Brierley's Boom

With prices rising by leaps and bounds and the economic crisis steadily getting worse, the Government is now trying a relatively new tack in combatting opposition from those who are being hit. Labour Minister Jim Bolger has made several statements recently implying that real wages are rising and therefore the working class is actually profitting from the crisis. Last Thursday's Evening Post told a different story about who the real victors are.

In an article on the financial page, it was revealed that Brierley Investments Ltd expect to net an extra million dollars profits for the year to June 30, 1979. Brierley's is one of the biggest and most successful corporate raiders on either side of the Tasman. Its business is speculation in business. In times of falling profits and bankruptcy threats to small businesses, Brierley's and its ilk get all their Christmases at once.

An example of how the company works is provided by its recent takeover of Beath's, a major Christchurch retail firm similar to James Smiths. Beath's profits were low (which meant the shares weren't paying well) but its assets were high! Brierley made the shareholders an offer they couldn't refuse, then sold the lot to the DIC, the chief competitor which just happened to live next door. DIC were happy but not as happy as Brierley's. Its net profit was a cool $2,000,000.

Brierleys expected profit for this financial year is based on figures revealed in its six monthly report to the Stock Exchange. The report states: "The net profit of $1,380,000 is 52% higher than for the corresponding period for the previous year. This is mainly due to better trading results in New Zealand, an increased contribution from Industrial Equity Ltd and an absence of the loss factors which affected the 1977-8 figures."

"Better trading results in New Zealand" refers to the type of vulture activity described above. Industrial Equity is busy in Australia heavying the breweries and property fields. Commercial property, not surprisingly, figures highly in the Brierley camp: Fifty two percent. As we all tighten our belts, it might be worth considering whether the Brierleys boys have enough notches in thiers to let them out by so much.

Simon Wilson