Family with the winning-post in sight

Lisa and Mark Chittick of Waikato Stud, say a win every Saturday is what keeps them going. Picture / Amos Chapple

With the recent purchase of an extra 91ha of grazing land at nearby Valleyfields, Matamata-based Waikato Stud says its 415ha makes it the country's biggest operation in terms of land dedicated solely to thoroughbred horse breeding.

And its annual turnover isn't bad either with stud master Mark Chittick, 35, putting it at about $6.5 million. The stud has regularly made annual net profits of more than $1 million in recent years.

The stud won the most recent Mercedes Breeder of the Year title - based on race wins - and expects to take the title again this season.

Chittick owns the operation with father Garry and runs it with marketing and advertising support from wife Lisa, the daughter of horse-racing legend Dave O'Sullivan.

The Chitticks - who previously had a breeding operation in the Manawatu - bought the business as a going concern from Elders Finance in the mid-1990s for about $8 million, when Chittick thinks it was probably turning over about $1.2 million.

The stud was established by Texan tycoon Nelson Bunker Hunt, who controversially tried to corner the silver market with his brother in the late 1970s. It went through several subsequent incarnations before ending up with Elders.

Chittick does not have a figure available for the operation's present value but said rural land alone in the area was worth close to $74,000 a hectare.

The stud is looking to expand further, as horses need plenty of fresh feed to help them achieve their optimum potential - and, said Chittick, "we find land a good investment".

The stud has 130 mares and five stallions: The 100 per cent owned Scaredee Cat and O'Reilly, Pins (70 per cent owned), No Excuse Needed (60 per cent) and the recently acquired, $10 million Savabeel (majority owned by Waikato Stud and the highest-price stallion syndicated under local ownership).

Although stallions can service mares up to four times a day, Chittick says that depends on the animal.

"They are like humans. Every one's different. Some will handle it, others won't. Others are economical - they're two minutes in the barn, whereas another one can be 10 minutes."

Lisa Chittick, with a laugh, said: "Some of them are very business-like."

It is hoped Savabeel's purchase price will be recouped within three years through stud fees and progeny sales. His first crop of foals are being carried now.

The stud's focus is on sales to Australasia and Asia.

Chittick said the rate of profit achieved at Matamata was more than could be achieved using the land for other rural activities.

"When we sell a horse for $50,000-$60,000, we reckon there's probably $40,000 in that for us ... that's a hell of a lot of litres of milk or it's a hell of a lot of bags of potatoes."

He said it was essential to have successful stallions to maintain profits.

Savabeel's $10 million price tag was an example of the importance of making the right stallion choices and getting a syndicate involved where necessary. "We couldn't handle that sort of exposure ourselves."

While it was possible to lease high-class stallions, particularly from the Northern Hemisphere, the stud prefers an ownership stake in the animals to help ensure availability, cost control and retention of service income.

Artificial insemination - which could cut the cost of service fees by allowing increased stallion output - is banned internationally for thoroughbreds. A NZ Thoroughbred Racing official said some viewed the ban as aimed at keeping prices high, while others believed it was necessary to maintain a varied gene pool and control the spread of disease. Chittick hopes the ban on AI continues.

However, the Chitticks welcome new Government measures effective from August to reduce racing industry gaming duty, accelerate depreciation for stallions and broodmares and extend to two years the period export stock are zero-rated for GST.

Chittick said the extension would mean horses "can be fully educated here" before being shipped overseas, helping the animals mature and boosting local employment. The reduction in gaming duty is expected to boost horse racing stakes as well.

And, no, he's never been tempted to sell up. What keeps him going? "Every Saturday, wanting a new winner."

Chittick is also keen to run a truly world-class stallion.

"We've got very, very good stallions that are doing a really good job ... but what we're targeting is one of those exceptional world-class horses, for ourselves personally and for the industry."

Such a stallion is Australia's Redoubt's Choice, whose service fee is A$250,000 ($290,811) compared with the stud's top fee of $35,000.

Chittick said: "He served 200 mares last year ... that's what we need."

WAIKATO STUD

* 415ha in Matamata area.

* Owned and run by Chittick family.

* Five stallions, including $10 million Savabeel, and 130 mares.

* $6.5 million turnover.

* $1 million-plus annual net profit. Family with the winning-post in sight