Rangitira quadruples profit after big selloff
Wellington investment company Rangatira has quadrupled its full-year profit on the back of $32.1 million in investment sales.
But the sale of oil and gas services firm Contract Resources put a dent in operating earnings, though Rangatira is confident its new raft of investments will improve returns in the coming year.
The company reported a $39.4m profit after tax for the year ended March 31, up from $8.5m in the previous year. Much of the increase resulted from the sale of a 50 per cent holding in Contract Resources, a direct holding in Xero and an investment in Greenfield, collectively worth $32.1m.
Without these contributions, earnings were closer to $7.3m, which chief executive Ian Frame described as a "steady" result.
"Our operating earnings were down a little this year, largely because Contract Resources wasn't there to contribute," he said. "But a number of our other companies have stepped up and we're very comfortable with where Rangatira's sitting at with its investment portfolio at the moment."
In the year, Rangatira acquired a 12 per cent stake in technology company Magritek and a 35 per cent holding in craft-beer brewery Tuatara, the values of which were not disclosed. It also made investments in technology firms IkeGPS, Mesynthes and United States technology fund JAFCO.
Frame said last summer had not been as good weather-wise as the company had expected. But Tuatara, Hellers and amusement park Rainbow's End would all trade a lot better this year, because they were well positioned for growth.
"They all did plays during the year," he said. "Hellers acquired Goodman Fielder's [meat business], the contribution from that will come through quite strongly this year, and Rainbow's End put in its new ride [Stratosfear], and that's been tremendously successful this year, very popular."
Frame said Tuatara, which was quadrupling capacity to 4 million litres a year, was poised for growth in the Australian, Asian and United Kingdom markets.
"Last year we sold everything we made. You could conclude from that, if we'd had more production capacity, we could have sold more."
Frame said the company was looking to invest, with about $50m available for well-managed New Zealand companies.
Chairman David Pilkington said the total shareholder return was 9.5 per cent, slightly down on the average 10.9 per cent return of the past 10 years.
"Rangatira has had a solid start to the year, which is pleasing given the seasonal nature of the performance of many of our unlisted investments."
Frame, retiring this month, said the company's long-term investment strategy had produced good returns for its shareholders.
The directors assessed the asset backing of Rangatira's shares as $11.20 a share, up from $10.63 last year.
A final dividend of 26 cents was declared, to be paid on June 30.