The Sydney Morning Herald from Sydney, New South Wales, Australia • 26

BUSINESS 25 TUESDAY JUNE 29 1999 wwwsmhcomau CBD Brokers boost BHP forecasts IiliJ Edited By EMILIYA MYCHASUK in a rising oil price Nevertheless BHP copped some criticism from institutional investors because of the size of some of the writedowns particularly US copper which has written off an additional $600 million above the book value in recognition of closure costs Analysts however were confident that BHP would now be able to realise an abnormal profit on the expected sale of at least some of the US copper assets another positive influence on BHP's share price going forward Credit Suisse First Boston director Mr Peter O'Connor has upgraded 1999-2000 profits by 5 per cent to $951 million "We believe BHP will generate sufficient cash flows from core assets to maintain its dividend and become a net acquirer of assets within 24 months" CSFB said BHP managing director Mr Paul Anderson warned share By KATE ASKEW Resources Writer Stockbroking analysts upgraded this year's earnings forecasts for BHP yesterday some by more than 10 per cent after the company demonstrated in last week's annual result that it had addressed its loss-making businesses and restructured its balance sheet to cut depreciation charges Investors responded by pushing BHP up 70c or more than 4 per cent to $1760 Last week BHP disclosed a net operating loss of S23 billion for the year to May following another round of asset writedowns Macquarie Equities had one of the most optimistic forecasts upgrading its 1999-2000 profit estimate by $100 million or 1 1 per cent to $1 billion saying BHP's financial performance was set to improve following the closure sale or restructuring of underper-forming assets It is also factoring holders after the company's third quarter result that its dividends were under pressure However he refused to comment on the board's view of the first half dividend (declared on the release of the company's first quarter result) last week "The more rigorous capital controls in place at BHP will see the company replace underper-forming investments with investments that exceed their cost of capital in the future creating significant wealth for shareholders" CSFB said Merrill Lynch lifted its profit forecast by 3 per cent to $851 million on the strength of upward revisions in commodity prices and reduced depreciation charges following the writedown of BHP's NZ steel operations Warburg Dillon Read which is reviewing its earnings forecasts lifted its forecasts by $101 million or 43 per cent to $9297 million -HV 3 Robbie Waterhouse a builder on the register Test captains from Bradman to Taylor at the stockbrokers' awards That compares with 1 1 00 for a Taylor bat at the Property Council Ball 1 400 for a Shane Warne bat or the $32200 paid for an original Bradman bat at Christie's Now that's a market for you The other event from the awards that still had 'em talking was the world's greatest hypnotist who lived up to his name Martin St James had the rowdy crowd of 600 brokers in his grip Starting out with 20 and then culling it down to seven guys and a gal by tossing out the non-believers he was able to will various brokers into a trance and get them to behave on cue like a drill sergeant screaming orders ballerinas dancing to Swan Lake a flasher Tarzan and a supermodel who sat on guys' laps and it was all entirely believable Brent Potts' PG Intercapital was the only small stockbroker to sponsor the awards showing spirited bidding in the companies Calcutta BTs Michael Brooks paid $10000 for a Himalayan skiing trip only to win the 1 5000 trip to Rome for two but maybe he expects to have plenty of holidays He won last year too There were suggestions of market rigging on behalf of Ord Minnett organiser Danny Dreyfuss by the time Ords also won for the second year in a row on the best dealing desk awards A total of more than 5300000 was raised for the Matthew Talbot Sounds familiar THE somewhat familiar name of the German market gambler Ludger Kohmascher who was driving the Etrade share surge earlier this year when it became a feature of the Berliner bourse's Internet trading has jumped onto the back of another Net beast This time it goes by the name of Golden Tiger Resources where Kohmascher has become a director News arrived at the same time that the no-liability company was going to buy into surprise an Internet service provider called Geko Internet and Aus-tel That was all announced last week after trading in the company was halted after the shares had jumped from 21c to 325c Is it starting to sound Master stake THOSE who have been watching the heavy trading in the Waterhouse family's market punt Cinimagic (to be renamed etec of course) and wondering about the identity of the new canny player can stop scratching their heads Yesterday we found out it was none other than a master builder in Adelaide An outfit called Marshall Brougham 'fessed up that it had taken a share placement that gave it a stake of about 1 35 per cent and it had been selling down to about 12 per cent over the past month or so The lawyers tried to clear it all up noting to the exchange yesterday that "in January this year our client became a substantial shareholder in Cinimagic however our client was unaware of the provisions of the