Tainui Group Holdings – 2012 results

Media statement – embargoed until 11.00 PM, Wednesday 27 June 2012

Tainui Group Holdings – 2012 results

Profits rise following completion of major projects

Increase in shareholder dividend

Total assets near $700M

Ruakura regional freight hub the major focus for the year ahead

Tainui Group Holdings Ltd (TGH) and Waikato Tainui Fisheries (WTF) have recorded a net profit of nearly $40 million for the year ended 31 March 2012.

The corresponding figure in 2011 was $23.1M.

Net operating profit was $20.7M, up 40% from $14.9M in 2011.

The results reflect a near 60% increase in revenue from recently completed projects.

During the year TGH completed the final two planned stages of Te AWA, the new mall at The Base retail centre at Te Rapa, Hamilton. It also finished development of the Novotel Auckland Airport hotel, in which it has a 70% shareholding.

Combined, the two projects represent an investment of some $210M, and they have taken the company’s total assets to nearly $700M. Overall debt levels were slightly down, at 26% of assets. TGH has also declared a dividend of $11M for its shareholder, Waikato-Tainui, an increase of $0.5M from last year.

“Getting these major projects finished has been something of a watershed for the company,” said Chairman John Spencer.

“They give us a higher level of secure income, so that means more certainty for our shareholder and an improved capacity to reinvest in future projects.”

“The hotel didn’t provide quite a full year’s earnings, but it still generated a quarter of our revenue. And for the first time, retail earnings made up over 50% of our income, and this reflects the new revenue stream from Te AWA. Until now the company’s main source of income has been rents from the Crown, SOEs and tertiary institutions.”

TGH Chief Executive Mike Pohio said that TGH was a very long-term investor. “We are firmly committed to further deep investments in the Waikato economy.”

MF .... (2)4 Bryce Street, PO Box 19295, Hamilton Telephone 07 834 4880, Facsimile 07 834 4881 “With the two big projects completed, our focus in the year ahead will be on our proposed inland port and freight hub on the 500ha of land we own at Ruakura, on the north-eastern side of Hamilton.” “The block is very strategically located. The railway to Tauranga runs through it and the new Waikato Expressway is to be built along its flank. And this is a very big year for the project, because we’re seeking approval for it under both Waikato Regional and Hamilton District Plans.”

“If it gets regulatory approval, it will have significant benefits, not just in taking the projected wall of freight off local roads, but in creating exciting new business, job and training opportunities for the region. It will also increase New Zealand’s international competitiveness through more efficient handling of exports in the upper North Island.”

Mr Pohio said that TGH would not be financing the whole development. “We will be looking for a wide range of partners. So we anticipate Ruakura will bring a high level of new investment into the region, with distribution centres, logistics and freight handling facilities and a wide range of servicing businesses.“

The TGH Board has also unanimously elected Sir Henry van der Heyden as its new Chairman from 1 July. Earlier this year TGH announced that its Chairman, John Spencer, was retiring as an independent Director after a decade at the helm, and that he was to be replaced by Sir Henry.

ENDS

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