Holdings

Our Role

To use on behalf of the Ngāi Tahu Charitable Trust the assets of the Trust allocated to it and to prudently administer them and its liabilities by operating as a profitable and efficient business.

Our Mission

To be an outstanding investment company creating wealth for our shareholder and respecting and contributing to the mana of Ngāi Tahu in all that we do.

Our Values

Ngāi Tahu Holdings Corporation embraces the values of Te Rūnanga Group and commits to ensuring these values become embedded in the organisation and are truly reflected in the way we behave and do business.

A Year in Review

The 2008/09 year has been labelled as the most difficult economic climate experienced since 1929 by respected commentators around the world. Given these trying operating conditions Ngāi Tahu Holdings Group (NTHG) has continued to deliver a solid financial performance reflecting the strength of its balance sheet and its underlying assets.

Undoubtedly FY09 was one of the most difficult so far for NTHG and it will come as no surprise that as a result, our performance was down significantly on the previous year with a net operating surplus of $18.63m (FY07/08 of $31.77m). The net surplus (prior to distribution) for the year was $13.3m (FY 07/08 $58.2m). This included a decrease in investment property values of $5.5m (FY07/08 included an increase in investment property values of $25.9m). However while being well below previous levels, NTHG was able to deliver both an operating profit and a net surplus in this period of severe strain, particularly for those companies with significant property assets.

The downturn in the property sector had a significant impact on Ngāi Tahu Property activity with an operating Earnings Before Interest and Tax (EBIT) of $15.6m (FY07/08 $19.1m). Property development activity contributed an operating EBIT of $2.5m (FY07/08 $6.6m). This included write-downs on the value of development property of $4.5m, primarily on the Iveagh Bay, Lincoln Residential and Allandale projects. The quality of the tenancy base in the Property Investment Portfolio proved its strength returning an EBIT ahead of budget of $11.7m. Revaluations of investment property (commercial and rural) have resulted in a decrease in value of $5.5m, a decrease of 2.1% on last year. This is a particularly pleasing result given that this figure is significantly lower than the industry average of 10% for the year.

FY09 was Ngāi Tahu Seafood's first year of trading post review and restructure and under a new strategy. The net surplus of $4.6m was down $8.1m on the previous year and was heavily impacted by a number of one-off, non-trading payments coupled with the extreme instability of exchange rates which resulted in foreign exchange losses in excess of $6m.

A full review of the foreign currency hedging policy has been undertaken and the level of the residual cover book now aligned with the true foreign exchange exposure of the business. This should see forecast results for Ngāi Tahu Seafood increase significantly in the new financial year. The underlying trading result excluding these was a 12% improvement on the previous year.

The year in review presented challenges for Ngāi Tahu Tourism also with the global credit crisis striking just prior to the beginning of the peak summer tourist season. This resulted in reduced visitor numbers and sparked a review of all Ngāi Tahu Tourism's operations. It is pleasing to report that due to the commitment and responsiveness of the businesses within the Tourism portfolio, a $6.4m net surplus was delivered (FY07/08 $8.5m) with Operating EBIT of $5.4m slightly ahead of the forecast for the year of $5.3m.

A priority for NTHG in FY09 was conserving cash resources. This led to a reduction in NTHG's debt from $98m at the end of FY08 to $95m at the end of FY09, against a forecast of $127m.

Ryman Healthcare continues its long-standing tenure as one of our leading and most consistent investments and despite the environment delivered another strong performance resulting in a 1% increase in share price over June 2008 and dividends of $2.1m.

Governance

There have been a number of governance changes over the year in review. Mark Solomon resigned at the end of September 2008 and was replaced by Gerry Coates. Wally Stone's departure in February saw Linda Constable step in as Interim Chair until the appointment of Trevor Burt on 1 August 2009. Mark Tume was not available for reappointment when his term ended on 30 June. Mark has been replaced by Catherine Drayton. We would like to pay tribute to all of our departing directors for their efforts over their time with NTHG. In particular we wish to acknowledge Wally Stone's leadership and the performance of NTHG during his two and a half year stint as Chair.

Full subsidiary boards are in the process of being established for Ngāi Tahu Property, Ngāi Tahu Seafood and Ngāi Tahu Tourism. These boards will be populated with a cross-section of industry expertise, commercial and governance expertise and will all have Ngāi Tahu representation. As a result the role of the Ngāi Tahu Holdings Corporation Board will be redefined and mechanisms put in place to ensure the alignment of the subsidiary boards to the overall NTHG direction. We believe this will give us a strong governance structure moving forward.

Our people

As with any organisation, the strength and success we enjoy is as a result of the skills, knowledge and commitment of our people. The ongoing challenges and change of the past few years have placed significant demands on our team. Thank you for your continued loyalty and hard work through these difficult times. We are committed to creating a positive and stable environment and believe we now have the foundation and structures in place to ensure our long-term sustainability.

In April 2009 Andrew Harrison resigned as Chief Operating Officer of Ngāi Tahu Holdings Corporation. We would like to pay tribute to Andrew for his contribution over his time with the organisation.

Sustainability

An internal sustainability audit was conducted in April 2008 and a sustainability framework developed incorporating economic, social and environmental sustainability objectives consistent with Te Rūnanga Group's vision: mō tātou, ā, mō kā uri ā muri ake nei, for us and our children after us. Progress has been made over the past year and we continue to develop initiatives in conjunction with the Office of Te Rūnanga o Ngāi Tahu.

Investment Strategy Review

NTHG is focused on accumulating a well-balanced and secure investment portfolio that will guarantee a long-term sustainable return for our stakeholders. We will continue to work with Te Rūnanga and independent advisors to ensure robust investment strategies.

Looking Ahead

With a strong balance sheet, a stable core of assets and good prospects we are confident that NTHG is well positioned for growth. It is critical however that we determinedly drive measures to ensure that we weather the storm of the ongoing economic volatility and are in a position to make the most of the economic upturn when it comes. Prudent and pragmatic therefore will be our modus operandi moving forward.

It is impossible to predict with any certainty future movements or the length of the current downturn. New Zealand as an agricultural producer with a limited financial services sector has been less adversely affected than other markets but the emerging reality is that no economy and virtually no industry will be immune to recessionary impacts.

Finally, on behalf of the board and management of NTHG, we wish to acknowledge our shareholders for their continued support. We remain totally committed to ensuring that the values and behaviours required to guarantee transparency and protection of our stakeholder interests is embedded in everything we do.