OUR OURMISSION MISSION To Toprovide provideinfrastructure infrastructure and andservices servicestotofacilitate facilitatethe the marketing marketingand anddistribution distributionofof fresh freshfood, food,flowers flowersand andother other ancillary ancillaryproducts. products.
OUR OUROBJECTIVES OBJECTIVES • •Facilitate the efficient and effective operation ofof Facilitate the efficient and effective operation
the Brisbane Markets. the Brisbane Markets. • •Provide and maintain world-class infrastructure and Provide and maintain world-class infrastructure and
services toto facilitate the marketing and distribution ofof services facilitate the marketing and distribution fresh produce, flowers and other ancillary products. fresh produce, flowers and other ancillary products. • •Enhance the services offered toto customers and the Enhance the services offered customers and the
role ofof the Brisbane Markets in in the marketing and role the Brisbane Markets the marketing and distribution ofof fresh and processed produce, flowers distribution fresh and processed produce, flowers and other ancillary products. and other ancillary products. • •Facilitate the ongoing growth and development Facilitate the ongoing growth and development
ofof the Brisbane Markets. the Brisbane Markets. • •Promote the role and importance ofof the Brisbane Promote the role and importance the Brisbane
Markets and the benefits ofof fresh fruit and vegetables Markets and the benefits fresh fruit and vegetables toto the industry and consumers. the industry and consumers. • •Provide effective and timely industry Provide effective and timely industry
advocacy and representation. advocacy and representation. • •Achieve satisfactory returns Achieve satisfactory returns
toto shareholders. shareholders. Cover image: A list of of Brisbane Markets’ first wholesalers who moved to to thethe Cover image: A list Brisbane Markets’ first wholesalers who moved Rocklea site in in 1964. The 5050 Year logo has been displayed byby thethe Brisbane Markets Rocklea site 1964. The Year logo has been displayed Brisbane Markets community throughout 2014 to to mark a half century since thethe city Markets community throughout 2014 mark a half century since city Markets moved to to thethe Rocklea site. moved Rocklea site.
CONTENTS 2
AT THE MARKETS Getting there
3
OUR PROFILE Brisbane Markets at a glance
4
HIGHLIGHTS 2013/14
6
CHAIRMAN’S REPORT
8
CEO’S REPORT
HISTORY FLASHBACK One of the goals set by BML when acquiring the Brisbane 20 FUTURE DEVELOPMENT Markets in 2002 was to facilitate upgrading 22 WHAT the WE ongoing DO and redevelopment of the 26 OUR DIRECTORS Rocklea site to promote and sustain its relevance in the fresh 27 OUR STAFF produce supply chain. 28 CORPORATE DIRECTORY 29 SHARE TRADING
Financial performance Return to shareholders Property Occupancy statistics Site infrastructure and maintenance Site operations Operational site figures 2013/14 Communications Retail markets Future development Our staff Acknowledgement and thanks
12 FINANCIAL COMMENTARY Asset revaluation
SHARE REGISTRY
Long-term debt Link Market Services Insurance recoveries from January 2011 Level 15 324 Financial Queen Street results Brisbane Qld 4000 Property valuation effects Email: registrars@linkmarketservices.com.au 2013/14 Revenue breakdown Website: www.linkmarketservices.com.au
15 STRATEGIC FOCUS 2015 AUDITORS AND INDEPENDENT Next 12 months ACCOUNTANT BDO Audit Pty Ltd 16 50 YEARS AT ROCKLEA Level 10 Growth comparisons 12 Creek Street Brisbane Qldtimeline 4000 50 Year
SOLICITORS HopgoodGanim Lawyers Level 8 Waterfront Place 1 Eagle Street Brisbane Qld 4000
50
BRISBANE MARKETS CELEBRATES
YEARS
AT ROCKLEA
2014 is a special year for the Brisbane Markets community, which celebrates 50 years since moving TRADING the city-based wholesale Markets to the SHARE purpose-built Rocklea site in 1964. shares in BML are not As an unlisted public company, traded onof the Australian Stock Exchange any other While most the anniversary events fall intoorthe share trading exchange system. BML does, however, second half of the year, the celebrations have continued maintain a2014, register parties interested in buying shares throughout withof Brisbane Markets-based businesses in the company and offers guidance in the process. displaying the 50 years at Rocklea logo. Our community has contributed towants a commemorative book,and If a shareholder to sell sharescoffee in thetable company been filmed for a Brisbane Markets Rocklea DVD, and advises BML, the information will be circulated to all aided the who refreshing of the Brisbane Markets History shares, parties have expressed an interest in buying Room and its renaming to the Arch Martin Brisbane and the individuals concerned can then negotiate a price Markets History the Room. and progress sale. If a sale is finalised, BML’s share registry, Link Market Services, must be sent a copy of the original stamped transfer form so that the change of ownership can be recorded on the company’s share register. People interested in buying or selling shares in BML, or who need any information in this regard, may register their interest by contacting BML’s Corporate Office on (07) 3915 4200.
BRISBANE MARKETS ANNUAL REPORT 2014 BRISBANE MARKETS ANNUAL REPORT 2014
1 29
AT THE MARKETS
GETTING THERE The Brisbane Markets is located on Sherwood Road at Rocklea. For more public transport information visit www.translink.com.au or call 13 12 30. By car: Take the Sherwood Road exit off the Ipswich
1964 – Entry time at the new Brisbane Market.
Motorway and travel west for 700m. Car parking is available. By rail: The closest train station is located in Station Road at Rocklea (800m walk). By bus: The Great Circle Bus Line (route 598/599) stops right outside the Markets.
HISTORY COLLECTION Take a glimpse of up to 150 years of Central Market history at the Brisbane Markets History Collection Room. It features a ‘50 Years at Rocklea’ exhibition throughout 2014. Hours:
8am to 3pm, business days
Where:
Level 2, Fresh Centre Brisbane Markets 385 Sherwood Road Rocklea Queensland 4106
PUBLIC SELLING TIMES Brisbane Markets maintains its strong ties with the community, offering options for those seeking value-formoney shopping when searching for fresh fruit, vegetables, flowers and other bargains in a market environment.
BRISBANE PRODUCE MARKET Brisbane Produce Market’s trading floor is open to public entry on Thursday and Friday, from 10am to 11.30am. Entry is $2 per person or $5 per vehicle.
RETAIL MARKETS There are three retail markets operated by BML. At Rocklea: • The Saturday Fresh Market operates from 6am to noon. • The Sunday Discovery Market operates from 6am to
noon. It costs $1 for pedestrian entry, $3 for vehicle entry and children under 15 years are free. At Ascot: • The Eagle Farm Markets operate on Sundays from 7am to 12.30pm with entry $2 per person.
BRISBANE FLOWER MARKET This wholesale and retail market is open to the public Monday to Friday from 5am to 3pm, and Saturdays from 6am to 1pm. Parking and entry are free.
Price: Free Donations: 07 3915 4200 or admin@brisbanemarkets.com.au
MARKET KITCHEN AND TRAINING ROOMS Brisbane Markets has training rooms and a five star Brisbane City Council rated kitchen situated next to the Brisbane Produce Market. Both are available for hire. The commercial kitchen and seating areas are specifically designed for individuals and companies in the food industry for the preparation and demonstration of food products. The training rooms can be hired in conjunction with the kitchen, or separately, and can include catering, audiovisual equipment and use of the highest quality kitchen appliances. Hours:
Bookings are by arrangement
Where:
Ground Floor, Fresh Centre Brisbane Markets 385 Sherwood Road Rocklea Queensland 4106
Bookings: 07 3915 4200 or admin@brisbanemarkets.com.au
OUR PROFILE Brisbane Markets Limited (BML) is the owner of the Brisbane Markets and is responsible for its ongoing management and development. BML operates on a commercial basis as an unlisted public company with more than 150 predominantly industry-based shareholders, including growers and wholesalers.
BRISBANE MARKETS AT A GLANCE
Brisbane Markets is Queensland’s major marketing and distribution hub for the supply of fresh fruit, vegetables and flowers.
• 53 primary wholesalers, one nut seller, two egg
It is one of only six fruit and vegetable Central Markets in Australia and is the third largest.
