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Gisborne Holdings reports a strong financial position

Gisborne Holdings could pay a higher dividend to Gisborne District Council than in the statement of intent, the board’s past chairman Bob Proudfoot told the District Council’s finance and audit committee.

Mr Proudfoot presented the six-monthly report for the period ending December 31.

A strong result for 2017/18 was definitely on the cards, he said.

They had been able to negotiate a loan with banks for the cost of the new council building that did not include having to mortgage the Tauwhareparae farm properties.

“That put us in a really good position. We have still got a farm up there with an asset value of around $70 million.

“That could mean we would pay out a bigger dividend than we are proposing in the six-month acounts at the moment.”

The ratio of debt to asset was on target and the farm was still unencumbered.

They were in a strong position with at least $10 million of equity.

The ratio of debt to asset was on target and the farm was still unencumbered.

They were in a strong position with at least $10 million of equity.

“We are very happy with where we are,” said Mr Proudfoot.

The report said the total assets had grown from $81.4 million to $102.5 million, mainly as a result of the new council chambers that it owns and carbon credits allocated from its forests.

Shareholders’ equity stood at 82 percent, so the total debt was 12.4 percent of the assets.

The distribution of $2.5 million from the 2017 year would be paid in May.

New chairman Rob Telfer said the company was in a good place.

Income figures for the first six months did not tell the full story. Most of the income from the farm properties came in the second six months of the year.

No stock had been sold up to December 31.

“We are having a really great season up there.”

Government legislation warrants of fitness meant Gisborne Vehicle Testing was a totally new business now. Warrants were a small part of it — they had moved into fleet maintenance.

At Waikanae Beach Holiday Park, there was a four-stage investment programme and they had already seen the benefits of having the new swimming pool over the summer. Pre-bookings for next year had doubled.

Mr Telfer asked the council to give the business time to grow.

“We consider ourselves to be a very new business. We have been sitting there waiting in the wings for some time.

“Our goal is to grow the asset and grow the income for the council.”

To do that it needed to retain investment in the company.

Bill Burdett said having heard the report he would like to ask how the council could future-proof the retention of the Crown jewel (the farms).

The council had heard the results. Going back in history, those who had wanted to retain the farms had fought the battle three times.

“This time maybe we should be doing something of a permanent nature so they never become at-risk again,” he said.

Committee chairman Brian Wilson said Mr Burdett was addressing the wrong people.

Malcolm Maclean said this was good news. He had been involved over the years in business groups that had absolutely rubbished ownership of the farms and pleaded to have them sold.

“It is a good news story and we should get it out there loud and clear, to tell the people of the district how well it has done.”

Graeme Thomson said the council had future-proofed the ownership of the farms through the way it had put in infrastructure.