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Fonterra sees good times rolling on – Good News for Investment in NZ Dairy Farming

22 September, 2011

Fonterra announces record result and payout for New Zealand dairy farmers.  The total cash payout after retentions of $7.90/kg was $1.55 up on last year’s $6.70, and was built on the back of a record profit after tax of $771 million for the year to July 31.

via Fonterra sees good times rolling on | The National Business Review.

This is good news for investment in NZ Dairy farming and makes the numbers in our current dairy equity investment opportunity look even more compelling.

New Zealand DAIRY INVESTMENT – NZ$500,000 – Budgeted returns approx 9.0% (pre-tax on Capital)

19 September, 2011

Expressions of interest are invited, from suitably qualified investors,  for investment parcels of $500,000 (with $50,000 increments) in this established, fully managed, Murchison (West Coast, New Zealand) dairy farmProjected average pre-tax returns on capital invested of 9.0%  (for first 3 yrs, based upon a Fonterra payout of $6.50).

This a large, established dairy farm of approximately 1400 hectares situated at the South Branch of the Tutaki Valley, Murchison, New Zealand. It has a proven production track record and an ability to increase production levels further.The company that currently leases and manages the farm has already entered into a conditional Sale and Purchase Agreement to purchase the farm for $17,800,000. This price is equal to $29.67 per kg milk solids, based on an annual production of 600,000 kg milk solids as forecast for the 2011/12 year. The total assets are estimated to be worth $26.4m, comprising of the farm property, cows, plant and Fonterra shares, providing the Company with a strong security base. It is intended to have Bank debt at $8.0M which will equal approximately 28.6% of total assets.

Front Cover 3
The primary aim of this Offer is to create an opportunity for investors to access returns from dairy farming as well as the potential capital appreciation of dairy real estate by purchasing new ordinary shares in company.Returns to investors will comprise six monthly dividends plus capital growth potential from the increasing value of the underlying farm property and its Fonterra shares. The managers, who will also own shares in the property, will be seeking opportunities to further improve the production of the Farm with productivity gains enhancing the potential capital value of the property asset.  The Board is budgeting on achieving pre-tax returns in excess of 7% per annum based on conservative, historically weighted budgets at $6.50 per kg/ms.
The Financial Forecasting Budget indicates that projected Pre-tax returns will be 7.9% for the year ending 30/6/2012, 9.2% for the year ending 30/6/2013 and rising to 9.9% for the year ending 30/6/2014. These returns are based upon a milk solids payout price of $6.50 per kg of milk solids which is below present Fonterra projected per kilogram prices. Sensitivity forecasts showing production in the range of 550,000 to 650,000 kg/ms and from $5.50 to $8.00 payout indicate average pre-tax returns may vary from 3.1% low to 15.1% high.
Shareholders in this property will also share in the capital appreciation of the farm, which has historically been above the average dairy farms capital appreciation of 10.19% p.a.

Average Returns 

(projected first 3 years at $6.50/kgMs)

On Total Assets  7.6%

On Capital Invested

(before-tax)   9.0%

(after-tax)    6.5%

Debt/Total Assets 27.4%

 

Key Offer Details

Issuer: Melco Investments Limited

New Ordinary Shares: 16,000,000

Issue Price: $1.00

Offer Closing Date:  14 November 2011

Shares Already Comitted: 3,000,000

 

Dividend Payment Frequency:6 Monthly

Key Investment Features

  • Melco, a private unlisted New Zealand Company.
  • Indirect investment in the $10 Bn Food Production & Dairy Industry.
  • Mt Ella Station, a 1,398 ha dairy farm inNew Zealand’sSouth Island.
  • Operating over 10 years, Mt Ella is a well managed farm with a proven production track record.
  • Lower than average cost structure in an area of reliable rainfall.
  • Conservative bank debt at less than 30% of total assets.
  • The offer is to purchase 16,000,000 new shares in Melco.

“The Directors believe this is an excellent opportunity to be involved in an industry that is performing well off the back of strong global commodity prices that are expected to be maintained because of the world-wide protein shortage.  An investment in *Melco will provide investors with the prospect of cash returns and capital growth potential in the shares.” 

