Lasercorp blows hot and cold

Press, 29 April 1987, Page 38

Lasercorp blows hot and cold

NEVIN TOPP

By

Lasercorp Holdings, Ltd, turned up the heat for financial analysts at a conference in Christchurch yesterday, by producing some cool predictions for participants to consider. The Christchurch-based distribution company that was floated in December, 1986, and listed late in January, has revised a number of financial projections, including a sharp jump in sales. The managing director, Mr David Bainbridge, told the meeting that the directors had revised the sales prediction of $Bl million in the prospectus to SI47M. The group net profit was now expected to be SSM, not $4.6M as predicted in the prospectus. Earnings per share had been revised from 5.0 to 5.4 c a share.

The deputy chairman, Mr Don Sollitt, said that Lasercorp had got to phase three of the plan in the prospectus in five months, when he had expected it to take two years.

Phase three was looking at buying companies in the Pacific rim and Lasercorp was already looking at. “a few targets” in that area.

Executives predicted that a statement on one of them might be made this week.

Mr Sollitt said that Lasercorp had already had approaches from a number of companies seeking to be taken over, because of the Christchurch company’s work in the distribution field.

The reason why the directors considered that the company was succeeding was that it was

strong on the fundamentals of business, with its experienced business team.

The company had concentrated on creating good systems and becoming computerised. (Mr Bainbridge said that 51.25 M had been spent on centralised hardware and a further $500,000 for hardware "out in the field," so.that the positions of companies in New Zealand and overseas could be known immediately.)

Mr Sollitt said that management also sought to get the companies performing above the industrial average. PDL was working at $360,000 sales for each staff member, while another company that Lasercorp had taken over was only at $llO,OOO a staff member.

Ways to improve the ratio included rationalising the distribution network.

Mr Sollitt also believed that Lasercorp was less vulnerable to market changes, because its four main products came from different areas — high technology electrical products, industrial electrical products, plumbing equipment, and “price sensitive” personal electrical products, such as heaters and hair dryers. Lasercorp’s executives are also the executives of PDL Holdings, Ltd, which owns 48 per cent of the company, but they felt that the market unfairly identified the companies too closely. Mr Bainbridge said that Lasercorp drew only 10 per cent of its products from PDL (compared with about 5 per cent last year). Other sources includes its own companies, A. and T. Burt, Ltd, of

Christchurch, the recent acquisition, J. A. Russell, Ltd, and PDL Industries Aust. Pty, Ltd, which is 51 per cent-owned. The acquisition of the 51 per cent holding in PDL Industries Aust, is also considered a key since the Australian company has bought Mistral Kempthorne, Ltd, of Melbourne, which makes Mistral fans.

Mr Bainbridge said that previously PDL Industries Aust, had found that sales fell for its heater proudcts during the summer months, but the acquisition of Mistral meant that there would be a smoother annual turnover.

Lasercorp had also acquired Mistral Fans Malaysia Sendirian Berhad for the rights to Mistral products — this company sent products to the United States, the United. Kingdom, and throughout South-East Asia. In this case PDL would eventually take over the manufacturihg and Lasercorp would hold the distribution. “We believe that we have the edge over other people (distributors),”. Mr Bainbridge said.

PDL had established excellent links in product sourcing, including an office in Nuremburg, West Germany, and an association in Hong Kong. The capital of Lasercorp now stands at 97,250,000 50c shares, although with another acquisition this is expected to exceed 100 M shares. A breakdown of the shareholdings show that PDL owns 48 per cent; Steel and Tube Holdings, Ltd, 9 per cent; Kemtron, Ltd, 9 per cent; PDL and Lasercorp staff, 10 per cent; and institutions, 13 per cent.