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Chief rides political turbulence

By Nick Stride

Friday 7th February 2003

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Managing a monopoly might sound like an easy job. But steering through the political and regulatory attention monopolies attract can test even the most steady temperament.

In his 15 years as head of Auckland International Airport John Goulter has seen plenty of that.

Not the least of his challenges was leading the company through its politically turbulent "people's capitalism" float.

Some 60,000 investors took up the government's 52% stake in July 1998. Adjusted for last year's capital return they have seen a return of 21.7% a year on their investment, and 48c in dividends.

The sale process was notable for the counterintuitive positions taken by its primary political champion and its most vocal opponent. New Zealand First leader Winston Peters, then the treasurer in Jim Bolger's coalition government, had previously taken a strong anti-privatisation stance and dug his trenches around a list of "strategic" state assets that were not for sale.

His influence ensured the shares were offered to the New Zealand public, avoiding a repeat of the resentment generated by Telecom's sale to financial and overseas investors.

An even more remarkable policy somersault came from Act New Zealand leader Richard Prebble, who criticised foreigners' participation. Nonetheless the float set the stage for the next year's much larger sale of Contact Energy.

Mr Goulter again found himself enmeshed in politicians' squabbles last year when Auckland City Council sold half its 26% stake. His management team has also had to cope with the Commerce Commission's lengthy investigation of airport landing fees amid heavy lobbying from airlines.

With a strong tailwind from climbing visitor numbers ­ landing fees and passenger charges make up around half of its revenues ­ the airport's profit has grown from 1998's $41 million to $71.5 million last year.

The strongest revenue growth has been generated by "non-aeronautical" activities. Some 40% of income comes from retail and property rentals, with the rest coming from car park and utility charges.

A strong institutional shareholder base was bolstered by last year's council sale and more than 53,000 retail investors are on the register.

Sharebroking analysts are picking further growth in revenues and profits. Mr Goulter's legacy is a world-class airport well able to service Auckland's future growth.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


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