. For a small utility like LPC I think a return of 9.5% is appropriate for the risk involved. That corresponds to a share price of $1.73, which is what I term 'fair value' for Lyttelton Port Company shares.

Personally I require a better deal than 'fair value' for this kind of share investment. I always like to buy at 'below fair value' and for me an expected annual return of 12% is sufficient to get me interested. This is where the second (12%) value line comes in.

As you can see, the share price is currently floating above the 12% value line. I wouldn't say this is expensive. If I wanted to set up a balanced income portfolio I would certainly buy LPC at these levels.

However, I already have my base portfolio set up, so I want to find the the best bargain of the month. Telecom was just that much cheaper, so that was where my money went.

SNOOPY

discl: hold LPC

foodee
23-04-2005, 08:25 AM
Snoopy
Appreciated your post-most helpful. TEL did come into consideration but its weight in our portfolio was a tad too high. All said our holding price in LPC is still below 1.70.

Have a good week one and all

Snoopy
23-04-2005, 09:37 AM
quote:Originally posted by foodee

Snoopy
Appreciated your post-most helpful. TEL did come into consideration but its weight in our portfolio was a tad too high. All said our holding price in LPC is still below 1.70.


I don't keep that close a tabs on it, but I think the value of my own holding in Telecom is approaching twice that of my shareholding in Lyttelton Port. My long term theory is that I want to keep the valuation of each about equal, so I guess I'm relatively underweight in Lyttelton Port at the moment. Mind you I think there are some fundamental reasons for being a bit light on LPC at the moment.

Lyttelton's great hope of the future is the coal trade. However, right at the moment they can't take advantage of it because the midland rail line has not yet been upgraded. I took a look at the Solid Energy Annual report when I was in the library last week.

Did you know that steel manufacturers and coke producers account for 75% of total coal exports? The steel market is on a high worldwide at the moment, but traditionally it has been quite volatile. I also noted that the two largest coal supply contracts to Nippon Steel and Mitsubishi Chemical only extend to 2006/2007. It is quite possible, if China comes off the boil for example, that these contacts may not be renewed.

The annual capacity of the the Lyttelton coal handling operation is 4 million tonnes and it is currently running at 2.1 million tonnes due to constrained rail capacity. However, here is a note from p9 of the FY2004 Solid Energy report.

"Growth in exports beyond 3.3 million tonnes will depend on where we can secure best value for West Coast Thermal Coals, in local markets for power generation or international markets for specialist coal uses."

That export volume also includes coal being directly barged to Australia. That means Solid Energy themselves are only projecting a 50% increase in business in the forseeable future, not the 100% that LPC has been publicly painting in. And if we get a new coal power station in the North Island even that volume increase might be overoptimistic (I presume they would simply barge the coal to the North Island rather than go through Lyttelton).

Meanwhile log exports through Lyttelton have collapsed. If farming comes off, we might be looking at a reduction in dry bulk goods as well.

On the plus side the increase in container terminal TEUs is encouraging. But Barney Sundstrum announced last week a further $18m in capital spending is required to support the development of the port. Let's say half that is Harbour Structures (depreciated over 50 years) and half container equipment (depreciated over 20 years). That adds up to an extra annual depreciation charge of:

9/50 +9/20 = $630,000.

All of this capital expansion is on borrowed money and the interest on $18m , at say 7.5% means additional interest expenses of $1.35m per year

Sundstrum announced a 10% wage bill increase over three years last week. If the workers are not 10% more productive, than means an annual increase in expenses of:

0.1 x 36,461,000 = $3,646,100

I would estimate over a million of that coming through into next years expenses.

Then if the domestic economy slows and some of those used car imports go down.....

In short, I don't think the medium term outlook for LPC, particularly FY2006, is very good. They are going to need a 25% increase in business in FY2006 just to maintain their profitability at current levels!

Furthermore I took a trip down to South Caterbury over Easter to inspect the Port Of Timaru. Land wise and equipment wise it seems more than the equal of anything that Lyttelton has. I think the threat of further competition from the Port of Timaru is very real.

SNOOPY

discl: A slightly grizzly bearish holder of LPC, who intends to keep it underweig

foodee
24-04-2005, 11:03 AM
Ahhhhhhhh! Grey clouds coming over.

Wages/productivity/capital expenditure/etc. - management to balance out.

Timaru - did not appreciate its potential despite knowing of its presence. One has learn in life that to compete one has to be better in most if not every way. LPC/Timaru or any coporate will strife for that edge.

Thanks again Snoopy & keep it coming.

Snoopy
21-08-2005, 09:39 PM
quote:Originally posted by Snoopy

Barney Sundstrum announced last week a further $18m in capital spending is required to support the development of the port. Let's say half that is Harbour Structures (depreciated over 50 years) and half container equipment (depreciated over 20 years). That adds up to an extra annual depreciation charge of:

9/50 +9/20 = $630,000.

All of this capital expansion is on borrowed money and the interest on $18m , at say 7.5%, means additional interest expenses of $1.35m per year

Sundstrum announced a 10% wage bill increase over three years last week. If the workers are not 10% more productive, than means an annual increase in expenses of:

0.1 x 36,461,000 = $3,646,100

I would estimate over a million of that coming through into next years expenses.

In short, I don't think the medium term outlook for LPC, particularly FY2006, is very good. They are going to need a 25% increase in business in FY2006 just to maintain their profitability at current levels!


The 'Lyttelton Port of Christchurch' annual result came and went the other week, without comment so far on this forum, but far from being without notice from me. Business was up in certain key areas, but still below target overall.

I wrote the quoted text in April. Since then the share price soared to near $2, dropped back savagely with the annual result, but then started to rise again.

The profit trend for the last four years has been deteriorating as follows:

2002: $16.3m
2003: $13.5m (excluding one off cost)
2004: $12.0m
2005: $11.8m

This is still enough to cover the (steady) dividend, but the margin between earnings and declared dividends is getting wafer thin! Given the result I wasn't surprise to see the share price drop back. But I *was* surprised to see it rise again.

LPC told us the principal factors in the deteriorating result were unanticipated problems with the tug 'Blackadder' and the coal processing equipment. An increase in wharf maintenance was expected, but I don't think LPC have even started on the major project of a completely new fuel wharf yet.

There are no retained earnings to speak of, so all new expenditure must be funded from new debt. I stand by my earlier prediction of the interest bill rising by over $1m in FY2006. That will, more than likely, result in a continuation of the unfortunate profit trend I have detailed above.

I wonder what will happen to the LPC shareprice when profits are forecast to fall yet again at the AGM?

SNOOPY

foodee
22-08-2005, 07:02 AM
Snoopy
Just managed to see you post before being away for a few days.
I hear what you are saying and thanks. I guess you are no longer holding.
Will be interesting to hear the forecast at the AGM.

cheers

Snoopy
22-08-2005, 09:58 AM
quote:Originally posted by foodee

Snoopy
Just managed to see you post before being away for a few days.
I hear what you are saying and thanks. I guess you are no longer holding.
Will be interesting to hear the forecast at the AGM.


Sorry if I gave the wrong impression Foodee. I still hold my LPC shares. Long term I still see the port (most ports actually) as a strategic asset that cannot be easily duplicated. I am just a little puzzled at the way Mr Market is behaving with this share.

I can think up some excuses:

1/ Overvaluation of the market in general: LPC may be fully priced, but most alternative investments are *even more fully priced*.
2/ Tightening of Port Sector liquidity: The delisting of the Port of Auckland has seen some of that money flow into other shares in the port sector (including LPC).

However, ultimately share prices have to trend back to reality. One of the biggest 'wins' for LPC in FY2005, apart from containers, was a large jump in dried goods shipments. But here in Canterbury we are now getting reprts of a significant drought on the horizon this summer. I wonder what that will do to farmers fertilizer programs?

I do have an additional theory. I don't do much in the fixed interest market. But I got a note from my broker last week highlighting how many of the fixed interest bonds on offer are trading at a good margin above their coupon rate, and the lack of new fixed interest offers in the pipline. IOW people are prepared to pay more to hold fixed interest bonds in general, due to their scarcity value.

Of all the shares out there, I think LPC is the most 'bond like'. Its profits have been 'flattish', well, forever really. I am sure major shareholder, the Christchurch City Council, sees it as a cash cow and will constrain LPC from growing by continuing to demand high dividends. Personally , I don't see the dividend being cut even if, for a while, LPC have to pay out *more* than their earnings as dividends. Cashflow is still OK even if headline earnings are on the slide!

My new theory is that the baseline share price of LPC has risen because all other bonds are rising in price too. Can that reason be sustained? Is it a sign of our bond rates falling more into line with those available in Australia - a long term 'reversion to the mean' of NZs traditionally high interest rates? I don't know the answer!

SNOOPY

discl: still hold LPC. But not looking to buy more at current prices.

Phaedrus
22-08-2005, 11:35 AM
Well Snoopy, I think you are right to treat LPC as a bond rather than a stock - an 18% loss over 8 years is not very good performance for a stock is it! You quite rightly damn this stock with faint praise, yet continue to hold it. You note that "Its profits have been 'flattish', well, forever really" yet seem to ignore the fact that its shareprice has suffered similarly.

I'm not sure whether you are :-
(1) An eternal optimist.
(2) Totally focussed on yield to the exclusion of all else.
(3) The most patient man I know.
or, perhaps most likely, someone who is not at all interested in capital gains and thus happy to invest in bonds - or their equivalents.

The chart below shows that, as you suspected, there is a loose correlation between bond rates and LPC's shareprice.

http://home.ripway.com/2003-11/39768/LPC822001.gif

Snoopy
22-08-2005, 01:18 PM
quote:Originally posted by Phaedrus

Well Snoopy, I think you are right to treat LPC as a bond rather than a stock - an 18% loss over 8 years is not very good performance for a stock is it!


I'll take your word on the eight year return Phaedrus. I've only been in this share 'short term' ;-P myself, a mere three years.

For these 'bond type' shares I have created my own 'fixed interest index'. In this I compare after tax returns from capitial gains and dividends over a year, against the alternative prospect of selling the shares and putting the money in the bank in a term deposit.

I realise that such a crude 'index rating' is in no way indicative of future returns. Nevertheless, my investment in LPC has been very satisfactory on this basis and consistantly averaged above '3' on my scale. That means I have been *three times better off* holding LPC shares than investing in term deposits!

I am well aware that this return has been achieved in a bull sharemarket and that by investing in other shares, maybe even the index, I haven't checked, I could have done better. But such comparisons ignore the very low risk nature of LPC (in the long term) that I perceive. This low risk is not reflected in net return figures, yet for me it is a replacement for a 'stop loss' policy, hence an important consideration.

Thus even though I may have 'underperformed the share index' over three years, I still regard my investment in LPC as a superior result - if that is not too perverse a concept for you!


quote:
You quite rightly damn this stock with faint praise, yet continue to hold it. You note that "Its profits have been 'flattish', well, forever really" yet seem to ignore the fact that its shareprice has suffered similarly.

I'm not sure whether you are :-
(1) An eternal optimist.


Yes I am an eternal optimist, as most fundamental share investors are. How could you plan to buy and hold a share if you weren't 'eternally optimistic' about the prospects? This is one area where I see that disciplined share traders have an advantage.

There is something to be said for being nether optimistic nor pessimistic, but simply acting on the picture as it unfolds in front of you.
So I have tried to learn from this 'disinterested trader attitude'. I would now describe myself as an 'an eternally optimistic cynic!'. I think I am a better investor because of this change.


quote:
(2) Totally focussed on yield to the exclusion of all else.


Let's just say I don't focus on share price movement at the exclusion of all else! See my explanation of my 'fixed interest index system' above.


quote:
(3) The most patient man I know.


The stock market is a mechanism for transferring wealth from the impatient to the patient! I think it was Ben Graham who said that first.


quote:
or, perhaps most likely, someone who is not at all interested in capital gains and thus happy to invest in bonds - or their equivalents.


I don't rule out investing in bonds, which I hasten to add you *can* make good capital gains in if you buy at the right price.

foodee
24-08-2005, 07:38 PM
Snoopy
I jumped to the wrong conclusion re-your holding. No harm done. I do treat LPC as a yield play. Still around 20% gain on value is a bonus or buffer.

Phaed
Not a chart expert (but still learning). My take is that LPC is trying hard to break out of its resistance at 195.

disc:hold LPC

foodee
07-09-2005, 04:57 PM
good hike in sp on significant vol.

Snoopy
07-09-2005, 08:46 PM
quote:Originally posted by foodee

good hike in sp on significant vol.


Yes, it's a real surprise to me to see LPC at $2 again. Perhaps it is someone chasing the dividend foodee? Perhaps the buyers are anticipating a 'surprise' at the upcoming AGM? That Mr Market can be a baffling fellow sometimes. I won't top up myself for all the reasons I have well documented already.

SNOOPY

discl: hold LPC

winner69
14-09-2005, 07:19 PM
Eh snoopy ... whats going on .... LPC up to 206

That is getting expensive for a 11 cent dividend isn't it?

Tempted to take some capital gains here?

foodee
14-09-2005, 08:59 PM
The break out has occured - ?reason.

With a PE of 18 and gross yield 8%, the sp is certainly getting full. As Snoopy say Mr Market knows more, most of the time.

Still a happy holder.

Phaedrus
15-09-2005, 08:41 AM
Foodee,
I'm not at all sure that LPC does breakouts!
To my jaundiced eye, this is a stock going nowhere, doing nothing. Long-term "investment" in such stocks all but ensures that you will fail to beat the Index.
Dividends at any price? Not for me.
http://home.ripway.com/2003-11/39768/LPC915001.gif

airedale
15-09-2005, 02:06 PM
Must be getting close to the registration/cut-off date for the divi. Can anyone remember the date.

foodee
15-09-2005, 02:27 PM
Airedale
I think the ex-date is 07/10 which is a little way away and therefore the price movement is somewhat unusual. Any ideas anyone?

Phaedrus

quote:Dividends at any price?

I do not think very many will go down that tract, so no problems. Once again appreciate your telling charts.

duncan macgregor
15-09-2005, 02:46 PM
Any long term holder of this stock must have a dulled out brain. Seven years of stagnation plus dividends of course. Pomme union problems what more is there to say. Even in hindesight from a TA perspective buying and selling its a dog. I reckon its a little old ladies stock the ones that get a christmas card every year that props it up. macdunk

Dough Boy
15-09-2005, 03:12 PM
I would not be so negatve on a stock going 'nowhere' as I have held a lot of these overtime that turn a significant profit to those who wait and quitely collect their dividend in the meantime. So long as they are profitable pay 10% and are improving their business operation then holding can be a very profitable exercise.

Snow Leopard
13-02-2006, 02:00 PM
Takeover offer (http://stocknessmonster.com/news-item?S=LPC&E=NZSE&N=127288)
See other announcements for more details

minimoke
13-02-2006, 02:39 PM
quote:Originally posted by Dough Boy

I would not be so negatve on a stock going 'nowhere' as I have held a lot of these overtime .....


Looks like it is now heading offshore

minimoke
13-02-2006, 03:46 PM
quote:Originally posted by Dough Boy

I would not be so negatve on a stock going 'nowhere' as I have held a lot of these overtime .....


Looks like it is now heading offshore

Snoopy
13-02-2006, 08:04 PM
quote:Originally posted by duncan macgregor

Any long term holder of this stock must have a dulled out brain. Seven years of stagnation plus dividends of course. Pomme union problems what more is there to say. Even in hindsight from a TA perspective buying and selling its a dog. I reckon its a little old ladies stock the ones that get a christmas card every year that props it up. macdunk


It has been a good day on the market for little old ladies (and some dogs). My own 'seven years of stagnation' only dates back three years since I purchased. I think time must not fly as fast as you get older!

Having carefully picked out LPC as a select member of my portfolio, I am a little annoyed that yet another one of my shares faces takeover and NZX annihilation. I know it happened to POA in Auckland, but perhaps the Cantabs will show a little more spine?

I'll wait for the independent report.

But my first reaction is that at $2.10 less the upcoming dividend, the bone I am being offered looks a little bare! But of course LPC 'doesn't do breakouts' so I guess I am wrong ;-P.

Actually the procedure of this takeover is a little odd. The whole deal rests on LPC being 'fully taken over' by the council first (to get around the pesky takeovers code?). Then if that leg of the exercise works some shares have been offered to some Hong Kong outfit at $2.10 with a remainder being on sold for the whatever price paid in the Council takeover to bring the council holding down to 50%- I think???!!!??.

At any rate I shall have plenty of time to digest the events as they unfold as I intend doing nothing (thanks to my dulled out brain): except to wait and see what develops. Any existing LPC shareholders out there I advise them to do the same. Grab hold of your walking stick Granny. We are in for an interesting couple of months.

SNOOPY



discl: hold LPC

airedale
13-02-2006, 08:46 PM
Hi Snoopy, you are right that there is no great hurry to take the bait being offered. You have a good filing system/memory for quotes from Macdunk.
Duncan, I managed to make good money buying LPC every time some half-witted journo wrote about labour problems and the price went down.[:p]

Gofish.
13-02-2006, 09:11 PM
The Chch city council is in a bit of a quandry - the cost of capital projects has gone up - particuarly the sewer outfall into the ocean (steel prices) and ratepayers are sick of being hit with rate increases when income is already increasing from new subdivisions etc.
Council can't push through the necessary increases so needs to sell some of the family silver.
There is worldwide competition for port and cargo handling companies -Singapore and Dubai have just fought it out for P&O Ports, one of the world majors. (Dubai looks to have won)
HW are ex Hong Kong but read China.
Will bring a lot to the table for LPC, so should be interesting.

duncan macgregor
14-02-2006, 08:24 AM
quote:Originally posted by airedale

Duncan, I managed to make good money buying LPC every time some half-witted journo wrote about labour problems and the price went down.[:p]
I find it difficult to see how anyone could make money trading this share over the last eight years. The sp for starters is lower. I also find it difficult to see how a fundamentalist would look on this as a buy, and hold. The sp is the first fundamental, followed by the divi, if one goes down, the other has to compensate. The sp is lower than it was eight years ago, add inflation to that on the one side, then deduct the divi on the other.
I think that the investors over that period would be lucky to come out even. In other words guys your system of buying and holding over long periods requires upgrading. Property prices have doubled in that time with a buy time looming up shortly. Why dont you do something simple, and buy a bit of dirt on the outskirts of the city.
ONLY STIRRING THE FUNDLES MACDUNK

Snow Leopard
14-02-2006, 08:34 AM
quote:
ONLY STIRRING THE FUNDLES MACDUNK

Sounds fun. Are there any side-effects, such as blindness? [:I]

glennj
14-02-2006, 12:36 PM
MacDunc et al I've just checked my records on this stock. Have bought three parcels over the last four years & the returns based on yesterdays closing prices are from 13% - 19% annualised. Not great but certainly acceptable.
If you take a value approach & buy at the right price you are generally rewarded. (often spectacularly) With such a good yield & my good purchase prices I had no problem waiting around for the stock to be rerated.
Price may have to climb a bit for the takeover to be successful?

nelehdine
14-02-2006, 03:38 PM
Seems to have helped POT sp as well, quite a while since that has been $4.50 + ....