• More than 270 leases and tenancy agreements are
Brisbane Markets, on 77 hectares, 11km south-west of the Brisbane CBD, incorporates the Brisbane Produce Market (Selling Floors), South Gate East (commercial offices and warehousing) and South Gate West, Brisbane MarketPlace (retail markets), Flower Market, Commercial Centre precinct and the northern warehouse precinct. BML strives to provide international-standard facilities and services at the Brisbane Markets. These include facilities and services for fruit, vegetable and flower wholesalers, retailers, provedores, secondary wholesalers, food processors, transporters, exporters, industry organisations and Market support businesses.
• More than 600,000 tonnes of fresh fruit and
vegetables pass through the Brisbane Markets each year, valued at more than $1.3 billion. suppliers and four flower wholesalers operate at the site, as well as an additional 100 support businesses. in place. • Up to 4,000 people work or do business at the
Brisbane Markets on a daily basis. • More than 7,000 growers supply produce for sale
at the Brisbane Markets. • The site comprises 38 buildings which include: • multi-tenanted selling floors • multi-tenanted warehouses and sole occupancy
warehouses • commercial and retail buildings. • The total lettable area of the site is 157,818m2, including
28 warehouses and five Selling Floor buildings with a net lettable area of more than 132,000m2, of which more than 80,000m2 is temperature controlled: • land leases covering an area of 25,115m2 • commercial offices with a total lettable area
HISTORY FLASHBACK On opening day in 1964, the Brisbane Market site comprised 50ha on what was once a former dairy farm.
of 5,451m2 • Brisbane Markets Commercial Centre, which houses
a post office, chemist, butcher, convenience store, seafood outlet, fast food outlets, cafe, stationer/ packaging supplier, barber and aquarium retailer.
BRISBANE MARKETS ANNUAL REPORT 2014
3
Brisbane Markets celebrated 50 years at the Rocklea site. On 26 August 1964, the then Queensland Premier, the Hon Frank Nicklin, officially opened the purpose-built facility. Trading began a few days later on 31 August 1964.
HIGHLIGHTS 2013/14
HISTORY FLASHBACK The new Rocklea site was a great opportunity for the Brisbane Market wholesalers to sort out a trading problem that had plagued both Roma and Turbot Street Markets. The buyers were kept at the gate before opening time to stop them sneaking in to disturb the produce.
PERFORMANCE • BML achieved a net profit after tax of $17.541 million,
which represents a significant increase on the previous year’s profit of $9.912 million. The figure does, however, include a substantial increase in the value of BML’s investment properties.
STRATEGY • The BML Board adopted a new Strategic Plan for
implementation over the five year period from 2014/15 to 2018/19.
RECOGNITION • Receipt of the inaugural 2013 Queensland Business
History Award presented at the Queensland Business Leaders Hall of Fame induction dinner. The award recognises businesses that cherish, protect, value and share their corporate story.
DEVELOPMENT • Stage 1 of a project to refurbish the Level 1 offices in the
Brisbane Markets Commercial Centre, re-roof these offices and install a fire ring main for the Commercial Centre was completed. Stage 2 of this project is due for completion in the first quarter of the 2014/15 financial year. • Design and construction plans for two new roofs
spanning the gap between the Covered Unloading Area and Buildings B and C were finalised ahead of these works commencing in 2014/15. This roofing project has received strong tenant support. • A contract was awarded for the replacement of seven
illuminated pylon signs and the installation of a new pylon sign, together with the replacement of major building signage at the Brisbane Markets. The new signs will incorporate BML’s new branding and updated logo suite. These signs will be rolled out in 2014/15.
HISTORY FLASHBACK On the first day of trade, on 31 August 1964, there may have been congestion and grumbles from the buyers waiting at the entry gate, but the traffic cleared within 12 minutes of opening time.
OPERATIONAL • In 2013, tenants with a lease expiry on 31 August 2014
were issued with a Deed (Right of First Refusal) which documented tenants’ right to any new lease of their premises. • Works to connect a series of fire ring mains at the
Brisbane Markets commenced this year, with the first fire ring main installed at the Brisbane Markets Commercial Centre. This project will be progressed over a number of years from 2014/15. • BML completed Stage 1 of a project to raise 11 switchboards
above the 2011 flood peak. Six of those switchboards were replaced, while substantial flood repairs were carried out on the remaining five. Stage 2 of this project will be completed in 2014/15. • A five year tender for waste management services was
awarded to SITA Australia, with emphasis on recycling and green initiatives designed to reduce disposal costs. • 7,000m of asphalt was replaced on roadways at 2
the Brisbane Markets, improving safety and on-site functionality. .
• Building Occupant Warning Systems were upgraded or
installed in Buildings E, G1, J, K, L1, R, S, T, V, W, X and Y2. • Fire system upgrades included new automatic detection
systems installed in Buildings U and Y1, along with network cabling installation to allow high level interface of Fire Indication Panels within Brisbane Produce Market’s northern site network. • Re-establishment of two committees:
Brisbane Markets Tenants Advisory Committee and the Brisbane Markets Safety Advisory Committee.
COMMUNITY • BML signed a platinum sponsorship with
Diabetes Queensland. • More than $68,000 was raised at the 2013 Brisbane
Markets Mango Auction for charities Life Education Queensland and Diabetes Queensland. • Brisbane Markets wholesalers donated 34 tonnes of
fresh produce to the Charleville area to assist with emergency drought relief.
BRISBANE MARKETS ANNUAL REPORT 2014
5
CHAIRMAN’S REPORT
CHAIRMAN’S REPORT
“IT IS MILESTONE YEARS SUCH AS THIS THAT HELP US CELEBRATE OUR PROGRESS BUT MOST IMPORTANTLY, HELP US TURN OUR SIGHTS TO THE NEXT 50 YEARS, TO PROVIDE OPPORTUNITIES FOR OUR COMMUNITY, AND FOR MARKET STAKEHOLDERS, TO PROSPER.”
BML has been at the helm of the incredible progress we have seen over the past 12 years. I am proud to say that in the 2013/14 financial year, our plans are advancing to keep us on track with our commitment to maintain, develop and operate an effective Central Market site. Our stewardship of this site has again resulted in proven positive results. The company achieved a net profit after tax of $17.541 million, which represents a significant increase on the previous year’s profit of $9.912 million. It should be noted, however, that this outcome reflects a positive property valuation (and mark to market adjustment). In addition, the BML Board has adopted a new Strategic Plan to cover the five year period from 2014/15 to 2018/19. A significant part of the plan is devoted to the operation, maintenance and development of the existing Brisbane Markets site. The Board does acknowledge, however, the need to look off-site to sustain the longer term growth of the business, which includes the delivery of off-site services and potential ownership of assets external to the Brisbane Markets. It is with this in mind that our collective ambition is to achieve growth through diversified property ownership, management, development and service delivery on the current site and in off-site locations. One man who has been at the forefront, championing our plans and the benefits of industry ownership, is former Queensland Premier and Treasurer, Michael Ahern AO, whose contribution as a BML Board Member is tremendously valued.
Mr Ahern was a strong advocate for industry-based ownership of the Markets and a passionate supporter of BML. He played an extremely important role in helping to guide the Board, offering strategic advice and insights, and working to give the company higher profile and recognition. He has been a valuable mentor. In his place we have welcomed Stuart Lummis, who has taken up the independent director’s role. Over the past 12 months he has brought us a fresh approach with more than 30 years experience as a senior executive and 15 years as a non-executive director on several boards. He has extensive experience in both large publicly listed groups and not-for-profit organisations and has become an important member of our eight member Board. This celebratory year has also had its lows with the passing of Brisbane Markets History Ambassador and former Chairman of the Brisbane Markets History Task Force, Arch Martin. This respected Brisbane Markets identity had spent almost 70 years in the industry, having held executive positions for most of his wholesaling life, or supporting others through his consultancy work until his retirement. While his passing in such a memorable year as our 50 year celebrations has saddened us, the legacy left by this man through his work to cherish and preserve our history has left us with a platform where we can look back at our past and ourselves. I express my thanks and appreciation to our CEO Andrew Young; to my fellow directors; to management; and, in particular, to all our shareholders. It is milestone years such as this that help us celebrate our progress, but most importantly, help us turn our sights to the next 50 years, to provide opportunities for our community, and for Market stakeholders, to prosper.
His resignation at the last Annual General Meeting allowed us to acknowledge the guidance that he provided our directors prior to the acquisition of the Brisbane Markets from the State Government, and through his appointment as a director in 2002.
