FY24 Result Delivers Growth and Diversification
28 February 2025
NZL’s FY24 Result Delivers AFFO Growth, Diversification and Dividend Growth
New Zealand Rural Land Co (NZL.NZX) is pleased to announce its financial result for the year ended 31 December
2024. NZL recorded a consolidated net profit after tax of $23.1m and Adjusted Funds From Operations (AFFO) of
$7.1m, excluding earnings from properties with put/call arrangements in place
1
.
FY24 Highlights
• Roc Partners purchased 25% of NZL’s portfolio, validating strategy and partnering for future growth;
• CPI linked rental increases of +18.6% on 37.3% of NZL’s portfolio took effect in mid-2024. A further 26.5% of
NZL’s portfolio was subject to a +4.0% increase on 15 April 2024;
• AFFO grew from 4.35 cps in FY23 to 4.94 cps (+13.6%) in FY24. NZL forecasts FY25 AFFO of between 5.25
cps and 5.60cps (FY25 includes further CPI linked rental adjustments and the first full year of higher yielding
horticultural acquisitions);
• Portfolio diversification and yield materially increased by forestry and horticultural acquisitions in FY24;
• WALT increased from 11.6 years (31 December 2023) to 12.5 (+8.2%) years at FY24 end;
• 17,503 hectares of rural land now owned, an increase of +9.0% on FY23 16,063;
• Restructured NZL’s borrowing arrangements on 20 December 2024 by entering into a syndicated facility
agreement with Rabobank and Bank of China. The new syndicated facility reduces NZL’s weighted average
cost of debt and increases total available debt capital from $133.5m to $140.0m;
• Gearing lowered to 29.6% from 36.2% (-6.6%) with 65.0% of borrowing hedged;
• Dividend reinstated at ~80% of AFFO, equivalent to a full year dividend of 4.00 cps. The final dividend will be
paid in April 2025. NZL will continue to offer a dividend reinvestment programme.
• Net asset value per share has grown from $1.25 at IPO to $1.603 (at 31 December 2024); and
• On-market share buyback programme continued, with 88,804 shares repurchased at an average price of
$0.89 per share, bringing the total shares repurchased to 710,131 since buyback was initiated in June 2023.
The FY24 result delivered an increased portfolio value, effective risk management, and sustainable growth in
value and dividends for shareholders.
A detailed results presentation is available at: https://www.nzrlc.co.nz/reports-presentations.
www.nzrlc.co.nz
E: info@nzrlc.co.nz | T: +64 9 217 2905
1. Reported figures include 100% of the earnings and assets of New Zealand Rural Land Investments Limited Partnership. NZL owns 75% of this
entity. AFFO and dividends are not reported on a consolidated basis and are 100% attributable to NZL.
www.nzrlc.co.nz
Roc Transaction
On 19 January 2024, NZL announced it had entered into an agreement to sell a 25% equity interest in its land
portfolio to Roc Partners (Roc). This transaction settled in early FY24 on 9 February 2024.
Roc acquired the equity interest for $44.2m in cash. NZL used the proceeds to repay the $11.8m owing on a
convertible note it drew down in April 2023 to partially fund its forestry acquisition. Further proceeds were used
to fund orchard and forestry land acquisitions detailed below, with the balance retained as working capital while
other opportunities were investigated.
Roc Partners has extensive experience in rural property investment and represent an ideal strategic partner
for NZL. The Companies have already co-invested in four acquisitions, successfully growing the portfolio.
Acquisitions
In the first half of the year, NZL announced the acquisition of several additional properties including a 97
hectare horticultural property in Hawke’s Bay and a 1,105 hectare forestry estate in Manawatu-Whanganui. NZL
supplemented the purchases with an additional 1,501 hectare forestry estate in the same well regarded forestry
region. These properties were collectively purchased for $34.9m and were leased to Kiwi Crunch, New Zealand
Forest Leasing and MM Forests respectively.
NZL also settled the first tranche of a 126 hectare apple orchard for $4.9m. This initial purchase consisted of
approximately 47 hectares, with an annualised year one income of $635k. Settlement of the property included
consideration of $3.5m worth of NZL shares issued at $1.58 per share - 2,215,190 shares. The next property is
scheduled for settlement in September 2025.
The average weighted lease term and yield for FY24 acquisitions is 24.4 years and 7.8%, respectively (by lease
value).