Disc: Bgt POT last Thurs at 439

Tyke
14-02-2006, 04:11 PM
I bought in at $1.58 in Jan 2003. I have had 49c in gross dividends since then and at Friday's close of $1.75 gives a return of just over 13% per annum. That lifts to 21% at today's price which aint bad for a fairly low risk boring type of share.


quote:Originally posted by duncan macgregor


quote:Originally posted by airedale

Duncan, I managed to make good money buying LPC every time some half-witted journo wrote about labour problems and the price went down.[:p]
I find it difficult to see how anyone could make money trading this share over the last eight years. The sp for starters is lower. I also find it difficult to see how a fundamentalist would look on this as a buy, and hold. The sp is the first fundamental, followed by the divi, if one goes down, the other has to compensate. The sp is lower than it was eight years ago, add inflation to that on the one side, then deduct the divi on the other.
I think that the investors over that period would be lucky to come out even. In other words guys your system of buying and holding over long periods requires upgrading. Property prices have doubled in that time with a buy time looming up shortly. Why dont you do something simple, and buy a bit of dirt on the outskirts of the city.
ONLY STIRRING THE FUNDLES MACDUNK

duncan macgregor
15-02-2006, 06:49 AM
I still find it hard to think that any real money was made guys sorry. You either take the divi with the drop in sp or get out at the top and miss the divi. macdunk.

Snow Leopard
09-03-2006, 12:57 PM
Explain this to me.

At 12:50, or 1:10 if you need to wait for the 20 minute delay, a stand in the market at $2.35 is announced.
At 1:16 75,000 shares sell at $2.25.

So Port Otago Limited want a blocking stake. I love these takeover battles, even as a mere spectator.

barney
09-03-2006, 01:28 PM
That is interesting PT.Looks like someone has mucked up.Although the announcement was made at 1.10pm the trading for the stand in the market at $2.35 did'nt start untill 1.45pm.Hence the person buying the 75,000 shares for $2.25 will be able to sell them again 30 minutes later for $2.35.Although the buyer may well have been Forsyth Barr in which case they won't be sold as they are buying for Port Otago.

I would say that Christchurch City Holdings plans may well be thwarted by this.Forsyth Barr already have 7.94% and at $2.35 there will probably be enough disgruntled locals who will sell to prevent a large part of the port being sold offshore.I'm also just a spectator but this will be interesting.

Snow Leopard
09-03-2006, 01:31 PM
The stand in the market has reached it's target we have a block on.

kittydashwood
09-03-2006, 04:58 PM
Well played mighty o.
IPO next year ?

I hope so, if only to show that greedy CHCH council a few tricks

JAMP
09-03-2006, 07:22 PM
Hmmm, I expect to see the LPC shareprice drift for a while now. Many an arbitrage player will be hovering over the eject button right about now.

Somehow I doubt that Christchurch City Holdings Limited are able to table an offer that Port Otago Limited simply can't refuse. What would it take I wonder?

Regards JAMP
NZX: AIA LPL MCH MVN NZO NZOOD PPG RBD SAN SKL SPN
NZAX: CVT NWFOA SAT
Unlisted: BRK

Snoopy
27-03-2006, 01:40 PM
quote:Originally posted by JAMP

Hmmm, I expect to see the LPC shareprice drift for a while now. Many an arbitrage player will be hovering over the eject button right about now.

Somehow I doubt that Christchurch City Holdings Limited are able to table an offer that Port Otago Limited simply can't refuse. What would it take I wonder?


POL can and will refuse this deal at any price IMO.

I Have just finished reading the Lyttelton Port of Christchurch target statement compiled by Crichton Anderson Corporate Finance. I must say that Crichton Anderson have done an excellent job, at least on par with Grant Samuel who have 'set the standard' with these company valuations up to now.

I had visions of doing a 'hold out at all cost' on this share, with the hope that *if* I was forced to sell it would not be for less than $2.35. $2.35 being the price point where Port Otago Limited made their lightning raid on LPC for a strategic stake.

What I learned from the CA report, that hasn't been spelt out in the media, was that this blocking ploy made sense but only as defence mechanism for the Port of Otago's own business. IOW it made sense from POL's perspective who were looking at facing a voracious Asian Tiger managed re-envigorated LPC to block this deal. But it might not have made sense for any other business to pay so much on a stand alone deal basis. Given Christchurch City Holdings Limited's (CCHL's) stranglehold on the share register, at around 70%, it isn't realistic to expect any other company to try taking over LPC. My view now is that it is now unlikely that a final takeover price of $2.35 will be achieved, even though $2.35 is within the fair value range of the CA valuation.

Personally I'd like to see a three way deal worked out. A combined South Island 'superport' meshing together the Ports of Lyttelton and Otago. Perhaps Port Otago Limited could sell some their own equity to Hutchison? That would allow the independent shareholders who wanted to continue to be part of the company in the future to remain on the register, while Hutchison got their 49% stake.

SNOOPY

hold LPC

airedale
27-03-2006, 02:36 PM
Hi Snoopy, I can't see Otago giving up any of their 10.1%, below that figure they havn't got much leverage.

foodee
29-03-2006, 09:46 AM
Directors have recommended acceptance of revised offer. Confirms Snoopy's views.
Seems the Asians are not likely to pay much more than 2.20.

disc: holder

Snoopy
30-03-2006, 10:09 PM
quote:Originally posted by foodee

Directors have recommended acceptance of revised offer. Confirms Snoopy's views.
Seems the Asians are not likely to pay much more than 2.20.

disc: holder


I got the confirmation of the revised offer in the mail today foodee, in a CCHL envelope.

However, what was absolutely extraordinary is that I got a letter from LPC in *exactly the same envelope* signed by LPC Chairman Barney Sundstrum saying that I should accept the offer!

I thought these two organizations were meant to be protagonists. On the one hand we have Christchurch City Holdings Limited (CCHL) putting forward an offer. On the other side we have Lyttelton Port of Christchurch (LPC) independently evaluating the offer.

It goes without saying that CCHL and LPC are close. They could hardly not be with CCHL owning nearly 70% of LPC. But I found it rather startling that there is no longer even a pretence at 'chinese walls' in the takeover process. It appears that CCHL and LPC are sitting around the same table holding hands! Both 'protagonist' letters, both dated the same day, arriving in the same envelope is getting a bit much, don't you think?

From page 2 of the LPC headed response to takeover letter:

"CCHL has indicated to the directors of LPC that it would be prepared to waive all conditions to the offer (i.e. declare the offer unconditional) and increase the offer price to $2.20 if the directors of LPC agree to recommend that shareholders accept the increased offer and agree not to pay or declare any dividend until after the closing date of 12 April 2006."

So, wonder of wonders, the LPC directors have agreed to the new offer, and not pay a dividend.

What the...?

Perhaps I am just being old fashioned here. But I would have thought the LPC directors should be evaluating the CCHL offer *on its own merit*. No bribery from CCHL ("you must unanimously recommend the offer and if you don't we won't go uncomditional") should be allowed to sully the independent LPC directors decision!

I want to be clear what I am saying here. I am not suggesting that the new offer of $2.20 is not fair. It is clearly within the fair value range of $2.15 to $2.45 determined by independent valuers Crighton Anderson. However, something about the way this process has been run stinks. It seems that the acquisition premium of 10cps that Crighton Anderson so carefully explained (section 4.4 of the Target Company Statement) has been dropped simply because CCHL ordered LPC to do so! IMO that is wrong.

Hutchison has retreated to Hong Kong (for the moment). No doubt they will be rolled out again if/when CCHL eventually gets full control of LPC. (It is interesting that CCHL has decided not to consult with the ratepayers - the 70% shareholders remember- on this part of the deal).

Through all of this process the only voice of reason I have heard is from Port of Otago Limited (POL). POL bought their so called 'blocking stake' not because they wanted to stymie any deal, but because they wanted to have a working arrangement with the Port of Lyttelton. To me this makes huge sense. No explanation is given by CCHL as to why they won't have a bar of it. I think it is time we forced CCHL and POL back to the negotiating table. And the best way to do that is to *not* sell your shares to CCHL! Now who is with me?

SNOOPY

discl: hold LPC. Will *not* be accepting the revised CCHL offer.

Tinker
31-03-2006, 01:42 AM
Hi Snoopy,

I too think directors, who should be maximising shareholder wealth for all, are getting a bit cuddly with Christchurch CC who obviously have their own cunning plan to increase their wealth.

I have put my modest stake on the market for $2.35. This is within the fair value range, inclusive of takeover premium, plus would compensate for missed dividend.

What do you want for yours Snoopy? $2.35 or more?

Cheers
Tinker

airedale
31-03-2006, 08:16 AM
Thanks, Snoopy, an excellent summary of the situation. I think that shareholders are being hustled too quickly for comfort. I am not in any hurry to sell. The Chch City Council and the LPC directors should be at arm's length or even further from each other. Certainly not cuddling or colluding in the same envelope.

foodee
31-03-2006, 08:57 AM
Snoopy
Thanks for the succinct post. The LPC board appears to be mere pawns to ChCH CC.
I feel the play is only just starting. Now if LPC+POL becomes a reality... The Asians will like that. Will continue to hold my shares.

COLIN
31-03-2006, 01:14 PM
You would need to be a one-eyed Cantabrian (I am not) to understand all these shenanigans. Canterbury Inc. is at work, and there has been a huge outcry from the public - Letters to the Editor, Petitions on shop counters, etc. - imploring the Council to clutch the port to its bosom and shut out all those foreign nasties (including Highlander supporters). Its a Crusade!

Snoopy
31-03-2006, 01:23 PM
quote:Originally posted by airedale

Thanks, Snoopy, an excellent summary of the situation. I think that shareholders are being hustled too quickly for comfort. I am not in any hurry to sell. The Chch City Council and the LPC directors should be at arm's length or even further from each other. Certainly not cuddling or colluding in the same envelope.


'cuddling or colluding in the same envelope.'

A nice turn of phrase airedale, that summarises succinctly the situation between CCHL and LPC!

I guess some of you who aren't intimately caught up in the situation will wonder what the motive is for CCHL and LPC to behave in this way?

Here is my take on the reasoning. A nice little deal with Hutchison (Hong Kong) will enable things to carry on pretty much as they are on the senior personnel front, both for CCHL and LPC.

Taking out minority shareholders of LPC means that CCHL will be able to bring their 'rebel business' completely 'in house' where it joins ChCh Airport, The Red Bus Company, City Waste and various other stuff. That is how CCHL like it. Keep the corporate smoking jackets, and bask in the illusion of being a multinational private investment company - comparable to any other corporate.

In reality CCHL are all a bunch of public servants, employees of the ratepayers of greater Christchurch. Being tied up with a Hong Kong corporation would, of course, mean much more international travel for CCHL staff. And since they would become 'international entrepreneurs' salary levels would have to be raised accordingly in line with other comparable international business executives (sic). We have here a classic example of 'the institutional imperative' at work!

The *real* reason CCHL don't want to link up with Ports of Otago Limited is that CCHL would then only be 75% (based on current market share) owners of a combined LPC/POL operation. If Hutchison were then to come in as a 50% partner on the new combined operation, then CCHL would find themselves as a minority shareholder of the new combined Hutchison/LPC/POL. Now, losing management control (which is what being a minority shareholder means) means CCHL have to consult with, horror of horrors, the ratepayers (gasp) as to what they are doing! The illusion of CCHL being senior partners in an international port business would be blown away under this alternative LPC/POL/Hutchison scenario.

Fortunately for us LPC minority shareholders, the Ports of Otago have identified what might be a real competitive threat to their own business and stepped in. Personally I have long held a view that the Ports of Lyttelton and Timaru should join together. But the commerce commission might have had something to say about that. So a link up between Otago and Lyttelton does, to me, sound a more sensible as a way of preserving some geographic competition.

What do you think?

SNOOPY

discl: Foundation holder in the new LPC/POL operation, oops I mean LPC ;)

Snoopy
31-03-2006, 01:35 PM
quote:Originally posted by COLIN

You would need to be a one-eyed Cantabrian (I am not) to understand all these shenanigans. Canterbury Inc. is at work, and there has been a huge outcry from the public - Letters to the Editor, Petitions on shop counters, etc. - imploring the Council to clutch the port to its bosom and shut out all those foreign nasties (including Highlander supporters). Its a Crusade!


You are right about this Colin, and this is the risk of 'consulting the ratepayer'. You will always get some who are against any sort of change at any price. Personally I don't count myself in that category. I do recognise that a business can't stand still and that change is necessary. To me, linking up with Ports of Otago is the way to go. The people of Otago will have been shocked by the emergence of an LPC/Hutchison alliance. Hopefully this shock will be enough for them to see the sense in giving up control of their own port and throwing their hat in with Lyttelton. Whether Hutchison would then come on board as a third partner at a later date would be a question I am presently undecided on.

I am in little doubt that the best thing for the ratepayers of Christchurch and Dunedin would be for LPC and POL to come together. I have little doubt that this *wouldn't* be the best outcome for senior management of CCHL, which is why they are resisting even the suggestion of such a link without reason.

SNOOPY

Snoopy
31-03-2006, 01:37 PM
quote:Originally posted by foodee

Snoopy
Thanks for the succinct post. The LPC board appears to be mere pawns to ChCH CC.
I feel the play is only just starting. Now if LPC+POL becomes a reality... The Asians will like that. Will continue to hold my shares.


You've got it foodee.

SNOOPY

Deev8
31-03-2006, 01:46 PM
quote:Originally posted by Snoopy
[brWe have here a classic example of 'the institutional imperative' at work!

I couldn't agree more.

A couple of excellent posts on the current state of play.

Disclosure: Not a holder of LPC, but a still-disgruntled ex-holder of POA

Snoopy
31-03-2006, 02:02 PM
quote:Originally posted by Tinker

Hi Snoopy,

I too think directors, who should be maximising shareholder wealth for all, are getting a bit cuddly with Christchurch CC who obviously have their own cunning plan to increase their wealth.


Or at least preserve their positions, ahead of the interests of minority LPC sharehoilders and Christchurch ratepayers!


quote:
I have put my modest stake on the market for $2.35. This is within the fair value range, inclusive of takeover premium, plus would compensate for missed dividend.

What do you want for yours Snoopy? $2.35 or more?


Tinker, the mid valuation range for LPC (including takeover premium)
is $2.30. Add on 5c for your share of the 'already in the box earnings' and I think your sell price of $2.35 is entirely fair. By co-incidence(?) it is also the price that POL paid for their blocking stake. In summary I find your position entirely reasonable.

What price would I sell at?

Let be quote you a phrase from the last 'bullet point' on page 2 of the 29th March LPC directors letter.

"There appears little prospect of LPC and POL merging. While the directors remain of the view that there is considerable potential value upside available to CCHL (and other shareholders) from such a transaction, it may be some time before that upside can be realised via a transaction."

I want some of that 'considerable potential value upside' the directors are talking about. It is hard to put a figure on it when LPC (or is that CCHL) and POL seems so far apart. But, for goodness sake if LPC directors recognise this value, and POL directors recognise the value (and they do or they would not have bought into LPC), then let the respective directors get together and thrash out a deal!

Once I have seen the synergies drop out as an accounting valuation, then, and only then, will I be in a position to 'name my price'.

The current deal of $2.20 would be fair if CCHL were going to take the whole business in house in perpetuity. But we all know what will hapeen if that bid succeeds. The very next day the boardroom door will open and Dr Paddy Austin (Chair of CCHL) will say:

"Oh, is that you Mr Hutchison? What a tremendous surprise! How would you like to buy half the Port of Lyttelton from us?"

IOW the claim that there are no synergistic benefits that should be paid to minority LPC shareholders, and that CCHL is just taking the existing business in house and all deals with Hutchison are off is a sham.

SNOOPY

Snoopy
31-03-2006, 02:08 PM
quote:Originally posted by Deev8



Disclosure: Not a holder of LPC, but a still-disgruntled ex-holder of POA


Yes, and of course the takeover of the Ports of Auckland by Auckland Regional Holdings is being held up in the Appendix of the Crighton Anderson valuation report as an example of a 'fair deal' that us LPC shareholders should gratefully follow!

SNOOPY

foodee
31-03-2006, 09:01 PM
POL has increased its holding in LPC to over 11%. [?]soon the M-word might be banded.

Snoopy
31-03-2006, 09:11 PM
Got the big rumble tonight. A call from Hamilton Hindin Greene brokers working on behalf of CCHL.

"Had I received the offer documents?"

"Yes"

"LPC has a big capital expenditure program going forward. Did I realize that the dividend might be cut?"

"Oh yes, but happy to keep holding." (actually I think this is scaremongering because the Christchurch City Council probably needs the dividend more than even I do, but we'll see).

I also told Hamilton Hindin Greene that I wanted CCHL to get together with POL for merger discussions but I was told.

"Those two parties seem a long way apart. Not much of a chance of a deal any time soon." (Well, we'll see)

I made it quite clear I didn't plan on accepting the offer and that was that. If you are an LPC shareholder prepare to be rumbled soon!

Good luck folks, and stay staunch to your beliefs.

SNOOPY

discl: Still holding LPC, just a little more tightly than before.

foodee
31-03-2006, 09:40 PM
Interesting indeed.
POL most likely will move towards board representation. I believe POL can move to sub 20% without triggering anything.

airedale
01-04-2006, 11:10 AM
Interesting article in the "Press" today says that LPC approached POL some months ago to explore some sort of merger/partnership/arrangement. POL actually turned the approach away, but now says that was regrettable,but now they would like to start afresh.
So I still intend to hold, despite the dividend blackmail !

flugel
02-04-2006, 01:16 PM
Snoopy Thankyou for summary. I also received phone call from stockbroker. am annoyed at missing out on dividend. will hold until further developments CCHL are miserable lot Flugel

glennj
02-04-2006, 04:41 PM
H H Greene phoned me Sunday lunchtime so they must be working overtime on this one. Don't think I made their day when I said I wasn't going to accept the revised offer at this stage.

airedale
02-04-2006, 08:17 PM
Just thinking about the dividend. The interim dividend due about now is historically not a lot.The main payout is at the end of the year.So missing out on it now is no great sacrifice.

Snoopy
02-04-2006, 09:38 PM
quote:Originally posted by airedale

Just thinking about the dividend. The interim dividend due about now is historically not a lot. The main payout is at the end of the year. So missing out on it now is no great sacrifice.


There are two 'missed dividend' issues here.

CCHL are saying that any dividend declared will reduce their offer price by the amount of the dividend. So there is no point in LPC directors declaring an interim dividend because doing so will just reduce the offer price accordingly.

