FORMER US President Herbert Hoover was a keen fisherman and even gave a speech once on the joy of fishing, or what he liked to call "the chance to wash one's soul with pure air".
The president, who was in office at the outset of the Great Depression, also knew a thing or two about the business aspects of fisheries and wisely advised to an audience in 1951 that fish can make "a mockery of profits and egos".
More than 60 years later the good advice still stands and should be heeded by former Santos chief executive John Ellice-Flint as he works hard to turn around commercial fisheries business Clean Seas Tuna of which he is the current chairman.
You see, Clean Seas Tuna has a major problem. It can propagate fish, in this case yellowtail kingfish, but just can't get the little buggers to grow properly, while 35 per cent of the fish stock have now died from a nasty intestinal illness called gut enteritis.
Worse still, an update provided by Clean Seas Tuna yesterday advised that the mortality rate had recently increased to 3 per cent a week among its kingfish juveniles.
Selling kingfish on the open market, where the product can fetch $15.50 a kilogram and as high as $20 a kilogram in Europe, is the company's main income source with its southern bluefin tuna operation still in its trial phase.
Chief executive Dr Craig Foster now has a major battle on his hands and the board has been forced to bring in experts to discover the cause of the gut problem, whose effects include diarrhoea. To date no other grower of kingfish that the company is aware of has encountered gut enteritis to the extent, variability and mortality rate that its fish have been hit with, and Clean Seas Tuna might have the awful honour of having a world-first discovery at its South Australian fish ponds.
Harvesting of the 2011 fish stock continues but the harvest size is less than anticipated by the company, although on the upside the prices it is getting for the kingfish are the best it has ever seen.
A strategic review has now begun at Clean Seas Tuna, which include investigating other ways of containing the kingfish stock as they grow from birth to ready for a dinner plate.
For shareholders expecting to land a winner from Clean Seas Tuna it has been a painful ride. Shares in Clean Seas Tuna hit the market in 2005 with an issue price of 50? reaching a high of $2.10 in April that year. The stock has lost 36 per cent of its value year to date and is now trading at just over 4.6? per share.
President Hoover believed that fishing "soothes our troubles". Clean Seas Tuna investors might not agree.
AFIC spends up
VETERAN stock picker Australian Foundation Investment Co it has been around since the 1920s raised $222.7 million via a convertible note issue in December and just how it is spending that money on behalf of investors is starting to emerge.
At a shareholder presentation in Tasmania it was revealed that more than $140 million of the new funds had already been invested. New stocks added to its $4 billion-plus equities portfolio include Ansell, QR National and Sydney Airport, while AFIC has also ploughed money into a range of healthcare stocks such as CSL and Ramsay Health Care, funeral company Invocare and mining waste management business Tox Free Solutions.
THE planned stockmarket listing of the Australian arm of mortgage insurer Genworth Financial has been shelved until early next near, after the insurer's profits were crunched by a jump in housing defaults.
Genworth's US parent was previously targeting the June quarter for the listing of up to a 40 per cent stake in the mortgage insurer.
Bullish estimates had put the value of a listing at as much as $850 million, although many institutions questioned whether the market could support such a valuation.
The Australian business was likely to report a modest first-quarter loss, Genworth said.
Rather than a systemic downturn in the nation's housing market, the company blamed banks and other lenders for accelerating some long-term mortgage delinquencies. A jump in natural catastrophes and downturn in some parts of the economy also caused a surge in mortgage losses.
Genworth ranks as Australia's largest mortgage insurer ahead of QBE Lenders Mortgage Insurance. Combined, the two hold a 75 per cent market share of the market.
"For the 2012 first quarter, the company expects to report elevated loss experience in Australia as lenders accelerated the processing of later-stage delinquencies from prior years through to foreclosure and claim at a higher rate and severity than expected," Genworth said.
Genworth says its liquidity and risk buffer plans were not dependent on the Australian initial public offer, with the holding company having approximately $US1.4 billion in cash and liquid securities. The delay is likely to represent a blow for Genworth's lead managers Goldman Sachs, Macquarie, UBS and CommSec.
Where there's smoke ...
SHAREHOLDERS in UXC reacted with equanimity to the news late on Tuesday that it is exposed to a $22 million lawsuit relating to the Black Saturday bushfires of 2009, with its shares closing down just 0.5? at 57? yesterday, maintaining its gains following its recent stellar run on its reorganisation last year.
UXC sold its Field Solutions unit in 2011 for more than $60 million. This unit had previously provided inspection services to SP AusNet, the operator of the high-voltage grid in Victoria.
It says it has insurance cover in place that provides bushfire protection, but given the propensity for insurers to challenge large payouts, it is perhaps surprising UXC shareholders are not on the back foot about the latest news at least until there is some clarity on the prospects of the legal action succeeding.