33
waikato-tainui
annual report 2014
TAINUI GROUP HOLDINGS
AND WAIKATO-TAINUI FISHERIES
FINANCIAL PERFORMANCE SUMMARY
at a glance
$
27.0m
$
44.3m
$
841m
15%
2014
Net operating profit
Net profit
$
13.9m
27%
8%
$
20.8m
$
45.1m
$
738m
$
11.5m
25%
14%
2013
9%
Dividend
Bank debt to total assets
Return on Shareholders Funds
Revenue growth
Total Assets
i n v e s t men t
s t r at e gy
In 2014, TGH began to implement the diversified investment
strategy it announced last year.
The strategy builds on and gives life to the ‘grow, prosper and
sustain’ mission laid down in the Waikato-Tainui Strategic
Plan, Whakatupuranga 2050, and is now encapsulated in the
Kawenata. TGH must not only deliver higher dividends in the
short term, but as an intergenerational investor it also needs
to provide substantial, sustainable returns over the long run.
One key facet of the new strategy is to invest directly in
medium to large private businesses that have strong growth
potential and good management. A filtering process has been
established to evaluate potential investments in suitable
sectors and sub-sectors.
A number of potential targets were identified during the
year. The first to come to fruition was Waikato Milking
Systems (WMS), a specialist dairy systems and technology
manufacturer. TGH purchased the company in March 2014
in partnership with Ngāi Tahu Capital and Pioneer Capital.
The three institutional investors each hold a third of the
equity with senior management holding a minority stake.
TGH has a long-standing co-investment agreement with
Ng
ā
i Tahu, and the latter has significant dairy investments.
With Pioneer, TGH is already an investor in their two funds
along with others such as the Guardians of New Zealand
Superannuation.
Based in Hamilton, with 120 staff, WMS has developed a
range of innovative products, including composite rotary
platforms and a range of sensing technologies, and it now
exports to more than 30 countries.
The investment is a significant one for TGH. It has relevant
primary sector expertise through its management of
Waikato-Tainui farms and in the skills of its Board and
management team. It also brings its experience in governance
to complement the make-up of the WMS Board.