Corporations Law relating to its obligations as a substantial shareholder and failed to give any notice to the company" They noted that Cinimagic was "well aware of the position" as the allocation had been approved at a shareholder meeting last December in May the Adelaide builder realised its mistake "Our client is not a share investor and has little knowledge or experience of the stock exchange and its requirements" Premature A PERSONAL portfolio decision by Macquarie Bank's Alan Moss doesn't look as smart as his business decision on the BT purchase The spike in Macquarie's share price yesterday put to shame the sale of stock by Moss a few weeks ago when Macquarie was trading about 1 760 He sold about 1 50000 shares acquired through the partly-paid scheme for senior executives to raise $26 million He still holds about 465000 shares worth $95 million at yesterday's closing price of $2050 Not that it will make that much difference to the mortgage on the new Middle Harbour house given the likely original low price paid on the stock Thanking you THERE must be someone thanking merchant banker Malcolm Turnbull for a change after the lawyerbanker sold down his KVB was getting involved So there's an unwritten blackball rule When asked about the method of getting people out as opposed to in the former Magna Data founder and twenty-something joint MD Vivian Stewart said there was nothing written down about it because they had a "gentlemen's agreement" His fellow twenty-something MD Janusz Hooker said they didn't need a "pre-nup" At least a couple of the backers would know all about pre-nuptial agreements Those bats STILL being talked about this week was the performance by the lads in the broking industry that led to several being thrown out of Star City at something like 4am (no-one could quite remember) last Friday with one offering the parting remark to a burly security officer: "Is this the part where you kill me?" Meanwhile as the auction price for the ubiquitous cricket bats goes the same way as Internet stocks Macquarie Bank's Richard Jenkins has been drawn into paying 1 7200 for a bat signed by all stake in the old play with Neville Wran FTR Holdings for a lot less than the stock is worth now Neville Wran and Peter Sar-ich bought the shares offloaded by Turnbull about a month ago paying a low of about 7c for the stock that closed at 195c each yesterday after news it was going into cyber world and becoming the new plaything of their mates Sean Howard and Trevor Kennedy Sarich bought about two-thirds of the shares the remainder were picked up by Wran The Wran-Turnbull interests collectively owned 40 per cent after the sell-down It was 57 per cent before Angelic club WH ATS almost more interesting than the hand-rubbing money men being dressed up as "business angels" in their role as backers of the Tinshed group? It's those who aren't in the group Apparently all the so-called angels including James Packer John Singleton David Lowy Rod Adler Michael Ball and Kevin Weldon had to agree to everyone else who LIHIR CONFIDENT LihirGold was confident that gold production this year would exceed 600000oz after overcoming problems with its autoclaves It said its new oxygen plant had been commissioned and the sulphide circuit would operate at capacity from the middle of next month TYNDALLCUTS Tyndall Property Trust reported an annual net profit of $287m down 5683pc on the previous year result The results for the year to May 15 include a second-half distribution of 12c per unit down from 16c FACTORED IN Qantas chief executive Mr James Strong said most of the recent good news about the airline had already been factored into it's share price METRO RAISES South African Metro Cash and Carry raised $US1255m via the private placement to reduce the bridging loan it took to finance its takeover of grocery wholesaler Davids last year CERAMIC CELLS Woodside Petroleum said it would invest $5m in research company Ceramic Fuel Cells CFC is developing electricity generation based on ceramic or solid oxide fuel cells capable of high energy conversion Efficiency CABONNE 'OK' Wine producer Cabonne expects forecast net profit of $20 99m to be achieved for the year to June 30 and said it knew of no reason for recent share price falls OVERWHELMED Metal Storm the rapid-fire machine gun concern said its $12m offer of new shares had closed oversubscribed The company plans to list on the ASX on July 8 BURNS TICKED Standard Poor's has revised its creditwatch outlook on struggling food company Burns Philp corporate credit ratings and debt issues to positive from developing implications HOLDEN CONTRACT Al Engineering has won a $178 3m automotive component supply agreement with GMC's Holden ATMs LINKED The two largest ATM card-bases Cashcard Australia and the Commonwealth Bank have linked for the first time PROGEN ZOOMS Progen shares raced almost 20pc higher to $615 on news the US Food and Drug Administration had given interim approval for its anticancer drug CORRECTIONS Anne Lampe (Herald June 10) referred to Ms Anne Keating as deputy president of the NRMA Ms Keating held that post until December 1998 she was succeeded by Ms Jane Singleton A June 21 report stated that an NRMA director Mr Ian Yates had applied to have a Supreme Court injunction (made against him upon the application of the NRMA) lifted