Tony Joseph Chairman
BRISBANE MARKETS ANNUAL REPORT 2014
BML Chairman Tony Joseph.
2014 is truly a milestone year as Brisbane Markets celebrates 50 years at the Rocklea site. Over the past half century, we have seen our community prosper, face natural and economic challenges, plan, develop and eventually take ownership of the site and our future.
 7
CEO’S REPORT
HISTORY FLASHBACK
The Brisbane Markets has entered its 50th year at Rocklea in a strong position after producing a robust performance in the 2013/14 financial year. BML has again produced record results, with our financial performance demonstrating the value of a back-to-basics approach, commitment to ongoing development and adhering to an effective cost containment strategy. Over the past 12 months, we have maintained excellent tenant relationships, strengthened the balance sheet, undertaken significant upgrades and made strategic progress in planning the future advancement of the site. This progress sets us up well to continue to deliver on our strategy to develop an effective Central Market site while improving returns for shareholders.
FINANCIAL PERFORMANCE Our strong financial performance in 2013/14 is outstanding and continues the consistent theme we have achieved in recent years to consolidate our position. It is the best result in BML’s history, with a net operating profit after tax of $7.856 million (excluding investment property valuation changes and hedge ineffectiveness adjustments) up on our previous best of $7.267 million in the 2013/14 financial year. This is an 8.1% increase.
Extensive roadworks in Curzon Street, at the northern end of the Brisbane Markets, were completed in 1976 to improve access.
RETURN TO SHAREHOLDERS The dividend paid to shareholders is also the best return paid by the company since taking ownership in 2002. The total dividend paid in respect of the 2013/14 financial year was 11 cents per share fully franked, with the previous best of 10.5 cents fully franked, paid in the last financial year.
PROPERTY Stage 1 of the Brisbane Markets Commercial Centre refurbishment project was completed and a start was made on Stage 2 before the end of the 2013/14 financial year. Stage 1 involved the redevelopment of the Level 1 Offices and replacement of the roof. It was completed in December 2013.
BML’s total assets were $233,707,225 as at 30 June 2014, as compared to $215,198,506 in 2013.
The work incorporated the first phase of a series of projects which will result in a fire ring main being installed throughout the Brisbane Markets site. This work will occur over the next three to five years to significantly improve water flow/pressure for fire hydrants within the site.
Total equity as at 30 June 2014 was $111,534,636, up on the prior peak of $103,694,910 in 2010, before the January 2011 flood.
Stage 2 of the Commercial Centre office refurbishment project began in March 2014 and was due for completion in August 2014.
OCCUPANCY STATISTICS The table below provides the occupancy/vacancy ratios for each building category at the Brisbane Markets: Building Categories Commercial Offices
Area (sqm)
Occupancy Ratio 5,451
Vacant
1,683
31%
Tenanted
3,768
69%
High Clearance Warehouse + Docks
37,183
100%
High Clearance Warehouse No Docks
20,267
100%
Low Clearance Warehouse No Docks
12,721
100%
110
100%
12,728
100%
Secondary Selling Floor
5,633
100%
Retail
3,434
89
3%
3,345
97%
35,090
100%
86
100% *
Mobile Aerial Primary Selling Floor
Vacant Tenanted Single Occupancy High Clearance Warehouse + Docks Storage Total Net Lettable Area (sqm):
132,703
Total Occupancy Ratio:
98.66%
Total Vacancy Ratio:
1.34%
By 30 June 2014: • Two levels of the Fresh Centre were fully occupied with take-up being progressed on Level 1. • The Brisbane Markets Commercial Centre total
occupancy rate for offices was up to 71%. Taking into account the disruption of Stage 1 and Stage 2 refurbishment works, this represents a reasonable occupancy rate. • BML was assessing options to lease the former service
station site. BML’s property holdings are primarily industrial stock, with a relatively smaller offering of retail and office accommodation.
SITE INFRASTRUCTURE AND MAINTENANCE A multi-million dollar project to raise the main electrical switchboards above flood level neared completion. The project involves electrical upgrading, with an emphasis on flood mitigation works to the most affected and critical switchboards. Cost efficiencies have been achieved by combining the raising of the boards with the current insurance project to replace flood-damaged facilities. There was also a focus on compliance projects and infrastructure upgrades, including upgrading fire systems, removing asbestos sheeting and the connection of sanitary mains to a number of the older warehouses. More than 7,000m2 of asphalt was replaced to smooth wearing surfaces, improve tenant safety and actively maintain the site.
* (Excluding land lease area of 25,115m2)
In comparison to the previous financial year: • There is a net increase of 407m2 of office area and a slightly higher office vacancy rate compared with the previous year (28.25%) due to the additional office stock. • There has been a net increase of 149m2 to the total
lettable area due to the reduction in storage by 151m2, the increase in offices by 407m2 and the reduction of retail area by 107m2. • The retail vacancy rate decreased to 3%. • Industrial properties remained at 100% occupancy.
New marketing programs to increase the take-up of office space are having an effect with commercial terms for new leases being signed for offices in the Commercial Centre and the Fresh Centre.
HISTORY FLASHBACK Buyers could not believe the space available to them at the Rocklea Brisbane Market site after working in years of congestion. There was parking space for 2,000 vehicles.
BRISBANE MARKETS ANNUAL REPORT 2014
9
SITE OPERATIONS
COMMUNICATIONS
Fewer accidents and incidents were reported in the 2013/14 financial year. Workshops, training sessions, Safety Week involvement, increased patrols and activity by Workplace Health and Safety Queensland resulted in a reduction of workplace incidents by 10% to just 276 compared to last financial year’s figure of 303.
In mid-2013, BML received the inaugural Queensland Business History Award from the Business Leaders Hall of Fame for cherishing, protecting and valuing its corporate story.
SITA Australia was engaged as the new waste management provider for the common areas. Over the next five years, there will be a focus on promoting recycling and green initiatives that are designed to reduce general waste at this site. A raft of services were introduced including: • revised annual online forklift refresher course • tenant waste handling information and a support service
which includes free waste audits • tenant online access to pest management website, on
which monthly inspection results of 1,400 rodent bait stations at this site are available for review.
OPERATIONAL SITE STATISTICS 2013/14 ACCESS CARDS (TENANTS)
3,147
ACCESS CARDS (BUYERS)
873
FORKLIFT REGISTRATIONS
361
FORKLIFT OPERATOR PERMITS
951
This commitment continued throughout the financial year with a project underway to produce a 160 page, hard cover Brisbane Markets Rocklea history coffee table book, a companion DVD and a refresh of the Brisbane Markets History Room. The book, DVD and refreshed history room will be launched in late 2014. BML and Brismark established a platinum partnership with Diabetes Queensland to promote understanding, communication, collaboration and cooperation to support the healthy eating message. The 2013 Brisbane Markets Mango Auction raised $68,000 for charity, including funds from an Act of Kindness (AOK) program, a fundraising campaign run by greengrocers to encourage their customers to contribute to the auction tally. SITA Australia, Brisbane Markets’ waste management service provider, became a Brisbane Markets platinum sponsor, joining Toyota Material Handling and Motorama.
HISTORY FLASHBACK Much of the fresh produce reaching the Brisbane Market in the 1960s arrived by rail at the purpose-built Moolabin Rail Siding, near Curzon Street. Originally it was called Fruit Market Siding until its renaming to Moolabin in 1967.
RETAIL MARKETS
OUR STAFF
Costs were contained across the department while an active trial and expansion phase took place: • The Saturday Fresh Markets expanded with an additional stall aisle, along with a trial of accepting casual stallholders, where previously only permanent stalls were available.
Safety continues to be a priority with an audit of the Maintenance Department. An Anti-Workplace Bullying Policy was introduced in line with the new bullying legislation.
limited staple food stalls. • Eagle Farm Markets introduced a casual stall component
together with a successful quarterly closet clean-out event.
FUTURE DEVELOPMENT The 2013/14 financial year proved to be an important period of consultation and planning to progress a number of significant capital works projects that will greatly enhance the functionality and appearance of the Brisbane Markets. Work is to begin in late 2014 on a $6.3 million weatherproofing project, which will include works to install two new roofs that will span the gaps between
BML’s Information Technology (IT) Department was expanded to meet the growing technology needs of the organisation with the creation of a part time IT Support position. A Safety and Environmental Coordinator’s role was created to assist with the implementation of safe work practices across the Brisbane Markets site.
