UPDATED POST 18.10.12
“It’s probably good to take all your bad news at the same time and look forward to the future.” -Denham Shale, DCHL
PROPERTY SPECULATION BY DELTA DIRECTORS WITH LOCAL COMPANY LINKS, IS THE MISUSE OF PUBLIC FUNDS. STOP.
GLARING CONFLICTS OF INTEREST ARE INVOLVED. STOP.
DCHL CHAIRMAN IS FULLY COMPLICIT, ALONG WITH DCHL BOARD OF DIRECTORS. STOP.
DUNEDIN CITY COUNCILLORS FAIL RATEPAYERS AND RESIDENTS SEVERALLY. STOP.
See link to ODT report added below.
DCHL Annual Report 2012 (PDF, 2.1 MB)
Dunedin City Holdings Ltd Annual Report 2012
Warren Larsen Report (PDF, 3.9 MB)
Governance review of all companies in which Dunedin City Council and/or Dunedin City Holdings Limited has an equity interest of 50% or more.
BUT WHAT’S THE REAL STORY?
Dunedin city Council
Dunedin City Holdings Limited Annual Result for the year ended 30 June 2012
This item was published on 17 Oct 2012.
This past year has been a challenging year in which there has been a well publicised change in governance of the parent company. It has been a year that has been affected by a slow economy and poor export log prices and a year in which the subsidiary companies decided to write down the values of assets where impairment occurred.
Revenue has increased for the year by 3.7% to $254.9m, however, the profit has been affected by a series of factors that are fully explained in the Annual Report of the company. These factors are the effect of the Dunedin City Holdings (DCHL) group providing subvention payments directly to Dunedin Venues Limited in lieu of dividends to the Council, the effect of asset impairment provisions made by the Delta group in respect of goodwill on a number of past business acquisitions and land at Luggate and Jacks Point, pressure on margins in a slow economy, and lower carbon credit income in comparison with last year.
Separately from the activities of the subsidiaries the holding company board has been active working on a number of issues arising from the Larsen report. “Last December I stated that we have been charged with restructuring a number of aspects within the group. You have seen the recent appointment of two additional directors to the parent company board. We anticipate further announcements by year end from suggestions to be made to the Council over the next two months.” comments DCHL Chairman, Denham Shale.
“As a matter of principle, the current board has taken the view that borrowing should not be entered into for the payment of dividends. But it is important to note that much of the drop in profit last year was caused by the agreement in respect of Dunedin Venues Limited and accounting provisions rather than cash outflows. Against this, dividends in this current year will be paid from surpluses that we would expect to make over the year to June 2013. Therefore it is not necessarily correct to assume that because last year was poor that there will be no dividend this year. ”
Aurora Energy Limited has traded well although the economy has slowed the growth in the quantity of electricity carried on the network.
The NZ forestry industry has had another difficult year and, as the public is aware, City Forests Limited decided to cease operating its timber processing mill. The Milburn asset has been leased to Craigpine Timber Limited.
The electrical asset planning and maintenance businesses of Delta Utility Services Limited have operated well. But the demand for other infrastructure services weakened and company was forced to conduct a series of adjustments to reposition the company to match reduced demand. The land holdings of the Delta group, which have attracted media attention, are under close management.
The summer tourism season last year was well underpinned by the visits of cruise ships. We expect an improving cruise ship season over this next summer.
Overall passenger numbers into Dunedin International Airport were 9.9% up for the year. The operating surplus after tax achieved by the company for the year was an improvement on both budget and the same period last year. A substantial revaluation of the assets of the company has increased the carrying value of the investment in the books of the DCHL parent company.
Contact Denham Shale, Chairman, DCHL on 021 375 112.
### ODT Online Thu, 18 Oct 2012
$5m loss for DCC group
By Chris Morris
A $9 million write-down in Delta’s investments – including property at Jacks Point and Luggate – is partly to blame for a multimillion-dollar loss booked by the Dunedin City Council’s group of companies.[…]Mr Shale was reluctant to criticise yesterday when asked if the property purchases had proven to be a mistake. “I wouldn’t call it a mistake, no. As we see it today, it could be called an unfortunate decision, but that is very much in hindsight. It’s very easy in hindsight.” He also saw no need for the new DCHL board to investigate the rationale behind the purchases, saying they were “a fact that’s there”. “We can’t do anything to change it.” He blamed the result on the world economy…
12.10.12 DCHL, subsidiaries and DCTL
30.8.12 Dunedin City Council seen by Fairfax Business Bureau deputy editor Tim Hunter
Posted by Elizabeth Kerr