Following these transactions, NZL now owns 17,503 hectares of rural land (25% of which is owned by Roc) with
a 12.5 year WALT (by lease value) and 100% occupancy across nine tenants. The new properties add meaningful
sector, income and tenant diversification to NZL’s portfolio, with forestry and horticulture now holding a 32% and
8% proportion of the company’s annual lease income.
CPI Adjustments
NZL benefits from CPI adjustments for all of its properties and has received CPI adjusted rental payments from all
18 properties due for review in FY24. Most of NZL’s dairy assets (37.3% of NZL’s rent) had rental reviews effective
in mid-2024, which resulted in CPI linked rental increases of +18.6%, a further 26.5% of NZL’s portfolio was subject
to a +4.0% increase on 15 April 2024. Reflecting this, the portfolio’s total lease value has increased by ~$1.56m or
+7.6%. NZL’s dairy leases undergo CPI review every three years, in contrast to its horticultural and forestry leases
which undergo CPI review annually.
Dividend and Share Buyback Programme
NZL reinstated dividend payments and paid an interim dividend of 1.46 cps. NZL will pay a final dividend of 2.54
cps in April 2025 resulting in a total FY24 dividend of 4.00 cps representing ~80% of FY24 AFFO.
NZL’s intention has always been to pay regular semi-annual dividends. NZL’s amended dividend policy targets
a pay-out of 60% - 90% of AFFO. The pay-out range grants the company greater flexibility to deploy NZL’s cash
operating earnings in ways considered most beneficial to increasing shareholder value.
The company maintains a selective on-market share buyback programme. During the period NZL repurchased
a total of 88,804 shares at an average price of $0.89 per share. Under the programme 710,131 shares have been
acquired as at the date of this announcement.
E: info@nzrlc.co.nz | T: +64 9 217 2905
www.nzrlc.co.nz
Outlook & Subsequent Events
NZL’s strategy is to own quality rural land in New Zealand; growing a diverse portfolio while delivering attractive
risk-adjusted returns as a ground lessor. Recent acquisitions are delivering on this strategy.
The outlook for agriculture is positive with property prices forecast to continue increasing and higher commodity
prices improving the servicing ability of NZL’s tenants.
NZL’s leases incorporate regular CPI reviews. That means inflation results in rental growth. NZL is also protected
from inflation-impacted, and all other operational on-farm costs by owning only the land.
Post the most recent acquisitions and Roc transaction, NZL forecasts FY25 AFFO of between $7.5m and $8.0m,
this excludes earnings from properties with put/call arrangements in place (~$1.4m).
Subsequent to balance date NZL entered into an agreement with a tenant which involves the acquisition of land
from the tenant for approximately $15.5 million. As consideration, NZL will transfer two properties currently held
for sale and cash to the tenant.
NZL will then lease the acquired land to the tenant. This transaction will see NZL receive increased rental revenue.
This agreement is expect to become unconditional by the 5th of March and be settled on that date.
Rob Campbell
Chair
For further information please contact:
Richard Milsom
Mobile: 021 274 2476
Email: richard@nzrlm.co.nz
E: info@nzrlc.co.nz | T: +64 9 217 2905
---
1
New Zealand Rural Land Company
Rural Land Company
New Zealand
Result for the year ending
31 December 2024
28 FEBRUARY 2025
LISTED ON:
www.nzrlc.co.nz
2024
2
New Zealand Rural Land Company
2
DISCLAIMER
The information and opinions in this presentation were
prepared by New Zealand Rural Land Company (NZL).
NZL makes no representation or warranty as to the accuracy
or completeness of the information in this report. Opinions
including estimates and projections in this report constitute the
current judgment of NZL as at the date of this report and are
subject to change without notice. Such opinions are not guarantees
or predictions of future performance. This report is provided for
information purposes only and does not constitute investment advice.
Neither NZL, nor any of its Board members, officers, employees,
advisers (including New Zealand Rural Land Management Limited) or
any other representatives will be liable for any damage, loss or cost
incurred by any recipient of this report or other person in connection with
this report.
NEW ZEALAND RURAL LAND CO OWNS AND
LEASES SOME OF THE BEST AGRICULTURAL LAND
IN THE WORLD.
