Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Warehouse shares fall after $100 mln share sale

Warehouse worst performer on NZX 50 Index after trading resumes following share sale

By Tina Morrison

March 7 (BusinessDesk) – Warehouse Group is the worst performer on New Zealand’s benchmark NZX 50 Index today after the shares resumed trading following a discounted stock offering to raise money for the retailer’s expansion into financial services.

Shares in Warehouse dropped 3.6 percent to $3.48 after the retailer yesterday raised $100 million selling shares at a discount of $3.23 apiece. The shares closed at $3.61 on Wednesday before the company issued a trading halt ahead of the announcement of its earnings and the expansion into financial services.

New Zealand’s largest listed retailer said yesterday it plans to pay $3 million for the Diners Club New Zealand business to beef up its financial services offering, as part of a plan to get half its earnings from areas other than its core ‘Red Sheds’.

Warehouse is following retailers including Target Corp and Tesco as it aims to boost earnings from selling financial services and help the estimated 1.5 million people who come through its doors every year buy more products.

The company expects to have $600 million of receivables by the 2020 financial year, which it anticipates could add $30 million to earnings. The company currently generates about $400 million of receivables for third parties and its joint venture, from which it receives a small share of profits.

“To bring it in house and try and get a little more margin out of that seems perfectly logical,” said James Lindsay, who helps manage about $400 million in equities at Tyndall Investment Management. “It’s obviously another leg for operations, a strategic area.”


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news