Buoyant Days And Life's A Beach For Baillieu Chiefs

The Sunday Age

Sunday December 2, 2007

Christopher Webb

THE owners of E.L. & C. Baillieu Stockbroking have been swimming in cash following record bull-market profits. A bit more than $7 million has been paid out in dividends over the past year or so and directors said that continued global economic growth, coupled with buoyant sharemarket conditions, contributed to the firm's strong profit growth during the year.

Pre-tax earnings jumped 17% to $5 million in the June year, on sales that improved 26% to $31 million.

Baillieu is a firm that believes in having all and sundry on the board; no fewer than 24 directors held office during the year.

Sharing in the booty were such folk as Ronald Hay, gun analyst Ivor Ries, Richard "Dickie" Morrow, and let's not forget veteran broker Georgie Varlamos.

The accounts revealed that money, and that's not including dividends, flowing the way of company heavies increased from $6.1 million to $8.5 million. A lovely year indeed.

Meanwhile, nice to see directors having a bit of a dabble on the market; the value of transactions executed on their own personal accounts was up from $61 million to $70 million.

Credit Suisse, in a move to strengthen its distribution capabilities, bought 25% of Baillieu - which provides advice on funds of more than $4 billion - during the year.

Tribunal thunder

THE ASX disciplinary tribunal has been handing out some hefty fines. The other day it was UBS that was fined 40 grand, now CommSec Trading has copped an identical fine. CommSec established a computerised order-record system account to act as a secondary market-making account for its parent company and only client, Commonwealth Bank.

CommSec contravened the rules in letting non-designated trading representatives submit 49 trading messages into a derivatives trading facility, and also failed to maintain records in sufficient detail to show particulars of 6035 orders.

The tribunal thundered that maintaining accurate records served an important role, not only in protecting a participant in the event of a dispute, but also as part of the exchange's regulatory function.

CommSec identified and reported the matter to the ASX and co-operated in the investigation and resolution.

A lonely affair

THEY gave an annual meeting and no one came.

Well, almost no one. One shareholder did turn up at Astro Diamond Mines' annual get-together, but a quiet affair it was.

Astro, now greatly diminished, was the one-time high-flyer associated with Joseph Gutnick. But the great man was not at the meeting, neither was his son, Mordechai. Both called it a day late last month, with their resignations announced in one sentence at the bottom of an announcement unveiling two new directors. New chairman and shareholder Peter Jermyn ran the annual meeting and sitting alongside him was the other new director, Robin Armstrong, chief of Findlay Securities' corporate department. David Tyrwhitt remains on the board but was a no-show at the meeting. Jermyn told the meeting that the Gutnicks had resigned, thanked Gutnick senior for his efforts and noted that Gutnick junior was pursuing business opportunities in the US.

Jermyn told the meeting that: "The board is particularly excited by the Ellendale diamond project, which is one that was acquired by the company approximately two years ago. There's been a fair degree of work done on that project and a geophysical program is about to be completed.

"It's our view that the company must move to production or near-production opportunities within the diamond arena. I think it's fair to say that the company will keep an open mind on, not just being singularly diamond-focused, but looking at other opportunities within the resources arena."

Jermyn said he had a good relationship with Joseph Gutnick.

"Mr Gutnick is still a shareholder and we had a lengthy meeting not very long ago and pledged to work together for the betterment of the company. The relationship is good."The reporter has an interest in Astro options.

Going public

SAUNDERS International joins public lists on Wednesday and the shares appear likely to sell at a premium. The group specialises in the design, construction and maintenance of steel bulk liquid storage tanks and services various blue-chip clients from the oil, gas and mining industries to water authorities. Raising $12 million, the share register revealed that a clutch of small-cap folk got shares, including SG Hiscock Micro Cap Trust, Geoffrey James Wilson's WAM Capital and Queensland Investment Corporation.

© 2007 The Sunday Age

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