ACKNOWLEDGEMENT AND THANKS I thank the BML Chairman, Tony Joseph, and fellow Board Members for their strategic input and support throughout the year. I also acknowledge and thank my management team and staff for their ongoing contributions and commitment in delivering the results achieved.
the Covered Unloading Area and Buildings B and C. The project will see the removal of awnings in front of these buildings and refurbish the facades. A development application was lodged with Brisbane City Council to widen the uses of one of its older buildings along Sherwood Road, known as Building G2, and the former service station, which are marked for future commercial precinct development.
Andrew Young Chief Executive Officer
In addition, a feasibility study is being progressed for a retail market in the South Gate West precinct. This project will continue to be reviewed in 2014/15 with progress being subject to a level of pre-commitment from prospective tenants.
BRISBANE MARKETS ANNUAL REPORT 2014
BML Chief Executive Officer Andrew Young.
• The Sunday Discovery Market was the subject of a trial of
11
FINANCIAL COMMENTARY
BML has again achieved a new high, realising a net operating profit after tax (excluding valuation and mark to market changes) of $7.856 million, an improvement of $589,000 on the prior financial years. Net profit after tax before the exclusion of the impact of changes in investment property valuations was $17.541 million.
• Site operations expenditure has increased by
Excluding the impact of insurance recovery accruals and the offsetting flood-related expenditure, group revenues have increased by $2.965 million or 8.03%, while total expenses have increased by $1.421 million or 5.22%. This has meant that operating profit before income tax has increased by $1.545 million or 15.9%, a revenue increase retention of 52.1%.
• Revenue from the Retail Markets increased by
The main contributors to movements in revenue and expenses included the following: • CPI increases of 2.1% were applied to the majority of
rentals at this site. In conjunction with a number of market rent reviews and the attraction of new tenants to the site, this has resulted in an increase of $1.024 million in rent revenue or 4.15%. • Entry fees and parking have increased by
approximately $85,000 or 3.4%. • Repairs and maintenance costs have increased by
$415,000 or 52%, reflecting ongoing expenditure on improving the site, enhancing site presentation and risk mitigation works which included: • $335,000 for reinstatement and flood mitigation
works • $50,000 on asbestos removal • $70,000 on various fence, road and asphalt repairs
and data network improvements.
approximately $184,000 or 19.4%, including $73,000 for cleaning and refuse disposal which was partially due to additional waste management levies, $60,000 in equipment expenses and other items such as line marking, pest control and security. approximately $273,000 or 8%. • There has been an increase of approximately $100,000
in insurance premiums, with an additional cost for building improvements that have been progressed through the period, as well as an increase of $70,000 for an increase of $2 million in flood coverage which equates to approximately $120,000 on an annualised basis. • Finance costs including interest and bank charges
have reduced by approximately $277,000 or 4% as a result of reduced line fees and margins on the renewed facility and reduced interest rates applicable to the variable portion of BML’s loan facility. The outcome of this improvement in the result is the declaration of a dividend of 6 cents for the final distribution for 2013/14 to be paid in October 2014, comprising an ordinary dividend of 5 cents per share and a special dividend of 1 cent per share. This dividend will bring the total for the 2013/14 year to 11 cents per share fully franked, which is the highest dividend paid in the history of BML. The balance sheet remains very strong with an overall improvement of $11.999 million in net asset position for the year, mainly due to the revaluation of the investment properties.
ASSET REVALUATION An independent property valuation of all BML owned properties was undertaken as at 30 June 2014. While the two vacant properties experienced a slight reduction in value in line with the prevailing economic property climate, the main properties at 250 and 385 Sherwood Road returned a significant increase in value due to increased revenue yields and capital improvements. The actual impact in the financial statements was a net increase of $13,835,575 before tax, which equates to an after tax increase of $9,684,903. This increase means that the cumulative movement in the value of investment properties since the introduction of International Financial Reporting Standards in 2005 has now reached its highest level to date at $37,647,454. Property valuation adjustments are unrealised income and cannot be included for purposes of cash flow, dividend calculation or financial covenants.
LONG-TERM DEBT BML funds a significant part of its capital expansion
INSURANCE RECOVERIES FROM JANUARY 2011 FLOOD CLAIM The insurance claim process following the 2011 flood has continued in 2013/14, although no recoveries have been received during the period. At the end of the 2012/13 financial year, a claim was submitted to BML’s insurance provider for the replacement of distribution boards which had deteriorated as a result of corrosion caused by the flood. This was in addition to substantial remediation works which had already been undertaken. This claim was approved and the work has progressed through the 2013/14 financial year in conjunction with a complementary flood mitigation project funded by BML to raise the boards at the time of replacement so that they would be above the level of the 2011 inundation. The amount approved by the insurer was $1.9 million and the project was approximately 95% complete at 30 June 2014, with the balance of the work expected to be completed in the first quarter of 2014/15.
requirements through a debt funding facility. This funding facility was last renewed in February 2011 directly after the January 2011 floods, and the limit was extended at that time in line with plans to progress the Master Plan for the Brisbane Markets site.
A submission for final settlement of the claim was lodged in April 2014. It was expected that advice would be received in September 2014 that the claim would be accepted and a final settlement of approximately $3.57 million would be made to BML soon after that date.
The facility was due for renewal in February 2014, and an extensive exercise was undertaken to evaluate the best offer for the supply of funding to BML. As part of this exercise a briefing note was provided to all four major banks and one international agribusiness-based bank outlining BML’s history and our requirements for funding. Three major banks and the international bank all presented options for BML to consider. These options were evaluated on the basis of cost of funds, services offered, capacity and the structure of funding to be provided. The successful offeror was the incumbent, which offered a range of services at a price which was considerably lower than the previous facility and which had an excellent working relationship with BML. The facility was extended with effect from February 2014 for a further period of three years at the same limit as the previous facility.
The total value of the claim was $17.330 million less the deductible of $1 million, leaving a balance of $16.330 million, of which $12.760 million had been received as progress payments as at the end of the financial year..
Interest rate risk is managed through the use of longterm swaps. At 30 June 2014 BML had four swaps in operation with a fifth due to commence from July 2014. The four swaps in place were originally for periods of 20 years, 15 years and two for 10 years, maturing in 2028, two in 2023 and 2018. The swap commencing in July 2014 is for a seven-year period maturing in 2021. All the swaps have been assessed and will remain effective over the period of their lives, despite being out of the money in the current economic environment.
HISTORY FLASHBACK The Brisbane Market Club operated from 1966 on Level 1 of the Commercial Centre and became the hub of the Brisbane Market community’s social and sporting activities. It closed in the early 1990s due to a steady decline in patronage.
