John Goulter spent the first 10 years of his stewardship as managing director of Auckland International Airport (AIAL) being reminded of what can’t be done at an airport. After so many coups that have made the airport New Zealand’s premier retail location, comprising what was the first in-airport McDonald’s in the Southern Hemisphere (1989), and more recent additions, 24-hour supermarket, New Zealand’s largest mall – Adventure Golf and Duke Box museum – people have long since given up telling Goulter what can’t be done. “In my first year as CEO [1988], the airport’s total revenue was $68 million. Fourteen years later, the after tax profit was $71.5 million. So to be able to take revenue to after tax profit, especially during year of major aviation turbulence – has been huge thrill,” says Goulter.
A former Penrose High School boy, Goulter was employed within manufacturing and services company, New Zealand-based Ceramco between 1961 and 1986. former graduate of the Advanced Management Programme, Harvard Business School, Goulter was voted Business Herald Leader of the Year back in 1999. His management style has always favoured being in the thick of things, testing the boundaries, and engaging the troops. In fact, even today he says with so many people seeking his input on any number of airport developments – it can take him good half an hour to get from the front door to his office.
In testimony to Goulter’s efforts, AIAL’s share price has more than doubled since it issued at around $2.05 (July 1998) – to over $5 share. Boosted by capital expenditure and an asset revaluation earlier this year, the share price has jumped around 40 percent since January. With market capitalisation of approximately $1.8 billion and total assets in excess of $1.1 billion, AIAL is currently the fifth largest company listed on the NZSE.
Underscoring Goulter’s outstanding success was his ability to integrate the airport with the broader Auckland and New Zealand communities. Arguably the jewel in the airport’s crown, says Goulter is its significant property space and available land bank. Based on its dominant franchise, solid margins and strong development potential within its large land bank – the airport is expected to repeat its former track record over coming years. Based on successful concession re-tendering, six percent international visitor growth, and future land development upside, some brokers expect full year 2003 earnings to jump to around $82.2 million.
Goulter & Co have already signalled their intention to grow property under management from $120 million to $200 million within three years. Assuming all goes to plan, one or two major developments could be announced during full year 2003.
Contributing strongly to the (full year 2002) 21 percent increase in bottom-line earnings ($71.5 million), and six percent increase in revenue (to $201 million), says Goulter were operational efficiencies, plus the airport’s diversified revenue streams comprising property developments, concession revenues.
In the past five years, retail has become the airport’s major revenue stream. Meantime, airfield revenue as proportion of total revenue had dropped from 33.5 percent to 26.8 percent. Aircraft movements for the same period, based on the tonnage of planes, had risen by just over 10 percent. For the past year, passenger movements through the airport rose by 4.5 percent to 8.8 million. While it’s difficult to predict international air travel movements, Goulter’s outlook remains upbeat. Based on tourist demographics, boosted by the America’s Cup – he expects international visitor numbers to reach around 2.7 million over the next five years.
Earlier this year Goulter announced plans to hand over the guardianship of this infrastructural asset in September 2003. However, he has accepted consultancy role with the airport for further two years after his retirement. His remaining legacy is one of the best performing companies on the New Zealand market. With plans for another runway firmly earmarked and property developments well on track – regulatory controls could become his successor’s lingering nemesis. But the way Goulter sees things, if the reviews are correct – there’s an argument for airport fees to go up – not down. “The $52 million the airport received in charges last year was spread over 30-plus airlines. So in that context, there are more fundamental issues. When we kicked off in 1988, return airfare to London was $2200 – 14 years later it remains $2200. People can draw their own conclusions as to where the real issues lie.”
JUDGES’ COMMENTS
Winner
John Goulter – Managing Director, Auckland International Airport
As head of Auckland International Airport John Goulter is the long distance high flyer of New Zealand corporate leadership. His 15 years at the controls have safely delivered shareholders business that is internationally acknowledged as one of the best airports in the world. As the airport’s managing director, John Goulter has demonstrated that he can manage change, build high performing team, foster innovation, embrace stakeholder demands for ethical management practice, manage risk and simultaneously deliver consistently outstanding financial results. He is personally committed to the encouragement and development of New Zealand’s tourist industry, and has involved his enterprise and his employees in community projects, particularly education partnerships. He is chief executive who has earned his wings as an accomplished business leader.
Finalists
Chris Liddell – Chief Executive, Carter Holt Harvey
An inspirational leader, Chris Liddell has breathed new life into one of New Zealand’s corporate icons, Carter Holt Harvey. On the eve of his departure for life among the tree tops of international business, the judges acknowledge his flair and innovation in rebuilding and reconfiguring this important resource-based enterprise. His ability to manage change, execute an acquisition strategy while simultaneously cutting costs and empowering his management team through the building of new innovative enterprises, highlights the range and depth of his leadership skills. Liddell is grass roots leader who understands the importance of effective internal communication. He is respected by his peers and employees alike. Under his watch the company has become place talented people seek to work.
Ralph Waters – Chief Executive, Fletcher Building
Ralph Waters is an outstanding change manager. He is reconstructing Fletcher Building. His leadership abilities were demonstrated by his rapid understanding of the value of the businesses within the Group. His strategic approach and ability to implement agreed strategies have, in relatively short order, delivered results for the company’s shareholders. Non-performing businesses have been sold and new opportunities identified. Ralph Waters is leader of vision and ability who is equipped with determination to act decisively and positively for the good of the company as whole.