The dividend issue that Hamilton Hindin Greene (HHG) are talking about is the dividend policy in general. Basically to pay for the long overdue update of port faciliities LPC may cut the dividend as a matter of policy, and instead reinvest more money back in the port.

I don't see cutting the dividend as necessarily a bad thing, if the same capital can be better used reinvesting in the port. However, cutting the dividend *might* be an issue if you are holding your LPC shares just to gain immediate income from the dividend. That is the point HHG are making, and it is a valid one.

SNOOPY

airedale
06-04-2006, 04:48 PM
I suspect that the Chch City offer for LPC shares will fail to get to the 90% mark.They have just over 70% today and the offer closes on Monday.

minimoke
06-04-2006, 05:11 PM
A dividend will be paid. ChCh Council is so short of cash it is looking at closing libraries and swimming pools (while continuing to build a brand new building for council staff). LPC has been a cash cow for the council and I can’t see this changing.

Snoopy
06-04-2006, 10:41 PM
quote:Originally posted by minimoke

A dividend will be paid. ChCh Council is so short of cash it is looking at closing libraries and swimming pools (while continuing to build a brand new building for council staff). LPC has been a cash cow for the council and I can’t see this changing.


I have attended the last two LPC AGMs. I always left with the impression that the required infrastructure upgrades could be funded out of new borrowing. And while the dividend would be unlikely to be significantly increased, it would be unlikely to be significantly cut either.

I accept that nothing stays still and that the competitive position of LPC may have changed, since last years AGM - for the worse. Let's assume the council were to sell down their holding in LPC by 20 percentage points. At $2.20, that would net them around $44m.

Carving $44m off the city debt, at say 6%, would save the council about $2.64m in interest payments each year after tax. The lost dividend on 20m shares amounts to about $2m p.a. So selling down the council's interest in the port could be the cash positive way to go, even if dividends are *not* cut.

SNOOPY

foodee
07-04-2006, 03:46 PM
Reading LPC announcements, there are some intrigues:-
[1] As the deal with the Asians has been terminated, why is ChChC pushing so hard to go to 100%, unless............
[2] POL is at 12%+ and picking up all they can get, when perhaps next week they might be able to buy cheaper - quite strange apart from stopping ChCHC getting to 80%.
I am all ears and continue to hold.

cheers

Snoopy
10-04-2006, 10:44 PM
quote:Originally posted by foodee


[2] POL is at 12%+ and picking up all they can get, when perhaps next week they might be able to buy cheaper - quite strange apart from stopping ChCHC getting to 80%.
I am all ears and continue to hold.


POL are now up to 13%, and have spelt out their intention to go to 15%.

Once POL reach that level they become an associate. That means certian financial transactions are no longer a 'fait accompli' rubber stamp by the LPC board. A very good thing I think.

Have just returned from the KOPP (Keep Our Port Public) meeting at the Christchurch Town Hall. There were a couple of interesting revelations.

Firstly the whole City Council with one obstention (councillor Helen Broughton) voted for the Hutchison deal. However, it would seem the matter was not given due consideration. There was no announcement that such a vote was going to take place before the council meeting started - it was just sprung on them. The councillors were presented with a high pressure powerpoint slide show, without any associated notes being given. The councillors were told that the deal had to be done in this half secret way to avoid any commercially sensitive leaking of a confidential deal. The concillors were furthermore almost scared into signing. They were told by CCHL (the arms length commercial arm of the council) that the long term consequences would be dire for LPC if they didn't. There was certainly no mention of alternative deals and other ways out of the 'downward auction on ports' problem.

Also the free trade deal with China being negotiated now is going to allow for free movement of labour. Because LPC will become a foreign company they will not have to abide by NZ labour laws. Thus a ghetto of foreign labour housed in bunkhouses built in old shipping containers stacked on the Lyttelton wharf front will become quite legal.

KOPP are however, quite open about the need for some reform. They see a union with Port Otago Limited as the most sensible 'first step' move.

SNOOPY

discl: hold LPC, Ratepayer of Christchurch

airedale
11-04-2006, 09:00 AM
Thanks for the update, Snoopy, it is no co-incidence that this deal with Hutchison is being played out as the China Free Trade deal is being discussed at government level.

minimoke
11-04-2006, 09:11 AM
Since when do these councillors have the skills and experience to make such a decision – indeed where is their mandate from the electors. In years to come there will be some interesting revelations about these backroom dealings with councillors. The current LPC situation will be one, the Kate Valley landfill will be another.

foodee
11-04-2006, 01:11 PM
Snoopy thank you for your update yet again.

Post-offer, it seems that there will only be about 13% of LPC 'free floating'. The sp could drop a bit but I think we have a stronger animal in LPC.

As for Chch councillers well.....

cheers

airedale
19-04-2006, 02:31 PM
Now that the takeover excitement is over for the time being, I wonder when the "threatened" dividend will be paid.
Renewed buying interest today.??

foodee
26-04-2006, 11:57 AM
Unusual sp movement with no announcement. [?]something brewing

Snoopy
29-04-2006, 09:26 PM
quote:Originally posted by foodee

Unusual sp movement with no announcement. [?]something brewing


Now bid $2.04, Sell $2.22. No sales for the last couple of days.

What unusual share price movement? Not all share price movements have meaning foodee. My expectation is that the pattern in share price movement you thought you saw in LPC was just random noise.

SNOOPY

airedale
29-04-2006, 10:03 PM
It is a big spread between bid and sell. But not surprising given the limited number of shares available and not cornered by Chch City or Port Otago.
Those still holding LPC will be in for the long haul. [however long that may be]

foodee
30-04-2006, 09:53 AM
Yes indeed I am hearing too many noises.

Incidently I note that SPN(holding) is heading northwards (not noise, hopefully).

cheers

airedale
30-04-2006, 04:39 PM
Hi Foodee, it is worth noting that SPN and/or LPC
Would benefit if oil/gas is found in the Southern Basin. I know that it is a long shot,but I bear it in mind.

foodee
30-04-2006, 06:19 PM
Airedale
Yes indeed, exploration of oil/gas is bound to happen in the southern basin, and thus these increase activities are bonuses to the ports and more so if they make a find!

cheers

Snoopy
12-05-2006, 09:35 PM
quote:Originally posted by airedale

It is a big spread between bid and sell. But not surprising given the limited number of shares available and not cornered by Chch City or Port Otago.
Those still holding LPC will be in for the long haul. [however long that may be]


Not everyone is in for the long haul. It has only been a month since the takeover closed and some shares have been sold at significantly below the $2.20 CCHL offer price.

I've been doing quite a bit of buying over the last few weeks since CCHL closed their takeover bid. That's when the share has been trading at all of course, and there are plenty of days when it hasn't!

Once again I've been buying in the downtrend, as I always seem to end up doing. Of course since it was my refusal to buy any shares at higher prices that *caused* this latest downtrend (it is funny how things get personal when the volume dries up), I can't complain too much! But if only I had bid for some more shares at *above* market price, then I wouldn't be showing such losses on paper dammit ;-P

We talk about this shadowey figure 'Mr Market' quite a bit on this forum. No one really knows who he is. But, putting my hand up, it has been quite fun actually *being* 'Mr Market' - at least for LPC shares - over the last month. I think I played the role quite well.

I got hold of an old heavy duffel coat, and my pair of heavily tinted 'Joe Kool' sun glasses. I started sniffing around the docks, talking to a few russian sea captains (they have to make their own tea on those boats Macdunk ;) ). I did my time in the Lyttelton bars, as that figure in the background with the long lasting beer and the pricked ear. I invested in some rum to help loosen some tongues. The secrets, oh the secrets I learned to get me 'one up' on the rest of you lot were of another world. The nods and winks, it was all there just as you share trading guys described. I'd really like to call a secret meeting of 'sharetraders' so that you could all know what *I* now know. But of course, if I did that I'd have to keel haul you all!

"Ooogh arrgh!"

Is that a nervous itch just below my neckline? Or could it be the surface scars from the talons of that large parrot I like to rest on my shoulder? One day I'll remove my eye patch so I can gaze through my blue beard for a look! This whole experience has seemed so surreal, perhaps it was all a dream!

Crighton Anderson aren't dreamers. According to their recent valuation report the fair value of LPC is somewhere between $2.15 and $2.45, including a premium for control (or between $2.05 and $2.35 without). That makes the closing market price of $2.04 on the boundary of 'fair value', but not below 'fair value' which is where I normally like to buy. So why have I *really* been spending up on a share that even I acknowledge is not cheap? It's a balancing issue. I've spent a reasonable amount on buying Telecom and Restaurant Brand shares over the last 18 months and my poor little LPC holding was being left behind. Balance is now much closer, although I do reserve the right to mop up a few more LPC shares should the price weaken. But there is a sting in the tail of this story.

CCHL currently hold 73.82% of the LPC shares on issue. POL holds 15.3%. That totals to within 1% of the magic 90% threshold where all of the remaining shares could be compulsorily acquired. That means thet we remaining small shareholders are more or less out of the game. Whatever CCHL/POL decide to do in concert will determine the future of the Lyttelton Port of Christchurch, company. And if they collude to mop up the remaining outstanding shares at $2.05, there may not be much of a profit on the table for us.

$2.04 may be a near full price for a company like LPC. But as an entry point into a new age LPC/POL combine, I can see

Phaedrus
13-05-2006, 09:27 AM
Snoopy, I don't know what to do. I'm at my wits end here. As usual, I find myself in disagreement with nearly everything you say. Should I push on disputing every point of your posts or is it time for me to relax and let it all go? We both know that this is not a personal vendetta, but it seems to me that my "Snoopy" posts have become boring and repetitive.

You proudly state "Once again I've been buying in the downtrend, as I always seem to end up doing."
The thrust of my argument is that is where you are going wrong.

You go on to say "I think I played the role [of Mr Market] quite well."
If a stock is in a downtrend, Mr Market is selling - that's why there is a downtrend. Snoopy, you were buying!!!!!! You have been going against the general market consensus. Again. Fighting the trend. Playing Mr Market? Fraid not!

Snoopy, I am a pragmatist. If your system worked well, I would not be questioning it. Let's take a look at the relative performance of some of your key longterm holdings - stocks you have been buying, holding and recommending over the last 3 years. To my eyes it looks as though you have devised a system that selects <s>dogs</s> stocks with below average performance. To be blunt, if this is the best you can do, you would be far better off buying an index fund.

http://img.photobucket.com/albums/v418/789456/LPCndx513001.gif
Note :- While the charted performance of LPC is very poor, over a longer time period it is even worse, with the current price being less than it was in 1997. I think the charts on pages 3 and 4 of this thread show this quite clearly - but then I would, wouldn't I?

Snoopy
13-05-2006, 05:19 PM
quote:Originally posted by Phaedrus


You go on to say "I think I played the role [of Mr Market] quite well."
If a stock is in a downtrend, Mr Market is selling - that's why there is a downtrend. Snoopy, you were buying!!!!!! You have been going against the general market consensus. Again. Fighting the trend. Playing Mr Market? Fraid not!


So by your argument Phaedrus, if I had upped my bid to $2.25, which is what the seller originally wanted, I would have avoided the downtrend and been onto a good thing?

For once, when buying shares, I was watching the market every day. I was wondering if my call for shares at $2.04 would be answered. Most days there were no sales. The seller(s) were dancing around all over the place. First they crept down from about $2.25 to $2.21, a plunge down to about $2.04, up to $2.15 then back to $2.04 again. Throughout that time I didn't change my own position one jot. Yet you claim that it was *I* that was being manipulated by that other Mr Market (the seller), 'going against the trend'?

I admit for there to be 'a market' there has to be a buyer and a seller. But in this case it was the seller(s) who was doing the dancing and I was holding firm. The only reason there was a downtrend was that *I caused it* by failing to lift my bid! I wasn't fighting the trend. I *created* the trend.

Over a period of around a month I didn't change my bid in response to any seller. Over a period of two weeks I bought all the shares that were offered to me. No one else tried to gently overtrump me, to challenge my 'market commanding' position. Although some others were hanging onto my coat-tails, buying at the same price come the end of last week! But largely over the last two weeks it is *I* that has been controlling the market for LPC shares. I bought almost all of the shares offered myself and have the contract notes to prove it. Having enjoyed my 'fortnight in the sun', I have now handed the duffel coat on to another Mr Market.


quote:
Snoopy, I am a pragmatist. If your system worked well, I would not be questioning it. Let's take a look at the relative performance of some of your key longterm holdings - stocks you have been buying, holding and recommending over the last 3 years. To my eyes it looks as though you have devised a system that selects <s>dogs</s> stocks with below average performance. To be blunt, if this is the best you can do, you would be far better off buying an index fund.


A few points Phaedrus, given you already know that I don't invest on a three year cycle.

Firstly it is a mistake to compare those three shares against the NZX50. The NZX50 includes dividends, whereas your three share plots do not. Dividends are not insignificant, around 10% per year for each of the three shares illustrated.

Secondly these are my 'income shares'. So I do not benchmark them against the index. The purpose of these shares is to create a steady income stream which they all do very well. Generally such shares will underperform the NZX in bull markets and outperform it in bear markets. So your chart, although exaggerating the difference does not tell me anything that I don't know.

Now if you will forgive me for poaching your chart, I have added a few arrows, showing where I have actually been buying shares.

http://img.villagephotos.com/p/2005-3/963787/LPCndxMOD1.gif

For a start, my strategy is not strictly 'buy and hold' as you claim. It is actually a 'value averaging' strategy. Probably 'buy and buy' would be a more accurate description.

For RBD you can see that I have been quite effective in buying in the

devito
31-05-2006, 04:19 PM
LPC
30/05/2006
DIVIDEND

REL: 0937 HRS Lyttelton Port Company Limited (NS)

DIVIDEND: LPC: LPC INTERIM DIVIDEND FOR SIX MONTHS ENDED 31 DECEMBER 2005

LPC INTERIM DIVIDEND FOR SIX MONTHS ENDED 31 DECEMBER 2005

The Lyttelton Port Company Limited Board of Directors met yesterday and
resolved to not pay an interim dividend for the six months ended 31 December
2005.

Following the failure of the recent takeover bid by Christchurch City
Holdings Limited and the involvement of international partner Hutchison Port
Holdings Limited, the Board are in the process of reassessing the company's
long term strategy, future direction and dividend policy.

The Directors intend to announce the dividend policy going forward when the
financial results for the year ended 30 June 2006 are released.

minimoke
01-06-2006, 07:54 AM
Is this just a cynical ploy by the board to put the screws on POL – or indeed the remaining few small shareholders.. There has never been any shortage of ideas on what to do with the dividend, indeed more infrastructure investment might have been handy, but this has been a cash cow for the Christchurch City Council. This may not be good news for ratepayers and the small holders who may give up on LPC and place their remaining shares on market for CCHL to mop up.

airedale
13-10-2006, 04:55 PM
The sellers have all gone. Dried up. None left.There are still a few buyers. Where to next for the port?..

Snoopy
13-10-2006, 07:32 PM
quote:Originally posted by airedale

The sellers have all gone. Dried up. None left.There are still a few buyers. Where to next for the port?..


LPC will go wheresoever CCHL and Port of Otago want it to go! They hold 74.06% and 15.47% of the shares respectively for a combined total of 89.53% - just short of compulsory acquisition!

Bizarrely neither CCHL or POL are talking to each other. When they do reach some sort of agreement though, it is effectively game over for the remaining shareholders. During the last takeover offer CCHL were adament that LPC was worth no more than $2.20. A 5c dividend has been declared and is due to be paid to those on the register on 17th November.

I think the share price might get to $2.25. But buy at any price above that and you are the mercy of whatever price POL/CCHL decides to offer you. Be careful out there folks.

SNOOPY

discl: hold LPC

Phaedrus
13-10-2006, 08:04 PM
On page 1 of this thread, investors say they are holding LPC for the yield. Fair enough, I suppose. You certainly wouldn't want to have held it long-term for the capital gain - there has been NONE in 9 years!
Other stocks with much better prospects for capital gain offer double the yield of LPC.
Why, then, would anyone want to buy this stock? - let alone hold it long term!

duncan macgregor
13-10-2006, 08:26 PM
PHAEDRUS, We require people to buy into stocks like this the longer they hold the better. I just exited out of POT today third time in three years i cant remember what the divies were but sure remember the buy and sell prices. Most people that think dividends are the where and all in the investment game are the succers that the astute feed on. macdunk

Snoopy
13-10-2006, 08:55 PM
quote:Originally posted by Phaedrus

On page 1 of this thread, investors say they are holding LPC for the yield. Fair enough, I suppose. You certainly wouldn't want to have held it long-term for the capital gain - there has been NONE in 9 years!
Other stocks with much better prospects for capital gain offer double the yield of LPC.
Why, then, would anyone want to buy this stock? - let alone hold it long term!


According to the chart on page 31 of the LPC 2006 annual report an investor who bought LPC shares then reinvested their dividends for ten years (as opposed to spending them) would have achieved *double* the return of the NZX40/50! That sounds as good a reason as any to own LPC shares to me.

SNOOPY

discl: own LPC (albeit only for four years not ten) and have done very nicely in terms of dividends AND capital gains.

airedale
19-10-2006, 01:08 PM
This Is slightly off topic but shows how profitable a port can be.
http://www.stuff.co.nz/stuff/0,2106,3832834a13,00.html

minimoke
19-10-2006, 02:19 PM
I wouldn’t be too impressed by the dividend yield as this has been driven by a rapacious Christchurch City Council who has a pretty insatiable need for cash.

Luckily for the Council the rate payers have investments in the Port as well as the airport which has been great for the cash flow.

Trouble is LPC hasn’t spent as much as it should on its infrastructure. While there has been some investment in coal handling and cranes I recall (as an ex holder) that a lot of this was done with borrowings. The wharves aren’t in as good a nick as they could be and I am not convinced they have solved their industrial relations problems which the other NZ ports have managed to do.

A company has a couple of choices with it profits: pay dividends (even if it takes borrowings to do this) or reinvest back in the business. I am not sure LPC has done a great job of the latter.

airedale
27-11-2006, 08:05 PM
I attended the company AGM today and was hoping to hear something from the Board re an alliance with Otago, but the chairman wasn't giving anything away. Although he did pay lip service to the idea that what was happening between POA and POT was inevitable and commendable.
Noticed Snoopy there with a couple of well thought out questions. Any thoughts, Snoopy,?
I was surprised to hear that there are still over 1600 shareholders.

Snoopy
28-11-2006, 03:47 PM
quote:Originally posted by airedale

I attended the company AGM today and was hoping to hear something from the Board re an alliance with Otago, but the chairman wasn't giving anything away. Although he did pay lip service to the idea that what was happening between POA and POT was inevitable and commendable.
Noticed Snoopy there with a couple of well thought out questions. Any thoughts, Snoopy,?


Yes, I'm surprised you recognised me as I was disguised wearing my world war one fighter helmet and goggles!

