DCHL Annual Result to 30 June 2009

I am pleased to report that our business has been growing strongly, with revenue increasing by 7.6% to $214m. Through a period of much economic instability the group has produced an accounting surplus of $8.7m, which is a slight improvement on last year.

"Directors have been satisfied with the underlying profit results given the extremely tough economic environment in which the whole group has operated." comments DCHL Chairman Paul Hudson.

Growth in the regional economy has been of benefit to the group in the past but much of the property development in the Central Otago region struck some form of difficulty as the financial world adapted to much lower liquidity across all markets. The network growth of Aurora Energy Limited has continued, but at a lower rate, and the excellent performance of this company has once again been the key to the group's results this year. Delta Utility Services, our water, waste-water and general contracting operation, remained the largest company in the group by revenue and improved its surplus and cash flow generation. This company was also able to make the most of counter-cyclical opportunities to expand its future business in the Wakatipu Basin. It also commenced the construction of the 'Flute' fibre optic network in Dunedin's central city area.

Dunedin International Airport hit a problem as the difficulties felt by all international airlines impacted on the number of international flights being scheduled. However the majority of people using the airport are domestic travellers and the introduction of Pacific Blue flights from 1 July 2008 expanded the market with domestic passenger numbers improving by 12.8%.

The export economy for City Forests Limited has not been ideal and the media has repeatedly reported in recent months the negative impact of what appears to be an artificially high New Zealand dollar on export industries. Nevertheless, the economic industry settings improved for a period of approximately three months during the year and the quick reaction to this by the company allowed it to significantly improve its cash flow over last year. Our forest operations ensure that the group, as a whole, is highly carbon positive. Over the previous six years the group has been heavily carbon positive and in this last year the group eliminated a further 63,060 tonnes from the environment by accumulating it in the forest.

Citibus improved its performance greatly over the year and expanded its local fleet. Taieri Gorge Railway has also invested heavily in its future as it renovated carriages and upgraded Dunedin Station facilities.

The strategy of the Dunedin City Holdings Limited board continues to be to pursue opportunities for growth where it sees the potential to develop or extend existing businesses. Underlying this strategy is the desire to continue to produce a reliable cash benefit to the Dunedin City Council. The dividends paid to the Council in respect of this financial year were $9.5m. A further $10.3m for interest on the Council shareholder's advance was paid so that the total cash payments made to the Council over the year amounted to $19.8m, a substantial distribution.

Contact details

Contact Paul Hudson on 027 432 1632.

Last reviewed: 02 Oct 2009 4:04pm