New Zealand’s largest renewable energy supplier has switched on some big results. It’s hard to ignore returns showing 34 percent spike in revenue and 292 percent hike in profits after tax. Much of that stems from Meridian Energy’s sale of its Australian subsidiary Southern Hydro to AGL (Australian Gas Light Company). This portfolio of 11 hydro stations had been in the company’s hands since 2001.
Since then, Meridian Energy also developed Australia’s largest wind farm at Wattle Point. So when these combined assets were divested to AGL this financial year they contributed $652.5 million gain before sale-related costs. That is underpinned by Meridian Energy’s underlying strong financial performance.
The company remains at heart big player that is unafraid to make bold decisions and both think and act strategically in vital sector of New Zealand’s economy.
Meridian achieved its latest batch of powerful results despite extremely poor hydro conditions for most of 2005/2006. These put considerable pressure on resources and led to the company having to buy electricity at high spot prices on the wholesale market to cover its contracted supply position for extended periods during the year.
The company continues to roll out plans to develop renewable energy. Strategic milestones this year include finalising the Waitaki Water Allocation Plan without disruption to existing hydro generation on the Waitaki chain – while also preserving options for future power development – and full year of operation of the Te Apiti wind farm.
Meridian benefits from being very ably steered by experienced chair Wayne Boyd – whose broad portfolio also includes chairmanships of Telecom, Auckland International Airport and Freightways – and managed by longstanding industry insider chief executive Keith Turner.
Together, they continue to govern and manage this flagship New Zealand enterprise with energy and aplomb.
JUDGES’ COMMENTS
WINNER: MERIDIAN ENERGY
There’s tendency in this company to take some big ideas and run with them. Meridian Energy has had momentous year. Not least, its decision to sell Australian subsidiary Southern Hydro.
The value gained underscores Meridian Energy’s strategic capability and its ability to make far-sighted big decisions. The company ran with its idea to go offshore, strategically applied its engineering know-how and harvested the results for the benefit of shareholders in this country. That’s tremendously improved performance in this past year.
Underpinning all that, is base level financial performance that is self sustaining year on year and community orientation that sees strong ongoing support for the arts back in New Zealand.
FINALIST: CREAN FOODSERVICE
Success tastes sweet for this major nationwide food distribution business. Latest published results from Crean Foodservice – since renamed Bidvest New Zealand – reveal 28 percent increase in revenue and an 88 percent increase in profit.
This profit hike come off small base, note the judges. But now with full range of frozen, dry and chilled goods, the company is well set to provide the economies of scale that its customers want. That equates to product range of over 10,000 items for New Zealand’s foodservice, hospitality and leisure markets.
First established in Rotorua in 1982, Crean Foodservice is now part of the international Bidvest group: leading foodservice products distributor that also operates in South Africa, the United Kingdom and Australia.
FINALIST: RYMAN HEALTHCARE
Another solid performance from this aged care provider. Ryman Healthcare has surpassed its own target of 15 percent earnings growth and given its expansion plans another shot in the arm with the acquisition of four new sites: in New Plymouth, Palmerston North, Nelson and Dunedin.
Under the very competent leadership of chairman Dr David Kerr, Ryman gets good results from its well-established model of organic growth. This listed company uses its own inhouse team to identify sites, buy land, and design, construct and operate its own villages.
Ryman has already lifted profits from $6 million to $35 million in the past seven years. Given the predicted hike in New Zealand’s aging population, there’s plenty more upside potential for this company.
