Rangatira in acquisition talks, may expand Hellers small goods unit

Thursday 1st December 2011

Rangatira, the Wellington-based investment company, said it’s in talks that may lead to an acquisition that would expand its Hellers small goods business.

The investment company has about $10 million in cash earmarked for investments, having sold a bed maker, a packing company and a wine maker in the past 12 months. The investment company owns 50 percent of Hellers, which makes sausages, bacon and ham.

“Hellers is looking at further opportunity for organic growth and acquisitions,” Ian Frame, chief executive of Rangatira, told BusinessDesk. “It has got to a size in New Zealand where there is still opportunity for us, but we would be number one in the sector.”

An acquisition would allow Rangatira to expand the Hellers brand into other food production lines, he said.

Frame declined to identify the target company though a food maker in the chilled foods sector would fit alongside Hellers existing product lines.

“We are subject to confidentiality on those negations but there are a lot of small-to-medium sized companies in New Zealand,” he said.

Rangatira, which added former Kiwibank chief executive Sam Knowles to its board in May, posted a 2 percent rise in earnings to $4.4 million in the six months ended Sept. 30. The result included only four months of trading from bed maker Dunlop following its sale in July.

The directors consider “the half-year result more reassuring than previous guidance assumed, and now expect operating earnings for the full-year to be similar to last year and possibly a little better,” the company said in a statement.

Rangtira boosted operating earnings by a third to $8.8 million in the year ended March 31.

The net asset value of Rangatira’s shares fell to $8.51 as at Sept. 30, from $9.15 on Mar. 31.

The directors declared an unchanged interim dividend of 18 cents per share, which will be paid on Dec. 12.

Rangatira has two classes of shares listed on the Unlisted platform, with 67 percent held as class ‘A’ shares and 33 percent held in class ‘B’ shares to differentiate between charitable and non-charitable shareholders.

The investment company was set up in 1937, and is now 51 percent owned by the J R McKenzie Trust, with other community and charitable organisations owning about 15 percent of the shares. The balance of the shareholding is held by various individual investors.

The ‘A’ shares last traded on Aug. 19 at $6.10 and have gained 1.7 percent this year. The ‘B’ shares last traded on Aug. 22 at $5.60, and have declined 1.8 percent this year.

(BusinessDesk)

BusinessDesk.co.nz

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