Editorial: Hoping for a better 2010

OPINION: It goes without saying that some of those most eager to see the back of 2009, and a change of fortunes in the new year that begins tonight will be those associated in some way with South Canterbury Finance.

Here in South Canterbury, that term encompasses thousands of people – those at the helm of SCF, those employed by the company, financial advisers and, by far the largest number, investors.

For all of those people the second half of this year will have contained a fair degree of uncertainty, but with the news that Sandy Maier, a man described as a "corporate fix-it specialist", has been appointed as chief executive, there is cause to hope that 2010 will bring better fortunes.

Possibly cause even, as sharebroker Grant Williamson was quoted as saying in yesterday's page 1 story, for renewed confidence on the part of investors.

If his prediction proves correct and Mr Maier – contracted to the board of directors of the Southbury Group to serve as chief executive of the group and of SCF for a year – is able to lift investor confidence, then the new year shapes up well, both for the company and for those with funds tied up in it.

Companies like SCF stand or fall on confidence and a lowering of expectations about a company's future performance, or indeed its ongoing viability, can quite easily become a self-fulfilling prophecy.

There's no doubt that a fall-off in confidence has contributed heavily to a difficult few months for SCF. Giving investors reason to hope that the future is more hopeful than it seems, therefore, would go a long way to making 2010 a better year.

In some ways, the fact that the year ends with SCF still a viable business is testament to its strength. Many lesser finance companies have been unable to absorb the sort of blows it has ridden out in the recent recession and gone belly-up.

Even as recently as the early part of this year there was still a widespread assumption in South Canterbury that, despite the travails of so many finance companies in New Zealand in the recession, SCF was strong enough not to be affected. It was seen as one of just a couple of bigger companies in the sector that would sail on regardless.

That impression began to change in early July when it was announced that SCF principal owner Allan Hubbard was injecting $40 million in the face of its first bottom line loss since 1934. Since then, there have been credit rating downgrades and chief executive Lachie McLeod has departed in a difficult six months.

The appointment of Mr Maier may be the most positive news for SCF in some time, but obviously the proof of the pudding will be in the eating. There's no shortage of investors hoping 2010 ends with a pleasant taste in their mouths.

- © Fairfax NZ News