Dunedin City Holdings Annual Result

Annual Result for the year ended 30 June 2013

The Board of Dunedin City Holdings Limited (DCHL) is pleased to report a very strong result for the year ending 30 June 2013.

Highlights

• Profit after tax for the group has improved from a loss of $5.1m last year to a profit of $20.5m this year.

• We have distributed to the Dunedin City Council (DCC) and its subsidiaries outside the DCHL group a total of $15.7m. This has fully met budget expectations and been achieved within the policy of not borrowing to pay dividends.

• Cash from operations has improved markedly from $19.5m last year to $35.7m this year. This was after paying the budgeted subvention payments of $9.5m to Dunedin Venues Limited.

• The solid cash generation has enabled the DCHL group to lower its net debt by $10m. The debt of the parent company also decreased slightly, by $300,000.

• Significant progress has been made in restructuring the group governance arrangements.

• The improvement in results this year reflects the hard work and focus of the staff and directors of the DCHL group of companies, which is much appreciated.

Profit after tax for the group has improved from a loss of $5.1m last year to a profit of $20.5m this year. There are a number of factors which go into making up this improvement. All companies in the group have performed strongly this year. City Forests Limited’s profit was increased by the sale of carbon credits, an increase in the valuation of the forest estate and a substantial increase in margins from the sale of logs. Aurora Energy and Delta Utility Services Limited both contributed improved performances, while Dunedin International Airport also had a strong year.

Cash from operations has improved significantly. Cashflow is the most critical measure as it is the basis for dividends and capital investment. This year, both City Forests and Delta markedly improved their cashflow generation performance.

The solid cash generation performance has also enabled the DCHL group to lower its net debt by $10m over the year. The group balance sheet shows a slight increase in the debt position as the debt of the DCC (which is accounted for in the Dunedin City Treasury company) edged upwards to cater for the completion of several budgeted projects. The debt of the parent company also decreased slightly by $300,000 over the period.

We have also made significant progress in restructuring the governance of the group. Directors appointed to subsidiary boards in the last quarter of 2012 have contributed strongly. In some cases, a new focus has been brought to company strategies and good progress has been made in exiting investments now well recognised as non-core investments.

We would like to make special mention of the contribution of Ross Liddell to both City Forests and Dunedin City Treasury. Ross retired as a director after year end and his contribution to the DCHL group over a period of years has been significant and appreciated.

The board of the parent company will alter again over the next few months and there will also be further changes to the subsidiary boards. In August, Denham Shale stepped down as DCHL Chair. He and Bill Baylis had been appointed to assist in implementing a range of recommendations from the Larsen Report and many of the positive developments that have taken place over the last year can be attributed to these changes. Mr Shale and Mr Baylis will step down from the board once the replacement directors have been agreed by the Council.

ends

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