‘Chase’s growth is in Australia’

Press, 6 December 1985, Page 20

‘Chase’s growth is in Australia’

PA Wellington Chase Corporation, Ltd’s future earnings growth hinges on its success in Australia, according to the chairman, Mr Colin Reynolds.

Mr Reynolds, who has moved to Sydney, said in a statement that with “adequate future profitability growth underpinned in New Zealand, Chase’s ability to maintain future earnings growth two or three years out will be very dependent upon the success in expanding the Australian operations.

Mr Reynolds announced the appointment of Mr Peter Francis as managing director, Mr Reynolds is to become executive chairman, responsible for Chase’s Australian property developments and investments as well as over-all corporate planning with him the group. Mr Reynolds said Mr Francis would have special

responsibility for Chase’s New Zealand operations and for establishing branches in London and New York. Mr Adrian Burr would continue as managing director, of the Australian company and its staffing structure will be “increased substantially” in coming months. Rapid growth was the essential element in Chase’s corporate plan, he said. In the meantime Chase has launched a bid for the 50 per cent of Australian investment company Jonray Holdings, Ltd, it does not already own. Chase said it would offer two Chase shares for each of the 3,341,250 Jonray shares it did not hold. If the bid were to succeed, it would involve Chase in the issue of 6,682,500 shares. At the time of the offer these shares are worth just over $26 million, or sAust2l million. The issue of the shares

would increase the Chase issued capital by about 7 per cent. Addressing the annual meeting of Jonray shareholders, the chairman, Mr A. K. Burr, said discussions had been held with Chase. Chase had decided a rationalisation of its Australian investments might be in the best interests of both Chase and Jonray.

Mr Burr said the independent Jonray directors would meet soon to consider the Chase offer and make a recommendation to shareholders.

Mr Burr said Jonray had been mindful of the possible conflict of interests between Chase and Jonray if both companies were to operate independently in Australia. Speaking from Sydney, Mr Colin Reynolds, chairman of Chase, said that Jonray shareholders would not be disadvantaged by the merger, as Jonrav had a

similar predicted earnings a share to Chase.

Mr Reynolds said that if the merger went ahead Chase would inject some sAust2s million into Jonray. Jonray would become the operating arm of Chase in Australia, although the Chase name would remain listed.

Mr Burr told shareholders at the meeting it was planned to change Jonray’s name to Century Pacific, Ltd. Directors believed that name reflected the new directions the company was embarking on with the aim of creating a Pacific-based company looking for major growth into the next cen-

Mr Reynolds said the name might prove helpful if a court battle with Chase AMP over the Chase name went against Chase Corportation.

Among investments made by Jonray which Chase would inherit are a share-

holding of more than 12 per < cent in Jennings Industries, J Ltd, a building and engineering company listed in ; Australia, a stake of more i than 10 per cent in Allied ; Pacific Investments, Ltd, a ! listed merchant banker, and • a 40 per cent stake in ; Polycure, Ltd, a hi-tech sur- . face coating specialist. Mr Burr told shareholders , the-outlook was favourable and dividend payments ; were expected to resume in the 1985-86 financial year. 1