Triumphs and travails: How businesses performed in 2012
Wednesday, December 19, 2012/
While GDP growth rattles along at a world-beating clip, business confidence is in the toilet. While the talk of the mining boom weighs heavily on the minds of investors, the ASX will finish the year up more than 12%.
The best thing to come from such a year is that there has been no shortage of great stories to cheer and jeer. With that, let’s hand out some awards.
Best ASX performer
While there has been plenty of doom and gloom around the market in 2012, there is actually a surprisingly strong field of candidates for the best ASX performer award.
The runner-up is Super Retail Group, which owns the Super Cheap Auto, BCF and Rebel Sports chains, and chief executive Peter Birtles. He deserves plaudits for his defying poor retail conditions and turning around the fortunes of Rebel, a company he was heavily criticised for buying last year. SRG’s shares are up 80% since the start of the year.
But the award goes to Ainsworth Game Technology, the gaming machine maker founded by 89-year-old entrepreneur Len Ainsworth. The gaming machine maker has struggled for years to crack the North American market, but Ainsworth’s perseverance has been rewarded with a firm foothold and strong profits. The stock is up a remarkable 400% since the start of the year. That means the value of Len Ainsworth’s shareholding in the company – now up to $443 million – is now greater than the value of the other pokie maker he created, Aristocrat Leisure.
Worst ASX performer
Never-ending concerns about the global sharemarket hit the mining sector hard in 2012, but the runner-up for the worst performer on the ASX was blindsided by another global force – the Indonesian government. Intrepid Mines, which has seen its shares fall 77% since the start of the year, has been struggling since Indonesia’s government stripped the company of its rights over a gold mine.
But the award must go to surfwear giant Billabong, which has seen its price fall 60% since March in what has been a series of calamities. In February, private equity firm TPG offered $3.30 for the group, but major shareholder and director Gordon Merchant knocked that back and said he wanted $4. Within four months, Billabong’s position had deteriorated to the point it had to sack its CEO, raise $225 million and totally restructure its operations. The shares fell to 96c, underlining Merchant’s complete and utter lack of feel for what the market though the group was worth. TPG eventually lobbed another bid of $1.45 a share, which it then abandoned. Another private equity firm, Bain Capital, made a takeover bid and abandoned this after a matter of weeks. A Billabong executive, Paul Naude, then made a bid. CEO Launa Inman has been left with a basket case that will be extraordinarily difficult to turn around.
Nine Entertainment boss David Gyngell takes the runner-up spot for orchestrating to snatch victory from the jaws of defeat by getting Nine’s hedge fund creditors to agree to swap their debt for equity, and keep the company out of receivership. It went down to the wire, but Gyngell held his nerve and got the deal done.