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Te pūrongo o Te Rau Toi Ariki
Chair person report - Dion Tuuta
Turuturu te kawa, whakamanamana te kawa, heke mai te kawa ora!
Kia piki ake rā ki runga i te waka o te manawanui, kia tāia ki te ngākau tangata te raukura o te whakapono, kia uruora ki roto i te whenua taurikura e māhora ake nei. Ko Parininihi ki Waitōtara tēnei e maioha atu nei, e whakairi ake ana i te kupu me te kōrero kia poipoia e te ngutu tāngata, ko tātou tēnei e ara ake nei, e matike ake nei kei runga, Rire, rire, hau pai mārire.
Kia whakaritorito i te tī, ahakoa ka whati, ahakoa ka wana; koia tēnā, ko te tohu o te ora, koia tēnā, ko te tohu o te mounga roa. He tai papaki i te mahara tangata i roto i ngā tau maha, engari ka rokohina ake rā i te āio o te tai kia paingia e tātou!
E kore e ngāueue, e kore e wharara, ko tā tātou taunaki ake i ngā pou rau takitaki. Nā rātou i taituarā mai tā tātou haere, nā rātou i waitohu te ara kei mua. Nēi kore, e kore pea ngē e taea noatia e tātou tēnei mea kotahitanga te whakakaupapa, e kore pea ngē e taea noatia e tātou tēnei whare tūranga kōrero o Parininihi ki Waitōtara te poupou ake. Nā whai anō i eke, nā whai anō i kite ate ara kei mua.
On behalf of the Parininihi ki Waitōtara Incorporation Committee of Management I am honoured to present the annual report for the financial year 2022/2023.
It has been another year of change for the Incorporation on many different fronts, and so I wish to acknowledge all our kaimahi, the executive management team and my fellow board members for bringing their best to their mahi every day right from the outset.
Resilience is something we know very well, both as Taranaki Māori and as an Incorporation, and over the last year it has been brought to the fore in a wide variety of ways.
Our values of Manaakitanga, Kaitiakitanga, Whakapono, Kotahitanga and Whanaungatanga remain a source of strength and focus for us, standing as touchstones as we negotiate the pathway of becoming a successfully diversified and sustainable Taranaki Māori owned and operated business providing meaningful opportunity for our people.
FINANCIAL REPORT
This year the PKW Group returned a net loss after tax of $1m, a result directly attributable to the downward re-evaluation of our corpus whenua. The volatility of the land valuation process has a considerable impact on our profit or loss position each year, and the reduction $10.5m (from $205m last year to $194m this year) is another example of this in action.
Our financial reports have benefited from large valuation uplifts in the past, and so the swings and roundabouts of the property market will continue. It is important to note that these movements represent paper valuation movements not cash.
A more realistic picture of our performance as a business entity can be seen in our operating profit before tax of $7.3m (FY21/22: $14.1m).
As the annual dividend payment is directly linked to the operating profit result, we are pleased to offer a total proposed dividend for this year of $2.20 per share, made up of an annual dividend of $2.05 per share (up 10c on last year's dividend of $1.95 per share) plus a special additional dividend of $0.15 per share. The is in line with our strategy of delivering sustainable dividend flow to our owners.
The dividend is a reflection on the underlying strength of our business from our 7-yearly rental revenue streams, alongside PKW Farms and our lobster investment continuing to provide strong outcomes. This speaks to the importance of diversification to protect ourselves from the increasing volatility being experienced by the economy as a result of continuing global uncertainty. We will continue to explore opportunities for strategic investment.
PEOPLE
This year has seen us farewell and welcome several significant people from our governance and management teams.
Governance Changes
At the governance level we farewelled Will Edwards from Te Raurengarenga/Committee of Management, and Richard Krogh from the PKW Farms Board. Both Will and Richard brought fantastic skills and networks to the Board table, and they made a huge contribution to the performance of the business. We wish them well in their future endeavours.
We welcomed Jayde Rangi-Wilkinson who was elected to the Board to succeed Will; Jayde brings with him a strong career in operations management. Jayde recently relocated home to Taranaki where he works as the Chief Executive Officer for Te Kiwai Mauī o Ngāruahine, the commercial arm of Te Korowai o Ngāruahine Trust.
Independent director Craig Hattle has stepped into the Chair of PKW Farms as the independent director successor to Richard, bringing with him a wealth of experience and a strong commercial acumen across the food and fibre value chain.
Parininihi ki Waitōtara Trust also saw governance changes with Angela Kerehoma being elected as the new Shareholder Representative Trustee to succeed Darryn Ratana, who retired after 12 years of dedicated service. We thank Darryn for his service and welcome Angela. Additionally, Allie Hemara-Wahanui was also appointed as the first Independent Trustee. We look forward to their leadership contributions to our whanau.
