Gisborne Holdings Ltd set to sell testing station

CHALLENGING FEW YEARS: Gisborne Holdings Ltd is in the advanced stages of negotiations to sell Gisborne Vehicle Testing to Vehicle Testing NZ. GHL board chairman David Mullooly said it had been a challenging past few years for the station and the sale would help retain an independent testing facility in the region. Picture by Liam Clayton

Gisborne Vehicle Testing is likely to be sold to Vehicle Testing NZ.

Gisborne Holdings Ltd, the district council's commercial arm, announced at its annual meeting this week that it was in an advanced stage of negotiations with VTNZ regarding the future of Gisborne Vehicle Testing and its staff.

The intention is to combine operations, which the GHL board believes to be the best outcome for their staff, the company and the district as it would help retain an independent testing facility in the region.

GHL's earnings before interest and tax rose 15 percent on the previous year to $5.3 million.

As a result its distribution to Gisborne District Council — GHL's 100 percent shareholder — will be $2.059m, $259,000 more than last year.

That figure is 14 percent higher than GHL's Statement of Intent commitment.

GHL chairman David Mullooly called it “a really good year, a fantastic year”.

GVT had been facing multiple challenges and its performance over the past few years had been challenging, he said.

The pandemic and staff departures had increased wait times for services, and Gisborne and the country as a whole was facing a shortage of qualified vehicle testers. He cited 1400 as the shortage nationwide.

One contentious issue raised at the meeting was the recent sale of the 2.5-hectare former St Mary's School site in Childers Road. Mr Mullooly called the sale a “little bittersweet” given the need for housing in the district.

The property was put to open tender and the Matai Medical Research Institute Trust was the successful bidder.

Matai was on the way to becoming one of New Zealand's leading research centres, and while the district council was critical of that sale, GHL remained confident community benefits would follow, including education and training.

They understood there would be accommodation on-site of 30 two-bedroom apartments to house students and staff.

Mr Mullooly told the meeting Jacqueline Blake had stepped down from GHL's board to take up a position as a district court judge, and he thanked her for her contributions.

A decision is to be made shortly on filling the vacancy.

Mr Mullooly and other board members underlined the resilience of GHL's diverse local operations in light of the pandemic.

GHL enjoyed 50 percent growth in equity over the past five years — from $82m to $123m. That equity increased by 24 percent in the last year — a serious achievement in a period of lockdowns and closures, he said.

He pointed to successful projects such as building the pool and new units at Waikanae Beach Top 10 Holiday Park, as well as the earlier building of the new council administration offices.

The holiday park had enjoyed revenue growth of 62 percent to a record $3.1m on the back of a surge in domestic travel post-lockdown last year, but Mr Mullooly said this business remained exposed to the risk of further lockdowns.

Pandemic aside, another difficulty GHL had to contend with was drought and an arduous recovery from it for its farming business.

Formerly the company's sole asset, before the council transferred other businesses to GHL, this year Tauwharepare Farms Ltd was amalgamated into GHL, ending the need for dual accounts and streamlining management operations and processes.

Director Andrew Allan described that business, the foundation of their portfolio, as a “juggernaut” of a farm that “gives us comfort in growing . . . a product that's feeding the world”.

GHL had ensured that farm vacancies were filled by local people and farm productivity had remained high despite the drought.

The company's overall net profit of $16.3m meant it met all financial targets, following a net loss of $113,000 last year.

Growth in EBITDAR and revaluations were a significant driver behind these results with the company recording revaluations across investments, including the farm and holiday park of $8.5m, and carbon credits of $2.0m, compared to -$1.9m, $0.8m and $1.5m respectively during the previous year.

Because of the nationwide lockdown in August, the company's new self-wash carwash business, Wash‘n Go, had been open only two-thirds of the time since its establishment.

Mr Mullooly said construction came in on budget,and performance was in line with initial projections. If not for Covid-19 it would have been well ahead financially.

The carwash was a cashless automated system, the first of its kind in Gisborne. Wash'n Go recycled 90 percent of its auto-wash wastewater, and with four 10,000-litre underground tanks was innovative in saving water.

Despite its location next to GVT, Wash‘n Go is not included in the negotiations with VTNZ.

“On company visibility in the community, as an organisation we don't tend to blow our own trumpet but prefer to get on with the job of providing non-rates-based income for our shareholder, GDC,” Mr Mullooly said.

“The world had turned, especially in the last few months, and we are now facing a different beast, but when you look out the window, we really do live in a cool place”.