Oh, hang on a minute ... ;)

Stocknessmonster doesn't seem to have caught up with the latest results, so I had to go to LPCs own website (http://www.lpc.co.nz). I have just re-read Chairman Barney's address.

Barney refers to the POA and POT deal as a 'potential' merger. I think this has to be far from a done deal. I can't see the commerce commission allowing it in the proposed form. And I can't see the government giving special legislatory dispensation either, following on from the 'waterfront stadium' affair.

I was disappointed too that there had been 'apparently' no progress with a potential partnership between the Port of Otago (POL) and LPC. Then again LPC was very coy about the original talks between these two South Island parties. The original talks only came to light as the later proposed Hutchison deal began to take shape. Someone told me that POL now has *four* big cranes for big boat unloading, upstaging Lyttelton which only has three (despite the October opening of the brand new one). Can anyone confirm? I get the feeling that now that LPC is getting to grips with getting their own house, the next item on the agenda will be to come to some arrangement with the neighbours (down in Otago) - even if they don't admit to it!

I see Barney is forecasting net profit to be down 20% this year, to $8m. Funny, I don't recall him saying that yesterday! It must have been the downbeat way he slipped the figure into his speech as part of the rebuilding program. Did you go on the boat cruise Airedale? I must say some of the wharf looked in little better condition than Pearl Harbour must have looked after the Japanese had carried out their little remodelling exercise over there in the 1940s. Was it wharves 4 and 5 that were basically ruins? Still, we were assured that what capital spending there has been at LPC is being carefully focussed in the right places - like Cashin Quay.

I reckon LPC is now overpriced given the current outlook for LPC as a stand alone business. However, with port consolidation afoot, we are not really buying a stand alone business any more. We are buying a seat at the reconstruction table.

It was also interesting to read in the media this week about bad boy Maersk, the world's largest shipping operator known for playing off our ports against each other, and causing competing ports to overinvest. Apparently Maersk's profits have completely evaporated with the rising tide of fuel prices. So maybe they are not quite as bad as the port companies paint them?

I am happy to keep holding LPC at this stage myself, even if I have had to transfer it from my 'income' portfolio to my 'growth' portfolio while port consolidation is carried out.

SNOOPY

airedale
28-11-2006, 07:32 PM
Hi Snoopy, I like that phrase "buying a seat at the reconstruction table". No I did not take the boat tour but I take your assessment of the wharves. Future growth will mirror the general growth in the South Island and that seems to buoyant. But the same could be said for Timaru and Otago. Will I sell out...no, because I think that there is still a possibilty of "reconstruction".
Barney Sundstrom said "the board believes the time for port reconstructuring has arrived". And "the economics of a merger are compelling".
The government may have a different view, but this government may only only have two years to go before we have a new set of idealogues with a different agenda.
The best question of the meeting was from the guy who asked if there had been any proposals to build a rugby stadium at Lyttelton.:D
I have just had my dividend notification payable on 4/12... net 5 cents /share paid fully imputed.

Snoopy
22-02-2007, 07:14 PM
quote:Originally posted by airedale

The sellers have all gone. Dried up. None left.There are still a few buyers. Where to next for the port?..


In a kind of deja vue from last October, a very interesting market situation has developed in LPC shares today. Bids are there at $2.25 (1c off the all time high of the last two years) and no sellers at all are left!

My warnings on trying to chase this share at this price point remain. But perhaps the market is at last about to price the 'seat at the reconstruction table' scenario. I guess over the next few weeks all will be revealed.

SNOOPY

Steve
23-02-2007, 09:05 AM
quote:Originally posted by Snoopy


quote:Originally posted by airedale

The sellers have all gone. Dried up. None left.There are still a few buyers. Where to next for the port?..


In a kind of deja vue from last October, a very interesting market situation has developed in LPC shares today. Bids are there at $2.25 (1c off the all time high of the last two years) and no sellers at all are left!

My warnings on trying to chase this share at this price point remain. But perhaps the market is at last about to price the 'seat at the reconstruction table' scenario. I guess over the next few weeks all will be revealed.

SNOOPY

There has been speculation of formal merger talks happening with Port Otago floating around Dunedin which have been dismissed as false by Port Otago

airedale
23-02-2007, 02:48 PM
Seems to me that a future merger between POA and POT will signal the way forward for LPC. If that happens all well and good, but if the northern ports strike problems then we get more of the same. Mind you Port of Otago will not want to see their money tied up in LPC for a long time if there are no prospects. Meanwhile having sold a few at 2.25.I am happy to hold all of the rest and wait developments.

airedale
26-02-2007, 09:56 AM
Someone is determined to buy them today. One parcel of 34,415 has gone though at $2.26. The next seller is sitting at $2.50.

airedale
27-02-2007, 07:31 PM
Not sure if it is worth while posting on this topic, perhaps Snoopy and I are the only ones left in this game. But after a ho-hum half yearly report yesterday, the SP rose 11 cents today. Given the relatively small number of shares not owned by the two ports/regional councils, some one else is showing some determination......despite Snoopy's advice not to pay too much;):)

Snoopy
27-02-2007, 10:01 PM
quote:Originally posted by airedale

Not sure if it is worth while posting on this topic, perhaps Snoopy and I are the only ones left in this game. But after a ho-hum half yearly report yesterday, the SP rose 11 cents today. Given the relatively small number of shares not owned by the two ports/regional councils, some one else is showing some determination......despite Snoopy's advice not to pay too much


Never mind Airedale, we can just keep talking amongst ourselves. Oh and do our job acting as the needle in the conscience for everyone else who 'saw the writing on the wall' and got out.

The closing price was $2.36. Not quite an all time high IIRC, but getting up there. More importantly $2.36 is above the Crighton Anderson stand alone 'fair valuation' issued in reponse to the takeover offer last year.

Container volunes for ½FY2007 were up 5%. This is above the highest growth assumption of 4.75% in the Crighton Anderson report. The announcement that the third largest shipping line in the world CMA CGM, via their New Europe Mascarene Oceania (NEMO) service, will be docking here within the year, and adding to the already overflowing container forecast, looks to have outdated the 2006 Crighton Anderson valuation entirely.

All I can say is thank goodness the shameless quick sale to Hong Kong interests was scuppered. The fact that LPC has outperformed all forecasts should cast a shadow of shame on those councillors who tried to flog it off. The Christchurch City ratepayers and remaining LPC shareholders are the winners from the failed council on-sell scheme.

The fact that

"The harbour structure maintenance programme work is proceeding in all areas of the port and is tracking ahead of schedule and under cost budget."

has to be a positive even if the headline result (NPAT down 18.6% doesn't look too flash). Chairman Sundstrum also noted that the slow start of the growing season may have delayed much of the shipping of primary produce. The coal conveyor system looks to be operating much better (volumes up 35%) and that must take some of the 'blame' for the fall in headline ship turnarounds. Less barges from the West Coast are needed!

I'm really pleased with this progress Airedale. I think the $2.36 closing price is not an overvaluation and I'm feeling less inclined to sell than ever. And we haven't taken into account any Port Otago synergies yet. Maybe that all time share price hurdle (was it $2.60, I can't remember exactly) isn't so far away.

SNOOPY

discl: hold LPC

airedale
28-02-2007, 08:14 AM
Hi Snoopy, from my records the all time high was on the 7th August 1997, when the SP touched $2.35 and closed at $2.34.

Steve
28-02-2007, 10:13 AM
quote:Originally posted by airedale

Hi Snoopy, from my records the all time high was on the 7th August 1997, when the SP touched $2.35 and closed at $2.34.

Has that been adjusted for dividends paid out?

Snoopy
28-02-2007, 12:41 PM
quote:Originally posted by Steve


quote:Originally posted by airedale

Hi Snoopy, from my records the all time high was on the 7th August 1997, when the SP touched $2.35 and closed at $2.34.

Has that been adjusted for dividends paid out?


No. Traditionally LPC have paid out all of their earnings as dividends. If you do that generally the share price doesn't rise.

I am a relative newbie, as I've only had my LPC shares for four years. But LPC were in the habit of paying a dps of 11c, which only got cut to 5cps last year. LPC have been using retained earnings to build the business and now the share price rise is starting to reflect that. I would guess that since August 1997 the total dividends paid out by LPC would be 9x11=99c plus I think 20c worth of special dividends and 5c of dividend this year.

I make that an 'adjusted price' of $3.70 for LPC. Not a flash performance over ten years but rather bettter than the bank deposit rate. That goes to show that even if you buy at the very top of the market you can still do OK as the time horizon stretches out and the dividends accumulate. Fortunately neither Airedale or I bought in at $2.34/$2.35, so our returns are rather better.

SNOOPY

discl: hold LPC

airedale
28-02-2007, 02:38 PM
Hi Steve, my figures have not been adjusted, but Snoopy has summed up the history fairly accurately.
Most of my shares were bought in late '02 for an average of $1.53.
The wharfies [bless them] were in pay talks, and every time voices were raised in negotiations, The Press and others reported it with a negative slant. Other buyers stayed away but it seemed like a buying opportunity to me.[:I]

airedale
15-03-2007, 10:12 PM
There is an intersting link on the NZO thread tonight re the purchase of a 49% stake in Spring Creek coal mine by a multi national company who intend to increase export coal production from 7,000 to 65,000 tonnes per month. Good news for LPC.

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10428975

foodee
21-03-2007, 09:19 AM
Back from 2 months away to find sp holding well and more interesting couple of good buy orders.
Found the west coast fizzing, with everyone knowing someone in the coal industry!

disc: holder

Snoopy
18-06-2007, 01:09 PM
quote:Originally posted by airedale

Hi Snoopy, from my records the all time high was on the 7th August 1997, when the SP touched $2.35 and closed at $2.34.


Ok if Airedale is correct we have now, to use a trading term 'broken out' ;-P.

LPC is now trading at or near their all time high with the sell price getting as high as $2.50 this morning. It has since 'come back' to $2.39 which has to be at the top end of 'Standalone Value' as determined by Crighton Anderson in March 2006. Actually $2.39 is still above the top end of value of $2.35 but that doesn't allow for the latest release information on container volumes


quote:Originally posted by Snoopy
"Container volunes for ½FY2007 were up 5%. This is above the highest growth assumption of 4.75% in the Crighton Anderson report."


As a negative factor Solid Energy have invoked a 'Force Majeure' clause. That will presumably allow them to cut coal shipments for FY2007. A 3.7% fall in coal volume will decrease the value of LPC shares by 7cps (Fig5, page 36 of Crighton Anderson report).

Whatever way you look at things LPC is looking 'peaky' to me. Or is it?

PE values are not out of line compared to the other major listed port POT, and the general appreciation in infrastructure values across the board over the past year. Then we have the synergies available from potential closer co-operation with Port of Otago' and the possibility of being 'taken out' by Christchurch City Holdings, which is the City Council in corporate drag. LPC is now my second biggest NZ holding and I intend to hold on to it for a while yet.

SNOOPY

airedale
18-06-2007, 07:28 PM
Hi Snoopy, the " force majeure" looked like Solid Energy just wanted to cover their back in case the snail protesters chained to the railway lines got out of hand. If there is no more threat from the protesters then coal volumes should be constant.
There has certainly been some consistent buying pressure recently.

Snoopy
21-06-2007, 08:10 PM
quote:Originally posted by airedale

Hi Snoopy, the " force majeure" looked like Solid Energy just wanted to cover their back in case the snail protesters chained to the railway lines got out of hand. If there is no more threat from the protesters then coal volumes should be constant.
There has certainly been some consistent buying pressure recently.


Yes Airedale. Although if you believe one press report Solid Energy's 'mole' even told them of the date of the 'chained to the rails' protest in advance. IOW Solid Energy knew when and where it was all going to happen! I wonder if it is still 'Force Majeure' if you know about it?

I have certainly never seen anything like this before with LPC. Last sale at $2.48, our buyer sitting there at $2.42 and nothing at all on the sell side! Maybe I'll slip my shares on the market tomorrow at 5 bucks and see what happens ;-P

I see LPC released a 'profit clarification' today.

------

21 June 2007
NZX RELEASE
PROFIT CLARIFICATION

Impact of Adoption of International Financial Reporting Standards on Full
Year Results:

Lyttelton Port Company's forecast profit after tax for the year ended 30 June 2007 remains at approximately $8.0 million.

The impact of the adoption of International Financial Reporting Standards will be a positive adjustment of $1 million taking the forecast reported profit after tax to approximately $9.0 million.

----

Technically that is a 12.5% profit upgrade, even if it is really a flat result boosted by fiddling around with the accounting rules. One thing it does clarify is that the 'Force Majeure' warning from Solid Energy will have no impact on this year's LPC profit result.

SNOOPY

Scuffer
22-06-2007, 07:26 AM
LPC have had a good few years of trouble free sailing but I expect the old spectre of disharmony coming their way, pay talks next year, wait for the trouble to start brewing soon, they have a new manager who is ruffling feathers, this lot are well known to be militant.

airedale
22-06-2007, 03:04 PM
ABN Amro has raised their target price from $2.35 to $2.75 according to the Herald today.The revision is underpinned by the belief that a merger with Otago is likely.

Scuffer
22-06-2007, 03:52 PM
Yup any merger will be the same as it is now Lyttelton importing to supply Ch.ch. and Port Chalmers exporting dairy and meat products.A good way to put some positve spin into the sp a bit like the new deal with cmg same containers coming in different company bringing them in.Still see trouble ahead with the workforce especially if the merger goes ahead, but that shouldn't affect the share price now should it,by the way I think they are undervalued at$2.50 as well.

airedale
13-11-2007, 03:28 PM
291,000 shares traded today. Which is a big volume for LPC. Almost half of them at $2.45 and the rest at $2.40.
There has been strong support at $2.40 lately.
The AGM is tomorrow.
One wonders about the chance of a merger, or if the recent support for coastal shipping is significant.

Billy Boy
13-11-2007, 04:07 PM
I think support for coastal shipping is a positive.
Talking with a Trucking Manager/owner. He was saying that the cost of fuel
and other operating expenses is make his life very difficult, especially in the
rural areas.
SPN man was saying there is a real possibility of manufactured goods being shipped
to the South Island ports and processed timber etc. backloading to the likes of
Tauranga for export. There seams to be an opening, and Mainfreight pushing the
coastal issue is good.
General consenses is that T/rail have lost the plot or don't care.
BB

Scuffer
13-11-2007, 10:09 PM
AGM tomorrow thats when Barney resigns puts himself up for re-election and asks for a 10% pay rise because he is doing such a good job like all the other companies he sits on the boards of.

airedale
28-11-2007, 04:23 PM
At this year's AGM a few weeks ago, Snoopy asked the directors why none of them held shares in the company. The chairman Barney Sundstrum sheepishly admitted that they had followed their own reccommendations and sold their holdings when Hutchisons of Hong Kong tried to buy in.
Today's news re Pike River Coal puts the SP well above their sell reccommendation.
The moral here is that"it is alright to be wrong once, but don't stay wrong". Buy back in.

Snoopy
28-11-2007, 11:32 PM
At this year's AGM a few weeks ago, Snoopy asked the directors why none of them held shares in the company. The chairman Barney Sundstrum sheepishly admitted that they had followed their own recommendations and sold their holdings when Hutchisons of Hong Kong tried to buy in.
Today's news re Pike River Coal puts the SP well above their sell recommendation.
The moral here is that "it is all right to be wrong once, but don't stay wrong". Buy back in.

It is always easy to look clever with hindsight Airedale. I have kept the directors recommendation to accept the takeover at $2.20 letter dated 29th March 2006.

The directors admitted that "there was considerable upside potential value to shareholders if the merger between Port Otago Limited and LPC went ahead (or any other merger involving LPC for that matter), but *it may be some time before that upside can be realised via a transaction.*" (my emphasis)

It is now 18 months down the track and no merger has occurred, so you could argue the directors were right.

The directors also said:

"It is possible that one or more of LPCs competitors may enter into mergers or strategic alliances which increase the competitive threat they pose to LPC."

True, but that hasn't happened yet either. Nevertheless, If POT and POA had got together maybe things really would have been different!

The directors also said:
"Any acceptance of CCHLs offer will reduce the free float of LPCs shares, which may have a negative impact on LPCs share price."

I never really believed this one. After all why would remaining shareholders panic and sell their shares at below the takeover offer price when they had already turned down the takeover offer price when it was presented to them on a platter? It always seemed far more likely to me that the tightening of the supply of shares would see the price of those shares that remained increase.

After the CCHL takeover closed the share price did fall to around $2. So in the short term you could say the directors' advice was spot on. Other more long term holders, like me, saw the price slide as temporary and used the period of price weakness to significantly boost their holdings.

I am not really interested in starting a points scoring competition between those shareholders that remain and the directors. Those that 'sell out' and those that 'hold' can both be right, depending on the timeframe of each investors investment horizon. I would say that in general NZers roll over and sell their assets too cheaply. Perhaps the directors thought that most of the LPC shareholders just wanted 'the quick buck'? It was very nice to be proved wrong in this instance.

Personally I would like to see the directors buy back into the company. I don't think it is a good look that none of them hold LPC shares. I can't think of any other public company where no shares are held by those at the top. I would not even see buying back in as a contradiction. There is nothing wrong with having a view that LPC2006 is a sell at $2.20, whereas LPC2008 is a buy at $2.50. The companay has changed and moved on. Only the directors seem to see the way forwards in the rear vision mirror.

SNOOPY

discl: hold LPC

Scuffer
29-11-2007, 11:58 AM
It is always easy to look clever with hindsight Airedale. I have kept the directors recommendation to accept the takeover at $2.20 letter dated 29th March 2006.

The directors admitted that "there was considerable upside potential value to shareholders if the merger between Port Otago Limited and LPC went ahead (or any other merger involving LPC for that matter), but *it may be some time before that upside can be realised via a transaction.*" (my emphasis)

It is now 18 months down the track and no merger has occurred, so you could argue the directors were right.

The directors also said:

"It is possible that one or more of LPCs competitors may enter into mergers or strategic alliances which increase the competitive threat they pose to LPC."

True, but that hasn't happened yet either. Nevertheless, If POT and POA had got together maybe things really would have been different!

The directors also said:
"Any acceptance of CCHLs offer will reduce the free float of LPCs shares, which may have a negative impact on LPCs share price."

I never really believed this one. After all why would remaining shareholders panic and sell their shares at below the takeover offer price when they had already turned down the takeover offer price when it was presented to them on a platter? It always seemed far more likely to me that the tightening of the supply of shares would see the price of those shares that remained increase.

After the CCHL takeover closed the share price did fall to around $2. So in the short term you could say the directors' advice was spot on. Other more long term holders, like me, saw the price slide as temporary and used the period of price weakness to significantly boost their holdings.

I am not really interested in starting a points scoring competition between those shareholders that remain and the directors. Those that 'sell out' and those that 'hold' can both be right, depending on the timeframe of each investors investment horizon. I would say that in general NZers roll over and sell their assets too cheaply. Perhaps the directors thought that most of the LPC shareholders just wanted 'the quick buck'? It was very nice to be proved wrong in this instance.

