Investors grab 'Midas touch' man's shares

By Chris Hutching

Friday 13th February 2004

Hirequip shareholders have demonstrated their faith in the company's new direction in the way shares were absorbed when sold by trustees of the estate of the late Howard Paterson, who founded the company six years ago when it was known as Southern Capital.

It was the measure of the man with the "Midas Touch" that when the company was floated he negotiated restraint of trade deals for himself and fellow founder Phil Burmester worth $1.5 million.

Now his estate has sold more than seven million shares into a market that has continued to strengthen and the share price has firmed from 55c a year ago to $1.03 more recently. Two of his close associates and business partners, David Smallbone and Mike Coburn, have taken directorships on Hirequip since Mr Paterson died in mid-2003.

Hirequip chairman Graeme Wong said yesterday that the way the shares were absorbed by the market was a "vote of confidence" for the future direction of the company as the country's leading hire equipment specialist after its closest large rival Hire Pool (less than half the asset base of Hirequip).

In recent weeks Hirequip has shed more of its property assets and taken over other hire equipment companies. The company confirmed a $3 million sale to AMP Property of its 30% of Northwood Supa Centa near Christchurch and the revenue will be offset against losses from abandoning a proposed 45ha Waimakariri Employment Park north of Christchurch after Hirequip accepted defeat in an Environment Court stoush with objectors (the property will be subdivided for lifestyle blocks).

A small consolation has been the receipt of $430,000 a record Environment Court costs award against Environment Canterbury for delaying the resource consents for the proposed Pegasus Bay township. Although the property has been on the market for several months, Hirequip directors are understood to have changed tack and are now negotiating over a new approach to the venture.

In December, Hirequip bought a rival, Ready Hire, for $21 million.

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