ASIC asks Federal Court to sack Walton Construction liquidator

Friday, 15. February 2019

The corporate regulator has asked a court to kick veteran insolvency practitioner Stirling Horne out of his role as liquidator of collapsed builder Walton Construction after accusing him of failing to disclose a perceived conflict of interest.

Mr Horne and his colleagues, Glenn Franklin and Jason Stone, breached a section of the Corporations Act that can attract criminal prosecution, the Australian Securities and Investments Commission alleges in an application filed with the Federal Court.

At an urgent hearing on Monday afternoon, the court heard the alleged conflict of interest related to assets sales agreements entered into by Walton before its collapse.

”ASIC’s attitude is that the liquidators ought to resign, which it has offered to facilitate,” counsel for ASIC, Oren Bigos, told the court.

The collapse of Walton Construction, which built supermarkets, apartments and car parks across Australia’s east coast, enraged subcontractors who were owed about $50 million.

Owner Craig Walton put the company and its Queensland arm, Walton Construction (QLD) into administration on October 3, shortly after a restructure in which profitable projects were moved into a new company, Peloton Builders.

The restructure was overseen by Pat McCurry from Melbourne-based restructuring group Mawson, which referred the insolvency job to Mr Horne, Mr Franklin and Mr Stone at Lawler Draper Dillion.

Just three weeks before the group went into administration, a company associated with Mawson bought an $18.9 million debt Walton Construction owed to its Queensland arm for just $30,000.

At a creditors meeting on October 15, the debt was voted to stop Lawler Draper Dillon being replaced.

ASIC said the liquidators would be required to investigate the Mawson transactions. ”ASIC believes that those transactions and the referral relationship were not sufficiently disclosed to creditors at the appropriate time,” the regulator said in a statement.

The legal move came as disgruntled creditors and subcontractors were preparing their own push to remove the liquidator.

Fairfax Media understands that Lawler Draper Dillon was going to be approached about voluntarily stepping aside early in the new year. The proposal could still be made since the ASIC matter is not due to be heard until January.

Industry sources say creditors are concerned about which liquidator would be nominated to replace Lawler Draper Dillon if ASIC’s bid is successful.

”Generally, it would be another blue-ribbon firm, but there’s a concern that they’re very friendly with the banks and the banks’ hands haven’t been clean in this,” the source said.

The Subcontractors Alliance, a group formed out of the collapse of Walton Construction, said it was essential that a comprehensive investigation be conducted.

”We are happy to go anywhere to get our money. But we need answers, whether that comes from a new liquidator or the ones already there,” said spokesman Les Williams.

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Sydney weather: rain expected for Christmas Day and Boxing Day

Friday, 15. February 2019

Two-year-old Ruby Tyrrell, of Five Dock, cools off at Newington Armory near Sydney Olympic Park on Saturday. Photo: Anthony Johnson Swimmers take a rough dip at The Bogey Hole in Newcastle on Sunday. Photo: Simone De Peak

Revellers who are planning to hit the beach or the backyard cricket pitch on Christmas Day have been urged to start the action early.

A burst of showers could hit Sydney from the early afternoon, starting in the west from about 1pm and the city from 3pm.

Weatherzone meteorologist Josh Fisher said a top of 25 degrees was forecast for Sydney on Christmas Day, which would dawn with mostly dry conditions.

“We’re actually looking at mostly dry and partly cloudy skies for the morning and into the afternoon. But there’s a chance we could see a few showers developing later into the afternoon and evening,” he said.

“The advice is to go and have your BBQs and head to the beach earlier in the day.”

Isolated showers are forecast across the north of NSW on Christmas Day, tending scattered in parts of the north-east, while it will be partly cloudy across the south of the state.

South-east to north-easterly winds are forecast near the coast, tending light and variable inland.

Mr Fisher said more rain was forecast for the start of the Sydney to Hobart Yacht Race on Boxing Day, when the weather is expected to reach a maximum of 27 degrees in Sydney.