Personally I would like to see the directors buy back into the company. I don't think it is a good look that none of them hold LPC shares. I can't think of any other public company where no shares are held by those at the top. I would not even see buying back in as a contradiction. There is nothing wrong with having a view that LPC2006 is a sell at $2.20, whereas LPC2008 is a buy at $2.50. The companay has changed and moved on. Only the directors seem to see the way forwards in the rear vision mirror.

SNOOPY

discl: hold LPC

A good start would be to offer employees shares as a bonus like they used to do, it may stop the exodus of staff, they are hard to replace you know. They need to build employee pride in the company they work for which in turn will breed loyalty, the port is going to go through an horrendous time in 5-10 years with the existing workforce heading into retirement the wannabe port workers are not there anymore and its a recipe for disaster the staff recruited in the future will be what they can get not the quality that they need.

Snoopy
29-11-2007, 01:44 PM
A good start would be to offer employees shares as a bonus like they used to do, it may stop the exodus of staff, they are hard to replace you know. They need to build employee pride in the company they work for which in turn will breed loyalty, the port is going to go through an horrendous time in 5-10 years with the existing workforce heading into retirement the wannabe port workers are not there anymore and its a recipe for disaster the staff recruited in the future will be what they can get not the quality that they need.

I absolutely agree Scuffer. Following the Layton/Viles days, I got the impression that the new breed of management were determined to rebuild the worker management relationship, and that shares for all employees was a part of this. It would be interesting to know how many employees of LPC still hold their shares, and didn't follow the board's advice to sell up.

The takeover offer had the unfortunate side effect of setting this aspect of the worker/management relationship backwards, and driving employees and shareholders back to the 'us and them' mentality.

This year, the directors militant 'take the directors pay rise at any cost' attitude I am sure will now be matched by the militancy of the workers during their own upcoming pay negotiations. An across the board 10&#37; pay rise would not be good for company profitability. The annoying thing is, if the workers still held the shares they had been goaded to sell, they would already have their 10% and more through share price appreciation and dividends. The shareholders would be happy, the management would be happy and the workers would be happy. The result of that would be a far less militant upcoming pay round!

SNOOPY

discl: hold LPC

airedale
29-11-2007, 06:30 PM
The directors also said:
"Any acceptance of CCHLs offer will reduce the free float of LPCs shares, which may have a negative impact on LPCs share price."

This is a standard and oft-used phrase to try to cajole and frighten shareholders in many takeover situations.
In fact it is probably a useful buy signal when you see it!:)

Scuffer
23-04-2008, 12:31 PM
Things are moving along at the port, they want to dredge the harbour deeper to get the really big ships in, I think they have to get resource consent, it will be interesting times as Lyttelton continues to grow attempting to support ChCh and the south island.
Sharetrader did an interesting question an answer review of the port with Peter Davie a few years back it would be nice to see that done again now all the hooha of Hutchison has died down, personally I think they will be sniffing around again, LPC and Otago now have a high percentage of the shareholding, one newspaper article said they could do a deal under a "scheme of arrangement", I wonder if that could open the door for Hutchison, it would come into conflict with the present governmental policy of trying to fend of foreign investment in our countrys major assets.
Pike River would also be an interesting topic for the port, the deal with them through Solid Energy surely must have major repercussions for a port in desperate need of space.
I wonder if Greenpeace will be welcome next time when the coal is moving through the port in larger quantities.

COLIN
23-04-2008, 09:45 PM
The Peoples Democratic Republic of Christchurch will resist any idea whatsoever of an outside significant corporate shareholder in their port company, be it from China, or Tibet (Well, perhaps Tibet, seeing the hard time they are giving Mayor Parker over his attendance at the FTA signing!) or anyone else outside Crusader country.
The narrow parochialism of the place is legendary.

airedale
24-04-2008, 07:58 AM
The directors admitted that "there was considerable upside potential value to shareholders if the merger between Port Otago Limited and LPC went ahead (or any other merger involving LPC for that matter), but *it may be some time before that upside can be realised via a transaction.*" (my emphasis)
That is a quote from a quote, from Snoopy's post. "it may be some time indeed". We are not going broke with this stock, but we don't have to make any quick decisions either.

Scuffer
24-04-2008, 08:15 AM
I think your right Airedale,I was kinda hoping that the Pike river deal would significantly increase profits hence dividends and sp increase but if they are going to undertake massive development then I suppose that will get swallowed up quite quickly, I've been expecting to hear about some sort of unrest down there but it hasn't happened they are usually militant, the docks are never a happy place I remember 51. So on that note it could be a fortuitous time to buy a few for my bottom drawer.

COLIN
24-04-2008, 01:26 PM
I think your right Airedale,I was kinda hoping that the Pike river deal would significantly increase profits hence dividends and sp increase but if they are going to undertake massive development then I suppose that will get swallowed up quite quickly, I've been expecting to hear about some sort of unrest down there but it hasn't happened they are usually militant, the docks are never a happy place I remember 51. So on that note it could be a fortuitous time to buy a few for my bottom drawer.

Well, I have news for you Scuffer. See today's announcement re industrial action. The unions control DPC and they know full well that they are going to get what they want as long as the Peoples Democratic Republic is the controlling shareholder. Brent Layton tried to put LPC onto a proper commercial footing but they soon got rid of him!

airedale
24-04-2008, 01:34 PM
Scuffer, I bought most of my LPC shares when there was the threat of industrial action. Mostly around the $1.50 mark, I think.
So if you would like more this is likely to be a buying window.
Eventually a deal will be done with the workers, the negative press articles will fade. Now if we just knew what Port Otago are likely to do.

Scuffer
25-04-2008, 11:39 PM
I'm not with you Airedale what has the port of otago to do with it, or do you mean the scheme of arrangement? Is the port of otago listed on the nzx?I would love to buy more LPCshares at $1.50 you got a bargain there have you still got them or did you sell out to aid the hutchison takeover.

Steve
26-04-2008, 08:10 AM
I'm not with you Airedale what has the port of otago to do with it, or do you mean the scheme of arrangement? Is the port of otago listed on the nzx?I would love to buy more LPCshares at $1.50 you got a bargain there have you still got them or did you sell out to aid the hutchison takeover.

Port Otago is not listed on the NZX, it is owned by the council. Port Otago is a substantial shareholder of LPC (for the time being)...

airedale
26-04-2008, 08:53 PM
Hi Scuffer, I have still got most of them, I think that Otago will insist on influencing any plans by LPC. They did not buy 15% just as a passive investment.

foodee
28-04-2008, 11:59 AM
Out last year - when cashing up.
We still hold SPN which has outperform all the other listed ports over the last 2 years.

Cheers

Scuffer
29-04-2008, 03:21 AM
Hi Scuffer, I have still got most of them, I think that Otago will insist on influencing any plans by LPC. They did not buy 15% just as a passive investment.


I think you are spot on Airedale any direction LPC take from now on will be influenced by Port Chalmers, the minnow that it is. LPC must be seething knowing that any major developments will now be curtailed by a competitor which otherwise would have been deemed to be inconsequential.
Hutchisons still may want to do a deal involving Port Chalmers but that would never get past the present government, I can well imagine the hue and cry from the public.
I would love to know if sharetrader had any plans to have a question and answer forum with LPC has they are now in dispute with the union, it would probably be a harrowing time for the ceo at the present, having said that the last time sharetrader ran one of the forums they were also in dispute, this time I think he would have a few more curly ones thrown at him.I personally would love to know if any of LPC management are once again shareholders in the company they represent, that would tell us if a deal with Hutchison or anyone else was on the cards in the near future, it is embarassing to know that they have such little confidence in the company they are not shareholders what hope is there for the rest of us.

Billy Boy
29-04-2008, 09:40 AM
However, if POT does clear the hurdles to run coal out of Malborough perhaps this could be serious for LPC? A fair chunk of their recent capex has been in anticipation of increased coal handling business - only some of which (if I recall correctly) is secured by long term contracts? A really naive question to end - does anyone know whether it would be economic to dredge Lyttelton so deeper draught boats could get in?

Yes LPC could be dredged, Its a volcanic lava roch so wont be to hard
to dig up. If I remember correctly, Parts have been dredged.
IMO... I think Malborough would be a long shot for POTor anyone.
1. Sounds Ite's dont like shipping coz it washes away the banks etc
2. A major port at the top of the island ?? South Island shipping is most
needed out of CHCH and south of.
BB

Scuffer
09-05-2008, 01:12 PM
Hey Billy Boy your quite right Lyttelton can be dredged but its mainly volcanic mud not much rock buddy except for a bit of a reef half way up the harbour. I think they want to dredge the harbour to a greater depth to enable the larger ships to get in but they need to get resource consent and the Greenies will put a stop to that haha! they like to put a stop to everything that doesn't fit in with the way they look at the world.

airedale
09-05-2008, 01:31 PM
I notice that CHch City Holdings have nibbled up a few more of the remaining shares this week. Paid $2.20 for them.

Scuffer
09-05-2008, 03:05 PM
Kinda makes ya think Hutchisons are back doesn't it, its all too quiet down there.

Fanny 22
15-05-2008, 06:50 PM
Kinda makes ya think Hutchisons are back doesn't it, its all too quiet down there.
Yea I would have to agree with you scuffer.Hutchisons are just hiding behind a bush I think its a timing issue and when they are ready they will re surface.

airedale
15-05-2008, 07:01 PM
Someone is taking everything offered at 2.20. I suspect the Chch City Council quietly increasing their holding.

Scuffer
15-05-2008, 07:15 PM
Fanny 22 you're bang on buddy they are lurking in the shadows you can just smell it, and it is the Parkies republic buying those small parcels just wait for the announcement to the NZX it will be coming soon, any way I see its your first post welcome to the LPC thread, you are among a few legends here some real bright sparks amongst these boys.

COLIN
15-05-2008, 10:08 PM
Yea I would have to agree with you scuffer.Hutchisons are just hiding behind a bush I think its a timing issue and when they are ready they will re surface.

I am intrigued as to why you would think that the good one-eyed xenophobic socialistic burghers of the Peoples Democratic Republic of Christchurch would be any more receptive now to the idea of Chinese - or any other overseas -billionaires gaining a cornerstone holding in their beloved Port Company, than they were before?

Fanny 22
16-05-2008, 04:52 PM
LPC needs a major cash injection so they can continue growing,the container terminal is way to small and is in urgent need for expansion so it can grow to be the main player in the South Island thats why I think Hutchisons still hiding in the bush.

Scuffer
17-05-2008, 08:11 AM
Hey big fella your bang on again, but don't forget that the SS council are still buying all those shares so the money is being dished out on the buyback, the coal storage area needs to be bigger as well as the container terminal and the oil wharf is getting a few pennies thrown at it, the rest of the wharfs are falling into the inner harbour. I think its a quick spruce up and a lick of paint before they sell it, maybe the new buyer will spend all the money on revamping the port like Toll did for the rail, that would be the Gestapo council train of thought they are probably getting advice from the national party, the next thing will they will be hammering their workers on the wages to make it look good on paper to any prospective buyer, not that the one hiding in the bush would see that as a problem when they will just get rid of the lot of them and bring their own Chinese workers in, after all everyone else will have gone to Australia haha! by the way I see your into wrestling by looking at your avatar.

Snoopy
22-05-2008, 04:53 PM
LPC needs a major cash injection so they can continue growing,the container terminal is way too small and is in urgent need for expansion so it can grow to be the main player in the South Island thats why I think Hutchisons still hiding in the bush.


Fanny 22, I am curious to know what you mean by the container terminal being too small. LPC commissioned a brand new container crane in FY2007, making a total of three. LPC management claim berth productivity has increased by 17&#37; as a result.

Of the six principal trading ports in the South Island, the total trading volume is as follows (using year to June 2005 figures):

Port, Total Trade Volume, SI Market Share

Nelson, 1.327m, 16.0%
Marlborough, 0.387m, 4.7%
Lyttelton, 3.087m, 37.1%
Timaru, 0.402m, 4.8%
Otago, 1.444m, 17.4%
South Port 1.666m, 20.0%

So LPC was easily the biggest player in the South Island *before* the new crane was up and running.

The geography of the Lyttelton Port means that there aren't acres of land just sitting there to expand the container section. That's why they acquired the 9.5 hectares that was the old NZ Express Transport site at Ferrymead, just through the tunnel.

I am curious as to what kind of container terminal expansion you expect from LPC?

SNOOPY

discl: hold LPC

Snoopy
22-05-2008, 05:13 PM
the coal storage area needs to be bigger as well


Why do you say that Scuffer? I have never heard of a coal ship having to 'wait for coal' in port.



The container terminal and the oil wharf is getting a few pennies thrown at it, the rest of the wharfs are falling into the inner harbour. I think its a quick spruce up and a lick of paint before they sell it, maybe the new buyer will spend all the money on revamping the port like Toll did for the rail,


I know you are being sarcastic Scuffer. But have you forgotten the details of the Hutchison deal? The company was to be split into two with 'strategic land assets' being one company which would continue to 51% owned by council, with the operational assets and personnel put into another company in which the council would hold 49% (the other 51% being owned by Hutchison).

The way the Auckland Airport 'non-sale' went (to the Canadians), I don't think such a deal would get through our goverment now. So the council would probably still end up still owning 80% of the buildings and wharves at best. Given those assets nothing more than a 'quick spruce up' would backfire on them would it not?

SNOOPY

airedale
22-05-2008, 07:01 PM
More than 90% of the shares are now tied up between LPC and Port Otago.
The Chch have recently nibbled up a few more, and I just wonder if the game is over for the rest of us.

Snoopy
22-05-2008, 10:06 PM
More than 90% of the shares are now tied up between LPC and Port Otago.
The Chch have recently nibbled up a few more, and I just wonder if the game is over for the rest of us.

Christchurch City Holdings have legitimately increased their holding of LPC as they are entitled to do under the creep provisions of the takeover legislation. As soon as LPC and POL can agree on what will happen next then it is 'game over'. All who are left will be bought out, but at what price?

CCHL were not exactly generous with their last takeover offer, and at first refused to pay any kind of premium for control. I am hanging in there because I can see the potential of LPC and POL working together as a southern super-port. But whether CCHL will be required to buy the remaining shareholders out on that basis, of that I am not so sure.

SNOOPY

discl: hold LPC

Fanny 22
25-05-2008, 01:52 PM
Fanny 22, I am curious to know what you mean by the container terminal being too small. LPC commissioned a brand new container crane in FY2007, making a total of three. LPC management claim berth productivity has increased by 17&#37; as a result.

Of the six principal trading ports in the South Island, the total trading volume is as follows (using year to June 2005 figures):

Port, Total Trade Volume, SI Market Share

Nelson, 1.327m, 16.0%
Marlborough, 0.387m, 4.7%
Lyttelton, 3.087m, 37.1%
Timaru, 0.402m, 4.8%
Otago, 1.444m, 17.4%
South Port 1.666m, 20.0%

So LPC was easily the biggest player in the South Island *before* the new crane was up and running.

The geography of the Lyttelton Port means that there aren't acres of land just sitting there to expand the container section. That's why they acquired the 9.5 hectares that was the old NZ Express Transport site at Ferrymead, just through the tunnel.

I am curious as to what kind of container terminal expansion you expect from LPC?

SNOOPY

discl: hold LPC
Yea you right LPC do have 3 container cranes which have trouble working efficiently in the congested area available because the container terminal is to small as for the land through the hill they only bought that to free up space in the terminal.They need to expand to the east which means upgrading CQ1 & CQ2 wharfs to container crane specs, huge money is needed here which is just one reason they need someone like Hutchisons to jump in.Then they might be able to work two large container vessels more efficiently at the same time.Well what about the coal another area which needs major up grading,theres the storage problems when Pike River finally come on stream there's barely enough room to stock pile Solid Energys coal now.Then to actually acheive the load out figures that will be required to load and turn the ships around this will require huge investment another good reason you need someone like Hutchisons on board.May be LPC would prefer to be landlords ?

Fanny 22
25-05-2008, 02:13 PM
Hey Snoopy it is a common occurrence for coal ships to be sitting at the berth waiting for coal

Steve
25-05-2008, 02:36 PM
Christchurch City Holdings have legitimately increased their holding of LPC as they are entitled to do under the creep provisions of the takeover legislation. As soon as LPC and POL can agree on what will happen next then it is 'game over'. All who are left will be bought out, but at what price?

CCHL were not exactly generous with their last takeover offer, and at first refused to pay any kind of premium for control. I am hanging in there because I can see the potential of LPC and POL working together as a southern super-port. But whether CCHL will be required to buy the remaining shareholders out on that basis, of that I am not so sure.

SNOOPY

discl: hold LPC

I wonder if Port Otago will have to consider selling its shareholding to give money back to the council to enable it to contribute its share to Dunedins new stadium?

Scuffer
11-06-2008, 08:18 AM
[quote=Snoopy;201699]Why do you say that Scuffer? I have never heard of a coal ship having to 'wait for coal' in port.

Well its a common occurence as the big fella said they have no room to store coal so if the reqired coal is not already sitting taking up space the ship has to wait until solid energy gets it there then it is loaded from train to ship. When Pike comes on line the logistical nightmares will begin they are short of storage space remembering that access is still needed for the bulldozers and other coal loading machinery the whole problem appears to me to be the differing grades and quality of coal that is required a lot of this has to be blended before loading. Pike are going to increase the load out to around 4 million tons a year across the wharf thats some amount even with new purpose built equipment not the old inherited Brit stuff that LPC brought in.

Fanny 22
11-06-2008, 01:51 PM
never mind the old inherited plant from Brit ,lets not forget most of the load out system was designed to load wood chip!!.So at the moment it is maxed to its limit needs serious capital chucked in this direction if they want to meet solid energy and pike rivers tonnages in next 12 months(I can see Hutchisons Peaking out the bush)

Scuffer
12-06-2008, 01:40 PM
I just love your dress sense big fella were can I get an outfit like that is it LPC company issue or do you have your own tailor, your not the CEO are ya in disguise trying to mislead poor investors into not buying in so ChCh holdings can lux up on the cheap.

Fanny 22
13-06-2008, 08:36 AM
I just love your dress sense big fella were can I get an outfit like that is it LPC company issue or do you have your own tailor, your not the CEO are ya in disguise trying to mislead poor investors into not buying in so ChCh holdings can lux up on the cheap.

