Contact Energy Ltd

Cry me a river of tears

A Black Power chapter has been left powerless and homeless after police confiscated the gang’s pad and its president was jailed.

Black Power New Zealand president Mark Pitman was sentenced to three-and-a-half years in prison in September last year for being the mastermind behind what the Crown said was a million dollar-plus a year cannabis-selling operation.

Pitman is believed to have finally given up his battle to keep the gang’s Mount Wellington, Auckland, headquarters after fighting police through the courts for more than three years.

The 47-year-old who had amassed a property portfolio of almost $1 million before his arrest was to appeal the forfeiture of the two-storey Jolson Rd property which is painted in the gang’s dark-blue colours but last month withdrew his attempt.

In her Proceeds of Crime decision released late last year, Manukau District Court judge Anna Johns also ordered Pitman to pay a “pecuniary penalty” of $60,000 and a former partner of his whose name is suppressed was ordered pay the Crown $47,520.

The seizure of the gang pad under the Proceeds of Crime Act was one of only a handful of successful confiscations of gang headquarters in New Zealand history.

Boo-fucking-hoo…..This is what I call a good start. Now the Police should get cracking on the next lot of oxygen thieves.

MacDoctor on Three Strikes

The eminently sensible MacDoctor gives the Ginga Espiner a good fisking for his silly, shrill post about the pending Three Strikes legislation. Legislation I might add that I am yet to find a person opposed to.

I really, really struggle with people who loudly claim that three time rapists have human rights….really struggle….yet there are people out there who think these c**ts can be rehabilitated.

MacDoctor refutes Espiner’s silly contentions well but in particular the tired old ‘facts’ that keep getting spouted.

Espiner brings out the tired old factoids.

  1. Longer incarceration makes no difference to the crime rate. This is only partly true, it makes little difference to the overall crime rate but drops the serious crime rate over time. Most studies use five and ten year time frames, but the likelihood is this will take 15 or more years to make an appreciable difference. It is usually years between each serious offense. It takes time to catch and convict criminals. All of this adds to the lag time between enforcement and decreased crime.
  2. The cost will be astronomical. The cost of $5 billion has been mooted. The assumptions behind this figure are highly questionable, including that crime rates will go up rather than down, that costs of incarceration will not be contained and that most serious offender will wind up as third strikers.
  3. It’s unfair. Only if you adopt California’s rather senseless three strikes law which does not distinguish between strike and triggering strike offenses (and also has far too many things that are counted as strike offenses)
  4. We don’t have enough jails to house them all in. Like that is such a good argument for allowing dangerous recidivists to wander around maiming and killing. </sarcasm>
  5. The way we treat our fellow human beings is how we are judged as a society. A lesson sorely missed by the criminals we are talking about. The fact that we wish to restrain these predators rather than simply kill them, makes us a more humane society than 90% of the rest of the planet.

I am not in favour of simply increasing all sentencing, but increasing the sentences of people who are dangerous and un-rehabilitatable makes good sense to me. It will make New Zealand society a safer place to live. Even for sheep.

The simple real fact for me is this. The current systems aren’t exactly doing a bang up job for society tright now are they…no…so lets try this.

Take the axe to the waste now!

Masakari (n) an ancient Japanese battle-axe, used by the Yamabushi warrior monks, with a blade made of heavy metal with a spike opposite attached to the wooden haft through a socket.

Once again as a faithful provider of a public service I crawled from my bed and visited the local stationer so that I could get Matthew Hooton’s NBR column and provide some insights for my dear readers. My fingers weary from the re-typing but my readers must have the insights.

Today’s column is short and sweet. Matthew Hooton implores Bill English to become a Yamabushi warrior and attack wasteful spending with a Masakari and to do it now.

There is talk about razor gangs but razors are by necessity delicate and precise. In many areas of public spending such delicacy is unwarranted when in fact the Masakari would be far more effective.

No-one wants to cut nurses and doctors wages, that is not the sort of cutting that I am talking about and nor is Hooton. He is talking about wanton and profligate spending where bureaucracy is not just doubled up, or even tripled up but more than 7 times repeated;

Tourism New Zealand (TNZ) is the government agency that promotes New Zealand globally. Compared with its competitors in Australia and elsewhere, it operates on a lean budget of just $69 million annually.

