R. Jones holds prophet line

Press, 24 June 1986, Page 22

R. Jones holds prophet line

Robt Jones Investments, Ltd, is continuing its characteristic of making “specific prophecies and ambitious undertakings” on the company’s performance.

The chairman, Mr Bob Jones, told the annual meeting in Christchurch yesterday that if people cared to read what had been released by the company in the three and one-half years of its existence they would find that the undertakings had been fulfilled and the prophecies exceeded. “That is of particular relevance and importance to what I shall say tonight, for as has been my custom, I intend again to give undertakings and make prophecies in respect of this company’s future prospects.” Such action provided an incentive to the board and management — having made such public commitments, it was then coldly analysed and carried out.

“Without such commitments it is just too easy to sit back and coast along which, of course, the vast majority of companies do in this country,” Mr Jones said.

If the company did nothing in buying properties or general expansion for the balance of the financial year it would earn a profit of about $35 million and “in my case, it has a lot of appeal

because it means a lot more trout being caught.” A capital growth rate of more than 2000 per cent in three and one-half years was “impressive,” but “I can assure you that the next three and onehalf years will dwarf that performance.”

The one-for-four cash issue would produce in hand non-borrowed cash of more than twice the capital that the company had used so far, thus shareholders could expect some spectacular growth, he said.

“In the annual report I outlined our target of becoming a half-billion dollar company by the end of the next financial year. I will be surprised if we do not attain that figure a great deal earlier.”

The investment by the company in Australia, Canada, and the United States was now bearing fruit, and shareholders could expect some big foreign acquisition announcements in the coming months. Robt Jones Investments was no longer a small New Zealand company, and was now a big international corporate investor.

"Accordingly, I confidently predict that last year’s acquisition achievement of $76.5M will be at least doubled in the current half-year.”

Each of the new foreign acquisitions would exceed in cost the total market capitalisation of all but the top 50 New Zealand public companies. “In summary, we are well advanced along the road to becoming this country’s largest international real asset holding corporation,” Mr Jones said.

The company’s dividend growth rate had been rapid and shareholders could expect a continuation of this velocity. The annual report has also shown a steady pattern of rental income doubling each year. This is expected to be greatly exceeded this year. “With a series of highly significant events coming into place, all indications are that the second halfyear’s events will exceed, in monetary value, the entire previous three and one-half years efforts.” “In that regard I issue a single warning (to shareholders); Don’t sell your shares,” Mr Jones said. As an aside, the directors were conscious of the need to split the company’s shares into lower units as the share price rose. With a minimum parcel of 200 shares, the price might unfairly penalise the smaller, but solid, share investor soon. However, the board was sensitive to this consideration.