FAI expects rise

Press, 7 October 1987, Page 46

FAI expects rise

By

BRUCE HEXTALL

NZPA-AAP New York The share price of FAI Insurances, Ltd, is expected to increase substantially in the coming year, company chairman, Mr Larry Adler, says. While stopping short of predicting what level FAI shares may be trading at in 12 months time, he suggested during a visit to New York that the company’s track record showed FAI shares cbuld provide exceptional returns.

“Twelve months ago when I was here FAI shares were trading around three dollars each — since then the price has risen by more than 300 per cent to around $9.40,” Mr Adler told a New York conference on Australian investment op-

portunities last week. “if I am here again in .another 12 months I hope to quote such figures again.” FAI is already assured of strong profit growth this year after its Pioneer Concrete Services, Ltd, share play which saw FAi emerge with a sAustl93 million second prize gross profit after failing to gain control of Pioneer via a 200 c a share bid. FAI built up a 19 per cent stake, paying an average 165 c a share and subsequently selling out to Robert Holmes a Court at 400 c a share. The $193 million profit, which also included profit realised from the sale of FAl’s 6 per cent stake in Pioneer subsidiary, Ampol,' Ltd, will be included in 1988 earnings.

On its own this profit surpasses 1987 total group net earnings of $113.43 million. Analysts expect FAl’s profit will be further boosted by the expected sale of its 14.9 per cent stake in British merchant bank, Hill Samuel Group Pic. Last week, Hill Samuel announced U.K. savings bank group, TSB Group Pic had agreed to buy Hill Samuel for SUS 777 million, subject to shareholders’ approval. ’ While Adler has declined to say whether he will accept the £B.lO a share offer, FAI is looking at a substantial profit, having begun buying Hill Samuel stock at £3.50. “Whatever way we go we have more than doubled our money,” Mr Adler said.