Tainui Group Holdings pays 10th anniversary record dividend

Tainui Group Holdings, the commercial wing of the main Waikato iwi Tainui, has declared a record dividend for its tribal shareholders at the end of its 10th year of operations.

The $11 million dividend is symbolic for lifting returns to the iwi above the designated level of $10 million, settled on in 2006 as part of a turnaround strategy after poor early investment of Treaty of Waitangi settlement claims cost Tainui $40 million and dried up bank funding.

The combined after-tax profits of TGH and the tribal fishing venture, Waikato-Tainui Fisheries, rose 40 percent to $20.7 million, boosted by a near 60 percent increase in revenue from completed hotel and large scale retail complex developments to $54.8 million.

The result included revenue for the first time from TGH’s newly completed 70 percent-owned Novotel hotel at Auckland International Airport and further growth at its mega-store and mall developments on the northern outskirts of Hamilton. Combined investment in both was worth $210 million and took tribal commercial assets managed by TGH to $700 million, while gearing fell slightly to 26 percent.

The iwi is now looking for commercial partners to build a new “inland port” on a strategically located 500 hectare site in Ruakura, adjoining major rail and trucking routes. The project will be developed over three to four decades and is estimated to require $3 billion of investment.

TGH chief executive Mike Pohio said the completions of the Te Awa mall on Tainui’s retail site, The Base, and the Novotel project were “a watershed” for the corporation, with the retail development occurring despite the depths of the global financial crisis.

“TGH is a very long term investor,” said Pohio. “We are firmly committed to further deep investments in the Waikato economy.”

Outgoing chairman John Spencer said processes for ensuring commercial success had now been entrenched at TGH. He is replaced on July 1 by the retiring chairman of the Fonterra dairy cooperative, Henry van der Heyden.