Bread winner Graeme Hart

By LIAM DANN

Next time you butter your toast for breakfast spare a thought for Graeme Hart - New Zealand's richest man. He's been thinking of you.

Never mind war in Iraq, Sars or any other diversions, Hart is betting his billion-dollar fortune that you won't stop eating.

"I'm pretty confident that you're going to eat your toast in the morning regardless," he said. "And you're going to put butter on it and you're going to have a glass of milk."

It's a belief that reassured Hart, even when he was being attacked for what was seen as a high-risk bid for Australasia's largest food group, Goodman Fielder, which Hart and his Burns Philp Group now control.

All that is left is to finally secure the $2.4 billion he will borrow to complete the deal.

It's a heck of a mortgage but if he is nervous, he doesn't let it show.

"I am absolutely anything but a high-risk player. In business terms I am conservative," he said.

"The reason people suggest we take risks is because they think we carry a lot of debt."

Compared to the debt levels of other food groups around the world, Burns Philp sat very much in the middle of the pack, he said.

It's true that there are several big food groups with higher debt ratios, but at 4.5 times ebitda (earnings before interest, tax, depreciation and amortisation) Burns Philp is twice as heavily leveraged as US giant Kraft. Another US food group, Kellogg, carries a debt ratio of 3.1 times ebitda.

"We're food,' said Hart. "It's not going out of fashion, there's nothing volatile about it. The cash flows are stable and predictable."

The debt will be in three tranches. Most of the money will come from a large group of Australasian banks and the second tier of subordinated debt has already been raised on the American debt market.

A final sum of up to $250 million is to be raised in New Zealand, through a public offer of capital notes.

Yesterday Hart made a rare public appearance to promote the New Zealand leg of the fundraising. He's on a charm offensive and for someone who doesn't like the spotlight he's remarkably charming.

It was not that he deliberately tried to avoid the press, he said.

"If I've got something to say and it's relevant because it affects shareholders, then I'll say it.

"I don't seek any media attention. It just goes with the territory."

Hart's story is compelling. He was a 16-year-old school-leaver, a former panelbeater and tow-truck driver. At 47, he is New Zealand's first billionaire.

He started a printing business soon after leaving school, built it up, sold out and bought into the catering and equipment hire business, amalgamating several companies along the way.

He went back to school and completed an MBA at Otago University before listing his private company Rank Group in 1987.

His break came in 1990 after he bought the Government Printing Office for $23 million - more than $20 million below its book value. A year later he captured Whitcoulls for $71 million (with $53 million borrowed on expected earnings).

After further acquisitions, he privatised the group, selling it to Blue Star stationery in 1997.

In June 1997 he paid $300 million for a stake in Australian food group Burns Philp. His timing was terrible. Within months his shares were almost worthless and the company was in the hands of bankers. But, against the odds he traded his way out.

He now controls Goodman Fielder - another Australasian giant that was born in New Zealand.

"I don't get the sense that Australians pay a lot of attention to that element," he said.

"I don't know if the underdog is the correct way to put it, but I think they've latched more on to that story."

What they have woken up to is how the Burns Philp turnaround is on the march and taking over a much larger company.

"They tend to forget I'm a Kiwi - fairly conveniently. Unless they want to throw brickbats at me ... then they remember."

But Hart is no ex-pat - "I still live in Auckland". When he is in Sydney he tries to spend as much time on his $40 million motor yacht. Boating is one of his few passions outside family and business. Another is swimming - he is reported to rise at 5am for a morning dip in the harbour before tackling the day's business.

"Business is what get's me out of bed in the morning," he said. "That's my hobby."

He is adamant it's not about the money - "that's a byproduct". "This is my passion. If I was a mountaineer or an athlete, or had an interest in politics or teaching, then I'd spend my day trying to do that to the best of my ability."

He has never paid attention to rich lists.

"It just happens that my passion is business and the byproduct of doing that well is the creation of wealth. That is not by any stretch the purpose and goal."

But the immediate goal for Hart is squeezing more of that byproduct out of Goodman Fielder as even sympathetic analysts think he paid a premium for the company.

Changes were expected and he hasn't disappointed. He has been in control for just four weeks and has already cut the company's costs by nearly $30 million.

The head of almost every key division at Goodman Fielder has been replaced and Hart has closed the 500-person head office - the empire will be run from Burns Philp's 23-person headquarters.

Five baking operations have been shut down and the international division wrapped into existing businesses.

"We've moved it straight to the de-centralised model that we run. We said we would be doing that. It's done."

He doesn't believe in mucking around.

"From a shareholder point of view if you've got an agenda that's about improving your business, then every day you waste you leave money on the table."

Market reaction has been good. Burns Philp shares - which went as low as 48c in February peaked at 75c last week.

New Zealand managing director Ron Vela is one of the chosen few to survive the cull.

"Ron Vela's business in New Zealand is in good shape. He runs a good business," Hart said.

"Does that mean there is nothing that can be done as an improvement? No. Does it mean there's wholesale change coming? No, it doesn't mean that either."

Hart isn't giving away his next move but it's clear his empire is far from complete.

"We buy businesses that fit and we go about integrating them. Once we've completed that and everything is happy and bedded down. Then we will move again."

He dismisses suggestions the next step is to go global. Burns Philp is already there, with operations in North and South America, Asia and Europe.

In the past year it has bought a very large yeast and bakery ingredients group in South America and New Zealand Dairy Foods.

Having come this far, Hart is not a man who thinks about limits.

"You don't get driven by a size goal. You just want to get up and do it every day and you want to do it well.

"I don't imagine retiring any time soon, so I guess if I keep doing it we will continue to grow."