Rangatira Annual Report 2025 - Flipbook - Page 13
Annual Report 2025
We are seeing some headwinds because of ongoing
softness in construction and demolition activity and
general commercial markets.
and has a strong balance sheet. We believe this
positions the business to take advantage of any growth
acquisition opportunities that may arise.
We will continue to grow revenue and strengthen
strategic positioning through both organic and
acquisition growth within existing and new
geographies.
While the team continues to work hard to drive
profitability, we look forward to the inevitable cyclical
shift and would expect the management team can
deliver a significant growth in earnings over the
medium term.
In parallel, the business is continuing to build
management depth and capacity to enable growth
and maintain existing market (regional) position.
Magritek
The business had another strong year, seeing strong
orders come through in the December 24 quarter.
With more focus now in Asia and the US we are seeing
increased volumes from these territories. To date we
have not seen a marked impact on US sales with the
new US tariffs. We are passing this cost onto the buyer.
We saw flat sales in FY24, although we saw a growth in
orders received and so expect growth in FY25. Despite
sales being flat, profitability increased due to margins
improving as the cost of materials reduced, production
process improved, and a greater portion of higher
priced / higher margin models were sold.
We have made further advances in development to add
to the features of the Spinsolve and expect more in the
coming year to stay ahead of Bruker, the predominant
competitor.
After considerable work the business is now
incorporated in Germany where most of the operations
are now based.
Magritek is positioned well to take advantage of the
increased use of benchtop NMR equipment for a wide
range of research, teaching, chemistry and process
control.
NZS Group
We continue to be impacted by a cyclical slowdown
in the construction industry. While a slowdown was
expected at the time of our investment, we must
acknowledge the depth and duration of the slowdown
in construction and development activity was
underestimated. Management remains focused on
ensuring the business is well positioned for the cyclical
recovery. This includes building management depth
and developing a stronger customer-focused culture to
generate sales.
We also note that despite the industry headwinds,
the business continues to generate good cash flow
Boulcott Hospital
Earnings have been flat for FY25, largely due to
limited capacity and tough working conditions through
construction. The construction is expected to be
complete in July with the new theatres open in August.
The Hospital has commitments from existing and new
specialists for 75% of the additional capacity upon
opening, which was ahead of initial expectations of
60%. Work is now underway to put the necessary
staffing in place in time for August.
With the end of construction disruption and opening of
the new theatres, we expect improved profitability in
FY26, although it will be FY27 before the full benefit of
extra volume is felt given the need to fully resource the
added capacity from the start, before the theatres are
operating at the targeted throughput and efficiency.
We remain committed to this as a long-term investment
and believe it may be used as a platform for additional
healthcare opportunities either on the same site or in
the Wellington region.
BeGroup
Consistent with the broader retirement sector, BeGroup
has faced headwinds as sales continue to be slow
with incoming residents taking longer to sell their
existing homes before completing their purchase in the
retirement village. In addition, in the Auckland premium
market, the important Rawhiti Estate site has faced
increased competition as new entrants have come to
market at a challenging time.
This has impacted BeGroup cash flows (and investor
distributions) in the short term. Nonetheless, unit
pricing across the portfolio has generally held up
well and BeGroup enjoys a strong balance sheet.
Buyer enquiry has been volatile but, equally, at some
locations a lack of available units for sale has been the
challenge. Despite these market conditions, we took
confidence from the annual independent valuation
process recognising a modest increase in the value of
the underlying villages.
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