Bill English ready for workIn the ten years since then Tourism Minister Lockwood Smith, TNZ chairman Peter Allport and chief executive George Hickton launched their “100% Pure” marketing strategy, annual tourist numbers have leapt 52% to 2.4 million, average length of stay is up 24% and earnings are now $5.9 billion, up a massive 53%.

Taxpayers might think that a junior Treasury analyst could work out that TNZ does a good job, and that a clerk at the Office of the Auditor General could check no one’s hand was in the till, but you would be wrong.

In fact, TNZ is monitored and evaluated by its board, its auditors and minister; by the Treasury, the State Services Commission and the Auditor-General; by the ministries of Women’s Affairs, Maori Development (TPK), Pacific Island Affairs and Ethnic Affairs; by a select committee of Parliament; and of course by the industry itself, including the Tourism Industry Association, the airlines, the Inbound Tour Operators Council, the Hospitality Association, the Motel Association, Regional Tourism Organisations and by dozens of tourism reporters and publications around the country.

This bureaucracy was not enough for Labour. In 2002, it set up a new Ministry of Tourism to advise the minister on “board appointments, roles and functions” and oversee TNZ’s “overall contribution to the government’s policy objectives.” The ministry has 24 full-time staff and an annual budget of $7 million, more than 10% of all the money TNZ has to do the real work of getting tourists to New Zealand.

As a result, the levels of accountability from the person who places advertisements in the People’s Daily now run through TNZ’s Shanghai office, to the general manager consumer marketing, to the chief executive, to the board, and now to the ministry, and on to the minister, currently none other than the prime minister himself – all overseen by at least seven other government agencies. Everyone in this process, except perhaps the person who places the ads, earns over $100,000 a year.

Were the Ministry of Tourism simply abolished, and TNZ left to get on with the job, overseen by “just” seven other government agencies, the taxpayer would save $21 million over the next three years, and no one would notice any difference.

The Ministry of Tourism is far from being the worst case. Take the masakari to the corporate welfare programmes of the Ministry for Economic Development and NZ Trade and Enterprise; abolish the pointless Tertiary Education, Families and Electricity commissions; simplify the Emissions Trading Scheme so it won’t cost tens of millions to administer; slash the “policy advice streams” of TPK, Youth Development, Women’s Affairs and so forth, and you’ve saved a billion dollars before breakfast.

Not a single doctor, nurse, teacher, police officer, solider or overseas marketing clerk would be affected. There could even be money left over for pay rises.

The challenge is there Bill, dress for the work required as a Yamabushi warrior-monk and wield the Masakari and do it now.

 

The Big Money in Elections is…..

The unions…..of course. In fact the only money spent on the Right was by David, Bernard and me under our Free Speech Coalition hat.  in fact we were outspent by the unions by almost $8 for every one of ours.

The Electoral Commission has published the details of spending by registered third parties in 2009. From largest to smallest they are:

  1. CTU $104,110
  2. PSA $71,304
  3. Free Speech Coalition $29,491
  4. Dairy Workers Union $16,740
  5. NZ Meat Workers Union $8,571
  6. EPMU $5,690
  7. Maritime Union $3,282
  8. Vote for the Environment $1,296
  9. NUPE $1,285
  10. Health Cuts Hurt $293

The Dairy Workers Union must be the dumbest idiots on the block not only did they list the donations they made – $10,000 to CTU, $12,000 to Labour and $3,000 to the Greens the funny thing they did was give to the Greens the very party that wants to gut Dairy and would put all the Dairy Workers Union members out of a job.

The most bizarre spending after that was the $20k for Youtube ads by the CTU!!!!

David will attest to the fact that my Two Helens ad was whipped up on the coffee table in a motel in Taupo in about two hours and the voice was recorded in Tauranga. The whole ad cost us nothing but time and pretty much stopped Labour’s Two Johns ad overnight.

Ditto the three Downfall videos I made. The scripts were mailed to be by Batman, I borrowed Downfall off a fan in Hastings and cut the videos in about 20 muntes per one. Vodafone provided the upload bandwidth on the move.

Someone sure as hell needs to be be paying me $20k for all those video considering the hurt that they put on Labour and Winston.

Still, I am quite proud of our ramshackle PR fiasco….our little $29k went a very long way in terms of smacking around the government, far further than the big money in politics that the Unions provided on behalf of the Labour party.