BRISBANE MARKETS ANNUAL REPORT 2014
13
FINANCIAL RESULTS AIFRS 2014 $
AIFRS 2013 $
AIFRS 2012 $
AIFRS 2011 $
AIFRS 2010 $
AIFRS 2009 $
Operating Revenues
41,800,469
37,348,257
35,938,930
38,696,587
32,336,031
29,489,921
Increase/(Decrease) in Value of Investment Properties
13,835,575
2,727,783
(648,600)
(12,848,319)
3,858,309
1,504,418
Adjustment for Hedge Ineffectiveness
0
1,050,304
(451,131)
(227,461)
(371,712)
0
Total Revenues
55,636,044
41,126,344
34,839,199
25,620,807
35,822,628
30,994,339
Operating Expenses
23,128,391
19,631,101
20,282,818
23,529,759
15,931,362
14,790,126
Net Profit Before Income Tax and Interest and Depreciation
32,507,653
21,495,243
14,556,381
2,091,048
19,891,266
16,204,213
905,276
975,284
845,531
520,559
528,698
458,179
31,602,377
20,519,959
13,710,850
1,570,489
19,362,568
15,746,034
Depreciation Expense Net Profit Before Income Tax and Interest Interest Expense Net Profit Before Income Tax Expense Income Tax Expense
6,541,409
6,818,712
7,320,816
6,266,343
5,410,543
4,852,667
25,060,968
13,701,247
6,390,034
(4,695,854)
13,952,025
10,893,367
7,519,908
3,789,444
2,053,802
(1,351,234)
4,262,098
3,260,728
17,541,060
9,911,803
4,336,232
(3,344,620)
9,689,927
7,632,639
Net Profit After Tax excluding Investment Property valuation changes and Hedge Ineffectiveness adjustments
7,856,157
7,267,142
5,106,044
5,808,426
7,249,309
6,579,546
Dividend Paid
4,568,750
3,718,750
4,250,000
3,931,248
4,009,369
3,674,532
Dividend Proposed Since 30 June payable October
2,550,000
2,443,750
1,700,000
2,231,250
2,443,750
2,104,922
Total Assets
233,707,225
215,198,506
206,491,712
204,230,364
196,402,827
171,055,129
Total Liabilities
122,172,589
115,662,987
114,207,429
106,722,906
92,707,917
84,184,043
Total Equity
111,534,636
99,535,519
92,284,283
97,507,458
103,694,910
86,871,086
Net Tangible Assets per Share
260.92 cents
232.69 cents
215.63 cents
227.92 cents
242.47 cents
228.80 cents
Earnings per share including Investment Property valuation changes and Hedge Ineffectiveness adjustments
41.27 cents
23.32 cents
10.20 cents
-7.87 cents
22.80 cents
20.25 cents
Earnings per share adjusted for Investment Property valuation changes and Hedge Ineffectiveness adjustments
18.49 cents
17.10 cents
12.01 cents
13.67 cents
17.06 cents
17.46 cents
Number of shares as at 30 June
42,500,000
42,500,000
42,500,000
42,500,000
42,500,000
37,687,500
Net Profit After Tax
PROPERTY VALUATION EFFECTS Financial Year ended 30 June 2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
Movement in value of investment properties
13,835,575
Cumulative movement
37,647,454 23,811,879 21,084,096 21,732,696 34,581,015 30,722,706 29,218,288 20,478,511 15,519,030 13,929,635
2,727,783
-648,600 -12,848,319
3,858,309
Hedge ineffectiveness
–
1,050,304
-451,131
-227,461
-371,712
Cumulative movement
–
–
-1,050,304
-599,173
-371,712
1,504,418
8,739,777
4,959,481
1,589,395 13,929,635
Rentals & recoveries (64%)
$25,672,593
Service revenue (22%)
$8,824,136
Parking & licences (7%)
$2,610,616
Retail Markets† (5%)
† In the financial years up to and including 2012/13, Retail Markets revenue included only amounts relating to licence fees paid to BML, with other amounts included as service revenue. From July 2013 all revenue items are shown as Retail Markets revenue.
$2,140,220
Marketing revenue (1%)
$276,896
Other income (1%)
$357,712
2013/2014
REVENUE BREAKDOWN
6 August 2002 – from left: Queensland Minister for Primary Industries and Rural Communities Henry Palaszczuk, Queensland Treasurer and Deputy Premier Terry Mackenroth, Chairman Landacq Limited Tony Joseph and Landacq Limited Director Tony Kelly signing the contract for the sale of the Brisbane Markets from the Queensland Government.
STRATEGIC FOCUS 2015 Brisbane Markets has a clear direction for its future. The BML Board has adopted a Strategic Plan to cover the five year period from 2014/15 to 2018/19. The plan highlights BML’s mission and the Board’s strategic focus on sustaining the business through growth and diversification. Six strategic priorities are identified including: • site development and utilisation • business diversification/investment off-site • relationship management • capital and asset management • human resource development and retention of
expertise • BML profile, stakeholder relationships and positioning
A significant part of the plan is devoted to the operation, maintenance and development of the existing Brisbane Markets site.
NEXT 12 MONTHS
• Central Trading Area – Finalise the current upgrading
projects with the construction of new roof structures and the refurbishment of the facades of Buildings B, C and D. • Permanent Retail Market – A feasibility study is looking
into the establishment of a permanent Retail Market precinct on South Gate West. This would be a $20 million plus project providing a modern food and lifestyle market. • Warehouse projects – There will be an ongoing focus on
opportunities for new/redeveloped warehouses to meet the needs of our tenants and stakeholders. This is in addition to an assessment as to the demand for further covered buyer loading areas and the redevelopment of Building G2. • Site upgrading – Ongoing major upgrading within the
site will continue with further projects in the areas of:
The ongoing work to maintain our goal over the next 12 months includes:
• solar power installations
• Leasing – New leases will be signed with tenants from
• services infrastructure upgrading.
• flood mitigation works
31 August 2014, when 150 leases will expire marking the end of a 10-year term under the standard lease, introduced by BML in 2004. This provides opportunity to review the standard lease with the primary objective being to ensure that this document meets site operational requirements and changes to legislation.
BRISBANE MARKETS ANNUAL REPORT 2014
15
1964
50 YEARS AT ROCKLEA
2014
2014 marks 50 years since the Brisbane Markets community moved from the city Markets Precincts of Roma and Turbot Streets to the purpose-built, then State Government owned Rocklea site, on what used to be dairy farmland.
PRE-1964
THE MOVE TO ROCKLEA
A central fruit and vegetable market has existed in Brisbane for almost 150 years, with the opening of the first city Market in 1868 in a shed near Market Street. After years of poor patronage, it closed in 1881.
In 1958, a Market Investigation Committee looked at a range of options for a purpose-built site and decided on dairy farmland in Rocklea, close to rail and with plenty of room to grow.
Four years later, in 1885, the Council opened the purpose-built Municipal Market in Roma Street. By 1906, a rival Market opened in Turbot Street, known as the Brisbane Fruit and Produce Exchange Ltd.
On opening day it comprised five buildings and a trading area covering just 14 hectares. However, the overall site totalled around 50 hectares.
The city Markets gradually became a congested, sprawled out tangle of businesses that spread as the city and its population grew.
In half a century, the Markets has grown from five buildings on opening day to 38. It has progressed from hand loading and trolleys to forklifts and palletisation; weathered the 1974 and 2011 floods; embraced the introduction of technology; improved transportation logistics; and increased its focus on work health and safety.
INDUSTRY OWNERSHIP
Landacq had 150 shareholders, which included Brismark.
In 2001, after much industry lobbying, the Queensland Government announced its intention to sell the Brisbane Markets through a public tender process.
The money was raised through a combination of share equity and bank debt. Underwriting the deal in the final days of the negotiations with the Queensland Government were wholesale organisations R W Pascoe and the Carter & Spencer Group.
In 2002, after a fierce bidding process, Landacq Limited, a public company comprising 150 predominantly industry-based shareholders, was the successful bidder, buying the 72 hectare site for $73.85 million. The company subsequently changed its name to Brisbane Markets Limited. The 50 year anniversary occurs at a time when the Brisbane Markets looks to its future, with a revised Master Plan guiding development to help prepare it for the next half century.
WHY SELL TO LANDACQ? The Landacq consortium offered an attractive price, minimal risk exposure for the Queensland Government and a strong vision for the future development, management and operation of the Markets.
The Annual General Meeting on 28 November 2002 unanimously approved a change in company name from Landacq Limited to Brisbane Markets Limited.
DEVELOPMENT UNDER PRIVATE OWNERSHIP In 2002, at the time Landacq bought the Brisbane Markets, there was a total gross floor area of 113,045m2 and lettable area of 112,402m2 (excluding land leases). Within 10 years, BML had constructed an additional 25,256m2 of warehouse/commercial office facilities and redeveloped the Fresh Centre as a three-level commercial building with a gross floor area of 4,780m2 and net lettable area of 3,751m2.
Landacq entered into an agreement with Brismark to manage Landacq’s bid for the Brisbane Markets.
GROWTH COMPARISONS – 50 YEARS Much has changed on the Rocklea site over the years, with the volumes of produce, numbers of buildings and forms of transport vastly different from 50 years ago: August 1964
July 2014
Total site area
50 hectare (124 acres 3 roods)
77 hectares
Number of separate buildings
5 (with the Commercial Centre shopping strip under construction)
38
Total asset value
£1,650,122
$234million
Forklifts
None
396 registered forklifts and 1,002 licensed forklift operators
Fresh produce was unloaded then reloaded by hand or by using hand trolleys Main transportation
Rail, truck and some shipping
Road transport
In 1964, Moolabin Rail Siding adjoined the Market. It was originally called Fruit Market Sidings when it opened on 17 September 1964, and was renamed Moolabin in 1967. Moolabin was built specifically to service the Brisbane Market as rail transportation was a vital link between the producer and the Market.
