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Utilico emerges as 13.6% holder of Smiths City as NBR Rich Lister Holdworth sells out

Utilico Investments, a UK investor managed by Infratil director Duncan Saville, has emerged with a 13.6 percent stake Smiths City Group [NZX: SCY] after former Datacom chairman and NBR Rich Lister John Holdsworth sold his shares in the Christchurch-based retailer.

Utilico holds 7.1 million shares in Smiths City, according to a statement to the NZX. A separate notice says Holdsworth ceased to be a substantial holder, having sold about 2.7 million shares, or 5.1 percent of the company.

Trading in the retailer's shares show some 4.5 million changed hands yesterday at 51 cents apiece. The stock has fallen about 17 percent in the past 12 months, while the NZX 50 Index gained 16 percent. Smiths City was last at 54 cents.

Smiths City last week reported a 24 percent decline in annual profit, citing weaker sales of appliances, which offset better returns from furnishings, finance and property.

In December Utilico reduced its holding in Infratil to 11.8 percent from 13.3 percent and it now accounts for about 15 percent of Utilico's gross assets, as the second largest holding after Utilico Emerging Markets. Among its top 10 investments after financial services and investment companies, the Vix Group automated fare collection firm, wind power, waste treatment and oil services businesses.

Utilico, an exempted closed-end Bermuda incorporated investment company, is managed by ICM Limited, of which Saville is listed as one of two directors, according to its website.


Comments and questions

Well now we know who, but the $64,000 question is why? Do they plan to take the company private at some stage? Are they activist investors who see opportunities to "drive long-term growth and enhance shareholder value with the company's management and its board"? Do they see pockets of value there that can be realised? One thing is for certain, the company appears to be one of the few company's currently listed on the NZX that is a pure Grahamian value play.

Trading well below intrinsic value, I have been purchasing over the past week also and if I had the money I would buy the whole thing. Great profits to come with the changes in how the customer finance book is managed.

I assume you mean they are trading below your view of 'intrinsic value'? Equally, one could argue they are continuing to suffer from intense competition and may continue on this downward spiral like every other nz listed retailer except briscoes.