Rangatira Annual Report 2023 - Flipbook - Page 10
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R anga tira Annua l Rep or t 2 0 2 3
between 100ha to 1,100ha which have been planted in the
ahead of the public pay rates. While we anticipated this, we did
2021, 2022 and 2023 winters. In total, we will have 4,900 ha
not expect that we would be required to meet this increase in
planted at the end of the 2023 winter. All blocks are managed
cost ahead of any increase in our charge rates from Insurers,
to harvest once the trees are mature, rather than have them as
ACC, and Te Whatu Ora. As these rates increase to account for
permanent forests.
this, we expect the earnings levels to recover.
We benefit in the case that the carbon price rises, and to a
We have advanced the development of two additional theatres
degree, as this rises so too does the cost of bare land for
on the site and expect to commence site works this year.
planting. We have tried to remain disciplined about both the
nature of the blocks we purchase and the price we offer for
Bio Strategy has made positive steps to grow revenues and
these. Over their life, these forests are expected to generate
add new agencies to broaden the revenue base. While they
between 1.8m to 2.0m carbon credits (370 to 400 per ha).
were behind budget due to some one-off stock write-offs and
poor performance of our New Zealand operations, we feel the
Over the time we have been doing this the carbon price has
business is positioned well to grow in the coming years with a
gone from $25 to $90 and now to $50. The recent fall is due to
stable senior team and strong position with its key agencies.
speculation about the future regulation of the current carbon
settings.
The Australian market is now over 65 per cent of revenues
and rising in an economy with more scale and research and
While increased regulatory risk remains around the carbon
healthcare spending.
regime and how pine forests may or may not participate in this,
we are cautious about increasing our exposure over and above
The acquisition of VWR in 2017 and moving the head office to
what we already have.
Melbourne in 2018 have been vindicated despite the difficulties
of integration. It has provided us with a significant presence and
These short-term fluctuations have limited impact on the
scale in Australia, a more prosperous market for a company like
investment to date as the carbon will not start to accrue on our
Bio Strategy.
properties until post 2027 and we hold all these properties at
the cost of the land and development costs incurred.
Mrs Higgins experienced significant increases in raw material
and employee costs which squeezed profitability. This was
Kiwifruit Orchards have had a remarkable season and seemed
slightly offset by strong gains in volumes, operational efficiency,
to dodge every weather event that was presented to the sector
and price increases, placing the business well for the future. This
this year. The weather events including floods, wind and frost
is still a small business for Rangatira and while we are now a
had a limited impact on our Orchards. A lot of credit for this
100 per cent owner and the business has stabilised, we are likely
goes to the diligence of Southern Cross Horticulture (SCH) the
to consider our options for this investment in the coming year.
manager who through site selection, design and implementation
has positioned the Orchards as well as one can.
Stuart Drummond was impacted by two major weather events
in the Nelson and Marlborough area over several months.
To a degree, the heat has come out of the Kiwifruit industry
Nonetheless, good operational discipline enabled a significant
as concerns are raised around poor quality, labour shortages
reduction in acquisition debt as well as funding a small bolt-on
and higher licence costs and increasing interest rates. Despite
acquisition from internal cash flows. The business continues to
negative media reports on the industry more generally, for the
trade well and to expectation although industry headwinds are
top-performing orchards run by leading operators like SCH we
expected to impact the business through the latter part of this
believe the long-term returns for our Eastern Rise and Oaklands
year.
will still be very good.
Auckland Packaging Company has had another tough year
Boulcott Hospital has had a challenging year. While demand
with increasing supply costs and high employee absenteeism
for the hospital is high, we experienced high levels of sickness
impacting profitability as well as some disruption and additional
in nursing and medical staff late in 2022 which impacted the
cost from the integration of the Jazz acquisition (completed
running costs this year. In addition, we have had to meet the
towards the end of FY22).
increased wage rates for theatre and nursing staff to remain