Potts' Luck Rolls On At Southern Cross

The Age

Wednesday February 16, 2005

CHRISTOPHER WEBB

ONE of the great stockbrokers of yesteryear Sir Brent Roderick Potts still knows how to make a quid.

In fact, his Southern Cross Equities, where Peter Gray is managing director, rang up a result last year that made it one of the country's most profitable brokers.

Southern Cross is an outfit that made money when many others were submitting results written in red ink.

To wit, in 2003, the firm's pretax result was $2,584,084.

That was booked on revenue of slightly more than $10 million, which made it a useful result in itself.

But the latest figures, including a handy gain in brokerage income and a much larger increase in corporate fees, showed that Potts, who has been in the game for nearly four decades and is one of the biggest block dealers of yesteryear - starting off as a chalkie, if memory serves correctly - has not lost his touch.

Southern Cross' pretax result increased from the aforementioned $2,584,084 to $6,629,683.

The latest effort was booked on $18,640,945 revenue, which takes some beating in terms of return on sales.

Brokerage income in the latest June year was up from $7.2 million to $11.2 million, but the bull market in capital raisings resulted in the firm's corporate fees jumping from $2.8 million to $6.9 million.

The eight-man board, headed by chairman Potts, offered little comment on the result, noting that significant events during the year included the move to new premises (part of the group's growth strategy), and "significant expansionary moves" in the development of annuity income streams.

They shared the moolah rather evenly around the boardroom table.

Chairman Potts and managing director Gray each collected $209,990 in directors' fees while the rest of the board, David O'Halloran, Richard Granger, Trevor Cain, Rex Adams and Angus Aitken collected about $208,000 each. Charles Aitken was paid $258,575.

All up, they collected about $2.1 million, up from $942,966 previously - and the money flow did not stop there.

The dividend for the year was up from $1.49 million to $5 million and a further $1.5 million was paid last August.

A lovely year indeed.

Big earnings jump makes for a good night's dreaming

ALAN Stockdale went to bed last night $140,000 better off than he was at the beginning of the working day.

That addition to his wealth was thanks to a gain in the share price of the company he chairs, Symex Holdings, the soap and tallow products group.

Stockdale was the chairman when Symex went public in 2000 and as befits a former state treasurer he was issued with 2 million options, exercisable at 50 ? apiece.

At last count, he had 2 million shares and 500,000 options and it's on those shares that yesterday's 7 ? a share improvement came in handy.

Symex scrip increased by that amount thanks to the group's interim result, which boasted a 40 per cent jump in pretax earnings on sales that were up by 25 per cent.

After declaring it to be an excellent result, managing director Michael Newton went on to forecast tax-paid full-year earnings of between $11.5 million and $12.5 million - a gain of anywhere between 28 per cent to 39 per cent.

That was the sort of result that the market was looking for after the disappointing experiences the company encountered after a booming start as a listed company.

After issuing stock at 50 ? in the float, the scrip soared to $2.14 but for much of 2002 and 2003 the stock was in the doldrums.

Stockdale and Newton watched theirs fall to 68 ?.

But the purchase of the Pental soap business in calendar 2003 helped Symex turn the corner and yesterday Newton stated that the Pental business had performed well, had exceeded his expectations and was continuing to increase its share of the local soap market.

"As the only Australian manufacturer of bar soap products, Pental is in a strong position and we except to see continued expansion of the private label and contract manufacturing business," he reported.

"The directors expect a strengthening in margins, consolidation and extension of the recently acquired Unilever brands into the Pental business and continued increases in the oleo products manufacturing capability at the Port Melbourne facility."

Noting "some uncertainties around the key elements of the trading environment", he said Symex would continue to expand its Pental business by more takeovers.

Good news indeed for everyone, including Stockers, while not forgetting Newton, a big shareholder, who is now being rewarded for getting the show back on the road.

© 2005 The Age

Back to News Index | Back to Home