Chris Dawkins – Chairman (Melco Investments Limited

We are seeking expressions of interest from suitably qualified professional investors able to meet the application criteria as defined by the New Zealand Securities Act 1978 and described in more detail in the Information Memorandum.

NOTE: Overseas investors are required to comply with New Zealand Securities Laws as well as any applicable laws relating to securities or investments in your own country. You should obtain your own legal advice in this respect.

 

 

 

Rentals regain rosy glow – industries – business | Stuff.co.nz

18 September, 2011

Rentals regain rosy glow – industries – business | Stuff.co.nz. Refer our website for further information on New Zealand investment property or contact us directly.

Major housing shortage looms – New Zealand

13 September, 2011

Major housing shortage looms – business | Stuff.co.nz.

This was totally predictable given the lack of new development over the last few years. This may be a strong signal to potential investors that now might be a good time to invest. However, as always, there will be certain areas and properties that are better than others. As such, it is important to “do your homework” and research the options. Check out the web link http://www.nzpbi.co.nz/welcome-to-your-nz-property-investment-resource  for market information, useful links and a sample of selected investment opportunities.

EXCLUSIVE Commercial Opportunity. New Building. Iconic tenants. Long leases. 9.0% p.a. projected return. Only 2 x NZ$1M parcels left!

12 September, 2011

Construction of this quality development, strategically located corner site in the retail hub of Hastings (Hawkes Bay, New Zealand), commenced in March 2011 and it is anticipated that this will be complete by the end of March 2012. The rentable area of the building will be approximately 6,502 sqm with associated on-grade carparks. Key features of this opportunity:

  • Projected initial cash return of 9% p.a
  • 15 year initial lease plus 3 rights of renewal of 5 years each to  100 year old “household name” iconic tenant (96% of net rent)
  • 6 year lease to well known bank from August 2007 with 1 right of renewal of 6 years (4% of net rent)
  • Rent  reviewed 3 yearly to CPI providing assured rental growth
  • Brand new retail building in the heart of Hastings, currently being developed
  • Very conservative gearing at just 37% loan to valuation ratio
  • Non-recourse interest-only bank funding – 5 years
  • Fully managed by experienced manager

There were originally only 11 individual proportionate titles available, at $1 million each, in this exciting new development. There are now only 2 units left.

Contact us for further information – Go to the website  www.nzpbi.co.nz 

” …surely on average things are shifting to a sellers market (N.Z.)”

8 September, 2011

According to the latest BNZ-REINZ residential market survey “All of the main eight measures we use to gauge the current strength of the residential real estate market around New Zealand have strengthened over the past month indicating that slowly but surely on average things are shifting to a sellers market. More and more first home buyers are appearing, prices are perceived to be edging upward, and auction clearance rates are considered to be improving. However there has been a sizeable lift in potential vendors seeking appraisals of their properties, and in the opinion of agents the market balance is only marginally in favour of sellers. Regional variations remain strong.”

Read or download the full report here http://www.nzpbi.co.nz/assets/galleries/Bulletins-External/BNZ-REINZ-Survey-070911.pdf

Property Investment in Volatile Times » New Zealand Property Based Investments

6 September, 2011

Property Investment in Volatile Times » New Zealand Property Based Investments.

Why Invest in New Zealand Property? » New Zealand Property Based Investments

6 September, 2011

Why Invest in New Zealand Property? » New Zealand Property Based Investments. New Zealand is a favourable place for overseas investors – a stable economy, low levels of corruption, relatively high yields and looming property shortages.

Prediction that shortage will lead to higher house prices » New Zealand Property Based Investments

5 September, 2011

House prices could increase by 12 per cent over the next three years, a mortgage insurer says. A report into the country’s housing market, released yesterday, finds a shortage of new housing is driving property values up.

via Insurer predicts shortage will lead to higher house prices » New Zealand Property Based Investments.

DAIRY INVESTMENT – TWO Offers; NZD$500,000 OR NZD$50,000 parcels » New Zealand Property Based Investments

27 August, 2011

DAIRY INVESTMENT – TWO Offers; 1 $500,000 OR 2 $50,000 parcels » New Zealand Property Based Investments.