Tainui Group Holdings
Annual Report
2013
9
This is my first
report as Chairman
of Tainui Group
Holdings. I accepted
the position because
I am a firm believer
in the increasingly
important role
Maaoridom will play
in our economy. It’s
my hope that Waikato-
Tainui will take a
leadership role.
For iwi-owned companies, their first
responsibility is to pay dividends from
their profits. But as retained earnings
and debt are their only sources of
capital, theymust reinvest some of
their profit each year to increase the
value of their assets, which they can in
turn borrow against.
Over recent years TGH has created a
solid core of investment properties that
generate a reliable cash flow, among
them
,
and the
They are however, stages in amuch
longer journey. If we are tomake a real
difference for themore than 64,000
people ofWaikato-Tainui, TGHmust
have an asset base capable of delivering
much higher returns to its Shareholder.
Our dividend this year is equivalent
to only $180 per person. Our Ruakura
development is vital to get to that next
stage where we increase our returns,
but it will not be an overnight process.
2013 financial results
Taking into account subdued economic
growth, TGH andWTF performed
well in 2013. Their combined net
operating profit was steady at $20.8
million, a marginal increase on 2012.
The net profit for TGH andWTF
was $45.1million, up 13% from$39.9
million last year. This came on the back
of a 13% increase in revenue, principally
reflecting good trading conditions at
the
.
TGH andWTF together paid a
dividend to the Shareholder of $11.5
million, up $0.5 million from 2012.
The value of total assets at 31 March
increased by $44million, to $738
million.
Our Shareholder converted its $70
million loan, on the books since the
settlement assets first transferred
to TGH, to equity. This has given an
extra $70million of permanent capital,
which now stands at $490million. As a
result, the return on Shareholder funds
reduced from 10.3% to 9.2%.
Total bank debt (excluding
sits at $161 million,
with approved but unused facilities of
$89 million. Total debt represents 25%
of total assets, in line with our policy
that debt cannot represent more than
30% of total assets.
New investment strategy
TGHhas embarked on a diversification
strategy. While the majority of our
assets remain in property, and will
continue to do so, TGH’s strategy
will see us diversifying into other
investment sectors.
There is good reason for this. The
company is charged with achieving
a return on the commercial assets of
If we are to make
a real difference
for the more than
64,000 people of
Waikato-Tainui,
TGH must have an
asset base capable
of delivering much
higher returns to its
shareholder.
(27)
34
0.4
0.5
0.4
23
39
(1)
WTFL
TGH
2009 2010 2011 2012 2013
45
Net profit after minority interest
TGH & WTFL
Net operating profit after minority interest
12
16 15
21 21
TGH & WTFL
2009 2010 2011 2012 2013
$M
0
$M
0
NON-TRADING
TRADING
2009 2010 2011 2012 2013
12
18
16 15
8
19
21 21
(40)
24
Net profit after minority interest
TGH & WTFL
$M
0