Shipping and air freight used by exporters and importers
Wholesalers
66, comprised of 55 dealing in fruit and vegetables and 11 in heavy vegetables
60 including fruit and vegetables, nuts, flowers, eggs and ancillary products
Staff numbers
Brisbane Markets Trust – 18 full time staff members
Brisbane Markets Limited – 58 full-time, 4 part-time and 4 casual staff members. Brisbane MarketPlace – 4 full-time, 1 part-time and up to 50 casual staff members
BRISBANE MARKETS ANNUAL REPORT 2014
17
1964
1968
1972
1976
1980
1984
1988
The new Brisbane Market at Sherwood Road, Rocklea, opened close to rail, connecting roads and with room to expand.
The Market Act was amended, resulting in an increase of membership of the Trust to eight.
The results of an overseas study tour indicate that the physical operation of the market compares favourably to international standards.
The first stage of the land reclamation project was completed on the western side of the site with 0.7ha made available for future development.
There were approximately 80 forklifts operating on site.
20 years of operation of the Market at Rocklea, as well as 100 years of Central Markets in Brisbane city
Selling Floor extensions to Buildings A, B, C and D were completed costing $3.7 million. The Covered Unloading Area roof was extended north and south to the full length of Buildings B and C.
1966
1970
1974
1978
1982
1986
The Brisbane Market Club is successfully launched. The first crate pool is established.
The Trust spent $1,411 on improved lighting in the unloading area.
On the Australia Day long weekend, the Market was inundated with flood water. The Markets resumed trading in four days.
A significant year of expansion of Market facilities including two further warehouse/storage buildings, further land reclamation and the extension of sewerage services.
Statistics from the Queensland Department of Primary Industries indicate there were 292,000 tonnes of market throughput.
Market Tenants Entry Passes were issued from 1986 for maintenance and security purposes.
1967
1971
Extensive reconstruction of Curzon Street was completed to service the Market’s busy northern access.
A total redemption of $283,932 has been effected since the Debt Redemption Fund commenced to operate on 1 January 1965 leaving as at 30 June 1971 a loan indebtedness of $3,149,704.
1965 Revenue collected in the first 10 months of Market operation resulted in a surplus of £12,248/11/7. The Commercial Centre (Building G) is completed.
1975 A Buyer’s licence was introduced on 1 November 1975 at an annual cost of $100.
1969
1973
The Brisbane Market Trust allows approximately 5,000ft2 (465m2) of former banana ripening and selling space in a flank building of the main market complex to be converted to a packaging process section.
On 1 July, The Chamber established the Credit Service.
1979 A transport terminal, used as a marshalling area for heavy transport, was established with a user’s parking fee.
1983
1987
Extension to Building V is used for storage and distribution of fruit and vegetables.
The Brisbane Market entry was upgraded with an awning over the Market entrance. The work included improved lighting and presentation of the main Market entrance at a cost of $23,000.
1977 Stage one of the Covered Unloading Area roof was completed in January.
1981 The Flower Market was officially opened on 13 April by Sir James Ramsey.
1985 To give Wholesalers unhindered access to their sales floor the Trust provides Tenants with forklift loading zones at the front of each Selling Floor. Major capital works included extensions to Building D and relocation of the Flower Market to Building W.
1989 The Market celebrated its 25th Anniversary at Rocklea. The site net lettable area totalled 45,100m2. There were approximately 950 licenced Buyers with the Market throughput valued at $340 million.
1990
1994
1998
2002
Building Q was completed in January 1990 at a cost of $1.8 million.
The Trust received $329,841 in income from the Trash and Treasure Market Flea Market operator which was a 12.3% increase on the previous year.
Brisbane Market Authority acquired land on the southern side of Sherwood Road. Onsite security was upgraded with the installation of CCTV.
Landacq Limited competes in a bid resulting in the State Government selling the Brisbane Markets to it for $73.85 million. The company changes its name to Brisbane Markets Limited (BML).
2006
2010
2014
The Brisbane Following Markets a WH&SQ educational investigation, induction video public entry was produced times were to give a better amended to two understanding days per week of the Markets from 10.00a.m. with mandatory to 11.30a.m. The viewing required Brisbane Markets of the Markets History Task Force community to was established. maintain site access. 2004 2008 2012
1992
1996
2000
Launch of the Fresh Fest campaign, the forerunner of the retailer development program.
The Brisbane Market Trust becomes Brisbane Market Authority, and releases a new logo, calling itself Brisbane Markets.
The new Brisbane Markets Service Centre allows for more accessible service for Markets’ Tenants and customers.
BML’s total assets were valued at $103 million. BML launched the LPG forklift refuelling facility in November. The Markets celebrated 40 Years at Rocklea.
Opened the $33 million South Gate East Facility. Purchased 9.7ha adjacent to the existing South Gate precinct for $7 million. Sold 4ha in Medway Street to State Government.
Brisbane Markets celebrate 50 years at Rocklea. A $6.5 million project is due to commence to provide roof cover to the open space between Buildings B and C and the Covered Unloading Area.
The Brisbane Markets opened its purpose-built History Collection Room. CCTV was upgraded from analogue to digital. Completion of the Fresh Centre parking and undercover walkway.
2011
1999 1995
1991 There were 220 forklifts registered to operate on site at a yearly cost of $180. Buyers were charged $130 per annum for a licence and parking charges increased to $24 per month.
Deliveries from the Market outside of normal trading hours became possible with the exception of weekends unless by prior arrangement with the Trust. 1997
1993 Two new warehouses, designated as Buildings O (4,505m2) and P (4,879m2), completed in April, are fully tenanted.
State Parliament passes legislation to corporatise Brisbane Markets administration. The new entity is called Brisbane Market Corporation.
Selling Floors underwent major maintenance with each building being repainted in colours chosen to reflect a ‘fresh’ and appealing work environment.
2003
2007
BML takes over management of the Sunday Flea Market. A temperaturecontrolled warehouse built in the South Gate precinct costing $4.25 million was completed.
Water consumption was reduced by 25% to meet the Level 5 water reduction targets. Construction commenced on the South Gate warehouse facility.
2001
2005
The BMC successfully made the transition to a Government Owned Corporation. The Queensland Government announced its intention to sell the Brisbane Markets through a public tender process.
BML refurbished 92 dock levellers throughout the site. The Saturday Fresh Market was launched.
The whole of the Brisbane Markets was totally inundated with flood water. The damage was valued at approximately $100 million. The Markets was operating within 60 hours of the flood waters receding. The Western Access Road was opened and the refurbished Fresh Centre was completed.
2009
2013
A Prospectus offering shares on the basis of a Rights Issue of 1 offer share for every 10 existing shares held, and a public offer issue, raised over $12 million. The annual throughput value was $1.045 billion.
Civil works on the South Gate West precinct were completed. Demolition of the former Commonwealth Bank to make way for a wider Brisbane Markets entry.
BRISBANE MARKETS ANNUAL REPORT 2014
19
FUTURE DEVELOPMENT
Top: Building G2 and the former service station sites along Sherwood Road are situated next to the golf course. Above: Piling at the end of Building B in readiness for the roofing project. Left above and beside, and the facing page are a series of artist’s impression of the completed Central Trading Area roof structure, including new facades and signage.
NEXT 12 MONTHS • Work will begin on the $6.3 million project to provide
roof cover to the open space between Buildings B and C and the Covered Unloading Area in September 2014. Included in the scope of work is the refurbishment of the facades to these Selling Floor buildings. • The second stage to the above project is the
construction of a roof cover between Building D and the Covered Unloading Area. This project is expected to be progressed in the first half of 2015. • Telstra will install a telecommunications tower at the
southern end of Building C from October 2014, with the new roofing project expected to permanently disrupt mobile aerial signals from equipment currently attached to Building C. • Groundwork will be carried out as part of continuing
planned capital works projects. This includes road widening between Moraitis and CHEP, at South Gate East.