that hearing was in fact to strike out a defence filed by Mr Yates Fairfax to pump $220m into Age printing plant The Renzo Piano model finally strikes a chord in a weak market ABN Amro on the move Shipping cartels given nod The cartels or "conferences" that dominate Australia's international liner cargo shipping and the clause in the Trade Practices Act that allows them to do so have been given a tick of approval in a position paper from the Productivity Commission Conferences carry more than 60 per cent of liner imports and 50 per cent of liner exports by value and involve ships banding together to exploit economies of scale in hauling goods and commodities on the long routes to and from Australia "Preliminary evidence suggests that there is a substantial degree of competition in Australian liner shipping markets which constrains the market power of conferences" the commission said It noted that independent operators still flourished and there were no trade routes monopolised by the cartels "Chiselling" or price-cutting from members within the conferences "appears to be very common leading to some conferences effectively abandoning rate setting" Tom Allard to match the colour capacity of The Sydney Morning Herald it would make media buying easier for national advertisers he said The managing director of media buying company Mitchell Partners Mr Colin Hinshel-wood said there was demand for more colour advertising "There are times where you get frustrated with the availability of key colour positions in The Age so I'm sure there is a market there" He said colour advertising generally commanded a premium of about 30 per cent Tfie Age's publisher and editor-in-chief Mr Steve Harris said the presses may result in the paper producing more magazines and strengthening the print base would also improve Fairfax's online business Mr Harris said The Age's advertising revenues were at a record high with most growth in employment and real estate The new plant will also print the weekend edition of The Australian Financial Review (now printed under contract by Rural Press in Ballarat) as well as the weekday editions which are now printed at The Age Fairfax shares closed 5c higher at S430 By JANE SCHULZE in Melbourne John Fairfax Holdings will invest $220 million in a new printing facility for The Age a move which is expected to generate higher revenues while producing a net abnormal charge of $23 million this financial year The company said the investment at Tullamarine its largest in Victoria would be financed from cash flow over three years in tranches of $886 million $826 million and $47 million Fairfax chief executive Mr Fred Hilmer said the plant would increase the amount of colour advertising available making it more attractive to advertisers But as the existing presses will be redundant Fairfax's chief financial officer Mr Mark Bay-liss said they would be written down to $15 million resulting in a net abnormal charge of $23 milUon this year The company's interest expense will also grow by about $6 million next financial year as repayment of its $700 million debt will be delayed by the investment he said "It the plant will allow The Age to be more flexible have more colour and ultimately will give us revenue opportunities we don't have and those opportunities outweigh the costs associated with the plant so it the investment decision is a bit of a no-brainer" he said The new presses will enable The Age to print up to 48 colour broadsheet pages in one paper three times the current limit Media analysts who are expecting Fairfax to report a 20 per cent increase in full-year pre-abnormal profit to $135 million said the amount spent on the presses was within the forecast range while the abnormal charge was expected given the limited life of the existing facilities "The benefit of incremental cost savings and improved work practices is more or less offset by higher depreciation and interest charges" one said Tfie Age's advertising director Mr John Allan said that apart from increased revenues from colour advertising he expected growth in the number of advertising inserts which now represent less than 1 per cent of total sales "We will have a more flexible insert capability which means we will be able to heavily target letter-box distribution" he said And as The Age would be able A spokesman for Lend Lease Developments Mr Alan Frost said Lend Lease was not looking at selling the building at present East Asia intended to hold its stake for the medium term after completion Lend Lease has signalled that it is looking to liquidate its Australian property portfolio as several buildings including Darling Park Stage 2 approach completion ABN Amro expects to move in next August shortly after the building is completed Lend Lease rose 18c to $21 "The leasing market is tough but leasing it is a function of having a slightly different product" Mr Frost said The valuation includes the 41-storey 49500 sq office tower and an adjoining 18-level unit block being sold off the plan There had been suggestions in the past that the Renzo Piano-designed building didn't stack up financially because of the high cost of realising Mr Piano's intricate design But a rent of that calibre would place the building above even the most expensive to lease buildings in the Sydney CBD ABN Amro