“For the start of the race, our weather models are actually pretty divergent for Boxing Day onwards. They both do still show that Sydney will see scattered showers on Boxing Day. The conditions will be worse than what we see on Christmas Day, with more showers, potentially heavy at times, and easterly winds,” he said.

“As they make their way further down the coast it looks like that system … will move further off the coast, so they could just see the odd brief shower on the 27th of December as they make their way down. Winds will be turning more to the east, north-east direction which should help and provide faster conditions.”

A top of 29 degrees and mostly dry conditions are forecast for the start of the Boxing Day Test in Melbourne, Mr Fisher said.

“There is the chance of a brief shower during the afternoon, but nothing to stop game play for very long, if anything at all. It will be very isolated and brief,” he said.

Weatherzone is owned by Fairfax Media, publisher of this website.

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Goodman Fielder sells biscuit business at loss to Green’s Foods

Friday, 15. February 2019

Just baked: Green’s Foods paid $17 million for the business. Photo: Ken IrwinFood group Goodman Fielder is selling its biscuits business at a loss of up to $55 million as part of its push to offload non-core assets.

The trans-Tasman company said on Monday it had sold its biscuit division, which includes the brands Paradise, Cottage, Vive and Veri Deli, to Green’s Foods for $17 million.

Goodman Fielder chief executive Chris Delaney said the sale would result in the company posting a non-cash impairment of between $50 million and $55 million in its half-year accounts.

But Mr Delaney was adamant the company would be better off in the long term.

”It allows us to concentrate our internal resources and investment on our core brands within the grocery division where we have profitable, category leadership positions,” he said.

”The biscuits business is not core to our grocery division, and we formed the view that this business can maximise its potential under different ownership.”

Goodman also produces bread, spreads, flour and dressings, with brands including Helgas, MeadowLea, White Wings and Praise.

Revenue from Goodman’s grocery division, which includes its biscuit business, dropped 7 per cent to $540.6 million in 2012-13.

It has been under pressure in recent years, particularly as a savage price war between Coles and Woolworths continues to rage.

Mr Delaney said when releasing the company’s annual report in October that retail trading conditions ”remained difficult”.

”Subdued consumer sentiment and increased competition from proprietary brands and private label … continued to put pressure on volumes and price.

”[But] despite lower revenue, gross margin as a percentage of sales improved on the previous year from a continued focus on cost discipline across the business.”

The sale of the biscuits business is part of Goodman’s asset review, which began when Mr Delaney started his tenure two years ago.

A Goodman spokesman said that when Project Renaissance began the company was ”spread too thin”, having more than 93 brands.

But he said the strategy was making inroads and was on track to deliver $100 million in annualised cost savings by 2015, having already achieved $65 million in savings in the past two years.

Assets it has already sold include the Integro fats and oils business, the New Zealand milling operations and dips maker Copperpot. The company is believed to be seeking buyers for its Pampas Pastry and NZ meats business.

Goodman will also pursue opportunities to sell its products outside supermarkets, such as the food service market, hotels, restaurants and cafes.

After the biscuit deal, expected to be completed by February, Green’s will emerge as the biggest Australian-owned biscuit company.

Goodman will retain its White Wings brand, which Green’s will license for two years.

Green’s executive chairman Shane Noble said the acquisition would ”secure the jobs of more than 300 employees” at Goodman’s biscuit factory in Carole Park, Brisbane.

”We are committed to delivering a strong local offer in the biscuit category, spanning branded and private-label products and we are excited by the opportunities to invest in growing this category,” Mr Noble said.

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Rise in premiums to fatten Medibank for privatisation

Friday, 15. February 2019

Australia’s largest health insurance provider, Medibank Private, is poised for a revenue boost before a potential privatisation after being given the green light to lift premiums 6.5 per cent next year.

On Monday, Health Minister Peter Dutton announced the approval of across-the-board private health insurance premium rises. All 34 health insurers had applied to increase their fees, Mr Dutton said.

Rates will increase by an average of 6.2 per cent, with the changes taking effect from April 1, 2014. The rises compare with the inflation rate, which currently sits at 2.2 per cent.

