DWC Annual Report Released.
A productive financial year has seen Development West Coast provide commercial finance to 20 businesses throughout the region totalling $14.4m, as well as increase the value of its own total assets to $127 million.
Releasing the annual report, Mr Mackenzie said the 2015-16 year saw DWC generate revenue of $9.2m and invest $5.8m into community projects.
"We were pleased to play a key role in support of the West Coast economy this year, in particular through our District Economic Stimulus Fund and the Digital Enablement Fund. These schemes present local businesses with a range of funding options, and for many it has been the support they needed to keep going through challenging times," Mr Mackenzie says.
DWC’s year-end loss of $345,000 was not ideal but also not unexpected given the outlay under the new funding schemes, and DWC chairman John Sturgeon says the bigger picture is the positive long term impact the funding schemes will have on the community.
"We have been supportive of the tourism sector this year and that is set to pay dividends with an increase in domestic tourists coming to the Coast. The outcome is a shared benefit for many businesses and services across our region, and that will only increase as more people visit."
Mr Sturgeon says the continued challenges for the dairy sector are difficult and have affected many related sectors over the past year, however he hoped the tide was turning on commodity prices which would translate into a better upcoming financial year.
He says DWC's role is to provide leadership in challenging times.
"I am pleased that we have been able to approve so many funding applications over the past year, and I know the team at DWC have been working hard to ensure the community is aware of what funding streams are available and how to tap into them."
Over the course of the year DWC ran numerous successful workshops and events which in total attracted over 380 participants. Upcoming events are advertised on the website www.dwc.org.nz.
As we close the door on the 2015-2016 financial year, we reflect on the challenges faced by industries across the West Coast and the role Development West Coast has played to create new opportunities and stimulate the local economy.
I am proud of what DWC has been able to offer over the course of the year to support the community in what has been ongoing uncertainty for many sectors.
Low commodity prices are clearly having a major effect on industry across the West Coast. Dairying and mining – and therefore their feeder industries – are bearing the brunt of the downturn. In Westport, the effect of the closure of Holcim’s plant is starting to take hold.
Although we generated revenue of $9.2m (including unrealised gains), DWC ended the year with a loss of $345k. The expenses include the $3m accrual of the District Economic Stimulus Fund and $1m to Digital Enablement Fund – both fantastic schemes which DWC has developed to stimulate the West Coast
The good news story in our community is the continuing boom for tourism, which has had its best year for some time. DWC has been pleased to be able to support this key sector, in particular with the $248,000 of assistance for Tourism West Coast’s domestic marketing campaign to bring more New Zealanders to our region. This has been used to great success in a variety of TWC promotions and DWC looks forward to seeing the continued growth of our domestic tourism numbers.
Our previous Chief Executive Joseph Thomas left DWC in October after an 18-month stint at the helm. While his tenure was short, his contribution was significant and we thank him for his efforts. The new Chief Executive Chris Mackenzie began with us in May 2016. His knowledge of the role, purpose and workings of DWC is significant due to his involvement as a trustee on the Interim Trust when the original settlement funds of $92m were allocated by the Government. I look forward to Chris’ leadership in the year ahead, and I would like to thank him for his swift efforts to integrate into DWC to date.
I would also like to acknowledge my fellow Trustees for their work over what has been a difficult year for the West Coast economy. Their decisions to set up the District Economic Stimulus Fund and the Business and Industry Stimulus Fund will go a long way to assist our local community. I particularly wish to thank Robert Buchanan who retired from his Trustee position in July 2016. As the New Zealand Law Society appointee, Robert has provided me much guidance and support during his tenure for which I am very appreciative.
Lastly, I wish to thank the staff of DWC for their ongoing efforts in supporting the West Coast community.
JOHN STURGEON ONZM, MBE
Chief Executive’s Report
My decision to return to having involvement with Development West Coast was not difficult to make. As a trustee of the Interim Trust in 2001 I have a keen appreciation of DWC’s role and the opportunity it presents for driving growth in the West Coast region.
I will be endeavouring over the next few months to talk to as many people as I can who are involved in business and industries across the West Coast. In these times of economic change, it is important to keep the West Coast enthusiasm alive and strive to work together to make things better.
The 2016 ﬁnancial year sees DWC with total assets of $127.3m. Total income for the year was $8.8m (excluding unrealised revenue), with a proﬁt before Community Distributions of $6.5m. Total Operating Expenses were $2.3m, up from $2.0m the previous year.
DWC invested $5.8m in Community Distributions and Projects, and is reporting a net loss of $0.3m with a Total Comprehensive Revenue and Expenses of -$0.4m. DWC’s total realised revenue generated since 2001 now stands at $127m.
It has been a productive year for DWC. 56 funding enquiries were received, translating into 24 commercial ﬁnance applications seeking funding of $10.8m. DWC approved 20 distributions to the value of $14.4m. Almost half of these approvals were generated by our Business and Industry Stimulus Fund (BISF), which has seen $2.2m invested into nine businesses across the West Coast region with the creation of around 35 jobs.
The distribution investments were across a range of industries and businesses, including EPIC Westport, S’All Good Juice Bar in Hokitika, Inchbonnie Hydro, and a new joint venture with Putake Group to set up Putake West Coast LP, a bee keeping and apiary business.
Staff have spent a considerable amount of time and effort working on the future of DWC’s dairy investments with the long term aim to provide stability and certainty in this sector. This resulted in a recent decision to increase DWC’s investment in Cranley Farms Limited (CFL) and Bold Head Farm Limited.
This ﬁnancial assistance will be used in part to restructure CFL’s balance sheet and support a new farm management system. DWC believes this investment will provide conﬁdence and stability for both the West Coast’s dairy industry and CFL as a substantial supplier to Westland Milk Products until the industry recovers or stabilises from the current challenging times. DWC will continue to review and monitor its involvement in these businesses.
In tourism, The Old Ghost Road Cycle and Tramping Trail was officially opened in December 2015. Together with the West Coast Wilderness Trail, the cycling/tramping experience is drawing an increased number of outdoor enthusiasts to the Coast.
The Sounds Air operation - which replaced the Westport to Wellington service when Air New Zealand withdrew from the route – is a signiﬁcant success story for both Sounds Air and the Buller community. The service ensures direct access to and from the Capital and connects with other Sounds Air services to Blenheim, Paraparaumu, Taupo and Napier, and also allows passengers to use other airlines from Wellington.
While all of these initiatives have been in the making before my appointment as Chief Executive, I am still very proud to see DWC’s efforts coming to fruition over the course of what has been a challenging time for the West Coast.
I would like to thank my predecessor, Joseph Thomas, for his contribution to DWC and wish him all the best in his new role.
I look forward to working with the DWC team and Trustees to ensure this growth and success continues as we push ahead into the next ﬁnancial year.