Rural Land Co
New Zealand
The Rural Land Investors
3
New Zealand Rural Land Company
Roc Partners purchased 25% of NZL portfolio, validating strategy
and partnering for growth
Portfolio diversification and rental yield materially increased by
forestry and horticultural acquisitions in FY24
Partnered with New Zealand Forest Leasing to execute native
regeneration on NZL’s forestry properties
AFFO per share grew from 4.35cps in FY23 to 4.94 cps in FY24
(+13.6%)
Gearing lowered to 29.6%, from 36.2% at the end of FY23
Total dividend declared of 4.00 cents per share (net) equivalent to
~80% of FY24 AFFO*
3
KEY MESSAGES
* NZL’s AFFO after deducting Roc’s share of AFFO
4
New Zealand Rural Land Company
FY24 - FINANCIAL HIGHLIGHTS & METRICS
Total Returns
Net asset value per share has grown from $1.25 at
IPO
1
to $1.603 (at 31 December 2024); total company
returns have been +35.9% (NAV growth plus
dividends)
2
.
1. 21 December 2020
2. This NAV growth has been achieved alongside an expansion of capital base from 60,600,000 shares on issue at IPO to 142,953,801 on issue as at 31 December 2024. Calculation assumes full participation in rights
issues.
3. AFFO per share is based on the portion of the consolidated company’s total AFFO attributable to NZ
4. AFFO per share guidance at mid-year based on 139,796,073 shares on issue. An additional 3,157,728 shares were issued in the second half of the financial year..
Increasing AFFO
FY24 AFFO was $7.1m (4.94 cps)
3
due to the impact of
CPI increases and higher yielding recent acquisitions.
This is inline with guidance on a like for like basis
4
.
$1.603
NAV per Share
$441.9m
Total Assets
$229.1m
Net Asset Value (NAV)
29.6%
Gearing
Dividend Resumption
NZL resumed its dividend during the year, paying
an interim dividend of 1.46 cps. NZL will pay a final
dividend of 2.54 cps bring total dividends for the year
to 4.00 cps (net) equivalent to ~80% of NZL’s FY24
AFFO.
CPI Linked
CPI linked rental increases of +18.6% on 37.3% of NZL’s
portfolio took effect in mid-2024. A further 26.5% of
NZL’s portfolio was subject to a +4.0% increase on 15
April 2024.
5
New Zealand Rural Land Company
YEAR ON YEAR AFFO GROWTH
NZL AFFO and AFFO/sh
• NZL has increased AFFO both in absolute terms and per share every year since listing
1
.
• In HY24 NZL updated its AFFO calculation to remove the impact of earnings from put/call arrangements as these are comprised of capitalised income rather
than cash, which AFFO is a proxy for. AFFO for years prior to FY24 are adjusted to remove the impact of put/call earnings (~$1.2m p.a) to facilitate a like-for-
like comparison.
• On this basis, since FY22 NZL’s AFFO has increased +99.7%. Over the same period AFFO per share has increased +61.5% (per share growth has been
achieved alongside a ~+27m increase in the number of shares on issue).
1. To further ensure a like-for-like comparison with FY24. AFFO is shown as at 31 December in each preceding year (NZL changed its balance date from 30 June to 31 December in FY22).
0.98
3.54
4.84
7.06
0.56
3.06 (+445%)
3.47 (+14%)
4.94 (+42%)
-
1.00
2.00
3.00
4.00
5.00
6.00
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
FY21FY22FY23FY24
AFFO cps
AFFO $m
AFFOAFFO/sh
New Zealand Rural Land Company
666
FY24 OPERATING OVERVIEW
SECTION 1
7
New Zealand Rural Land Company
NEW ACQUISITIONS IN FY24
Acquisition 1: Twyford OrchardsAcquisition 2: Forestry EstateAcquisition 3: Forestry EstateAcquisition 4: Southern Orchards
LocationHawke’s BayManawatū-WhanganuiTaranaki, Whanganui & RangitikeiOtago
Asset ClassHorticultureForestryForestryHorticulture
Area97 ha1,105 ha1,501 ha126ha
Purchase Price~$18.1m~$9.5m~$7.3m~$13.2m
TenantKiwi CrunchNew Zealand Forest LeasingMM Forests LimitedSI Orchards
Lease TypeTriple Net LeaseTriple Net LeaseTriple Net LeaseTriple Net Lease
Lease Term 30 years16 years22 years30 Years
Year 1 Rent ~$1.35m$760k$657k$1.13m
Lease Rate 7.50%8.00%9.00%8.50%
Rent ReviewsAnnual adjustments of 2.5% or CPI,
which ever is higher
Annual CPI adjustmentsAnnual CPI adjustmentsAnnual adjustments of 2.5% or CPI,
which ever is higher
Four AFFO and WALT accretive acquisitions settled during FY24. Further
diversifying NZL by tenant, geography and sub-sector while also increasing
rental adjustment frequency
1
.
