Forum Archive Index - July 2003

["david.gibson" <david.gibson@k.co.nz>]

I am aware that GPG have considered Trans Tasman "in play" since the
conversion of the convertable notes to shares.  GPG also has a significant
investment in AGH.

While I cannot consider the interest/involvement of GPG to be wholy positive
... I do not consider the involvement of SEA to be completely negative.  My
understanding of management fees is that AGH contract with SEA for property
management in Australia.  These fees are benchmarked at the approximate cost
of performing management "in house".  The NZ operations rely on "in house"
management.  I do not know where the perception that SEA or Directors are
"creaming" the profits comes from ... I would appreciate any information on
this ;)

My research into the "Property Trust" sector in NZ leads me to believe that
other listed property organisations have management company fee structures
that are significantly worse than the TTP benchmark.  Again, I would
appreciate comment and information.

Overall, I think SEA are a significant asset to TTP.   The company has been
able to commit to long term restructuring because of the support of the
foundation shareholder.  The RJI Trans Tasman and SEABIL really "fell
together" rather than separately "falling over" in 1995 - the balance sheet
was quite shocking at this point - and has progressively improved.

Today, I think the shareprice discount is anomalous.  However, I am keenly
interested in other opinions and pertinant facts!!

In terms of the reallocation of the sale proceeds of the AGH property:

1)  AGH will have lost critical mass - they either need to reinvest or
dissolve.
2)  They have an experienced Australian based Board - my guess is they will
find some investment/development opportunities.
3)  There is scope for further restructuring of the TTP parent - my guess is
payback of the expensive secured bonds.
4)  Rather than a cash special dividend, for TTP shareholders, there is
significant opportunity for a share buy back on the NZ market to improve the
NTA.

By the end of the year, I expect:

1)  Resumption of the dividend to about $0.04 per share from operational
cash flows
2)  A share price in the $0.40 - $0.45 range
3)  An end to the downward property revaluations

Of course this is personal speculation - but it is based on a close look at
the balance sheet and keen interest in the companies recent "events".  I
would appreciate comments or critiques of this "straw man" argument.

Unfortunately the stock does not attract any coverage from Analysts or
insightful Journalists.

Thanks to Marilyn for the market insight :)


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