The 2019 financial year marked our 15th anniversary as the newly structured commercial entity for Waikato-Tainui.
In that time, we’ve seen substantial growth, progressing from an original asset base of $179.7m to this year’s milestone of $968.2m. Over 15 years we’ve generated total revenues of $707.4m for a total net profit of $648.5m and net operating profit of $297.8m.
Our stable of assets has built from our original Raupatu settlement to now also include The Base, hotels, residential property developments, equity and financial investments, the emerging Ruakura development and more farms.
Many people are responsible for this performance and I acknowledge them and the expertise, commitment and dedication they gave so that TGH could benefit. Maa pango, maa whero, ka oti te mahi.
During 2018 we were saddened by the loss of one of those people. Hon Dr Koro Wetere was a founding director of TGH and a key driver of the vision held for this company. His aspirations for TGH remain and we will not lose sight of the legacy he leaves. Takoto mai, moe mai raa e te rangatira.
One of our key goals has been to increase annual dividend because that is what enables tribal development and social investment in our people and environment. It is why this company exists. So, as we reflect on the past 15 years we acknowledge the effort that has gone into achieving total dividend returns of $184.5 million. Of this, dividends returned since 2012 total $119.9 million, and I want to thank our staff for that result.
NGAA HUA AA-TAHUA
Financial Result 2019
Our financial performance for FY2019 was solid and sound. Our hotel investments led the way in earnings, followed by commercial leases, residential development, share market investment income, The Base, fishing quota and farms.
Revenue was in line with prior year, with other income dropping from $6.8m to $2.0 based on one-off sales that occurred in FY2018. Direct investments saw some improvements during the year and Net Profit landed at $47.3m, up from $45.5m.
Comprehensive income was $72.2m, up from $44.0m, and included a $23.6m uplift in valuation of our Hamilton hotels. Total Liabilities remained flat at $233.8m and TGH is conservatively debt leveraged at 15 percent of Total Assets. Return on Investment was 6.9 percent.
Total Equity was $734.4m, an increase of $43.9m on 2018, and at balance date Total Debt was $145.3m. Importantly, dividend to our iwi shareholder increased to $18.0m, up by $0.5m. This does not include services valued at $1.0m which are provided in-kind to our tribal development arm. Our policy is to return a minimum of 60 percent of cash earnings as dividend annually to our iwi.
The theme of this Annual Report is partnerships. We consider partnerships to be part of our DNA; a trait that we inherited from the Tainui Maaori Trust Board. The Novotel Tainui Hamilton hotel, which opened in 1999, was developed through a partnership approach led by the Trust Board. That hotel was followed by The Base, then the Ibis Tainui Hamilton hotel and the Novotel Tainui Auckland Airport hotel, all of which included strategic partnerships.
Those partners included the Perry Group, Hamilton City Council, Accor Hotels, The Warehouse and Auckland Airport Ltd as well as design, construction, and project management suppliers and banking partners. Successful strategic partnerships are built on trust, respect and mutual benefit and we continue to work in this way to advance the interests of TGH on behalf of our iwi.
NGAA KAUPAPA ARUMONI
Following a heavy weighting on property in its earlier years, TGH remains on a path to diversify its investments in order to balance risk. In line with this, our ongoing development of the Ruakura Inland Port over the past year gives us a stake in a significant infrastructure asset for the region.
Meanwhile, the extension of the Novotel Tainui Hamilton hotel and the plan to build a new 5-Star luxury hotel, named Te Arikinui, at Auckland International Airport will add further strength to our hotel operations which are significant cash earners for our business. A third key strand of our investment strategy is refreshing our fixed income portfolio by entering long-term lease agreements with Crown agencies, which provide secure, medium and long-term income.
TOO TAATOU IWI
Paataka Kai, jobs, asset tours, tribal kaupapa, and furthering our cultural knowledge help sustain our connection to our iwi.
This year we distributed 365 mutton and 2,280kg of mussels to 49 marae, identified 1,336 jobs for tribal members, held four asset tours, attended poukai and events, and immersed staff into our culture at a Waahi Paa noho marae. Karakia and waiata practise are held three times per week and we have recently introduced te reo Maaori lessons for staff.
We also supported the Waikato Raupatu Lands Trust by heading contract negotiation and project managing civil works for the Te Kaarearea housing development. Led by the Lands Trust, this initiative will provide 50 houses for iwi members purchasing their first homes.
These kaupapa ensure we are aligned to our values as iwi as we go about the important business of growing puutea for now and future generations.
Click here to view the Waikato-Tainui Annual Report 2019.