Well Scuffer these attacks are getting a bit personel anyhow I can see you have good dress sense.In my hay day it fitted quiet well as for it being LPC issue could you imagine a work force climbing around the wharfs looking like that,I dont think so lets face it most of them would have the same figure. I probably knocked a few of them around ring in my hay day.The fabric could be quiet good because it would save money on the refective gear they are required to wear and what about the stretchy fabric one size fits all save a lot money there ( worth looking at)No Im not the CEO in wolfs clothing

Scuffer
13-06-2008, 09:30 AM
Well Scuffer these attacks are getting a bit personel anyhow I can see you have good dress sense.In my hay day it fitted quiet well as for it being LPC issue could you imagine a work force climbing around the wharfs looking like that,I dont think so lets face it most of them would have the same figure. I probably knocked a few of them around ring in my hay day.The fabric could be quiet good because it would save money on the refective gear they are required to wear and what about the stretchy fabric one size fits all save a lot money there ( worth looking at)No Im not the CEO in wolfs clothing

Easy Big boy just having a bit of fun don't take it personal, but I like your humour, I hope your not insinuating that my dress sense is alluding to me being a menace some on this site would say I was, but I'm a lover not a fighter your obviously the latter, because you are definitely not the tealady at LPC.:eek:

Steve
14-06-2008, 07:08 PM
I wonder if Port Otago will have to consider selling its shareholding to give money back to the council to enable it to contribute its share to Dunedins new stadium?

Not even considered as an option, according to a recent article in the ODT...

Snoopy
16-06-2008, 09:59 PM
LPC do have 3 container cranes which have trouble working efficiently in the congested area available because the container terminal is too small as for the land through the hill they only bought that to free up space in the terminal.They need to expand to the east which means upgrading CQ1 & CQ2 wharfs to container crane specs, huge money is needed here which is just one reason they need someone like Hutchisons to jump in. Then they might be able to work two large container vessels more efficiently at the same time.


Fanny 22, for those who don't know what we are on about, the Port of Lyttelton has an 'inner port' where all the smaller ships go and an 'outer port' sheltered by an artificial breakwater which is where the deeper draft larger ships are moored. The outer port goes by the name of 'Cashin Quay' . 'Cashin Quay' is one long stretch of dock length to look at. But in reality it is divided into four berths CQ4 and CQ3 (the existing container terminal berths), CQ2 and CQ1 which is currently used for outshipping bulk loads of coal.

I can't see any need to revamp CQ1 as particularly with the the increased coal coming through I think it will be needed as a full time coal berth. There certainly are plans to upgrade CQ2. Chairman Sundstrum told us in the FY2007 annual report, on page 11, that quote:

"We are half way through a $90m reinvestment in the port and have completed a number of significant works while others remain to be started; most notably the oil berth and the rebuild of Cashin Quay Number Two wharf."

I guess if they are halfway through, that means around $45m is yet to be spent.

Next we learn from the half year 2007/2008 interim report p4 that:

"Work is well underway on a $10million to upgrade the oil berth, strengthening it and ensuring it meets the needs of current and future vessels."

So how much is the Cashin Quay 2 update going to cost - $10m?

If you return to the FY2007 annual report under the financial report note 16 you will see that LPC have a $110m borrowing facility. $62m of this had been drawn down on last annual report date. There is plenty of headroon there to borrow in full for the cost of rebuilding the oil berth and upgrading Cashin Quay 2 without the need to go the shareholders for more equity. Contrary to what you say Fanny 22, IMO LPC do not need Hutchisons or anyone else to 'jump in' and fund a Cashin Quay 2 upgrade.



Well what about the coal another area which needs major up grading, theres the storage problems when Pike River finally come on stream there's barely enough room to stock pile Solid Energy's coal now. Then to actually achieve the load out figures that will be required to load and turn the ships around this will require huge investment another good reason you need someone like Hutchisons on board.


Fanny 2, the best year for loading out coal was FY2006 with 2,505,100 tonnes of coal dispatched (p17 FY2006 annual report). However the best month was June 2006 in which I quote:

"approximately 357,057 tonne of coal shifted from wagon through the stockpile and onto six vessels."

Multiply that by 12, less a couple of weeks for a maintenance shutdown, and we are looking at potentially moving 4 million tonnes of coal per year. That is with the existing set up 'as is'. Now if we look back to the November 2007 press release, where the effects of Pike River Coal coming on board are described:

---------

INCREASING COAL VOLUMES FOR LPC

Coal volumes at Lyttelton Port of Christchurch (LPC) are expected to increase by up to 1.3 million tonne per annum, over the next three years, thanks to a new agreement between Solid Energy Limited and Pike River Coal Limited.

The 18-year agreement will begin late 2008 and the full financial implications for LPC will be advised once they have been fully determined.

------------

Add that extra 1.3m tonnes to the maximum tonnage achieved so far (2.5m tonnes in FY2006) and we get 3.8 million tonnes. That is well within the capacity of what the current plant has done already - on a monthly basis - with no changes. Consequently I dispute your suggestion that a 'huge investment' will be needed, and that the search for some large equity partner (like Hutchison) is on.

SNOOPY

Snoopy
18-06-2008, 04:39 PM
For those that haven't caught up with it yet, my latest essay on the performance and prospects of 'Lyttelton Port of Christchurch' may be found here.

http://forum.sharechat.co.nz/showthread.php?t=1969

If you conclude that the review is a bit negative and that LPC is fully priced, then you'd be right.

I haven't put much effort into looking at LPC over the last two years. That's because it has been 'in play'. With the company commissioning Crighton Anderson to do a full valuation report in 2006 as a result of the CCHL takeover offer, there seemed little point in trying to outdo or even equal a professional team of beavers on the case. However, times have moved on even if the business performance hasn't. There are of course good reasons why LPC has 'apparently not done that well' that are fully discussed in my reference.

But two years ago, as now, the real value in LPC is not on a 'stand alone basis', but how it can fit into a 'great southern ports' alliance, with 15% shareholder Port of Otago Limited. Still, on a stand alone basis, both coal and containers are looking good for FY2008 and there has been a small profit upgrade. But with a new labour agreement and work yet to commence of Cashin Quay 2, expenses are rising as well.

On a stand alone basis the highest price I can jusify is around $2.10 (based on a prospective PE of 20). LPC closed up again at $2.35 today.

SNOOPY

discl: hold LPC, but not planning to buy more

Scuffer
21-06-2008, 11:26 AM
Congratulations Snoopy, I've just had a quick read of your gleanings on LPC you must be a substanial shareholder and over a long period of time to focus on them as you have done, your hard work helps other traders on their decisions on LPC and has certainly helped me, I sold out last year with a tidy profit I've thought about climbing back in for the long term but am apprehensive as yet. CCHL are tinkering behind the scenes in my opinion and it could be the wrong decision. I agree with you though that we need to consolidate the ports through out NZ, that would put us in a stronger position with shipping companies, similar to the way things tick in Australia.

Snoopy
22-06-2008, 10:44 AM
Congratulations Snoopy, I've just had a quick read of your gleanings on LPC you must be a substantial shareholder and over a long period of time to focus on them as you have done,


'Substantial shareholder'? Well, in my own terms I guess I am. But I don't think there is any possibility of cracking that 5&#37; threshhold that the NZX considers 'substantial'! I can't claim to be in there for a long period of time either as my first LPC shares I only bought six years ago and my 'average holding period' would be only 3.5 to 4 years.



your hard work helps other traders on their decisions on LPC and has certainly helped me, I sold out last year with a tidy profit I've thought about climbing back in for the long term but am apprehensive as yet. CCHL are tinkering behind the scenes in my opinion and it could be the wrong decision.


I have focussed more on LPC than some of my other investments. That is partly out of necessity because the wider media coverage of this company is so dismal. I guess even the brokers feel there are so few free float shares available to the public the LPC company isn't worth covering in any substantive way. Of course that is cold comfort to the 1700 or so shareholders that are left, and those former shareholders who still take an interest in the company. So I hope my analysis has been helpful to others as well as your good self.

You are right to be wary of CCHL. They may yet try to scoop up the company before the merger talks with POL get underway, thus shutting small shareholders out of any restructuring premium. Of course they would need POL's co-operation to be able to do this. The more resolute POL is, the better we small shareholders have a chance of hanging on. If POL capitulates it is 'game over' for the rest of us and we could be forced to sell an a minimal if any premium to current market prices.

SNOOPY

Fanny 22
23-06-2008, 03:05 PM
Fanny 22, for those who don't know what we are on about, the Port of Lyttelton has an 'inner port' where all the smaller ships go and an 'outer port' sheltered by an artificial breakwater which is where the deeper draft larger ships are moored. The outer port goes by the name of 'Cashin Quay' . 'Cashin Quay' is one long stretch of dock length to look at. But in reality it is divided into four berths CQ4 and CQ3 (the existing container terminal berths), CQ2 and CQ1 which is currently used for outshipping bulk loads of coal.

I can't see any need to revamp CQ1 as particularly with the the increased coal coming through I think it will be needed as a full time coal berth. There certainly are plans to upgrade CQ2. Chairman Sundstrum told us in the FY2007 annual report, on page 11, that quote:

"We are half way through a $90m reinvestment in the port and have completed a number of significant works while others remain to be started; most notably the oil berth and the rebuild of Cashin Quay Number Two wharf."

I guess if they are halfway through, that means around $45m is yet to be spent.

Next we learn from the half year 2007/2008 interim report p4 that:

"Work is well underway on a $10million to upgrade the oil berth, strengthening it and ensuring it meets the needs of current and future vessels."

So how much is the Cashin Quay 2 update going to cost - $10m?

If you return to the FY2007 annual report under the financial report note 16 you will see that LPC have a $110m borrowing facility. $62m of this had been drawn down on last annual report date. There is plenty of headroon there to borrow in full for the cost of rebuilding the oil berth and upgrading Cashin Quay 2 without the need to go the shareholders for more equity. Contrary to what you say Fanny 22, IMO LPC do not need Hutchisons or anyone else to 'jump in' and fund a Cashin Quay 2 upgrade.



Fanny 2, the best year for loading out coal was FY2006 with 2,505,100 tonnes of coal dispatched (p17 FY2006 annual report). However the best month was June 2006 in which I quote:

"approximately 357,057 tonne of coal shifted from wagon through the stockpile and onto six vessels."

Multiply that by 12, less a couple of weeks for a maintenance shutdown, and we are looking at potentially moving 4 million tonnes of coal per year. That is with the existing set up 'as is'. Now if we look back to the November 2007 press release, where the effects of Pike River Coal coming on board are described:

---------

INCREASING COAL VOLUMES FOR LPC

Coal volumes at Lyttelton Port of Christchurch (LPC) are expected to increase by up to 1.3 million tonne per annum, over the next three years, thanks to a new agreement between Solid Energy Limited and Pike River Coal Limited.

The 18-year agreement will begin late 2008 and the full financial implications for LPC will be advised once they have been fully determined.

------------

Add that extra 1.3m tonnes to the maximum tonnage achieved so far (2.5m tonnes in FY2006) and we get 3.8 million tonnes. That is well within the capacity of what the current plant has done already - on a monthly basis - with no changes. Consequently I dispute your suggestion that a 'huge investment' will be needed, and that the search for some large equity partner (like Hutchison) is on.

SNOOPY

Well Snoopy you must have a huge interest in LPC beause you certainly like reading about them (dont believe everything you read) Money needed for rebuilding CQ2 10 million not even close. Lets not forget this is a container berth not an oil wharf. A container berth needs to be able to support container cranes which weigh in excess 700 tonnes each and all the other activities envolved with unloading container ships. So at anyone time you could have the weight of 3 container cranes on the stucture (excess of 2000 tonnes) plus all other activities required for unloading container ships. Another important factor the container ships tied at this structure are not small and do not have the protection of the inner harbour.This is why huge money is needed for rebuilding this structure 10 million wouldnt go anywhere thats why Hutchisons is needed or someone with some real money.

As for the coal there is not enough room to sockpile all the different grades of coal yet alone Pike Rivers coal. Huge investment required here as well for reclaiming more flat land (not a cheap exercise) as for the facilities more investment required here as well. Once again dont believe everything you read they only print what they want you to know. The design and the layout of the stuctures in the coal handling area need to be redesigned for LPC to meet the targets required. Lets talk about mechanical breakdowns these occur all the time (your projected 2 weeks for maintenance is way out) It all sounds so real when you read about it !As for CQ1 this will become a container berth, and the coal berth will be moved east (otherside of the breakwater Te Bay) but thats another story. Hence another reason you need someone like Hutchisons hiding in the bush ready to pounce.

Snoopy you never answered the question about coal ships waiting for coal this happens all the time.

Scuffer
24-06-2008, 11:37 AM
Well big boy you an Snoopy are well informed which one of you is on the board you two could run the place with what you know. I'm picking that you are both long term shareholders, your not both into wrestling are ya? you could tag team this company, Fanny 22 an Snoopy, I can just imagine Snoopy in a little Muttley outfit but what I want to know is, who is the Red Baron? He could be the guy from Hutchison but he is Chinese not german.

Snoopy
24-06-2008, 04:44 PM
Money needed for rebuilding CQ2 10 million not even close. Lets not forget this is a container berth not an oil wharf. A container berth needs to be able to support container cranes which weigh in excess 700 tonnes each and all the other activities envolved with unloading container ships. So at anyone time you could have the weight of 3 container cranes on the stucture (excess of 2000 tonnes) plus all other activities required for unloading container ships. Another important factor the container ships tied at this structure are not small and do not have the protection of the inner harbour. This is why huge money is needed for rebuilding this structure 10 million wouldnt go anywhere thats why Hutchisons is needed or someone with some real money.


That $10m for rebuilding CQ2 was just a figure I pulled out of the hat (because the oil berth reconstruction was set down for $10m). Of course what you are saying about the engineering required on CQ2 having much greater strengthening requirements is right Fanny 22. Countering that is that CQ2 is at least in a servicable state to start with. But the old oil terminal was one step away from being declared a ruin, when I last did the shareholders bus tour!

Let's say I accept that $10m will not be enough to rebuild CQ2. The total borrowing facilities of $110m are still available to LPC (annual report, note 16, top of page 68). As at the last published balance sheet (31st December) there are $59.6m worth of interest bearing loans and borrowings (p11 interim report). And that figure is *down* $10m on the previous year, even as the rebuilding of the port continues. There is still a net $50m line of borrowing to be taken up by LPC. Would $50m cover the rebuild of Cashin Quay 2 do you think Fanny 22?



As for the coal there is not enough room to stockpile all the different grades of coal yet alone Pike Rivers coal. Huge investment required here as well for reclaiming more flat land (not a cheap exercise) as for the facilities more investment required here as well. Once again don't believe everything you read, they only print what they want you to know.


The new agreement is between Pike River Coal and Solid Energy and the existing agreement is between LPC and Solid Energy. In both agreements it is Solid Energy that is the coal exporter. And it is Solid Energy that needs to get the 'blend' right. I can see nothing in the LPC Pike River announcement (27th November 2007) that suggests additional separate piles of coal will be required when the Pike River coal comes through.



The design and the layout of the stuctures in the coal handling area need to be redesigned for LPC to meet the targets required. Lets talk about mechanical breakdowns these occur all the time (your projected 2 weeks for maintenance is way out) It all sounds so real when you read about it !


In the FY2006 annual report, there was a comment:

"we did experience some frustrations with the coal system's plant not meeting all our expectations and as a result we have recently conducted an independent review which includes recommendations for remedial action."

I am not clear what that comment means. Although I note there was no follow up comment in the FY2007 annual report.



As for CQ1 this will become a container berth, and the coal berth will be moved east (otherside of the breakwater Te Bay) but thats another story. Hence another reason you need someone like Hutchisons hiding in the bush ready to pounce.


Is that the ten year plan, or the twenty five year plan? I have never heard of any plans along these lines. Indeed I suspect this is the kind of development that LPC are hoping an an agreement with POL will forestall.



Snoopy you never answered the question about coal ships waiting for coal this happens all the time.


I didn't realise it was a question! I have never seen coal ships doubled up myself. That doesn't mean it doesn't happen. If the other coal ship is forced to 'go slow' on approach or anchor out at sea while waiting, then I guess most casual observers would be none the wiser .

SNOOPY

Fanny 22
28-06-2008, 12:07 PM
:D:DSnoopy I’m pleased you’re starting to come around to my way of thinking on this matter on the rebuilding of CQ2. The 10m won’t go anywhere and as for the 50m it will help but still fall way short, let’s not forget this is a container berth we hope to end up with. So what is required here is all of CQ2 needs to be removed because in its current state it is no good for a container berth. You need to start from scratch and do it right, if you don’t and start taking short cuts to save money you end paying the price like LPC are already on CQ3 & CQ4.They have had contractors under both these wharfs for the last ten years patching substandard work and they are still down there, hate to think how much extra that’s costing. So what do you reckon do it once do it right?
As I stated before there is a shortage of stock pile space on the current land available, this problem is highlighted mainly because of all the different piles required for the different grades of coal already being stockpiled. So, when Pike River’s coal comes on line this will just add to an existing problem not enough room. The area they plan on stock piling Pike Rivers Coal is a wee bit out of the way for loading back into the load out facility, which in turn means double handling and a lot of travelling with front end loaders, which in today’s market is a very expensive exercise when you look at the current price of fuel, these machines drink fuel like you won’t believe they are not your average car as I’m sure you’re aware of. Now to touch on the blending of the different coals which you seem to think is Solid Energy’s problem. This is LPC’s problem they have to get the mix right by loading the different coals into the load Hoppers and Bucket Wheel at different percentages to get the specified blends required, the only thing Solid Energy needs to worry about is that enough of the correct grades of coal are there for blending.
Right! now the layout of the current coal facility and the upgrades to make the place work efficiently.
Well we know it is way too small, so some reclaiming is needed here in Te Bay. Once this is done you would be able stock pile a shipment either side of the Bucket Wheel which in turn saves wearing out Front End Loaders and burning unnecessary fuel. Also you would have enough coal for 2 ships sitting either side of the Bucket Wheel which would go a long way to stop ships waiting for the coal. Let’s also not forget that half of the current coal handling facility was designed to load out wood chip, this part of the system needs majorly upgrading, also required for upgrading, is the Ship loader and a purpose built berth for exporting coal which would be on the eastern side (Te Bay) of the break water, because like I said before the Container terminal will need to expand all the way down to CQ1, this may well be a 10 year plan but it needs to happen for LPC to grow efficiently in proportion with the city that it services . So I really believe LPC need someone like Hutchison’s to step in and invest the necessary capital to get all these projects up and running in the very near future. Procrastination on the part of LPC will only turn out to be more expensive in the long run, but history tells us that they favour the marathon over the 100metres.
Ok! Ships waiting for coal, I’m referring to ships waiting for coal at the berth, not anchored at sea like they are in Newcastle (Aust.), although this can happen on the odd occasion. What I mean is waiting alongside the berth because there is not enough coal there for their shipment. Now believe me this happens on a regular basis, reasons for this can be the ship needs parcels of coal still coming by rail to complete their shipment. Because there was not enough coal in stockpile area reasons for this can be no trains because of weather conditions which cause slips and close the rail down. Then you have got the truck drivers who think they can beat the train and end up derailing the train. Then you have got the well maintained rail network running on narrow gauge line. These are just some of the reasons that coal ships sit at the berth waiting for coal

COLIN
28-06-2008, 03:48 PM
To add to the Fanny List of Rail Link Risks: What about political activists welding themselves to the rails!

