Mixed Signals In The Tussle For Ailing Aav

The Age

Friday March 4, 2005

CHRISTOPHER WEBB

IN THE ravaged share price department, an interesting little tussle of the fund managers is under way in the scrip of AAV, the event management, video duplication and outside broadcast concern.

AAV's woes have been reported here in the past, an earnings downgrade posted in the last quarter of 2004 resulted in a slashing of the share price and since then the scrip has been on the weak side.

The company weighed in just the other day with pretax earnings for calendar 2004 that were down 10 per cent, despite a 47 per cent sales gain.

The outfit was a pin-up stock for many in the small-cap community, and some of them did very nicely indeed. The scrip multiplied fivefold, until the aforementioned downgrade caught many of the professionals by surprise.

Topping $2.50 in October last year, the scrip nowadays is in the discarded stock bin, fetching $1.49.

Chairman Bob Mansfield and his board colleagues were busy over the holiday season looking new recruits up and down, with the result that Michael Gardner, a one-time Computershare operative, took the chief executive's reins in January and this week Jeffrey Krug, formerly of McCann-Erickson, was appointed as chief numbers man.

Against a background of diminished earnings and senior hirings, various fund managers have been providing useful commissions to brokers.

SG Hiscock & Co, a small-cap manager that has been on the AAV register for some time, was behind a line of 1 million shares booked on Tuesday. The sale was sufficient to erase Hiscock from AAV's substantial share register.

Elsewhere, Paradice Cooper Investors has done an about-turn and at last report was selling at $1.61, after buying previously at $1.75.

The stock has fallen further and Paradice Coopers looks to be tenaciously hanging on with its 6 per cent stake, hoping for some strength in the stock.

Luckily for the sellers, buying has emerged from some of the more staid investors around town and, without them, AAV would presumably be even lower.

The House of Sachs Were took a fancy to the stock in early January and, on behalf of its managed funds, started buying decent licks of shares at around the $1.66 mark, chasing them all the way down to $1.47.

Indeed it was Sachs that looks to have relieved SG Hiscock of 1 million shares at $1.50 on Monday.

Sachs has now shot up the register and is now the proud owner of 5.3 million shares, representing 6.4 per cent of the capital.

Elsewhere on the buying side, Westpac, in the form of BT Funds Management, has emerged as a believer and is now sitting on 4.1 million shares, or a shade more than 5 per cent.

One other player has more stock than the rest of them, and that is Perpetual Trustees.

Perpetual has been the biggest shareholder for some time, and the earnings kerfuffle and falling share price appears not to have fazed it.

The fund manager has kept buying since the initial earnings downgrade.

Its steady accumulation has followed the market, so much so that Perpetual nearly bought stock right at the year's low of $1.35, settling instead for the tiniest parcel of scrip at $1.39.

At $1.49, AAV was valued yesterday by the market at $123 million, compared with pretax earnings of $11.2 million.

Penned-in hacks far from OK, due to bunfight at PM's corral

SECURITY is generally considered a blokey profession, so it's good to see the Business Council of Australia veering from tradition in its hiring of an army of lady gatekeepers for its annual strategy meeting held in Melbourne this week.

Members of the media, who were arriving in anticipation of Prime Minister John Howard's speech, had little time to admire the lavish surrounds at the Aitken Hill conference centre in Yuroke before being pounced upon by what seemed an army of beautifully groomed conference centre staff eager to "corral" journalists and cameramen into a "waiting bay" - to use their words.

And when a pair of less punctual hacks arrived at the same time as Howard and decided they would linger in the corridor, maybe to catch a few words with some of the influential council members, one of the lasses was quick to round them up, cattle-dog style.

It's not clear, though, whether the army was deployed to protect Howard, who was probably tiring of reminding the electorate to put this week's interest rate rise into perspective, or the various council members, people such as Guy Russo of McDonald's, Qantas' Geoff Dixon and Alinta chief Bob Browning - all there hoping to hear something insightful about changes to industrial relations laws.

Business council president Hugh "Huge" Morgan might have overplayed the part of perfect host a bit - his intensive head-nodding and grinning routine throughout most of Howard's speech must have been tiring.

After it was all over, there was no time to stand idle in the hallway and reflect on the afternoon's events. The lipstick-wearing, designer-suited army of kelpies reappeared to "corral" the media to another waiting bay outside the conference centre - this time the car park.