• An upgraded Traffic Management Plan is being
developed that will include: • changes to line-marking and signage that will be
rolled out in the 2014/15 financial year • consultation with tenant groups over proposed
traffic management requirements • a Hazard and Risk Register and the
appropriate control measures • reviewing and updating the Brisbane Markets
Regulations with amended traffic management controls. • The Market Kitchen is to be relaunched and an
induction course implemented after an upgrade with the installation of Fagor Industry Equipment keeping the Brisbane City Council five-star facility modern and revitalised. The upgrade was carried out under a sponsorship arangement at no cost to BML. • The Brisbane Market History Collection Room will be
revitalised with a ‘50 years at Rocklea’ exhibition and renamed leading up to the anniversary celebrations in September.
FUTURE • A review is underway of the area at the front of the
Brisbane Markets in which Building G2 and the former service station are located. BML is assessing the feasibility of refurbishing Building G2 and redeveloping the service station, with this precinct to be designed as a new commercial zone. • Work will continue on a feasibility study for a
proposed retail markets development at the South Gate West precinct.
HISTORY FLASHBACK The centre awning of the Undercover Loading Area was completed in January 1977. The north and south awnings were constructed in 1988, providing much needed additional all-weather coverage.
BRISBANE MARKETS ANNUAL REPORT 2014
21
WHAT WE DO
HISTORY FLASHBACK By the end of the eighties, Brisbane Markets had 950 Buyers buying fresh produce. There were more than 130,000 visits a year made by the general public to pick up a bargain at the end of the trading day.
2014 TENANT SERVICES
Brisbane Markets is a hive of activity, at any time of the day or night.
As a landlord, BML provides a high level of services to its tenants, which extend far beyond most landlord/tenant arrangements in industrial properties. These services include:
The 24 hour operation, spread over 77ha of land, sees 45,000 articulated semi-trailer and B-double vehicles, and thousands of smaller trucks and vehicles, delivering produce to and from the Markets each year. Behind the scenes, a hardworking team of BML staff members are committed to property management, maintenance, upgrading services and infrastructure, keeping the site compliant and working with more than 150 businesses to improve the facilities that assist their successful operations.
• site maintenance • ongoing capital works projects to replace and upgrade
infrastructure to promote: • site compliance and building occupant safety • flood mitigation • 24 hour security • access control • CCTV monitoring • secure car parking
The following takes a look at the work behind the scenes
• waste and pest management programs
to keep Queensland’s largest fruit and vegetable hub operating smoothly.
• site cleaning • provision of common area services including loading
docks, site parking and lighting
• management of site operations including traffic
management, accident/incident reporting and investigation, and enforcing the Brisbane Market Regulations through Market Officers who patrol this site on a 24 hour per day, 7 day a week basis • conducting building inspections on tenant fixtures,
plant and equipment to ensure that these comply with risk management requirements • regulation of access to this site through online site
induction programs • facilitating work health and safety workshops for
tenants and their staff so as to increase awareness of safety requirements and decrease potential for unsafe practices • development and implementation of an intranet for
all tenants, which provides information on events, issues and Market Bulletins, together with a raft of application forms and policies relevant to this site • industry representation and sponsored marketing and
promotions campaigns. BML’s continued commitment to upgrading buildings, services and infrastructure, providing site security, promoting site safety and regulating vehicle and pedestrian traffic has provided tenants with a safer, more accessible site in which to do business which in turn has been recognised locally and internationally.
combining the raising of the boards with reinstatement works covered by BML’s flood claim. The work included: • raising a number of switchboards above the 2011 flood
level in what was Stage 1 of a two-stage project • replacement of a number of flood-affected
switchboards.
STAYING COMPLIANT BML has an ongoing compliance program, in consultation with tenants, to promote site compliance with changing Australian Standards and regulations. Extensive work has taken place, mostly out of normal trading times, to reduce the potential disruption to tenant businesses, and includes: • ongoing management and removal of asbestos sheeting • installation of sanitary mains to a number of the older
buildings • upgrading or replacing the Building Occupant
Warning Systems to 12 buildings • upgrading or installing new fire systems in
three buildings • installation of safe roof access and roof anchor points • staged installation of a fire hydrant ring main
throughout the site over a number of years
SITE RESTORATION BML has used the opportunity that has come from restoring the flood damage caused to the site by the 2011 flood inundation to further upgrade its facilities, and improve its emergency-readiness. Electrical upgrading has occurred, with an emphasis on flood mitigation works to the most affected and critical switchboards. Cost efficiencies have been achieved by
• upgrading of emergency lighting throughout a
number of warehouses. All works were managed by in-house staff members, assisted by BML’s Property Department, who liaised with the tenants in regards to timing of works to minimise business impacts.
BRISBANE MARKETS ANNUAL REPORT 2014
23
HISTORY FLASHBACK During 1966, a building was erected along Sherwood Road for commercial letting as shops and offices, which became fully tenanted. This was the Commercial Centre, which has had a number of substantial refurbishments since then.
COMPLETED MAJOR WORKS A range of major works occurred throughout 2013/14 including: • clear Perspex roof sheeting replacement to
Buildings Q & R • 7,000m2 of asphalt replacement • perimeter fencing replacement
HEALTH AND SAFETY A PRIORITY Brisbane Markets’ work health and safety culture has continued to improve over the past 12 months. This was aided by tenant workshops, increased communications on keeping safe, improved online site inductions, tighter forklift registration processes and release of on-site safety statistics. BML worked with Workplace Health and Safety Queensland to assist its compliance role. In the past financial year, the Brisbane Markets Safety Advisory Committee supported and promoted safety on site.
• replacement of sluice valves
BML also takes site infrastructure safety seriously, with works including:
• roof repairs to Building P, Q, Y, L, O, J, X, R, Z, N, W
• highlighting of storm water drains that flow to
and the Covered Unloading Area
waterways
• box gutter replacement at Building S
• upgrading of Selling Floor dock stairs
• replacement of Building E roof
• installation of roof access equipment – Stage 2
• replacement of Western Gate asphalt with concrete
• various asbestos removal projects
• replacement of the CUA sewerage pumps
• perimeter fencing replacement
• site presentation, including continuation of the
• lighting upgrades.
repainting of Armco railing, kerb painting and replacement of old and worn signage.
HISTORY FLASHBACK A Sunday Retail Market has been operating from the Brisbane Markets site since the early 1980s. BML took over ownership in 2002 and by October 2003 had launched the Saturday Fresh Markets in addition to the Sunday Discovery Market.
TRAINING HUB A 24 HOUR RESOURCE BML’s Tenant HUB is a 24 hour resource allowing on-site businesses to access it daily to check up on the Markets community’s news and information, as well as complete online training courses. The HUB is found at http://tenants.brisbanemarkets.com.au The 24 hour, seven day a week website includes the tenant directory, online maintenance requests, bulletins and news items.
The Privacy Policy was in response to changes to the Privacy Act 1988 (Cwlth). Amendments to the Act introduced obligations that significantly affect the way organisations collect, handle and disclose personal information, with the overarching principle being that organisations manage personal information in an open and transparent manner. The proposed amendments were enforced from 12 March 2014.
Tenants can refer to the site daily to search Market Regulations and keep a daily watch on any news that may affect their business.
Ahead of this date, BML developed a compliant Privacy Policy, and collection notification statements for all forms that requested personal information, together with amendments to operational procedures, including
POLICY REVIEW
a privacy complaints handling procedure to uphold our obligations under law.
BML’s policies are reviewed on a regular basis. In recent months, the driving forces have been legislative changes and an ongoing need to ensure that policies best meet This year, BML reviewed and distributed: • Leasing Consent Policy • Alterations and Additions Policy • Ancillary Products Policy • Finance Management Policy
The Service Provider Site Access Policy sets out BML’s requirements for all service providers accessing the Brisbane Markets to undertake works. This includes providing evidence of insurances and licences (where relevant), providing indemnities to BML, and entering into a binding agreement for service providers to comply with the Brisbane Markets Regulations while on site. This policy, and the online service provider induction program, will be released in September 2014.
• Privacy Policy • Service Provider Site Access Policy and a new online
site induction for service providers and contractors.
BRISBANE MARKETS ANNUAL REPORT 2014
25
SIMON GEORGE
NOEL GREENHALGH ANDREW YOUNG
BRUCE HATCHER PETER TIGHE
STUART LUMMIS
ANTHONY JOSEPH ANTHONY KELLY
OUR DIRECTORS ANTHONY (TONY) JOSEPH (CHAIRMAN)
ANTHONY (TONY) KELLY
Mr Joseph has been a director since BML’s incorporation on 4 July 1994. He is a director of a private company with interests in fruit and vegetable wholesaling, and is a previous long standing Brisbane Markets Trust member. He has held the position of BML chairman since 11 November 1997.
