Improved Full Year Outlook for Rangatira Despite First Half Result
Wellington investment company Rangatira today announced its interim result for the six months to 30 September 2012. Operating Earnings were $3.3 million, compared with $4.4 million for the six months to September 2011. Profit after Tax was $3.0 million, against $4.9 million for the same period last year.
A fully imputed dividend of 18 cents per share (last year 18 cents per share) will be paid on 10 December 2012.
Chairman Murray Gough said, “The slower first half largely reflected phasing of project work in one of our major investments, Contract Resources. Looking ahead, we have reviewed the outlook for each of our companies and expect a lift in our Operating Earnings for the full year in the range of 10% to 20%.
Directors also reported that they consider the net asset value of Rangatira’s shares, including the mid-point of their assessment of the value of unlisted companies, was $9.26 at 30 September 2012 compared to $8.77 at 31 March 2012.
Rangatira has continued to progressively reinvest the proceeds realised last year from the sale of Tecpak and Dunlop Living.
During the period, Rangatira invested $3.5 million for a 15% stake in Konnect Net, and a further $3.8 million in Partners Life - total investment in Partners Life is now $8.3 million, representing a holding of around 9% in the company.
Konnect Net is a leading provider of business process management solutions for the insurance and health sectors in Australia and New Zealand. Konnect Net’s computerised systems link insurance companies with insurance agents and healthcare providers to enable a streamlined customer service covering policy applications, management and claims.
Partners Life is a recently established insurance company that continues to achieve very rapid growth from the sale of life risk protection products including life, income protection and health insurance to families and businesses.
On 24 November, Rangatira received advice that its bid of $10 million for 74.86% of the shares in NZ Experience Ltd, owner of the Rainbow’s End theme park in Auckland, had been accepted. Rangatira is now required under the Takeovers Code to make a bid for the remaining shares.
Mr Gough said, “Rainbow’s End is a sound and well established business and we believe it has good prospects for continued moderate growth. It will help maintain our preferred portfolio balance between established businesses and high growth developing companies.”
The company announced earlier this month that Richard Wilks and Sophie Haslem will join the Rangatira Board.
Mr Gough said, “Richard and Sophie bring an excellent spread of experience and I am confident they will make a strong contribution to Rangatira’s future performance.”
Further investment opportunities sought
Rangatira has around $20m of funds available for further investment and continues to search for good opportunities.
Chief Executive Ian Frame said, “Looking forward, it is our intention to make additional unlisted New Zealand investments and we are actively looking to invest in up to two 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 and management. In some cases, it will do this alongside other like-minded investment companies and institutions.
“Rangatira’s investment strategy of ‘investing in business for growth’ has produced good and sustained returns over many years for its shareholders. This can be attributed to a diversified portfolio, conservative gearing and the active involvement of our directors and management in the governance of the companies in which we invest. We are now in a position to expand our portfolio of New Zealand business holdings, to the mutual benefit of those companies and Rangatira,” Mr Frame said.
Rangatira’s shares are listed on the Unlisted platform, and will trade ex-dividend from Monday 3 December 2012.
Rangatira is a Wellington-based investment company with assets of over $150 million. Established in 1937, the Company is 51% owned by the JR McKenzie Trust with other community and charitable organisations owning another 15% of the shares. The balance of the shares is owned by private investors. Rangatira’s mission is to increase both the capital value of its shares and the dividends paid to its shareholders by investing creatively and competitively.
Rangatira has built a portfolio of local and international investments across a wide range of sectors. The Company has pursued a policy of investment in small to medium-sized unlisted New Zealand companies, complemented by holdings in a range of publicly listed New Zealand, Australian and international companies. All investments have been made taking a long-term position in companies that are well founded and well managed with good growth potential.
Rangatira is strictly commercial in its investment approach and benchmarks its performance against the wider investment community.
Rangatira will continue to explore investment opportunities across a range of business sectors. We aim to add value to our unlisted investments by actively contributing at management and board level, recognising the need to combine high standards of governance with sound management and a clear focus on growth and profitability.