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Tenon considers US listing

CATHERINE HARRIS
Last updated 11:02 04/12/2013

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Tenon will look at tapping into the United States investor scene, possibly through a dual listing.

The company says it will also look at a cash return next year, a share plan and a small share buyback to increase liquidity in the tightly held company. Further details would be sent to shareholders this week.

Tenon, a high-value wood products company with factories in Taupo and the US, is experiencing an upturn after several years of losses as the US housing market picks up.

At an annual meeting today, chairman Luke Moriarty said a dual listing was only one option but greater exposure in the US would help its share price.

It was where ''news flow on our sector is much greater, where comparable company multiples are more favourable, and where we should be able to generate new interest in the stock as a result''.

Moriarty said part of the firm's share price value-gap largely to the fact 90 per cent of its revenue was derived from the US, where the bulk of its operations were located.

''Yet our equity is New Zealand-based, where news of the US housing market and the performance of Tenon's competitors, is sparse''.

As well as looking at the listing option, ''we will also be undertaking a complete company review as to how Tenon can best position itself to create value for shareholders as the current US cyclical recovery progresses. Enhancing share price momentum is top of our minds."

About 80 per cent of the company is held by three long-term investors, including the ACC and Rubicon.

Moriarty forecast that barring unforeseen events, Tenon would produce an interim operating profit equal the results of its previous financial year to June.

Tenon slashed its net after-tax loss last year to $3m, from $9m in 2012, and operating profit rose to $5m from a loss of $3 million the year before.

Tenon also said it believed its shares should be higher than their current level of $1.30. Although the shares have doubled over the past year, the company believes this price is still well below fair value, and based on comparable company trading multiples, should be above $2.00. 

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