Mr Kelly has been a BML director since November 2001. He is a qualified lawyer, and until 2004 was a director of a number of private companies with interests in fresh produce wholesaling, distribution and export. He is formerly president of Brismark, chairman of the Brisbane Lions AFL Football Club and a Director of Gladstone Ports Corporation.
BRUCE HATCHER Mr Hatcher is an independent director who joined the Board on 21 November 2012. He has extensive experience in chartered accounting covering many industry sectors, and consults to, and serves on the boards of, several private and family owned businesses. He is a director of Queensland Rugby League, Deputy Chairman of the Board of the Queensland Academy of Sport and Director of MTAA Superannuation Fund. He is a former managing partner of an international accountancy practice and has international experience in a number of industries.
SIMON GEORGE Mr George became a director on 27 March 2012. He is a director of a number of private companies with extensive interests in fresh produce wholesaling, processing and exporting, as well as commercial developments in Queensland and the Northern Territory. His more than 35 years experience in the fruit and vegetable industry gives a depth of experience of the industry to the Board and its shareholders.
NOEL GREENHALGH Mr Greenhalgh is a director of a number of private companies with interests in fruit and vegetable wholesaling. He first held the position from 9 September 1997 to 22 September 1998. Shareholders re-elected him on 16 November 1999 until his resignation on 17 January 2002. He was reappointed as a director on 18 March 2003.
PETER GERARD TIGHE Mr Tighe is a director of a number of private companies with interests in fruit and vegetable wholesaling and exporting. He was a director from November 1994 to September 1998. He was reappointed in November 1999. He is also a director of the Brisbane Racing Club.
STUART LUMMIS Mr Stuart Lummis has over 30 years experience as a senior executive, with 15 years as a non-executive director on several boards. Mr Lummis has extensive experience in large publicly listed groups in addition to not-for-profit organisations. Mr Lummis is currently the Director for Building, Planning, Facilities and Property with a notfor-profit organisation. Mr Lummis holds a Bachelor of Economics, a Diploma in Project and Construction Management, and a Postgraduate Diploma in Accounting.
ANDREW YOUNG Mr Young held the position of Managing Director until January 2000. He was appointed Chief Executive Officer of BML in October 2002, while retaining the position of Chief Executive Officer of Brismark. He has extensive managerial experience and tertiary qualifications in agricultural science, accounting and corporate management. Mr Young also has detailed knowledge of the operations of the fresh produce industry, Central Markets, and property development and its management.
TRICIA WILLIAMS
JOADY RAPH ALISON CAMPBELL
JOY WILLIAMS STEVE COOKE
SAL TRUJILLO
ANDREW YOUNG JESSIE FIELD
OUR STAFF Creating a workforce that reflects the attitudes and needs of the community in which we operate is a priority for BML. Not only have all departments performed strongly, but our management team is working closely to build the best solutions for our tenants.
The 2013/14 management team consisted of:
BML operates with a relatively small team of motivated professionals who keep services flowing to its tenants and stakeholders in what is a 24 hour operation.
• Joady Raph – Administration Manager/Executive
As at 30 June 2014, BML employed 58 full-time, 4 parttime and 4 casual staff members. Brisbane MarketPlace employed 4 full-time, 1 part time and up to 50 casual staff members to ensure the efficient operation of the retail markets.
• Steve Cooke – Site Infrastructure Manager
• Andrew Young – CEO • Joy Williams – Chief Financial Officer • Tricia Williams – Property Manager
Assistant • Jessie Field – Operations Manager
• Sal Trujillo – Human Resources Manager • Alison Campbell – Retail Markets Manager.
BRISBANE MARKETS ANNUAL REPORT 2014
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CORPORATE DIRECTORY
DIRECTORS
TOP 20 BML SHAREHOLDERS
Number of Shares
%
13,258,476
31.20
• Anthony John Joseph (Chairman)
The Queensland Chamber of Fruit and Vegetable Industries Cooperative Limited
• Anthony Robert Kelly
S & D George Investments Pty Ltd
7,887,200
18.56
• Peter Gerard Tighe
RW Pascoe Pty Ltd
1,889,350
4.45
• Noel Anthony Greenhalgh
Stan Carter & George Spencer Pty Ltd (George Spencer Family A/C)
1,125,000
2.65
Santo Antonio Varapodio & Teresa Carmel Varapodio & Rocco Salvatore Varapodio
1,125,000
2.65
Perati Investments Pty Ltd (Perati Superannuation Fund A/C)
1,100,000
2.59
• Simon Michael George • Bruce Miles Hatcher • Stuart Anthony Lummis • Andrew Alexander George Young
COMPANY SECRETARY Joy Lindsay Williams
ADMINISTRATION AND REGISTERED OFFICE Level 2 Fresh Centre 385 Sherwood Road Rocklea Qld 4106 Telephone: (07) 3915 4200 Facsimile: (07) 3915 4291 Email: admin@brisbanemarkets.com.au BML: www.brisbanemarkets.com.au BMP: www.brisbanemarketplace.com.au
Alfred E Chave Pty Ltd (Super Fund A/C)
804,375
1.89
VGI Partners Pty Ltd (VGI Partners Master Fund A/C)
707,285
1.66
Gregory Lamanna
687,500
1.62
Cedars Properties Pty Ltd (The SM George Family A/C)
680,625
1.60
Mr Peter Gerrard Tighe & Mrs Patricia Jean Tighe (The Peter Tighe Super Fund)
665,075
1.56
Moraitis Fresh Pty Limited Alfred E Chave Pty Ltd John Frederick Pressler & Pamela Deanne Pressler (J & P Pressler Unit Trust A/C)
650,000
1.53
618,750
1.46
562,500
1.32
Udass Pty Ltd
450,550
1.06
Robinson Farm CO Pty Ltd (Glenellen Employee Inv A/C)
404,000
0.95
Susan Armstrong
389,191
0.92
Mr Anthony Gribben (Gribben Super Fund A/C)
371,250
0.87
Hambleton Investments Pty Ltd (The Tighe Property A/C)
281,250
0.66
LCM Employees Plan Pty Ltd Lawnton Country Markets Fruit
281,250
0.66
Mark Moore & Robert Mcintosh Davidson (Panos Produce S/F A/C)
281,250
0.66
JH Britten Pty Ltd (Super Fund A/C)
251,900
0.59
Tree Tops Investments (Jersey) Limited
229,322
0.54
HISTORYFLASHBACK FLASHBACK HISTORY Oneofofthe thegoals goalsset setby byBML BML One whenacquiring acquiringthe theBrisbane Brisbane when Marketsinin2002 2002was wastoto Markets facilitatethe theongoing ongoingupgrading upgrading facilitate andredevelopment redevelopmentofofthe the and Rockleasite sitetotopromote promoteand and Rocklea sustainits itsrelevance relevanceininthe thefresh fresh sustain producesupply supplychain. chain. produce
SHARE REGISTRY
SHARE TRADING
Link Market Services Level 15 324 Queen Street Brisbane Qld 4000 Email: registrars@linkmarketservices.com.au Website: www.linkmarketservices.com.au
As an unlisted public company, shares in BML are not traded on the Australian Stock Exchange or any other share trading exchange system. BML does, however, maintain a register of parties interested in buying shares in the company and offers guidance in the process.
AUDITORS AND INDEPENDENT ACCOUNTANT BDO Audit Pty Ltd Level 10 12 Creek Street Brisbane Qld 4000
SOLICITORS HopgoodGanim Lawyers Level 8 Waterfront Place 1 Eagle Street Brisbane Qld 4000
If a shareholder wants to sell shares in the company and advises BML, the information will be circulated to all parties who have expressed an interest in buying shares, and the individuals concerned can then negotiate a price and progress the sale. If a sale is finalised, BML’s share registry, Link Market Services, must be sent a copy of the original stamped transfer form so that the change of ownership can be recorded on the company’s share register. People interested in buying or selling shares in BML, or who need any information in this regard, may register their interest by contacting BML’s Corporate Office on (07) 3915 4200.
BRISBANEMARKETS MARKETSANNUAL ANNUALREPORT REPORT2014 2014 BRISBANE
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