More on Kordia

Kordia have released the 1st Half 2006 report and boy hasn’t it caused a real stink. Now NBR is in on the  act.

I have taken the time to a bit more research and analysis for you;

“The transformation of the business to a diversified telecommunications company is progressing to plan.”

So they’ve spent close to $200m transforming the business and EBITDA has fallen from $51m in FY07 to $33m over the last 12 months and a broadly similar result for the full year and that’s the plan! One can of course understand the $200m not making a full contribution but going backwards at such a rate of knots!!!

In fact it gets worse;

“It is forecast that by the end of FY09, the total investment in new platforms, new businesses and internal systems for a diversified modern telecommunications business will be $200m (including the two new digital broadcast platforms). Internally-generated cash flows have funded 80 per cent of this investment and bank debt, the balance

Whilst there has been a short-term reduction in profit during the major investment period as the company was transitioned…”

To get to the $200m one has to work backwards to the end of FY03 i.e. the 6 years FY04 – FY09 will have cumulative capex and acquisitions of subsidiaries of a touch over $200m. So in FY04 the business made $19.5m pre-tax and EBITDA of $44.7m which isn’t a million miles away from what their SOCI has them doing for FY10 (EBITDA $59m and NPAT $12m). 6 years and $200m to stand still!!

“As at 31 December 2008, the Group was in breach of its net debt/EBITDA ratio (a rolling twelve month calculation). The reason for the breach of this covenant is that the interim period ended 31 December 2007 included two amounts of income pertaining to the termination of contracts which would have ordinarily been earned in subsequent months. As at 31 December 2008, this income was no longer included in the 12 month rolling calculation of EBITDA and the subsequent periods where it would have ordinarily been spread showed reduced results.”

 In fact the reason for the breach is that earnings have fallen!

“The Bank of New Zealand (BNZ) provided a waiver prior to 31 December, satisfying the appropriate accounting standards, however as the BNZ facility expires on 31 March, it is treated as current. The Australia New Zealand Banking Group (ANZ) did not provide a waiver, but advised prior to 31 December that it would not take any action under the breach, although it reserved the right to do so. ANZ further advised it had no objection to Kordia Group Ltd treating the loans as a long term facility in its interim accounts. The Directors’ view is that in the absence of a specific waiver the ANZ’s facility should be treated as current. The Commonwealth Bank of Australia (CBA) provided a waiver prior to 31 December with the exception of the potential event of default forecast to occur in April 2009. In the absence of a specific waiver from the CBA with respect to the forecast April breach, the Directors’ view is that the CBA facility should be treated as current.”

Dead CrowSo they’re in breach (hey it’s happening to a lot of other people as well) but there’s another expected breach in April. They’ve got sufficient headroom on all of their covenants but Net Debt / EBITDA (at Dec ’08 was 3.58x vs. covenanted 3.5x) so they’re clearly not picking EBITDA to pick up immediately.

Maybe they should actually cut their shirt to the size of the cloth i.e. 2H09 cashflow is still expected (or at least budgeted it’s not 100% clear) to be negative ($11.2m in 1H09 and FY09 budget -$15.6m).

Come to think of it given that 1H09 EBITDA was broadly in line (only marginally down) on 2H08 why wasn’t this breach anticipated earlier and corrective action taken earlier?

In fact they write “When the results are normalised for last year’s one-off items, the first half FY09 EBIT result is similar to last year” so what this implies is that they’d have been very close to breach historically if they hadn’t been saved by some one-off items or put another way on a normalised basis they’ve been in breach for a lot longer than they say.

On the subject of Mark to Market of SWAPs. They’re entirely within the rules with what they’re doing but they’ve elected to use Hedge Accounting which means that the M2M swings on derivatives (i.e. interest rate hedges) don’t go through the P&L rather they just go through equity. Anyone can do that if they document all the reasons for the hedge and then monitor its effectiveness etc. so it’s just a bit of paperwork really. When I looked at it originally PWC said their clients were split about 50:50 so, as I said, they’re not out of the ordinary at all but if they had adopted the policy that a large number of listed companies have NPAT would have been worse by another $4.67m for a total loss of $9.07m. You watch them change their policy when interest rates rise and their swaps move into the money!

