North Otago Irrigation Company focus now on selling shares

The North Otago Irrigation Company is in a good position to sell millions of dollars worth of shares.

With the final stage of its infrastructure construction project complete, the North Otago Irrigation Company is now in a position to focus on selling its remaining $15 million of shares.

Chairman Matt Ross and commercial manager Stephen Craig-Pearson presented the company's annual report for the 2017-18 financial year at a special meeting of the Waitaki District Council this week.

The company is required to report to the council each year under a loan agreement between the company and the council, which loaned the company $17 million in 2015 to help fund its 10,000ha stage 2 expansion.

The company now irrigates about 64,000ha of land in the district.

There are 20,000 shares, of which 17,145, or 85.7%, have been sold, leaving 2855 yet to be sold. At $5250 each, the remaining shares' face value is just under $15 million, and buyers must pay annual variable and fixed charges, the latter amounting to $612.

For the year to June, the company earned revenue of $12.6 million and booked an operating profit of $3.25 million after employment and direct expenses. Its after-tax profit was $178,000. The company reported $160.5 million in assets.

After a delay of several months caused by issues with contractor McConnell Dowell, the $57 million project was completed in September 2017.

At the meeting this week, Mr Craig-Pearson said that meant the company was able to properly shift its focus from construction to its business operations

"The company is now pivoting into operation mode.

"We are now about looking after our customers and our farmers."

He said demand for water last December and in January this year was the highest the company had seen in its history, giving those who were part of the scheme "more confidence" in it.

The company's main priority over the next several months was to sell its outstanding 2855 shares.

Council finance and corporate development group manager Paul Hope, the council's representative on the company's board, said how those sales progressed and the company's asset management would be closely followed by the council.

Cr Colin Wollstein asked when it was likely the shares would be sold.

Mr Ross said the company would prefer to sell its remaining shares "as soon as possible", but admitted that had been troublesome as a result of higher than average rainfall in recent times.

The company would target areas where there were "dry holes", he said.