SI-based listed companies shed $1 billion in value

South Island publicly listed companies lost more than $1 billion in value last year as a turbulent second half of the year eroded capital gains enjoyed in the first six months.

The Deloitte South Island Index, which monitored the movement in the market capitalisation of 32 publicly-listed South Island-based companies, dropped 27% for the year to March 31 to $2.8 billion, having lifted 12.2% from April to August.

In comparison, the New Zealand Stock Exchange NZX 50 index fell 25.4% for the year and Australia's All Ordinaries dropped 34.7%.

A corporate finance lawyer with Deloitte in Christchurch, Paul Munro, said a year ago PGG Wrightson (PGG-W) threatened to overtake Ryman Healthcare as the largest South Island publicly listed company.

Despite shedding $150 million in market capitalisation, Ryman retained that position and ended the year double the size of PGG-W, which shed $295 million to halve in size, as its share price slipped from a peak of $2.94 last August to close the year at $1.03.

Investors fled over concern about the non-settlement of the partnership with Silver Fern Farms and the subsequent spat over liability, and then a profit warning.

Companies associated with PGG-W were also hit hard.

A subsidiary, NZ Farming Systems Uruguay, lost $161 million while Pyne Gould Corporation, a cornerstone shareholder in PGG-W, lost $144 million or 45% of its market capitalisation.

Investors stayed loyal to Ryman, which saw its share price slip just 17% during the year despite 2008 interim results being 10% higher than a year earlier.

The worst performer in the index was Plus SMS Holdings, which lost more than 90%, or $35 million, in capitalisation, while Widespread Portfolios and Wool Equities both lost more than 80%.

While the survey set some unwanted records, Mr Munro said the South Island and New Zealand was holding up better than other developed countries.

The United States Dow index fell 34.7% in the last financial year.

Just four of the 32 listed companies followed by Deloitte did not lose value.

Wool Services International was the strongest performer with its share price rising 17%, lifting its market capitalisation by $4.2 million.

Mr Munro said all eight industry sectors lost ground in the year, with the port sector the least hardest hit, declining 2.2%, while technology (minus 47%) and financial services (minus 43%) were the biggest losers.

He said companies were strengthening their balance sheets and adopting conservative capital structures to buffer themselves against the recession, and that included issuing bonds in the face of declining access to capital and looking at joint ventures for when economies recovered.