About the only area they’re ahead of budget is their monopoly Kordia Networks business – should they be entering competitive markets when their track record is so poor?

Contracting “while revenue is has tracked close to budget, its EBIT performance is below budget due to provisioning for local taxes for an offshore project.”

So, there are two possible interpretations:

1. Tax is impacting EBIT- Duh! what does the T stand for?
2. They quoted on a project and didn’t realise they’d have to pay local tax – no wonder they got the job!

Also on Contracting “further downsizing is anticipated”. That’s fine but then go to the end “The 2H performance may be stronger than the first half….However, if continued adjustments to the NZ-based contracting business are required this will result in further unbudgeted redundancy costs and this will impact on NPAT” Sounds like 2H will definitely be worse!

Contracting did have problems last year as well – in fact they blamed a poor FY08 partly on “Redundancy costs in the Contracting and Consulting business totalled $2.6m for the year.” So why were the costs unbudgeted?

If any readers have further information about Kordia then feel free to contact me on the WOBH tiplines.

Red Ink flows from Kordia

Dead CrowI have more than a passing interest in Kordia and have been keeping a watching brief on this SOE so I have just had a good look at Kordia’s latest actual accounts. They are unaudited interim accounts to 31 December 2008 …therefore full of explanatory bluster and have been released without much of a public relations “to do”.  In other words Kordia hopes and prays no one bothers to look at them.  To date they have been successful with this objective. Kordia have made a first half loss greater than they forecast. So they lost more money than they thought they would lose in the first place. Here are my lowlights of reading their accounts.

1. Arguably Kordia is currently insolvent three times over. Current assets of $53 million vs. current liabilities of $169 million. The burning question is whether Kordia can “pay its debts as they become due in the normal course of business”. If not then the company and the board are in breach of the Companies Act.  The defining point is that of how contingent are these contingent liabilities  The use of a “negative pledge” makes the solvency of Kordia more questionable as I will explain below.

Central to the solvency issue are loans of $150 million under covenants from three banks that Kordia are currently breaching. The BNZ facility expires 31 March 2009, worse ANZ reserves the right currently to call in breach. Commonwealth Bank’s facility is up in April 2009.  All have promised to play nicely.  Well, according to the interim report.

I say “arguably” Kordia is insolvent as its an SOE isn’t it?….only an SOE could have a balance sheet like this and alarm bells not start ringing with Shareholders because the Shareholder is the nicest Shareholder of them all – the Crown and a previous weak Minister under Labour.

The entire commentary from Kordia  is explaining why this massive gearing and breach of banking covenants isn’t that bad.  It reads like a child trying to get out of being grounded by their parents.

2. Kordia bought Orcon for $24,750,000 of which the net identifiable assets were just $64,000. The remaining purchase price was a whopping $24,513,000 of goodwill and a client list. Seeby Woodhouse must have felt like the Toll Directors when Michael Cullen came calling, little wonder he throws parties for New Zealand’s Next Top models in his home and appears weekly drinking and cavorting in social pages.  He’s still celebrating and full of goodwill. The Kordia Directors must have a crystal ball that no one else can gaze into or they are dimmest fools in the world because Orcon made a net loss of $3,578,000 to the Group to 30 June 08. 

3. There are 3 identifiable divisions to the Kordia Group – Kordia Networks, Kordia Solutions and Orcon. You would hope they’d be forced to break it up and flog it off. But it won’t be that easy.

4. The financing described above is done by negative pledge.  This means that there is a clause in the contract meaning none of the assets listed can be used again to borrow against.  In other words, Kordia Group currently has no more access to a financing facility than it currently has without the three banks lifting the negative pledge  as there are no assets it can loan against. The Group loans have been made in a way that means the finances of all the subsidiaries and divisions guarantees the debt of the other.  Therefore the more profitable companies in the group owned by the Crown are cross-subsidising through guarantees those that are in financial difficulty or looking to throw money at to expansion plans. Which hardly makes for a competitive environment when the Crown is competing against privately and publicly owned companies in New Zealand in these distinct areas of provision of services.

The notes state that assets can only be disposed of if within limits and ordinary course of business.

Again, the three banks (ANZ, BNZ and CAB) currently have a greater say in the running of Kordia than the Directors of the company do.  Perhaps they should be the one’s meeting Simon Power.