Executive Changes
At the executive level we farewelled Warwick TauwhareGeorge, our Te Rau Matomato/Chief Executive Officer. Warwick led the organisation for six years driving a dedicated focus on improving financial performance and seeking out new land-based opportunities, including our venture into Miraka Hipi and investment in SLC Ventures and Spring Sheep.
On behalf of the Board I would like to acknowledge the vision and commitment Warwick brought to his role and wish him well for the future.
As one door closes, another opens, and we were extremely pleased to welcome Aisha Ross (Ngāruahine, Ngāti Ruanui, Taranaki Iwi, and Te Atiawa) as our new Te Rau Matomato/CEO.
Aisha has a deep understanding of the Incorporation as a member of a committed shareholder whānau and is a previous Associate Director and member of the Committee of Management. He has a strong professional background in innovation and venture capital and brings a fresh strategic outlook to the role of Te Rau Matomato/Chief Executive. The Board is looking forward to working with Aisha and refreshing our strategic plan while continuing to pursue our vision of He Tāngata, He Whenua, He Oranga.
Aisha will be ably supported by our experienced executive team, including its newest member Jahron Neha (Ngāti Maniapoto) in the role of General Manager Finance and Investments. Jahron has a strong background in finance working with KPMG, Tatua and AFFCO and his skills and experience have already shone through.
Upcoming Changes
This year we will also see the departure of two highly respected members of the Committee of Management, Tama Potaka and Claire Nicholson.
Tama will step down from the Committee of Management following his election as the National MP for Hamilton West. Claire Nicholson will also retire from the Board after 9 years of dedicated service.
Both Tama and Claire brought fantastic skills and commercial experience to the Committee of Management and PKW Farms Board. On behalf of the shareholding whānau I thank them both for the significant contribution they have made to the Incorporation over the years.
After a period of transition and change, we are now looking forward to gaining some stability around the board table to enable a collective focus on re-energising our collective strategy.
NEW STRATEGIC RELATIONSHIPS
During the year the Incorporation undertook a successful refinancing process as we sought competitive bids for our debt provision.
As shareholders are aware, for the past 15 years Rabobank has been our sole banker. Following a robust tender process, undertaken with assistance from our advisors PWC, the Board invited ASB to join Rabobank in providing PKW’s finance. ASB was also selected for its commitment to sustainability aspirations, and the strong alignment with the Incorporation’s Te Ara Putanga framework.
Our strong and positive relationship with Rabobank will continue, with their expertise in the agribusiness sector continuing to add tangible value to our farm operations.
Shareholders can be proud of the fact that Parininihi ki Waitōtara Incorporation received a number of highly competitive bids from high quality financiers who recognise the strong performance of the Incorporation and want to partner with us to help us achieve our aspirations. This places us in a good position to deal with expected economic volatility moving forward.
ECONOMIC AND REGULATORY CHALLENGES
The post-pandemic business environment remains challenging. We face increasing costs across the board and lower prices for the products we produce. Profit margins across our organisation and investments are under real pressure. Careful management is called for as we continue to adapt and insulate ourselves to these growing economic pressures, while also ensuring we continue our strategy of diversification.
Significant challenges will also present themselves in a slew of impending regulatory reforms to resource management, climate change and freshwater management legislation. These anticipated impacts will flow through to all land-based businesses.
However, our response to these challenges is from a position of strength, of robust foundations and a resilient and determined team that draws inspiration from our intergenerational perspective and commitment to our shareholders of today and in the future.
The focus on cost control will be integral along with our awareness of risk and the way we manage it. As already mentioned, diversification of the investment portfolio is a clear strategic pathway forward, and potential investment in the renewable energy space and residential property development is being explored.
SHAREHOLDER ENGAGEMENT
The shareholder voice is one we listen to closely, and we will be reflecting on the messages the recent shareholder survey provides to guide us in our decision making. We also intend to increase our engagement with whānau with opportunities to kōrero kanohi ki te kanohi with owners to learn more about what they want for the Incorporation, and their expectations of the Committee of Management.
One of the challenges we face is the ongoing fragmentation of shares, but I wish to reiterate our commitment to all shareholders, no matter the size of their holding.
ACKNOWLEDGEMENTS
In conclusion I would like to thank my fellow Committee of Management members, the executive leadership team, and our business partners for the support they have shown to our incorporation over the past year.
I also would like to acknowledge once more the resilience and effort that our kaimahi have shown as they continue to work to deliver on the expectations of the business.
Finally, I would like to thank and acknowledge our shareholder whānau for their continued support and belief in the power of our collective action as Parininihi ki Waitōtara Incorporation.
Mauriora
Dion Tuuta - Te Rau Toi Ariki
Parininihi ki Waitōtara Incorporation Committee of Management
