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Hirequip investors told to stand tall and proud

Mark Peart

Friday 7th November 2003

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Howard Paterson would have appreciated the compliment.

Shareholders in Hirequip, the reinvented Southern Capital, were given a good-natured rark-up by retired sharebroker and local identity H Robert Wilson at the annual meeting in Dunedin on Wednesday.

Wilson, seldom backward in coming forward at Dunedin company annual meetings, chided his fellow shareholders for not being more enthusiastic about the company's recent performance.

"This company is the focus of a lot of Dunedin's hopes and aspirations," he said.

Paterson was the driving force behind Southern Capital's acquisition of the Dunedin-based hire equipment business in two blocks.

In August last year, the company bought 50% from Australian investor GS Private Equity, and the other 50% in March from Hirequip executive director Stuart McKinlay.

Although Hirequip's investment and public company functions are run from executive chairman Graeme Wong's Wellington base, the annual report said all head office functions will ultimately be centred on Dunedin.

At the same time as Hirequip eyes expansion opportunities, with plans this financial year to increase its branch network from 37 to 39, and other hire company acquisitions being considered, it is also focusing on making hire equipment its core business.

The biotechnology investments Paterson spearheaded are to be progressively sold.

Wong told the meeting Hirequip's stake in A2 Corporation, valued at balance date (June 30) at $771,000, had already been sold.

Hirequip's biotech investments include Blis Technologies ($2.2 million), Botry-Zen ($989,000), PharmaZen ($900,000) and CO Surgical ($350,000).

Wong said directors were updating the independent market valuation of Pegasus Bay town in North Canterbury, which they have put up for sale after a controversial association.

The development was valued in March at $25 million and Wong said the company was confident it would sell for at least that.

The company plans this financial year to increase the ratio of hire equipment to the average book value of hire equipment from 0.84 to 0.92.

It invested $15.9 million in plant and equipment in the year to June, including $1.6 million spent bringing off-balance sheet funded assets on to the balance sheet.

Equipment sales totalled $2.6 million and depreciation financed a further $6.7 million. Wong said the company expected to spend about $14 million on plant and equipment this financial year.

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