• Twyford Orchards: Horticultural land supporting three apple orchards
located in Hawke’s Bay, marking NZL’s entry into a new sub-sector
(Horticulture).
• Forestry Estate 1: Forestry land located in close proximity to NZL’s existing
estates and leased to New Zealand Forest Leasing (NZFL).
• Forestry Estate 2: Forestry land located in Taranaki, Whanganui and
Rangitikei and leased to MM Forests Limited.
• Southern Orchards: The first tranche (47 hectares) of 126 hectares of
horticultural land supporting an apple orchard in central Otago. Settlement of
the property included consideration in the form of NZL shares. Settlement of
the second tranche is scheduled for September 2025.
1. The properties were acquired through a newly formed Limited Partnership 75% owned by NZL and 25% owned by Roc Partners
Portfolio as at 31 December 2024
Diversity Increased
0.53
0.09
0.33
0.05
DairySupportForestryApples
WALT IncreasedGearing Lowered
Summary of Acquired Properties
New Zealand Rural Land Company
8
New Zealand Rural Land Company
NZL FINANCIALS & RETURN METRICS
for the period ending 31 December 2024
SECTION 2
9
New Zealand Rural Land Company
ADJUSTED FUNDS FROM OPERATIONS (AFFO)
4.94cps
(+14%)
AFFO
5.10cps
(+8%)
FFO
NZ$00031 December 202431 December 2023
Net Profit After Tax23,07910,854
Adjusted for:
Unrealised Net Gain on Investment Properties(23,859)(7,388)
Unrealised Movement in Redeemable Limited Partnership Units7,724-
Performance Fee Payable in Shares660901
Unrealised Net Loss on Derivatives1,9982,512
Deferred Tax Expense / (Benefit)979(483)
Amortisation of Rent Free Incentives176176
Amortisation of Lease Fee3430
Disposal of Surplus Asset(21)-
Loan Interest Rolled into New Syndication Facility234-
Initial Recognition and Unrealised Net Gain of Carbon Credits(26)-
Capitalised Interest Loan Receivable
1
(1,316)-
Funds from Operations (FFO)9,6626,602
FFO Attributable to the Land Trust2,367-
FFO Attributable to NZL7,2956,602
Company FFO per Share (cents)5.104.74
Adjusted Funds from Operations
Incentives and Leasing Costs23120
Future Maintenance Capital Expenditure(336)(663)
Adjusted Funds from Operations (AFFO)9,3486,059
AFFO Attributable to the Land Trust2,286-
AFFO Attributable to NZL7,0626,059
Company AFFO per Share (cents)4.944.35
AFFO is a proxy for free cash flow commonly used by REITs. AFFO is intended to provide investors with a clearer picture of the company’s free cash flow.
1. Capitalised interest on loan receivables removed as this is non-cash income and AFFO serves as a proxy for free cash flow.
10
New Zealand Rural Land Company
PROFIT & LOSS STATEMENT
NZ$00030 December 202431 December 2023
Gross Rental Income
Rental Income
19,86915,350
Net Rental Income
19,86915,350
Less Overhead Costs
Directors Fees
(227)(227)
Insurance
(87)(85)
Shareholder Registry & Communication
(74)(95)
Management Fees
(1,407)(1,039)
Repairs and Maintenance
(396)(117)
Professional, Consulting and Listing Fees
(686)(380)
Performance Fee
(660)(901)
Loss on Convertible Loan
(160)-
Other
(38)-
Total Overhead Costs
(3,735)(2,858)
Profit / (Loss) Before Net Finance Income, Other
Income and Income Tax
16,13412,492
Finance Income2,5501,879
Finance Expense(10,808)(11,388)
Net Finance Income(8,258)(9,509)
Profit /(Loss) Before Other Income and Income Tax7,8762,983
Other Income
Change in Fair Value of Investment Property23,8597,388
Movement in Redeemable Limited Partnership Units(7,724)-
Other47-
Profit / (Loss) Before Tax24,05810,371
Income Tax Expense(979)483
Profit / (Loss) and Total Comprehensive Income for
the Period
23,07910,854
Earnings per Share (EPS) (cents)16.478.06
$23.08m
(+113%)
NPAT
16.47cps
(+104%)
EPS
11
New Zealand Rural Land Company
BALANCE SHEET
NZ$00030 December 202431 December 2023
Current Assets
Cash and Cash Equivalents5,5201,258
Derivative Assets 151-
Trade and Other Receivables 1,769378
