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Tena koutou katoa. Tena koutou i o tatau tini mate. Ka tangi tonu te ngakau mo ratau I mahue atu a tatau i te tau kua taha ake nei. Na reira, okioki te hunga, okioki. Okioki i te okiokitanga a o tatau matua tipuna. Ki nga kanohi ora, tena hoki tatau katoa.
The financial highlights for the last year are:
The greatest contributor to Group performance was again the Holdco investment portfolio, which returned $14.3m on the back of another strong year for global equities. This compared to an initial plan of $6.9m.
As set out on page 23 the result from investments equates to 10.6% return for the year and 7.8% over the last five years against a SIPO target rate of 3.5% (or 2.5% over the rate of inflation).
This five-year return reflects the generally strong market for global equities over the last five years and the Holdco board is conscious of the risk to the group of a drop in the market. The Holdco board is, therefore, considering steps to mitigate, as best we can, the impact of a market drop.
NPHCL has seen sound growth in its balance sheet since inception.
Because intercompany eliminations are not shown, the columns do not add to the group total.
A breakdown of assets by asset class is as follows (and comparisons to the 2017 year):
A summary of earnings for the NPHCL along with its subsidiaries is set out in the table below:
Because intercompany eliminations are not shown, the columns do not add to the group total.
In 2017/18, the Seafood Group recorded an operating profit of $1.3m, after facing a number of challenges during the year. In line with its strategic plan the Seafood Group focused its efforts across the following three key areas:
The highlight for the year was the establishment of the partnership with Air New Zealand. This resulted in the Seafood Group becoming a certified supplier to Air New Zealand’s food caterers, LSG-SkyChefs, for premium smoked fish products to front-of-plane and lounge services on Trans-Tasman and Pacific regional flights. This supply of smoked fish products is scheduled to commence in December 2018, well ahead of plan. This is seen by both the Seafood Group and Air New Zealand as a first step to other global destinations.
The Seafood Group continued to build its consumerfacing business throughout the North Island with AHIA premium-branded smoked fish products. A dedicated Sales & Marketing team has enabled the Seafood Group to make positive progress in growing sales and revenues.
The Seafood Group has sought to make a strategic shift up the value chain. This has resulted in a review of current activities and changes to improve efficiency, capability, and performance. Strategic partnerships are also continuing to evolve. These partnerships produce solid financial results and create opportunities for investment to support future growth initiatives
Air New Zealand’s food caterers, LSG-SkyChefs recently visited the Ngati Porou Seafood Group operations. (From Left) Brett Johnston (NPSFL), Mark Ngata (NPSF CE), Mauricio Novaes (LSG General Manager), NZ, Chloe Surridge (GM Procurement), Shabnam Munif (NZ Quality Assurance Manager), Alleyn MacGregor (LSG Procurement Manager, NZ), Ken Houkamau (NPSF).
In 2017/18, Pakihiroa Farms recorded an operating profit of $0.5m. This result was down on last year’s result of $0.6m. It was driven by a decision by Pakihiroa Farms to invest $0.1m in increasing the size of the area that it farms by leasing and developing other landblocks within Ngati Porou. This is part of a strategic initiative by Pakihiroa Farms to increase annual operating profit to $2 million per annum over the next 3-5 years. Without this investment Pakihiroa Farms would have generated an operating profit of $0.6m.
Under the lease and development arrangements being entered into with landowners, Pakihiroa Farms will pay a combination of a rental and profit share. Once the lease and profit share are agreed, Pakihiroa Farms will plant the blocks in a range of high value feeds to allow stock to be finished to targeted weight and grade specifications. New stock will also be acquired and there will be an increase in both permanent and casual jobs. In total 11 blocks from Te Araroa to Makarika (1016 ha) entered into these arrangements during 2017/18.
PFL also continues to support a project to reduce both sediment and nutrient loadings in the Waiapu River. The creation of riparian strips and establishment of debris dams in the tributary streams of the Waiapu are expected to hold sediment at source and reduce the negative impacts of farming, on both the awa and kaimoana beds.
During 2017/18, the harvest of the Hoia forest was completed. The timing of the havest coincided with good pricing, producing revenue of $5.2m and an EBIT of $1.0m. Planting of new forest has also continued as Ernslaw One progressively returns lands from the Tokomaru and Ruatoria forests. In 2017/18 616 hectares were returned and planted. This takes the total new forest area owned by Holdco to 3540 hectares.
Ngati Porou Holding Company purchased 350 hives for the 2017/18 honey season, and had a total of 1000 hives operating through the Ngati Porou Miere Limited Partnership. The 2017/18 season produced 10 tonnes of high-quality Manuka honey, with a current market value of $425,000. This honey is being stored with Ngati Porou Miere to allow for the UMF level to grow. Holdco is also continuing to work with Ngati Porou Miere on opportunities to increase returns through the honey supply chain.
An agreement has, in principle, been reached with the Hauiti Incorporation on a joint venture to grow up to 4 hectares of blueberries on Incorporation Land. This joint venture is forecast to generate an EBIT of $550,000 per annum and create approximately 40 part-time jobs. The intention is to begin operating in 2019 with the establishment of an initial 1-hectare trial area.
Work commenced in 2018, on a tourism experience on Mount Hikurangi, called “Mt Hikurangi - Journey To The First Light”, which will operate over the summer of 2018/19. The experience will offer manuhiri the opportunity to have guided visits to the whakairo and a local marae experience. 2018 is seen as a first step and the experience will develop over time. It is also hoped the experience will attract visitors to the region and boost wider tourism opportunities for Ngati Porou whanau.
Amanti made much slower progress than expected in contracting brand tourism experiences during 2017/18. Amanti is continuing to work to conclude contracts for experiences in late 2018 and early 2019. However, it has become clear that the lead-time for brand tourism experiences is a lot longer than anticipated. A decision was therefore made to impair the Amanti investment and no further capital has been released to the company. Despite having made these decisions Holdco continues to support the activities of Amanti and its 100% owned design business, Pohewa.
It has now been five years since the Holdco SIPO was implemented. The Holdco board has therefore decided that this is an appropriate time revisit the SIPO and other strategic planning objectives. The planning work is well underway and the Holdco expects to report on the revised plan in early 2019.
Naku noa,
Mataanuku Mahuika
Chair
Ngati Porou Holding Company Limited