Scuffer
29-06-2008, 01:39 PM
Well Snoopy and Fanny 22 you guys sure know your stuff, betwween you there has been a lot of homework done, so come clean who is on the board and playing the rest of us. Snoopy you get to go on a bus tour with LPC who was the tour guide Fanny 22, you would need a big bus for the big fella were you there on the bus trip big boy?
Personally I think that the company is worth heaps more and CCHL are just vacuuming up the leftovers watch its worth skyrocket once a deal is done with Otago then the well dressed big fellas little chinese mate will appear from behind the bush with his cheque book, its gonna happen I can see the wood for the trees.:eek:

Fanny 22
29-06-2008, 03:17 PM
:rolleyes:Hey Scuffer I can tell ya one thing for sure I'm not on the board, but I might know the tea lady;). You know what I mean :):) You refer to me as the big fella all the time all I can say is don't judge a book by its cover I could be ya skinny neigbour for all you know:eek::eek: You are right Snoopy is the one whos had the ride on the bus not I so you would have to suspect he's the one in wolfs clothing:confused::confused:

Fanny 22
18-07-2008, 01:24 PM
Ive answered alot of your questions and your gone into hiding are you hiding behind the bush with Hutchisons just waiting for the right moment to pounce Ha Ha LoL:):):):

Snoopy
02-08-2008, 08:47 PM
Ive answered alot of your questions and your gone into hiding are you hiding behind the bush with Hutchisons just waiting for the right moment to pounce Ha Ha LoL

Fanny 22, I have read your answers in detail and I thank you for them. I am not here to argue any point to eternity. I simply wish to understand my investment in LPC as well as I can. Your comments are helping me achieve this.

As it happens I have just returned from the land of Oz and passed through Newcastle north of Sydney on my travels. No time for real sightseeing there, but the taxi driver gave me a lightning tour. I counted 27 ships anchored offshore and the taxi driver told me they were all coal ships, waiting to be loaded. He said at one time they had had 50 ships waiting. That kind of brings LPCs coal handling problems into perspective.

I acknowledge all of your points. I know considerable money has been spent on the Tranz Alpine rail tracks over the last couple of years. I know the coal handling plant was second hand and perhaps compromised on what an entirely purpose built installation would have been. But LPC has never had a Rolls Royce budget to work with, and I would argue they don't *need* a Rolls Royce coal transfer system. The coal transfer system they have now is obviously vastly superior to the gaggle of diesel powered excuvators that they needed before.

Finally I find it hard to believe that LPC would take on Pike River Coal's exports, knowing they had insufficient land to do the job. Of course it would be easier if they had more land. Welcome to the real world of limited resources.

SNOOPY

Phaedrus
03-08-2008, 10:18 AM
On a stand alone basis the highest price I can justify is around $2.10 (based on a prospective PE of 20) discl: hold LPC, but not planning to buy more.
Snoopy. Here we have a stock that after meticulous and thorough investigation you value at $2.10. I have sufficient respect for you and your methods to accept this figure as most probably being reasonably accurate. Now, LPC carried on climbing to exceed your valuation by over 25% before it fell away in a downtrend. This is only to be expected - we all know that the market tends to overshoot value, whether it is heading up or down.
Question :- How much above your valuation would a stock have to go before you considered it a Sell? To me, you are in the process of giving hard-won profits back to the market because you appear to have no exit strategy.

In my experience, the very best entries and exits are made when TA and FA agree. That happened here with LPC when this fundamentally overvalued stock gave a clear Sell signal (the break of a confirmed trendline). This was preceded by a nice clear Bearish "Double top" formation, but lets not get too technical here.

http://h1.ripway.com/Phaedrus/LPC83.gif

Warning. Do not read this if TA upsets you.
Those interested might like to take a look at the craftily inserted candlestick chart.
8/1/08. Apex of the market marked by a "Gravestone Doji". (So called because it represents the gravestone of the bulls that have died defending their territory!) Quoting from Steve Nison "The gravestone's forte is calling tops." [Exit at $2.60]
18/1/08. Another (lower) Gravestone Doji. [Exit at $2.55]
22/1/08. Double top formation completed. [Exit at $2.50]
11/2/08. LPC broke below the support level of $2.50 that had held since November. [Exit at $2.45]
15/2/08 - 22/2/08. LPC struck resistance at $2.50. As often happens, the broken support had become resistance. [Exit at $2.50]
2/4/08, trendline break. [Exit at $2.35]

Snoopy
03-08-2008, 05:49 PM
Snoopy wrote:
"On a stand alone basis the highest price I can justify is around $2.10 (based on a prospective PE of 20) discl: hold LPC, but not planning to buy more."

Snoopy. Here we have a stock that after meticulous and thorough investigation you value at $2.10. I have sufficient respect for you and your methods to accept this figure as most probably being reasonably accurate. Now, LPC carried on climbing to exceed your valuation by over 25% before it fell away in a downtrend. This is only to be expected - we all know that the market tends to overshoot value, whether it is heading up or down.
Question :- How much above your valuation would a stock have to go before you considered it a Sell? To me, you are in the process of giving hard-won profits back to the market because you appear to have no exit strategy.


Phaedrus, my exit strategy is to be taken out by majority shareholder Christchurch City Holdings. I hope it won't happen, as that means more work for me checking out replacement investments when I am quite happy with what I have. But I am realistic enough to know that this is my probable fate, if/when CCHL and Port of Otago get their heads together.

CCHL has been buying shares on market earlier this year at $2.20. Operationally the performance of LPC is improving since CCHL made their first takeover offer at $2.20 in April 2006. So I am fairly sure the clean up price will be higher than $2.20. I think the downside to the LPC share price is very limited from here. We are looking at an investment almost as capital stable as cash. Granted the upside is limited too. IMO, LPC is near fully priced on a stand alone basis *without any takeover premium*. Yet as I said in that post you quoted from:

"But two years ago, as now, the real value in LPC is not on a 'stand alone basis', but how it can fit into a 'great southern ports' alliance, with 15% shareholder Port of Otago Limited."

I remember some broker valued LPC earlier this year at around $2.70 on a merged company basis. I suspect that $2.70 is pushing the envelope. But in this market, even a takeout price of $2.40 would be a good result. I might have been tempted to take the money and run if I could find another port style infrastructure investment that was significantly cheaper than LPC. So far I haven't found such an investment. So I'm staying put.

SNOOPY

discl: hold LPC

Snoopy
04-09-2008, 08:08 PM
An LPC press release noted:
---------

INCREASING COAL VOLUMES FOR LPC

Coal volumes at Lyttelton Port of Christchurch (LPC) are expected to increase by up to 1.3 million tonne per annum, over the next three years, thanks to a new agreement between Solid Energy Limited and Pike River Coal Limited.

The 18-year agreement will begin late 2008 and the full financial implications for LPC will be advised once they have been fully determined.

------------

Snoopy commented
"Add that extra 1.3m tonnes to the maximum tonnage achieved so far (2.5m tonnes in FY2006) and we get 3.8 million tonnes. That is well within the capacity of what the current plant has done already - on a monthly basis - with no changes. Consequently I dispute your suggestion that a 'huge investment' will be needed."

Fanny 22 retorted
"As I stated before there is a shortage of stock pile space on the current land available, this problem is highlighted mainly because of all the different piles required for the different grades of coal already being stockpiled. So, when Pike River’s coal comes on line this will just add to an existing problem not enough room."

and Snoopy came back:

Finally I find it hard to believe that LPC would take on Pike River Coal's exports, knowing they had insufficient land to do the job. Of course it would be easier if they had more land.


2008 LPC results are out and buried in there MD Peter Davie made the following comment on coal:

"Our coal volumes were on target for the year at 2.2 million tonnes. Our coal operation is the biggest in New Zealand, and coal will become an even more important export commodity for us in the near future. The agreement between Solid Energy New Zealand and Pike River Coal which facilitates Pike River coal exports from Lyttelton will see up to 1.3 million tonnes of additional coal per annum through Lyttelton by the end of the 2010 financial year. To accommodate that growth we are currently investigating options for expansion of our coal facilities."

I guess I take back everything I said Fanny 22, or should I say Peter Davie - in drag!. The cover is blown so you might as well admit who you are now! Looks like you are right on the button with the need to upgrade the LPC coal facilities - to an unspecified level!

SNOOPY

Snoopy
04-09-2008, 08:49 PM
I couldn't let the 2008 result go without making a couple of comments. Superficially the result is O.K. as LPC have beaten their forecasts. Margin (that's normalised net profit divided by normalised revenues) continues to decline though, down to 12.4% from 12.6% last year.

Five years ago the margin was 17.4%, and overall profits were higher on 25% less turnover.
Perhaps that is one of the reasons Chairman Roger Fisher tacked this ensuing comment on to the end of the press release!

"LPC continues to believe that the present situation within the New Zealand port industry is not sustainable in the long term. We still espouse the view that to achieve optimum returns on assets port rationalisation is necessary."

Yet, LPC's new board member elected at the last AGM, the legal expert on corporate restructuring and business recombination - David MacKenzie - has already resigned!

Ostensibly this is to take up the position of Chairman designate of Christchurch International Airport Ltd, a position he will assume in October 2008. However, surely a man with the experience and ability of MacKenzie has the ability to take on more than one directorship at once?

SNOOPY

Scuffer
19-09-2008, 12:35 AM
So Fanny 22 you are Peter Davie, Snoopy has blown your cover but I reckon that Snoopy is the chinaman hiding in the bush he has to be Hutchisons in disguise, come on Snoopy fess up an big fella fess up too.
You guys have had me wondering for ages.:cool:

Snoopy
30-10-2008, 10:11 AM
Phaedrus, my exit strategy is to be taken out by majority shareholder Christchurch City Holdings. I hope it won't happen, as that means more work for me checking out replacement investments when I am quite happy with what I have. But I am realistic enough to know that this is my probable fate, if/when CCHL and Port of Otago get their heads together.


Arrrgh! I could be on my way to being taken out! This announcement today.

-------

KEY SOUTH ISLAND PORTS LOOKING TO JOIN FOR A SUSTAINABLE FUTURE

Joint statement from Port Otago Limited Chairman, John Gilks and Lyttelton
Port Company of Christchurch Chairman, Rodger Fisher.

"Port Otago Limited [POL] and Lyttelton Port Company of Christchurch [LPC] have today announced that a Memorandum of Understanding has been signed to explore a merger of their respective port operations.

A steering group representing both companies has been established to work with an independent advisor to explore the potential benefits and recommend a path forward. The interests of all stakeholders will be considered throughout the process.
This is a major step forward, however, whilst there is much support for this process from the two Boards, it must be emphasised that this is the first stage and there is significant work to be done.

The focus is on operational integration to strengthen the performance and future of both companies. The Boards believe that significant efficiencies and other benefits that could not otherwise be achieved will result from the proposed integration.
A key element with any future structure is that each port will retain ownership of its core physical assets [such as wharves and land]. This is recognised as being of significant importance not only to shareholders but to local interests.

Core port assets will remain in local control. To achieve this, the structure being considered involves the legal separation of the infrastructure assets from the operations and commercial activities that occur at each port.

Key stakeholders including staff, unions and shareholders are being briefed and will be kept informed on progress.

The integration of the operations of POL and LPC would result in:

- Co-ordination of future expenditure to avoid duplication
- Reducing the environmental impacts through co-ordinated road and rail use
- Increased productivity at each port
- Joint development of new services
- Significant efficiencies being achieved

The need for port rationalisation within New Zealand has long been recognised. This investigation takes up that challenge.

It will address both the interests of stakeholders and any legal obstacles to integration.

An operational merger such as this could help future proof both ports and it is important for both LPC and POL to continue contributions to the economy at the same or better level than currently.

Customers have specific requirements that necessitate long-term infrastructure worth millions of dollars and an operational merger could potentially allow for co-ordinated port development.

POL Chair John Gilks and LPC Chair Rodger Fisher are confident that there is a robust process in place to ensure both companies give serious consideration to how they could work together in the future in the interests of all stakeholders.

The Chairmen of the two companies are enthusiastic about the signing of the MoU, which is the first stage of this process. They are also committed to investigating all the options; the potential challenges and benefits, and then recommend an appropriate path forward.

It would be inappropriate for the companies to make any further public comments during the investigation process."

---------

SNOOPY

airedale
30-10-2008, 01:30 PM
Hi Snoopy, I don't mind being taken out as long as the price is right:o

Hoop
21-11-2008, 08:44 AM
STAND: LPC: STAND IN THE MARKET - Lyttelton Port Company Limited 09:00a.m.

LPC 21/11/2008 STAND REL: 0900 HRS Lyttelton Port Company Limited (NS) STAND: LPC: STAND IN THE MARKET - Lyttelton Port Company Limited URGENT COMMUNICATION Memorandum To : NZX Market Participants NZX Data Distributors From : NZX Client & Market Services Date : Friday, 21 November 2008 Subject : Stand in the Market - LPCY Message: STAND IN THE MARKET - Lyttelton Port Company Limited Hamilton Hindin Greene Limited has received instructions to stand in the market to acquire up to 2.536 million (2.48% of the shares on issue) ordinary shares in Lyttelton Port Company Limited at a price of $2.75 on behalf of their client, Christchurch City Holdings Limited ("CCHL"). This stand in the market will be conducted using a Temporary code in Trayport as provided in Rule D10.7 of the NZX Participant Rules. The stand in the market will commence at 11.00am under the Trayport code LPCY. The settlement code will be LPCY. Pre-Open will commence at 10.00am. Normal Trading will commence at 11.00am. The following conditions apply to this bid: The stand will commence from 11.00am on Friday 21st November 2008 and will remain open until the earlier of: i) completion of the instruction; ii) 5:00pm Friday, 28th November 2008 The stand is subject to the following condition: Subject to further discussions with Custodial Service Providers, CCHL will buy up to a maximum of 5,000 shares from each shareholder on a first come first served basis, except where that leaves a shareholder with less than 5,000 shares, in which instance, the remaining shares are also included in the offer. This is to be monitored via shareholders' CSN numbers. Notes: The requirements of Rule D10.7 are designed to ensure that retail investors have the opportunity to participate in substantial acquisitions. Accordingly CSN requirements relating to entering orders into a stand will be the same as for "general" trading, i.e. those at Participant Rule 11.4. and other legitimate exceptions from the requirement to enter a CSN. However, NZX will disallow the use of the "m" (multiple) flag to allow for adequate monitoring of the above stand condition. Where this condition is not met and the broker has not contacted NZX and satisfied it that the objectives of Rule D10.7 have been met, NZX will reverse trades. Failure to meet undertakings given to NZX in relation to this will constitute a breach of Good Broking Practice. Short selling shall be governed by the standard rules relating to that issue in force from time to time. These rules are currently at A10.14 of the Participant Rules. There are no price escalation terms for the stand. NZX Firms should note that trades executed in the temporary Trayport stand security are traded under a quotation basis of 'XX". This means that Claims of Delivery may not be made until such a time as NZX confirms these trades following acceptance processing. A copy of the statement released by Hamilton Hindin Greene Limited is attached for your information. Please refer to the information on CSN use provided in the Guidance Note - Stands in the Market. Please do not hesitate to contact NZX Client and Market Services on (04) 496 2853 or lcr@nzx.com if you have any queries. ENDS End CA:00173168 For:LPC Type:STAND Time:2008-11-21:09:00:15

Snoopy
21-11-2008, 08:52 AM
Hi Snoopy, I don't mind being taken out as long as the price is right


Is $2.75 enough Airedale? CCHL are in the market today offering that, looking to take 2.5m shares out of the market. I can't figure out why, given they already control LPC in all meaningful ways. Perhaps they are just using the general market volatility to shake out a few weak shareholders and top up to the maximum extent allowed under the sharemarket creep provisions? In any event if CCHL do proceed with a full takeover offer in the new year that potential offer has just had a floor put under it at $2.75.

The $2.75 applies if you have 8000 shares or less. If you have more than 8000 shares the $2.75 is offered only on the first 5000 of your shares.

I have run a very quick back of the envelope calculation on a valuation for LPC. From page 45 of the 2008 annual report EBIT is $19.811m. Add back depreciation and amortization of $11.077m and I get EBITDA of $30.89m.

I have kept my Crighton Anderson report on the previous takeover offer made by CCHL. The 'mid point' EBITDA valuation used is 10, in other benchmarked takeovers in the industry.

There are 102.261m LPC shares on issue. This gives a back of the envelope takeover valuation per share of:

(10x $30.89m)/ 102.261m = $3.02 per share.

On that basis I would say the latest CCHL offer is probably reasonable, albeit at the lower end of the valuation scale. However, this valuation does *not* take into account any synergy benefits between CCHL and POL.

I wouldn't blame small shareholders from selling into this offer. But I have said earlier, I am in this to capture the benefits of the merger - so I am not selling myself.

Let's be clear, this is *not* a full takeover offer for LPC , although that may come. It is possible that if/when a full takeover offer is posted this will be on a pre-merger basis and I will be unable to realise any benefits of the LPC/POL synergy. This is a risk a I prepared to take, given that the offer on the table is at the lower end of the fair valuation range of LPC - as a stand alone entity.

Sitting tight for now, although I may be being influenced by the fact that if *I* accepted the takeover offer, I would still have the majority of my shares left!

What do others think, or am I the last man -errr beagle- standing?

SNOOPY

discl: hold LPC

Scuffer
21-11-2008, 11:20 AM
Delist sell to Hutchisons it was the plan all along union tied up for next two and a half years profit up in tough economic climate get the deal done asap CCHL want to be a landlord nothing more the plan never changed.

Snoopy
21-11-2008, 01:04 PM
Delist sell to Hutchisons it was the plan all along union tied up for next two and a half years profit up in tough economic climate get the deal done asap CCHL want to be a landlord nothing more the plan never changed.


Scuffer, the Lyttelton board are on record as saying they want to maintain ownership of the land the port rests on. Whether that is 51% ownership of the land and 49% ownership of the combined port operation as before is open to debate, but you may be right.

I would hope by now that CCHL have seen the folly of 'selling out cheap'. The bid today is tacit admission that their previous takeover offer was light, and that the original Hutchison deal was a bum one. Thanks to the hard work of LPC staff, the company is now worth $56.7m [ ($2.75-$2.20)x 103.2m ] more than it was two years ago. That is a compounding return of over 12% per year in these tough times. Good stuff.

Well done to everyone involved, but I think we can do even better. So I won't be selling out at $2.75. In fact, any significant weakness after this offer CCHL closes on Friday and I will be looking to increase my LPC holding - again.