Medibank, which has been slated for sale by the Coalition government, secured a slightly bigger premium rise than many of its rivals. In November, Finance Minister Mathias Cormann appointed several advisers, including Ernst & Young, to compile a scoping study to give the government recommendations over all aspects of the proposed sale of Medibank, which is tipped to raise more than $4 billion.

Opponents of privatisation claim a sale would increase premiums, while supporters argue that the insurer has been run as a commercial business for some time. Last financial year, the insurer posted a profit of $232.7 million – almost double the $126.6 million of a year earlier.

Australia’s only listed private health insurer, nib, will lift premiums across all products by an average of 7.99 per cent. The increase is the largest across the private healthcare sector.

Chief executive Mark Fitzgibbon said the increase was necessary to keep pace with the rising cost of healthcare services, as well as nib’s contribution to the risk equalisation scheme.

”In financial year 2013, nib paid out more than $1 billion in benefits to customers, including risk equalisation. That’s an increase of more than 10 per cent on the previous year,” he said.

The risk equalisation scheme forces health insurers to contribute to a pool of money to help share the burden of more expensive customers. The scheme is designed to stop providers cherry-picking healthy customers and denying age groups that generally require more care.

For years, nib has been targeting a younger customer base, however, this means it becomes a net contributor to the risk equalisation scheme, rather than a recipient.

Without the additional cost of the risk equalisation expenses, nib’s price rise would have been closer to 6.5 per cent, Mr Fitzgibbon said.

Shares in nib jumped as much as 2.5 per cent on the premium increase, closing 6c higher at $2.50, just shy of their record high of $2.60, reached in November.

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Christmas cheer for investors as Santa rally holds

Friday, 15. February 2019

In a day of quiet trade, Australian shares have extended last week’s late rally, riding the wave of confidence spurred by the US Federal Reserve’s decision to cut stimulus.

The benchmark S&P/ASX200 rose for the fourth consecutive day, adding 35.3 points, or 0.7 per cent, to 5327.2. The broader All Ordinaries pushed 33.9 points, or 0.6 per cent, higher to 5325.4.

The local bourse has rallied 4.5 per cent in the last four trading days and is now finally up for the month of December, having lifted 7.2 points, or 0.1 per cent.

“The market has obviously reacted to the Fed last week pretty well, there’s a belief also that growth can be stronger,” Colonial First State senior analyst James White said.

“There was indication that [the Fed] is comfortable with policy remaining pretty loose for quite some time and that certainly helped markets,” he said.

Mr White said he expected the market to trade thin volumes while the majority of businesses were finished for the year.

Consumer stocks were among the best performers of the day, with discretionary and staples jumping 1.3 per cent and 0.5 per cent respectively.

Among listed retailers expected to benefit from a pickup in Christmas business, JB Hi-Fi gained 1.2 per cent to $21.38 and Harvey Norman finished up 1.6 per cent at $3.15. Supermarket giant Woolworths inched 0.3 per cent higher to $33.70, and rival Wesfarmers added 0.6 per cent to $43.79.

“There will be a lot of eyes on retailers and Christmas trade, and if it comes in at expectations,” RBS Morgans analyst James Wilson said.

Shares in Australia’s only listed health insurance provider, NIB, jumped for the second day running, rising 1.6 per cent to $2.54, after a 2.5 per cent lift on Monday.

NIB announced on Monday that it would lift premiums by 7.99 per cent after approval from the federal government.

Northern Star Resources shares continued their strong run, lifting 6.2 per cent to 77 cents, adding to the 6.6 per cent from Monday after the miner announced the purchase of the Plutonic goldmine in Western Australia for $US25 million ($27.99 million).

Among financials, Westpac gained 0.7 per cent to $32.14 and ANZ rose 0.6 per cent to $32.13. CBA and NAB both lifted 0.5 per cent to $77.16 and $34.78 respectively.

Trade is expected to remain quiet for the rest of 2013 and the first weeks of next year, with many businesses and traders enjoying a holiday break.

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