Austock Brokers A 'feefully' Good Year

The Age

Wednesday November 10, 2004

CHRISTOPHER WEBB

ANOTHER in the long line of stockbrokers celebrating champagne times has been Austock Ltd, broker to such empire builders as child-care king Edmund Stuart Groves.

Austock enjoyed a near doubling of brokerage fees and a big increase in underwriting and placement fees in the June year: these combined to produce pretax earnings of $4,209,506.

That compared with $303,613 for the 2002-03 year.

Underwriting and placement fees improved from $976,356 to $5,632,375, thanks to a stockmarket that suited the likes of Austock down to the ground, with booming small caps and new issues abounding.

Brokerage also helped, increasing from $5,586,124 to $10,458,564, while management and advice fees were down from $1,525,541 to $1,210,199.

Presiding over the performance were such folk as managing director John Wheeler, Peter Curtis, Ryan Whitelegg and one Peter Geoffrey Hollick, also known by those old enough as the "Red Bullet".

The Warrnambool-born "Bullet" ceased to be a director on September 20.

There appears to have been various changes to Austock's capital and corporate structure during the past little while.

At balance date, some 53 per cent of the company was controlled by Australian Pooled Development Financing, with the balance owned by Austock operatives.

That company, to wit, Australian Pooled Development Financing, was also owned by Austock people, and its board included such people as Billy Bessemer, Victor Cottren, John Wheeler and Martin Ryan.

During the year, Austock Ltd's 75 per cent stake in Austock Corporate Finance was sold to Australian Pooled Development Financing.

Meanwhile, the stockbroking company's balance sheet contained far bigger numbers, with total assets at $61.6 million ($23.7 million previously) and total liabilities at $59 million ($21.4 million).

Dividends for the year totalled $4 million, compared with zero previously.

Moolah flowing to directors was also on the improve, with a couple of 'em on about $335,000 and someone on $255,000.

Goodyear dines out on big speech, but chips aren't down on WMC deal

AS AMAZING as it may seem, BHP Billiton's boyish chief, Chip Goodyear, has never met up with the mining industry's living legend, Sir Arvi Parbo.

Until yesterday that is.

Chip finally got to meet Sir "Please Call Me" Arvi as seats were being taken at the Melbourne Mining Club luncheon at the Town Hall, a function attended by a record 570 mining types.

Our operative was in earshot to hear Chip express how delighted he was to finally meet Arvi, patron of the club and former WMC heavyweight.

They had a private conversation that lasted five minutes, so it's not known if the subject of WMC Resources and its battle to steer clear of "Big" Mick Davis at Xstrata was discussed.

Arvi was managing director and later chairman of the "old" WMC during its high-growth years, eventually handing over the reins to Hugh "Huge" Morgan, who felt the need to split it into two - WMC Resources and Alumina Ltd.

In all the speculation surrounding a counter-move on WMC, it is BHP Billiton's name that pops up more than most. After the lunch, when he was speaking to the media, Goodyear wouldn't comment on the "situation".

Whether it came up in his chat with Arvi, we will never know. What is known is that Chip could do worse than take some free advice from the old sage.

Question time after the lunch itself created a chance for some more punting in the wake of the spring racing carnival. On some tables, bottles of wine were being bet that the first question would be on BHP Billiton's WMC intentions, if any.

Those backing against the obvious won the day when Merrill Lynch mining analyst Vicky Binns popped the first question. It was something about the dichotomy between long-term planning and the short-term expectations that can rule in investment markets.

"Good question," said Chip. Good for sure, but doubly good that it wasn't about WMC.

As for Chip's speech, it was his version of the China "boom" story. He delivered it in the style perfected by Steve Jobs of Apple Computer Inc - a sort of breezy look at me, I'm so relaxed and so on top of my subject that I'm walking around the stage and talking without notes.

Chip said that the developing middle class in China had developed a taste for fridges, cars and air-conditioners just like any other middle class. Those trappings consumed lots of energy and metals, and their consumption in increasing amounts by the Chinese was not about to come to a halt.

Chip concluded that now that the Chinese had had a taste of the good life, it would be "extremely difficult to put the genie back into the bottle".

Nufarm boy reaps his reward

THE scrip has appreciated from $3 to $8 in two years; so, who could blame Douglas Rathbone for taking a bit off the table?

Rathbone, managing director of Nufarm, the crop protection concern, has peeled off 1.35 million shares from his stake and tipped them into the market.

One institution took them off his hands at $7.95 apiece; a transaction that raised $10,732,500.

He plans to use the cash to reduce borrowings in the family wine business, Yering Station, the first vineyard planted in Australia.

Rathbone, 59, said yesterday he looked forward to occupying the chief's seat at Nufarm until he was at least 65, and added that he had never been more confident about the company.

He is still on the register: his interests own 29.4 million shares, representing about 18 per cent of the company, worth $243 million.

© 2004 The Age

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