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Yealands performance and asset growth help boost total dividend - Marlborough Lines Group 2019 Annual Results

09/12/2019
Electricity lines company, Marlborough Lines Ltd, today announced a 20% increase in the total dividend paid to the Marlborough Electric Power Trust ($6.0m) and a net profit after tax of $8.4m, for the year ending 30 June 2019.

Marlborough power consumers benefit annually from the Company’s discount and also the dividend to the Trust, which is used to fund a distribution to consumers.

Chairman David Dew says that Marlborough Lines is in a strong position and continues to deliver to its dual vision of operating a successful, reliable and safe electricity network and undertaking investments to the benefit of current and future beneficiaries.

While total operating revenue increased 0.5% to $152.4m, a decrease in net profit after tax on the previous period resulted from the increased cost of sales and lower harvest volumes for Yealands Wine Group (YWG). The mark to market (non-cash) movement on interest rate swaps was negatively impacted by falling interest rates, contributing to the decrease in profit.

YWG has continued to perform satisfactorily. Wine sales reached $104.7m (up 2.8% on the previous year) and EBITDA was $20.0m, prior to NZ IFRS adjustments.

Property owned by YWG saw a revaluation gain of $13.8m. This reflects a 3.8% increase on the last financial year following a registered valuation as at 30 June 2019. The valuation placed the average value per hectare at the Seaview vineyard at $137,000. This gain is recognised as part of the Company’s total comprehensive profit for the year of $20.2m.

The net assets of YWG are now $205m compared to the amount invested by Marlborough Lines of $122m - a substantial increase over the four years following Marlborough Lines’ purchase of the wine producer and exporter. Planted vineyard, winery capacity and dam storage have all increased over the past year and provide strong foundations for the future.  A new CEO, Tiffani Graydon, has been appointed and will provide strong leadership for YWG.

Consistent with previous years, YWG has paid a dividend of $5.5m to Marlborough Lines. These funds along with other investment proceeds have been used to fund the $6.0m dividend to the Marlborough Electric Power Trust. The Trust has announced that these funds will be used to distribute a $200 credit to consumers for their electricity accounts in early 2020.

During the financial year, Marlborough Lines has paid discounts of $9.7m including GST to consumers, with a typical domestic consumer receiving $226. Over the past 20 years, Marlborough Lines has paid out $142.9m (including GST) in consumer discounts.

The company’s investment in Nelson Electricity has continued to perform in line with expectations and Marlborough Lines has funds on deposit pending further investment.

 
Marlborough Lines’ network reliability was seventh best out of the 29 network companies in New Zealand, recording an average of 129 minutes of outage for the year. This is despite its unique and challenging terrain.

The company is not facing significant expenditure as a consequence of deferred capital and maintenance expenditure, and has quality assets, sound investments, and a solid financial base which will enable it to further improve its performance.

“Improvements in future performance will be for the benefit of local electricity consumers and the wider Marlborough community.  We are confident that our electricity network, Nelson Electricity and Yealands Wine will deliver this value,” says Mr Dew.
 
Ends.
 
For further information please contact David Dew, chairperson, 03 577 8858

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