SNOOPY

discl: hold LPC

Scuffer
21-11-2008, 02:39 PM
Hey Snoop the writing is on the wall they will sell to someone but it will be selling of the company and not the land same sort of deal as before with Hutchisons. The whole past trials and tribulations could have just been set up to get to where we are now with LPC and port chalmers working together to get a lever over the shipping companies and why not aussie ports don't get hammered on port charges like we do in NZ, for the simple reason they are not fighting each other for business, ports in NZ have been dancing to the shipping companies tune for too long here in NZ at the detriment to all who work in the industry, ports and their workers, good on them I say.
The scary part is selling off the working side of the ports to overseas companies,what Labour was against,now with a National government in place it can all change, we don't want to go down the same road as rail with no investment with the downside affecting our countrys ability for growth. Time will tell whether Mr. Key can control and steer this ship past that pirate Mr. hide because he will want to sell sell sell.

airedale
21-11-2008, 07:47 PM
Hi Snoopy, I don't mind being taken out as long as the price is right:o

Hi Snoopy, I wish you well, but it is game over for me.

Dr_Who
27-11-2008, 02:35 PM
Why is CCHL hlding just over 78% of LPC? Why such an odd number of shareholding?

POSSUM THE CAT
27-11-2008, 03:42 PM
DR Who maximum increase in holding they could make with out triggering a Compulsory Takeover offer. From Previous Holding

Dr_Who
27-11-2008, 04:14 PM
DR Who maximum increase in holding they could make with out triggering a Compulsory Takeover offer. From Previous Holding

Why hold 78% when you can T/O the company and own 100%. Why 78%?

Snoopy
27-11-2008, 05:28 PM
Why hold 78% when you can T/O the company and own 100%. Why 78%?

CCHL can't take over the company Dr Who, because Port of Otago Limited holds a blocking stake of 15% and POL are not selling! Until POL and LPC see a joint way forward it is a stalemate.

CCHL have just bought as many LPC shares as they can under the existing creep rules. The $2.75 bid was just a tactic to shake out weak sellers before the final end game for listed LPC some time in 2009 (?). $2.75 is an high historic price but it doesn't reflect the progress the underlying business since the $2.20 takeover offer. I am expecting to eventually be bought out at near to $3.

SNOOPY

discl: hold LPC

Snoopy
27-11-2008, 05:43 PM
Hi Snoopy, I wish you well, but it is game over for me.


Fair enough Airedale. You have done well out of LPC. And there are certainly plenty of opportunities out there to reinvest your cash at bargain prices. You may be switching at just the right time. Me? I'll wait until the end game and capture the 'bird in the hand' in its full glory.

SNOOPY

discl: hold LPC

devito
27-11-2008, 09:07 PM
Hope you don't miss the boat there. The stand got taken up pretty quickly. I have been a holder of this stock for years.
In this current market $2.75 is a good result. I have taken my profits and will move on to other opportunities.

devito
29-11-2008, 11:16 AM
Well so far all good for the people who sold. LPC down to $2.55. A .20cent profit already.
If they keep falling maybe it is time to get back in.
CHCH will not be able to buy any more under the creep provisions (they are creeps:) ) so there will be very few buyers now.

I bet the people who sold their 2,500,000 shares are feeling happy.

Dr_Who
29-11-2008, 04:43 PM
I bet the people who sold their 2,500,000 shares are feeling happy.

Indeed :). I am happy with any profit in this market.

kiwi_on_OE
30-11-2008, 05:10 AM
I see that CCHL and PoO signed a MoU about LPC. Would that make them 'related parties'? With a combined holding of over 90%? Therefore shareholders could force them to buy their shares off them at a suitable price?

Snoopy
30-11-2008, 08:13 PM
Well so far all good for the people who sold. LPC down to $2.55. A .20cent profit already.
If they keep falling maybe it is time to get back in.
CHCH will not be able to buy any more under the creep provisions (they are creeps:) ) so there will be very few buyers now.

I bet the people who sold their 2,500,000 shares are feeling happy.


Let me get this straight Devito. You claim that those who sold at $2.75 have 'made a profit' since the LPC share price has gone down to $2.55? You and others may have made a profit, but not for that reason. Get back to me when you *have* actually bought those LPC shares back. Seeing a price on the market, and actually owning those shares are quite different things, for thinly traded shares like LPC.

If you don't believe me look at the volume of shares that has traded since the CCHL offer closed. It would be somewhere near 1% of the shares that CCHL bought last week. So perhaps 'one in a hundred' has made a profit as you say. But I don't think you can claim to be part of that 1% if you don't actually *own* any LPC shares! Plus you have to subtract the brokerage both ways. 2% might not sound a lot. But it represents over 10c per share. So over half of the profit, the profit that you yourself haven't made, has gone in broker fees even as you crow about it.

Perhaps you are still having doubts about selling out of LPC in the first place? Don't. IMO you have probably made 90% of the eventual gains you would have made by continuing to sit on the shares like I am doing. There are plenty of other great shares around that will allow your capital to be redeployed with statistically a much better chance of making greater gains than if you had sat tight. I am staying in LPC myself as much for the lack of a significant downside as well as keeping myself in play for whatever upside is left. And if in the interim the LPC share price does fall significantly, I, like you, will have no hesitation in buying more. And I suspect you and I am not alone in our thoughts.

SNOOPY

Snoopy
30-11-2008, 08:36 PM
I see that CCHL and PoO signed a MoU about LPC. Would that make them 'related parties'? With a combined holding of over 90%? Therefore shareholders could force them to buy their shares off them at a suitable price?


Actually it is Lyttelton Port of Christchurch and the Ports of Otago that have jointly hired an independent Auckland based consultant to look at how a merger between LPC and POL *could* be implemented. Christchurch City Holdings Limited may be majority shareholders in LPC. But CCHL are *not* LPC, even if sometimes they behave as if they are!

The brokers who tried to acquire my shares in the $2.75 offer ran some scaremongering story about LPC having to delist after this latest offer due to lack of sufficient shareholder depth remaining. The chairman of LPC then came onto the news and said, no there has been no application by LPC to get LPC shares delisted.

LPC directors are required to act in the interests of *all* of their shareholders, not just majority shareholder CCHL. Frankly I would be disgusted if LPC were to delist as we remaining independent shareholders would then lose the protection of the NZX takeover rules. I cannot imagine the new LPC chairman would do that to us, but then again those CCHL 'masters' in the background are very powerful.

If LPC and POL were related parties, LPC could simply have made a $2.75 mop up takeover offer that would have been accepted by both major parties and the mop up of the minorities would happen under compulsory acquisition. LPC didn't do that because POL are independent, and would not have accepted a takeover offer on those terms without a clear pathway forwards.

SNOOPY

Snoopy
20-03-2009, 07:39 PM
And if in the interim the LPC share price does fall significantly, I, like you, will have no hesitation in buying more. And I suspect you and I am not alone in our thoughts.


Well the LPC share price did weaken, down to $2.25 or so, but the latest sale was at $2.50. I haven't bought any more LPC shares. But that is because I have been snapping up what I perceive as even greater bargains elsewhere. It certainly doesn't mean that I have lost faith in LPC. Indeed, with the last six months of market action I now find that my LPC shareholding is the most valuable of all my NZX holdings! The credit crunch is out to lunch as far as LPC shareholders are concerned.

Management have a somewhat more cautious view though. Looking in detail at the interim report which arrived in my mailbox today, they are projecting a full year profit of $10m, roughly flat with the $10.3m that LPC generated in FY2008. Given that first half FY2009 earnings are substantially up to $5.7m, that leaves only $4.3m to be earned for the remainder of the financial year. $4.3m represents a 20% drop on the $5.4m earned in the second half of FY2008. This is not good news.

Perhaps LPC management have adopted the culture of underpromising and overdelivering? Or perhaps majority holders CCHL will use a declining profit outlook as an excuse to mop up LPC shares that they do not already own at bargain prices?

At $2.50 the shares are on a projected PER of 25. That is more than fully priced on an ongoing operational basis. However, those PER projections take no account of any Port of Otago synergies should LPC and POL do a deal and get together. It is my intention to hold on to my LPC shares and see what happens. Meanwhile I'll be picking up an interim dividend of 1.5cps on 27th March 2009.

SNOOPY

discl: hold LPC

Snoopy
01-04-2009, 07:34 PM
As I stated before there is a shortage of stock pile space on the current land available, this problem is highlighted mainly because of all the different piles required for the different grades of coal already being stockpiled. So, when Pike River’s coal comes on line this will just add to an existing problem not enough room. The area they plan on stock piling Pike Rivers Coal is a wee bit out of the way for loading back into the load out facility, which in turn means double handling and a lot of travelling with front end loaders, which in today’s market is a very expensive exercise when you look at the current price of fuel, these machines drink fuel like you won’t believe they are not your average car as I’m sure you’re aware of.

Right! now the layout of the current coal facility and the upgrades to make the place work efficiently. Well we know it is way too small, so some reclaiming is needed here in Te Bay.


*Some reclaimation*? I went past the Lyttelton Port for a look see at the weekend. I couldn't help notice the application for resource consent to reclaim 10 hectares of land. That is huge. It basically doubles the size of the existing coal loading area. I'm guessing it is hugely expensive as well. But I notice the application also mentions digging further into the cliffs on the land side. So I guess they expect to get some of the fill from there. Anyone out there know how much it would cost to reclaim this amount of land?



Ok! Ships waiting for coal, I’m referring to ships waiting for coal at the berth. What I mean is waiting alongside the berth because there is not enough coal there for their shipment. Now believe me this happens on a regular basis.


Perhaps not so regular now the coal trade has been credit crunched? Traditionally that coal port was always full. I don't think that ship loading hopper has been operating for a couple of weeks now....

SNOOPY

Scuffer
01-04-2009, 09:41 PM
I would say LPC don't have the money to pay for that amount of development but solid energy would.Resource consent should be a foregone conclusion looking at who owns all the shares.

Snoopy
02-04-2009, 04:06 PM
I would say LPC don't have the money to pay for that amount of development but solid energy would.

Solid Energy rather pessimistic in their half year (mid March) outlook.

"Revenue and profits were both ahead of plan through to October, but in November customers began to defer export shipments and seek substantial price reductions, and every planned December shipment was deferred."

The reclaimation may not be needed until things pick up.

However, Solid Energy has agreed to transport across other West Coast coal in Solid Energy trains on a commercial basis. Perhaps separate (greater) dumping areas are needed for that?
Are these smaller players willing to pay LPC to reclaim this land?

SNOOPY

Marilyn Munroe
14-05-2010, 09:13 PM
A pre-dick-shun.

When Christchurch City Holdings was in the process of buying out the small shareholders in order to go into a joint venture with the Asian port interests, critics of the arrangement within the citizenry of Christchurch directed their ire at the city council.

His worship Flowershow Bob is facing vociferous opposition to his candidacy at the forthcoming local body elections.

I predict the proposed merger with Port Otago will be placed on the back burner until after the election.


Boop boop de do

Marilyn

devito
17-05-2010, 06:46 PM
Well Snoopy, I'm back in today. A mix of $2.31 and $2.30 for my new small holding.

Marilyn Munroe
02-07-2010, 09:34 AM
LPC MAKES STRATEGIC LAND INVESTMENT

http://www.sharechat.co.nz/announcement/NZX/LPC/196824/general-lpc-lpc-makes-strategic-land-investment.html

Boop boop de do

Marilyn

Marilyn Munroe
20-08-2010, 10:41 AM
Absolutely fascinated at the biff handed out by former chairman Brent Layton to his former patron, Christchurch City Holdings, in the report on port company privatization he wrote for the New Zealand Institute of Economic Research.

Equally fascinating was the snarling reply from current managing director Peter Davie.

In my opinion Brent Layton's decision to not pay the Dane-geld was the correct one, not that he got any thanks for it.

Dane-geld is the subject of a poem by Rudyard Kipling. It ends in the following words;

It is wrong to put temptation in the path of any nation,
   For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
   You will find it better policy to say: --

"We never pay any-one Dane-geld,
   No matter how trifling the cost;
For the end of that game is oppression and shame,
   And the nation that plays it is lost!"

Boop boop de do

Marilyn

Kipling poem courtesy of Wikipedia.

percy
20-08-2010, 12:32 PM
Absolutely fascinated at the biff handed out by former chairman Brent Layton to his former patron, Christchurch City Holdings, in the report on port company privatization he wrote for the New Zealand Institute of Economic Research.

Equally fascinating was the snarling reply from current managing director Peter Davie.

In my opinion Brent Layton's decision to not pay the Dane-geld was the correct one, not that he got any thanks for it.

Dane-geld is the subject of a poem by Rudyard Kipling. It ends in the following words;

It is wrong to put temptation in the path of any nation,
   For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
   You will find it better policy to say: --

"We never pay any-one Dane-geld,
   No matter how trifling the cost;
For the end of that game is oppression and shame,
   And the nation that plays it is lost!"

Boop boop de do

Marilyn

Kipling poem courtesy of Wikipedia.

LPC has been a very poor performer since Brent Layton was disgracefully pushed.I note that Paddy Austin has not done well for herself since her poor display of lack of corporate covernance or manners,while Layton's reputaiton stays in tack.Funny how the backward thinkers react to a progressive thinker.

Snoopy
20-08-2010, 03:14 PM
LPC has been a very poor performer since Brent Layton was disgracefully pushed.


Percy, Layton/Viles engineered unsustainable accounting profits while letting the wharves fall into a state of dangerous disrepair. IMO if Layton had remained though, the merger of the Ports of Otago and Lyttelton Port of Christchurch would have been easier. All shipping of any substantial size would have gone to Otago and Lyttelton would have closed.

SNOOPY

percy
20-08-2010, 04:13 PM
Percy, Layton/Viles engineered unsustainable accounting profits while letting the wharves fall into a state of dangerous disrepair. IMO if Layton had remained though, the merger of the Ports of Otago and Lyttelton Port of Christchurch would have been easier. All shipping of any substantial size would have gone to Otago and Lyttelton would have closed.

SNOOPY
Any wharfe that was in use had money spent on them.Any wharfe that was not in use,or did not look as though it would be used had no money spent on it.Layton would not foolishly spend money unless it was commercially viable.Common sense to me.I think Layton/Viles would have sorted it all out but dim local politicians make any sensible arrangement unlikely.I think we would have seen Otago the export port while Lyttelton would have been the import port,much like what is happening with Auckland and Tauranga.Ofcourse the import port is much more profitable as you are dealing with a number of customers,while export port you only have a few customers who dictate prices.ie Dairy/forest exports compared with cars/comsumers products.CH CH city holdings went on to prove they should not have anything to do with commercial enterprise by appointing as Layton's replacement that commercial disaster Barney{my grandfather was a ship captain]Sundstrum.Barney went on to keep his record intact with Property Finance Group{in receivership] Both Layton and Viles both lost their wives at this time.I ran into Viles at a PGC meeting a couple of years ago.He was working for a group trying to get water rights for the Hurunui river.A clever gentleman who spoke highly of Layton.

Snoopy
20-08-2010, 07:19 PM
Any wharf that was in use had money spent on them. Any wharf that was not in use,or did not look as though it would be used had no money spent on it. Layton would not foolishly spend money unless it was commercially viable. Common sense to me.


What about the fuel wharf that was virtually falling down? You think Canterbury could have done without fuel?

A wharf is a 50 year (or more) asset. You can't just not spend any money on it when some shipping line pulls out. That means if in five years time they want to come back you will have no wharf to service them!
We will have to agree to disagree I think Percy.



I think we would have seen Otago the export port while Lyttelton would have been the import port,much like what is happening with Auckland and Tauranga.


Problem is Percy, if you do that you have too many empty containers in Lyttelton which then have to be transhipped - empty- to Otago. That would be massively inefficient. You actually want volume balance between imports and exports.

SNOOPY

percy
20-08-2010, 07:31 PM
Agree to disagree. Build a KFC in Bluff because one day Marcus may want some hot wings in the next ten years.Layton is not mad.
The oil wharfe arguement was to do with the huge amount of land the oil companies were occupying and would not come to the party for more efficient use of that land.
Ofcourse everyone wants balance between imports and exports.Just will never happen.

Snoopy
20-08-2010, 09:17 PM
The oil wharf argument was to do with the huge amount of land the oil companies were occupying and would not come to the party for more efficient use of that land.


I know the fuel wharf got built. Since you seem to know a bit about the background Percy, do you know if the oil companies came to the table?

SNOOPY

percy
21-08-2010, 06:19 AM
I know the fuel wharf got built. Since you seem to know a bit about the background Percy, do you know if the oil companies came to the table?

SNOOPY

I donot think they did.What you must remember is it would have been a lot more profitable to have coolstores where the oil tanks are.So what do you do to encourage then to make better use ofthe space when they are queit happy with what they have?.Can you move some of it over the hill? I would have asked them if Timaru would have suited them better?I am sure Layton knew the value of the land at Lyttelton, while Barney would have been more interested in wearing granddad captain"s hat and building the Sundstrum whalves without having any customers for the same.I sold out of LPC when Layton was pushed as I thought the whole thing was a disgrace,which it was, and only this thread has reminded me of it.I do not follow LPC.The only one I would buy is POT and I have not really looked at it as it is an export port,although you will note they have the inland port in Auckland so as they gain the more profitable import trade.
Not all shipping is container.There are still bulk carriers,coal ships and tankers.Some of the huge ships being built will only call at one port in NZ so the idea of hubs will become important again.So you will always be moving empty containers around the country.
All ports are only interested in self interests,and NZ as a whole will suffer unless we embrace the shipping ideas Layton puts forward.With your analysis mind Snoopy I am sure you would enjoy looking though the mind field

percy
21-08-2010, 07:52 AM
A bit on the side.Go to google and enter emma maersk says no suggestions,but clic on to it.Huge containner ship.
transports goods across the Pacific in about 5 days from China to California.Crew of 13 on a ship longer than a US aircraft carrier,which has a crew of 5,000.Cruise speed of 31 knots.
Carries 15,000 containers,nearly all of the containers are shipped back to China EMPTY.

Snoopy
21-08-2010, 12:10 PM
It would have been a lot more profitable to have coolstores where the oil tanks are. So what do you do to encourage then to make better use of the space when they are quite happy with what they have?. Can you move some of it over the hill? I would have asked them if Timaru would have suited them better?


With Shell having left NZ and Mobil wanting too, I wonder if the new tank owners would be more receptive to such a deal now? I was over at Heathcote the other day and was amazed to see containers piled four stories high. Obviously LPC are making very good use of the land that they have subsequently acquired there. In any event I know that from an energy perspective sea is far and away the most efficient form of bulk transport. I can't see the economics of having large storage tanks at the Port of Timaru and a steady stream of heavy road tankers ferrying the stuff the Christchurch being very attractive to the oil companies. Why do you think that cool stores are a so much better use of that land? Doesn't It all smell a bit fishy? ;-)



I sold out of LPC when Layton was pushed as I thought the whole thing was a disgrace


That was about when I bought in I think, amidst all the trouble. I may even be the owner of your old shares Percy!

SNOOPY.