Published 1 December 2011
Wellington investment company Rangatira Ltd said yesterday it increased operating earnings by 2% in the September half to $4.4 million. It also signalled its intention to invest over the next 12 months in additional mid-sized companies with good growth opportunities that require additional capital to take them to the next stage.
Rangatira’s shares are listed on the Unlisted platform and will trade ex-dividend from Monday 5 December. The company is still 51% owned by the JR McKenzie Trust. Other community & charitable organisations own another 15% and the balance is owned by private investors.
Based on market values for listed equities and the mid-point of directors’ assessment of the value of unlisted companies, the net asset value of Rangatira’s shares at 30 September was $8.51 ($9.15 at 31 March). It will pay a steady 18c/share fully imputed dividend.
Chairman Murray Gough said: “Economic turmoil continues in Europe & elsewhere, and is having a negative impact on investment markets & the outlook for global growth. Despite the difficult economic situation, the performance & value of our unlisted companies has been maintained overall, but the value of our listed equities has fallen by 20% after adjusting for dividends.
“Of the larger unlisted investments, Contract Resources (NZ) Ltd performed well, particularly in Australia, where the oil & gas industry continues to provide opportunities for expansion. Hellers Ltd’s result was down on last year, due largely to fluctuating raw material prices. Rangatira’s result this year did not include a contribution from Tecpak Industries Ltd due to its sale in December 2010, and included only 4 months’ trading for Dunlop Living Ltd, following sale of that business in July.”
Mr Gough said the first half wasn’t fully representative of Rangatira’s earnings for the full year as Hellers’ & Polynesian Spa Ltd’s business activities are seasonal and generate more income over the summer – offset to a degree by Contract Resources, where the first half is usually the busier.
“Directors consider the half-year result more reassuring than their previous guidance assumed, and now expect operating earnings for the full year to be similar to last year and possibly a little better.”
Rangatira has about $100 million invested in privately held unlisted New Zealand companies. It also has listed equity investments of about $40 million and is holding over $10 million in cash earmarked for new investments. The unlisted holdings are mostly in mid-sized enterprises with sound growth potential. Rangatira is actively involved with these investments to help develop each company’s potential.
Last year, Rangatira sold 3 investments it had held for many years – Dunlop Living, Tecpak Industries & Te Kairanga Wines Ltd.
Chief executive Ian Frame said: “It is our intention to make additional unlisted New Zealand investments to replace the ones we have sold. To this end, over the next 12 months, we are looking to invest in up to 3 mid-sized companies that have good growth opportunities and require additional capital to take them to the next stage.
“Rangatira has a longer investment timeframe than many private equity funds and prefers to be a cornerstone investor, co-investing with business owners & management. In some cases, it will do this alongside other like-minded investment companies & institutions. Its portfolio currently includes Auckland Packaging Co Ltd (since 1999, 100% owned), Contract Resources Holdings Ltd (since 2004, 50% owned), Greenfield Rural Opportunities Ltd (since 2008, 16% owned), Hellers (since 2004, 50% owned), Polynesian Spa (since 1972, 51% owned), and Precision Dispensing Systems Ltd (since 1999, 80% owned).”
The JR McKenzie Trust is a leading New Zealand philanthropic organisation, founded by John McKenzie, who established the McKenzie’s chain of department stores.
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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.