Forum Archive Index - May 2001

["Peter Maiden" <pmaiden@xtra.co.nz>]

Brian - a really good post and I like the way how you use the term  'work in progress'. A very apt phrase. GPG certainly has a lot of it at the moment.

 

I concur with you that buying shares in GPG is a better option than taking up a capital notes issue - for the reasons you state.

 

However there is a market for fixed term investments and that is probably what GPG are going to tap in to.

 

Capital notes issues and the like sometimes are a worry. Large sums of money raised need to to be invested somewhere and often burns holes in the directors pockets. This often leads to undisciplined expansion which eventually leads to losses for shareholders.

 

It has been the raising of cash in this manner that  lead to the underperformance of the likes of Brieley Investments, Fletcher Challenge, Capital Properties and St Lukes Group 

 

However in GPG's case I'm pretty sure that they have in mind what they want the cash for - and don't need to go out and find something to invest in.

 

You also mention that GPG stayed out of the tech hype last year.

 

Maybe it is the opportunism of GPG that they are now interested in getting into technology related companies. 

 

The 36% interest that GPG have in Tomorrow Ltd in Australia is a fascinating move. Led by the Wayne Bos who must know more about this market than anybody else it will be interesting where they go. Maybe they see plenty of bargains in the tech wreck? or is the recognition that 'tech' is the way things are done these days anyway?

 

The main target for Tomorrow seems to be unlisted company Mincom. Mincom is one of the biggest software houses in Australia with annual revenues in excess of A$160M - more than twice the size of Advantage.

 

As you say Brian,  GPG has demonstrated good growth in shareholders funds over the last few years. I do feel that this is the year when shareholders will be rewarded more than they have in the last two years. 

 

Hopefully that 'work in progress' will be turned into something tangible

 

Cheers

 

Peter