Blue Chip to offer rights issue

By Duncan Bridgeman

Friday 16th July 2004

Controversial Auckland apartment developer Mark Bryers is back in the money with his investment firm Blue Chip NZ set for expansion.

Blue Chip, which last month gained a backdoor listing on the NZX through former IT company Newcall, this week turned in a consolidated June-half net profit of $1.89 million.

Blue Chip's 52.5 million shares, of which Bryers owns 75.4%, last traded at $1.25.

According to NZX data the company carries an earnings multiple of 14.7.

The company is set to raise further capital through a pro-rata rights issue to help fund what chief executive Nick Wevers' describes as "substantial" expansion plans.

Wevers said the upcoming rights issue was also designed to give Newcall shareholders the chance to subscribe to a meaningful parcel after they ended up with just 2.5 million shares following the consolidation.

"We won't disclose exactly what our plans are at this stage but it won't be too far away," he said.

It was likely the company would be looking to expand further into financial services.

The rights issue was expected to be at a discount to the prevailing market price, he said.

Blue Chip's result included the performance of Newcall, which recorded a loss of $176,000 over the period.

Wevers said the company looked to be on target for a full-year after-tax profit of about $8 million, or 15c a share.

That compared with a net profit of just over $5 million last year, he said.

Founded by Bryers and former bankrupt Bob Bangerter, Blue Chip aims to encourage residential investors to use the equity in their homes to fund themselves into other properties.

The company runs seminars, gets tenants for investors and manages a housing portfolio.

In 2001, two of Bryers' property companies were put into liquidation.

Comments from our readers

No comments yet