‘Mixed results’ as Holdco profits dip

Invercargill council-controlled investment company Holdco has reported an after-tax profit of

$8.1 million, slightly below last year’s $9.4m profit.

The Invercargill City Council holding company, and its subsidiary company Invercargill City Property Limited, published their annual reports on Holdco’s website on Tuesday.

It was recommend Holdco’s dividend be $5,850,000, an 11 per cent increase, to be paid out of the 2018 profits. The return to the city was $6.2m, up from $5.7m last year.

In his report, Holdco chairman Cam McCulloch said results were mixed. ‘‘While we are disappointed to record a lower result than last year, the diversification of the group continues to be a strength.’’

Subsidiary companies Electricity Invercargill Limited posted a $7.3m after tax profit for the year ending March 31 (up from $7m the previous year), Invercargill Airport Limited a $302,000 profit (up from $189,000 the previous year), and Invercargill City Forests Limited a profit of $733,000 (significantly down from $2.3m last year).

EIL’s recommended dividend was $6.2m, and ICFL’s $550,000.

Invercargill City Property Limited posted a loss of $383,000 (compared to a $40,000 profit last year), which was because of the stage of development of HWCP Management Limited and the impairment of loans.

ICFL results were ‘‘affected significantly’’ by harvesting and planting activity during the year, the valuation and market conditions at balance date.

‘‘While this produced significant gains last year, it did not produce the same gains this year,’’ McCulloch said.

The company also wrote off a net $331,000 goodwill on its investment in Forest Growth Holdings Limited this year. In July, Forest Growth Holdings was formally warned by the Overseas Investment Office and a settlement reached over the sale of land the company owned.

CHE BAKER