THE 2003 TRUDO Total Shareholder Return survey covers a continued period of subdued stock market conditions.
THE 2003 TRUDO Total Shareholder Return survey covers a continued period of subdued stock market conditions.
The S&P/ASX200 Accumulation Index fell 1.7 per cent for the 12 months to June 30 2003, while the broader All Ordinaries Accumulation Index recorded a drop of 0.5 per cent over the same period.
For the second year running, a strong macro-economic performance from the Australian economy and continued low interest rates failed to be reflected in corporate TSR performance.
Despite the generally weak overall market, the 2003 TSR survey provided a range of highlights.
Brick and tile maker Bristile remained the strongest performer among the larger industrial stocks, based on continued strength in the housing sector and the takeover premium paid by major shareholder Brickworks.
The buoyant housing sector also gave a boost to developers Port Bouvard and Cedar Woods Properties.
A number of mid-cap industrial companies that featured in the 2002 TSR survey continued their strong performance during 2003, including Kresta Holdings, Fleetwood, iiNet and Schaffer Corporation (see page 10).
Coventry Group and Joyce both experienced a positive reversal of fortune, while at the riskier end of the market, biotechs Chemeq and Clinical Cell Culture provided large gains for their shareholders.
Last year’s top performers among the larger mining and resource stocks included gold miner Abelle, which is now majority owned by Harmony Gold, nickel miners Mincor Resources and Jubilee Mines and oil producer Amity Oil.
Mincor and Amity, along with emerging oil producer Arc Energy and gold miner Equigold, were also among the top performers over the past three years.
Bristile has featured positively in all TRUDO TSR surveys and 2003 proved no exception.
The company continued to experience positive trading conditions in the residential housing market and the share price received a lift following the takeover offer from major shareholder Brickworks.
After initially bidding at $3.15 per share in March, Brickworks ultimately raised the offer to $3.65 per share following Bristile’s 22.5 cent dividend payment. Much of this premium was already built into the share price as at June 30.
Bristile has since disappeared from the boards, following completion of Brickworks’ takeover, and has been joined by BankWest, which is now wholly owned by UK banking group HBOS.
The continued strength of the residential housing market was reflected in the TSR performance of developers Port Bouvard and Cedar Woods Properties.
Cedar Woods Properties reported a full-year net profit of $7.1 million for the 2003 financial year, up 107 per cent on the previous year, on sales revenue of $36.4 million.
Port Bouvard (formerly Menzies Court Holdings) continued to experience record sales levels from its Mandurah development, reporting a net profit of $5.5 million for the first half of the financial year on revenue of $28 million.
Futuris Corporation achieved a strong one-year TSR performance of 31.3 per cent.
In January 2003 the company resolved a long running and hard-fought dispute over the future of Incitec through an unconditional takeover offer from Orica.
Since then, longstanding CEO Alan Newman has retired, with chief operating officer Les Wozniczka assuming the CEO role in July 2003.
Coventry Group also experienced a reversal in trading fortunes during 2003.
After a 39 per cent fall in net profit to $4.5 million in 2001-02, improved trading conditions in both automotive and industrial divisions resulted in the company posting a full-year net profit of $10.8 million on revenue of $423.5 million.
Coventry has moved to 100 per cent ownership of Coventry Auto Parts, deriving tax benefits on consolidation and reduced losses through the closure of the subsidiary’s Victorian operations.
Chemeq’s share price continued its upward path with the company’s market capitalisation exceeding $500 million as at June 2003.
The company continues to move towards the completion of its manufacturing facility with market announcements positively received.
It raised $35.6 million through two placements to assist in construction financing.
Shareholders in Clinical Cell Culture can attest to the volatility of small cap biotechnology companies.
After a reverse takeover of the former investment company Ecat Development Capital, 3C has secured further equity funding and continues to make progress on its skin treatment activities.
Anthony Wooles is a director of TRUDO