On pg 17 of the notes it is reported that the negative pledge is an “insurance contract”. I call it a large barrier to splitting the SOE into three salaeable pieces as you would have to unravel the $150 million of bank debt currently intertwining the operation.

On top of all this red ink is the mis-investment in terrestrial trunk radio through their subsidiary KorKor. Despite the bluster about diversifying away from broadcast technologies they then went and set up yet another broadcast radio business based on proprietary gear.

So all and all Simon Power and Bill English should have a good meeting with Kordia checking on the progress of this SOE and a please explain just what the objectives and short to medium term future of this experimental corporate of Dr (but can’t write a script) Michael Cullen actually is.

Shabby Reporting of important milestone

After reading the story about Paula Bennett’s “gang connections” I read this crap in the increasingly hopeless Herald on Sunday.

Has this paper become the dumping ground for the inept and the indolent of APN?

What a sad and miserable person Nicola Shepheard must be.

Every weekend there are queues at this junction, and on holiday weekends it is not unknown for them to be almost back at the BP service centre in the south.

This is what the fantastic new toll road has been built to fix. It has also been built to avoid sending heavey transport vehicles through quiet and somnolent Orewa. It is a great achievement, built by a very competant and capable construction team and the locals at Orewa will have peace at alst, except from cheapskates who want to save $2.00 but will spend that and more in fuel trying it on.

The misearable Herald reporter reports on the long and frequent queues as if it was something new (which it probably was to her), and caused solely by the Opening Ceremony. Us regular travellers have had to endure it for years and years.

Why does her report need to be so negative? Does she think that eating a few sandwiches, and thanking the builders, residents, 3rd parties and politicians is a bad thing.

(No mention of caviar……I have it on good authority that the food consisted of sandwiches and cold water, while the buses were provided by the local bus company as part of their appreciation)

For gods sake the thing was finished well ahead of schedule and ahead of budget. Bloody Good Job, Well Done!!!!!! Pats on backs all round are well deserved (unless you are a Herald reporter, and envious of success and competence)

Surely that can be celebrated, without some negative journalist using a poison pen. Why not emphasise the positive, and tell what a well run project it was?

One can only hope that the Herald realise the importance of these projects, and support them instead of printing negative crap.

Someone really needs to put this prick in jail

Doug Somer-Edgar has the Reverse Midas Touch, but usually only when he touches someone elses money. Just about everything he or his associated companies has touched has turned to shit.

Clients of financial adviser Money Managers, who were advised to put their money into the First Step investment trusts, have been told by the trustee they lost $59.7 million in 2008.

Much of the “non-recoverable investment losses” comes from losses on loans the trusts made to Club Finance, a South Auckland vehicle finance company which was 50 percent owned by Doug Somers-Edgar, the founder of Money Managers.

It is about time that he had “I am a Crook” tattoo’d in large black letters across his forehead.

Still I guess the old adage of fools and their money being easily parted is still true today especially when it is Doug Somers-Edgar parting the fols with their cash.

Industry fury at Govt for cancelling conferences

Industry fury at Govt for cancelling conferencesThe conference industry has lashed out at the National Government for the cancellation of two conferences since the election, saying it should support the $1 billion industry and not be trying to destroy it. The latest cancellation… [NZ Herald Politics]

Oh Boo-fucking-hoo, any business that exists solely on the basis of the government spending money is no business at all.

The gravy train has to end.

Job well done; here's a billion for your troubles – Saudis

Make no mistake where Hamas gets their funding from. From jihadist regimes like the Iranians and from the Saudis. Faced with falling oil prices Iran needed some conflict in the Middle East and Hamas the ever loyal servants of their main arms suppliers dutifully obliged.

For their part the Saudis have chipped in a cool billy to help with “reconstruction and rehabilitation in Gaza”. The chances of Hamas reconstructing anything in Gaza witht he billion dollars is remote, more likely the money is fulfilling the Saudis own duty towards the jihad — jihad al-mal, the “money-jihad,” which Bin Laden recently reminded Muslims of.

We should also remember that the Saudi King says;

“One drop of Palestinian blood” is more valuable than all the money in the world…

Given the fact they have chucked a billion at the jihadist regmie run by Hamas for about 1500 killed you’d have to say that the Saudi King lied and he rates Palestinian blood at about $666,666 a body. (ironic number that, isn’t it?)