GHL in ‘a fine state’

$11.2 million in income, $1m payout to council

$11.2 million in income, $1m payout to council

THE first consolidated report from district council-controlled organisation Gisborne Holdings Ltd has seen a sharp rise in income and a payout to the council of just over $1 million. The financial report for the year ending June 30 is the first to include not only the income from Tauwhareparae Farms Ltd but also the revenue for the first seven months GHL has been responsible for assets transferred to it by the council.

Speaking to the council’s performance, audit and revenue committee this week, GHL chairman Bob Proudfoot reported a comprehensive income for the year of $11.2 million compared with $3.2 million last year.

This and the business transfers resulted in GHL’s total assets increasing to $72.5 million from $55 million the previous year, an increase of 31.5 percent, while net assets were $64 million, up from $49.1 million. This was a fine state for the new consolidated group and set a good base for future development, said Mr Proudfoot.

Asset valuations, not cash

However the elephant in the room was that only $1.4 million was in cash and distributable. The rest came from asset revaluations less provision for deferred income.

Income from Tairawhiti investments (the assets transferred to GHL) for the seven months was $1.1 million. With the addition of the Waikanae Beach Holiday Park and vehicle testing station from July 1, 2016, a solid contribution was anticipated for the first full year of consolidated trading.

Accordingly the GHL board had approved a subvention payment for the year to the council of $1.02 million in line with the distribution policy from the statement of intent for the year. This is $21,000 more than forecast for 2016.

Mayor Meng Foon queried whether the board needed to retain 30 percent of the $1.4 million net distributed income. Mr Proudfoot said this money was needed for development and had already been spent. Director Rob Telford said a lot of the asset increase was because of the revaluation. It was not reality. It was a paper figure, not cash.

“We are not in a position to hand out cash willy-nilly, as much as you would like it.”

Tauwhareparae Farms

Tauwhareparae Farms had a good year, considering the average lamb price this year was $89 compared with $97 last year, said Mr Proudfoot. There had been excellent lambing, increasing to 144 percent.

The most pleasing thing about the farming was the extra production that had been achieved. Calving for 2016 had also achieved a very creditable 91 percent overall. The first trees from the farms would be harvested this summer. These would not actually be from the best forest, rather from very steep country.

A new homestead was needed for Tauwhareparae Station said, Mrs Proudfoot. There was laughter when he told Mayor Meng Foon that this building was definitely one that could not be strengthened and needed a full rebuild. Mr Proudfoot said the only risk that could be foreseen was drought. Things were already getting quite dry there.

New director

An additional director was expected to be appointed in December. The board was looking for someone with commercial ability. Peter Reeves would also be retiring by rotation at that time but would offer himself for re-election.

Committee chairman Brian Wilson said there were invariably good news stories from GHL.

Bill Burdett said the decision to retain the farms had been vindicated again.

THE first consolidated report from district council-controlled organisation Gisborne Holdings Ltd has seen a sharp rise in income and a payout to the council of just over $1 million. The financial report for the year ending June 30 is the first to include not only the income from Tauwhareparae Farms Ltd but also the revenue for the first seven months GHL has been responsible for assets transferred to it by the council.

Speaking to the council’s performance, audit and revenue committee this week, GHL chairman Bob Proudfoot reported a comprehensive income for the year of $11.2 million compared with $3.2 million last year.

This and the business transfers resulted in GHL’s total assets increasing to $72.5 million from $55 million the previous year, an increase of 31.5 percent, while net assets were $64 million, up from $49.1 million. This was a fine state for the new consolidated group and set a good base for future development, said Mr Proudfoot.

Asset valuations, not cash

However the elephant in the room was that only $1.4 million was in cash and distributable. The rest came from asset revaluations less provision for deferred income.

Income from Tairawhiti investments (the assets transferred to GHL) for the seven months was $1.1 million. With the addition of the Waikanae Beach Holiday Park and vehicle testing station from July 1, 2016, a solid contribution was anticipated for the first full year of consolidated trading.

Accordingly the GHL board had approved a subvention payment for the year to the council of $1.02 million in line with the distribution policy from the statement of intent for the year. This is $21,000 more than forecast for 2016.

Mayor Meng Foon queried whether the board needed to retain 30 percent of the $1.4 million net distributed income. Mr Proudfoot said this money was needed for development and had already been spent. Director Rob Telford said a lot of the asset increase was because of the revaluation. It was not reality. It was a paper figure, not cash.

“We are not in a position to hand out cash willy-nilly, as much as you would like it.”

Tauwhareparae Farms

Tauwhareparae Farms had a good year, considering the average lamb price this year was $89 compared with $97 last year, said Mr Proudfoot. There had been excellent lambing, increasing to 144 percent.

The most pleasing thing about the farming was the extra production that had been achieved. Calving for 2016 had also achieved a very creditable 91 percent overall. The first trees from the farms would be harvested this summer. These would not actually be from the best forest, rather from very steep country.

A new homestead was needed for Tauwhareparae Station said, Mrs Proudfoot. There was laughter when he told Mayor Meng Foon that this building was definitely one that could not be strengthened and needed a full rebuild. Mr Proudfoot said the only risk that could be foreseen was drought. Things were already getting quite dry there.

New director

An additional director was expected to be appointed in December. The board was looking for someone with commercial ability. Peter Reeves would also be retiring by rotation at that time but would offer himself for re-election.

Committee chairman Brian Wilson said there were invariably good news stories from GHL.

Bill Burdett said the decision to retain the farms had been vindicated again.

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