Trade accord needed

Press, 15 August 1984, Page 35

Trade accord needed

PA Wellington Australia and New Zealand needed to sort out an accord on cross-investment, company ownership and agricultural products, said the new director of Goodman Group, Ltd, Mr John Elliot, at the annual meeting yesterday, Mr Elliot, who is the head of Goodman’s new investment and associate, Elders IXL, Ltd, of Australia, told the meeting that if countries as diverse as Britain, France and Germany could reach agreement under the European Economic Community, it should be simple for Australia and New Zealand, to reach a Closer Economic Relations accord.

“We still have some very odd foreign investment rules in both countries. Australia’s even more restrictive than yours. These rules must be totally freed up, so there can be easy exchange of equities. “Also we have to have similar rules about what you’re allowed to own and not own. We have to have our takeover codes brought into line.”

The two countries should develop a better relation-

ship on sales of agricultural S' is, and work together of competing, Mr Elliot said. “We see Goodmans as an exciting company with strong prospects and a broad range of activities. We’re confident about its future.” Its investment in NZ Forest Products, Ltd, together with Wattie Industries, Ltd, would stand it in good stead. “We’ll be able to bring them opportunities in the food industry in Australia and around the world,” he said. The chairman of Goodman’s Mr Pat Goodman, said he did not think people had realised the tremendous amount of cash flow that would be available to Goodman through Elders, which the company has been equity accounting into its results since April 1. The managing director of Goodman’s, Mr Peter Shirtcliffe, said the company had assumed full management responsibility for the Elders food group, and were responsible for financing it on a stand-alone basis. “Consequently, all cash .flows generated by the Eld-

ers food group will be directed to a newly-formed subsidiary, Goodman Group Australia Pty, Ltd, and through this to the parent company. Though sales figures for the Elders food group would not be incorporated into Goodman’s parent company accounts, it expected to accumulate cash surpluses in its new Australian companies from their first full year of trading. Mr Goodman said the first quarter of the current year had been remarkably strong, though it was usually a “soft” period. Firsthalf profit indications would please shareholders. “It is quite apparent that at this time some in the marketplace do not share our level of optimism. Questions have been raised about the quality of earnings. “Everyone is aware of the reverberations which resulted from our decision to invest in NZFP. It is clear that Goodman Group was put in a position where it could have been in a totally unsatisfactory and unacceptable position of holding only a minority shareholdering in its largest

associate, Wattie.” The company resorted to “resourceful” means to protect its own position and shareholders’ investment, at the same time entering a joint, shareholding with Elders. ‘ "Is it little wonder that there is some element of confusion in the marketplace about Goodman Group? In ten weeks it had increased its gross assets base by around $l5O million,” he said.