Ngai Tahu in good shape
THE PRESS – 06 November 2006
Despite recent media publicity, Ngai Tahu’s business interests are in sound spirits, writes WALLY STONE.
Ngai Tahu has a successful track record of ensuring appropriate structures are in place to manage the commercial and long-term aspirations of the tribe.
Like any other organisation, the key to achieving this is to consistently review performance, leadership, strategic direction and operational structures.
The tribal council, 18 months ago, began a review process that has resulted in robust and at times vigorous debate. It is unfortunate that parts of the debate have found their way into the public arena, resulting in a distorted view of the organisation and its operation.
It should be noted that the tribal council exercised clear judgment by putting in place the interim Ngai Tahu Group Board to take responsibility for the day-to-day operation of the Ngai Tahu group while they continue their debate. This means the operational arms are clearly separated from tribal politics.
As the chair of the Ngai Tahu Group Board, I congratulate the tribal council on its desire to address the hard questions while separating the operation from the politics.
Such an approach is necessary if we want to end up with an organisation capable of taking us forwards in the 21st century. I’m reminded of the high expectation placed on Ngai Tahu to be a responsible and effective leader in the South Island.
The review of the Holdings Corporation identified clear areas for improvements specifically designed to increase the overall performance.
While some businesses within the Holdings Group have had their challenges in recent times, other businesses have performed extremely well. Ngai Tahu Property and Ngai Tahu Investments should both be congratulated on their financial performance and results. These two business units comprise 69 per cent of our asset portfolio.
In September, the media ran stories based on our unauthorised annual accounts. These articles were completely unbalanced and misleading, with headlines that included “Ngai Tahu’s big trading losses cause alarm”, “Ngai Tahu empire hit by money woes”.
We have always strategically maintained a balanced portfolio of assets and our overall financial performance bears out this strategy.
Ngai Tahu Property made an overall profit of $36.3 million and Ngai Tahu Investments’ assets under management grew from $69.5m in 2005 to $128.1m this year.
These successes have been overlooked by the media, and this leaves us wondering what has happened to the media’s mandate of balanced reporting.
There is no denying that the last financial year was a difficult and challenging one for the seafood industry, and Ngai Tahu Seafood was no exception. While the New Zealand dollar corrected against the United States dollar during the year to produce a more favourable export environment, factors such as rising marine fuel prices and continued poor profitability for large-volume wetfish species meant continued pressure for the company. As a result, we pursued options to increase efficiencies and margins.
It was unfortunate that previous decisions and purchases have dramatically affected the seafood company’s ability to perform in line with industry standards. The seafood board decided that the asset base needed to reflect true market value and its ability to generate revenue. As a result, we wrote down $20.7m. This was a balance-sheet correction – not a cash loss, as implied by the media.
Contrary to media reports of a $2m loss for Ngai Tahu Tourism, the reality is that its result before interest and tax was a positive $3.3m. Yes, there has been a general softness in the tourism industry and a couple of our individual tourism businesses experienced one-off difficulties, including the temporary closure of Shotover Jet during the peak season.
However, we are pleased with the results of several of the successful businesses within our tourism portfolio that are earning excellent returns for shareholders.
Our vision is Motatou, a, mo ka uri a muri ake nei – for us and our children after us. We are a family business, so we invest heavily in helping Ngai Tahu people – and we do this by using the profit that our business ventures make.
We believe Whai Rawa is one of the most innovative initiatives that has come out of Ngai Tahu for some time. It is a scheme to encourage Ngai Tahu whanau to develop the important savings habit.
Already 12% of the tribe have made financial commitment to their future by joining Whai Rawa, and at the end of its first year, we expect this to be around 35%.
Whai Rawa is about empowering people and giving them independence, and the take-up so far compares favourably with the 21% of New Zealanders who have superannuation funds. Whai Rawa is just one of the many innovative initiatives we are undertaking.
In the short term, the tribal council will continue its vigorous debate. This will ultimately provide Ngai Tahu with the leadership and strategic direction to continue our successful track record for us and our children after us.
* Wally Stone is Ngai Tahu Group board chairman and the acting chairman of the Ngai Tahu Holdings board.