will have naming rights for the office tower as part of the leasing package With the recent signing of Minter Ellison the office tower is two-thirds leased By ANTHONY HUGHES Lend Lease Corporation's $650 million redevelopment of the former State Office Block has defied a weak leasing market to secure ABN Amro as anchor tenant lifting prospects for the eventual on-sale of the holding After more than a year of negotiations ABN Amro has agreed to take 13 floors in the Phillip Street development being built in a 5050 joint venture between Lend Lease and Hong Kong's East Asia Property Group It is believed the net rent paid will top $800 a square metre for some floors helping to ensure the property's end valuation of $650 million-plus can be achieved Computer logged Hannes visits Newcomer wins Pizza Hut Limited direcc investments from only $10000 are now available in a quality industrial property portfolio anchored by multinational and national tenants Freecail 1800 672 211 for a Prospectus By ANDREW HORNERY Marketing Writer It's been a tense six weeks for -executives at Pizza Hut The fast-food chain has been trying to find an advertising agency with a new idea to take the brand into the new millennium After two months of searching Pizza Hut executives narrowed the list to two agencies incumbent Clemenger Sydney and newcomer Singleton Ogilvy Mather However marketing bosses demanded that both agencies keep producing ideas until one worked Yesterday Pizza Hut decided to dump Clemenger and appoint SOM to the business worth more marketing director Mr Greg Creed told the Herald that having two ad agencies "is not an ideal situation it is very difficult and expensive to be working with two agencies at once I want to have one agency as quickly as possible But we've been forced to do this because as yet we have not been given the creative idea we're looking for to take Pizza Hut into the future" However exactly what the "creative idea" SOM has come up with was being kept under wraps yesterday by both Pizza Hut and SOM with neither able to elaborate on the brand's future advertising direction than $10 million a year "We're going to inject some life into the brand" SOM managing director Mr Chris Mon said last night Pizza Hut is part of the Tricon family of restaurants which includes KFC and Taco Bell SOM handles the KFC and Taco Bell accounts in Australia The addition of Pizza Hut makes SOM the only advertising agency in the world to handle all three Tricon brands "We always believed that agencies get the clients they deserve and this win says a lot about Singleton Ogilvy Mather" Mr Mort said Last month Pizza Hut executed a search warrant on Hannes's home in Kimo Street Roseville on January 1 7 1997 His job was to seize property from Hannes's residence at the back of the house and bar code it Among the property seized was a laptop computer five exercise books two lots of reading glasses an anorak a file which contained documents relating to Leveraged Equities and a company called Taxol and a small black notebook In the back of this book was a notation of an address for Alexi Voltaint whose name has come up in previous evidence in relation to transactions effected in the name of Mark Booth The other was called This and That which tracked only Hannes's access to the bank and level 20 in the six months Crown prosecutor Mr Tim Game SC walked Mr Roberts through a number of extracts from the two reports which revealed several late-night accesses by Hannes to level 20 of the bank starting in July 1996 with several in August and September 1996 Most of were recorded after 10 pm with some after midnight Some were at a weekend In other evidence Mr Anthony Viel who in 1996 was an intelligence officer with the Australian Securities Commission told the court that he was part of a five-member team which By ANNE LAMPE A security administration manager at Macquarie Bank Mr lan Roberts told a District Court trial yesterday that the bank's computerised security access tracking system logged MBL executive director Simon Hannes entering the building and accessing the corporate advisory floor on numerous occasions between June and December 1996 Hannes is on trial on one count of insider trading in TNT options in September 1 996 and two counts of structuring cash transactions to avoid reporting them under the Cash Transactions Reports Act He has pleaded not guilty to all charges Mr Roberts told the court yesterday that a blue mill key which gave Hannes 24-hour access to MBL building and a black DKS key which enabled him to access levels 20 and 21 of the bank left a tracks on the computer system Level 20 housed the corporate advisory section which from July to October 1 996 was working on a secret friendly merger of TNT with Dutch postal group KPN Mr Roberts produced two reports on staff movements within the bank during the July to December 1996 period One was called You Name It which tracked all staff access to level 20 of the bank during the six months Applications may only be made on the application form attached to the Prospectus dated 23 April 1 999 lodged with the ASIC Based on forecast return for first full year Landmark PROPERTY SYNDICATES LTD Landmark Property Syndicates Ltd Level 16 215 Adelaide ACN 061 5S6 212 Street Brisbane 4000 Phone 07 3211 337S Email: lanarnarklpscomau.