Assets Held for Sale11,355-
Current Tax Receivable-7
Total Current Assets18,7951,643
Non-Current Assets
Investment Property400,448346,281
Loan Receivable21,68520,363
Deferred Tax Assets5521,398
Derivative Assets35271
Other Non-Current Assets10175
Total Non-Current Assets423,138368,188
Total Assets441,933369,831
Current Liabilities
Trade and Other Payables3,1571,090
Borrowings 47,10129,500
Convertible Loan- 11,980
Derivative Liabilities129-
Other Current Liabilities 169169
Total Current Liabilities50,55642,739
Non-Current Liabilities
Borrowings84,106104,000
Derivative Liabilities2,342-
Redeemable Limited Partnership Units75,797-
Total Non-Current Liabilities162,245104,000
Total Liabilities212,801146,739
Net Assets229,132223,092
Net Asset Value (NAV) per Share1.60281.6016
$229.13m
(+3%)
Total Equity/ Net Asset
Value
$441.93m
(+19%)
Total Assets
12
New Zealand Rural Land Company
DEBT SUMMARY
2.2 Years
**
Weighted Average Term
to Expiry
5.9%
**
Weighted Average
Interest Cost
Key Metrics31 December 202431 December 2023
Debt Drawn ($m)131.2133.5
Debt to Total Tangible Assets29.6%36.2%
Interest Coverage Ratio2.38x1.7x
Weighted Average Term to Expiry (Years)2.22.3
Weighted Average Interest Cost5.9%5.8%
% Of Debt Hedged65%64%
Total Debt Facilities Available ($m)140.0133.5
NZL Debt Facility Expiry Profile
* Gearing is calculated as: bank debt / total tangible assets
** As at 31 December 2024
29.6%
*
Gearing
Key Banking Partners
In December 2024 NZL restructured its borrowing arrangements, entering into a syndicated facility agreement with Rabobank and Bank of China. The new syndicated
facility reduces NZL’s weighted average cost of debt and increases total available debt capital from $133.5m to $140.0m.
NZL has hedging arrangements in place for 65.0% of its total borrowings at an average cost of 6.2%. The remaining debt is floating and the cost of the floating
debt component is 5.4%. Accordingly, NZL’s weighted average cost of debt is currently 5.9%.
65.0%
Hedged
13
New Zealand Rural Land Company
TOTAL RETURNS
Dividends per Share
1. This NAV growth has been achieved alongside an expansion of capital base from 60,600,000 shares on issue at IPO to 142,953,801 on issue as at 31 December 2024.. Calculation assumes full
participation in rights issues.
2. AFFO per share is based on the portion of the consolidated company’s total AFFO attributable to NZL.
NAV Performance
AFFO & AFFO/sh
• NZL delivered FY24 AFFO of $7.1m in
AFFO (4.94 cps
2
)
• This represents AFFO growth of +16.6%
(+13.6% cps)
• NZL forecasts FY25 AFFO of between
$7.5m and $8.0m.
• NZL’s NAV per share has increased from
$1.250 to $1.603 (+28.2%) since listing.
• This growth in NAV per share plus dividends
over the same period means NZL has
delivered total company returns of +35.9%
1
since 21 December 2020.
• NZL reinstated its dividend in FY24
and paid an interim dividend of 1.46
cps for the six months to 30 June
2024.
• NZL will pay a final dividend of 2.54
cps for a full year dividend of 4.00
cps.
• Total dividends are equivalent to
~80% of NZL’s FY24 AFFO.
• NZL forecasts a full year dividend
for FY25 of between 4.20 cps and
4.50cps representing ~80% of
forecast AFFO.
New Zealand Rural Land Company
14
SUSTAINABILITY PROGRAMME
as at 31 December 2024
SECTION 3
15
New Zealand Rural Land Company
SUSTAINABILITY PROGRAMME
NZL continues to work on mapping its current portfolio for marginal land which can be enhanced with planting and a programme to increase
biodiversity. The mitigation of erosion is a key outcome of this planting with potential for carbon sequestration and sediment control.
NZL has initiated work on several special projects across its portfolio. These include a solar pump upgrade (from diesel), improved effluent
systems on some farms, (budgeted capex at purchase) and native regeneration and predator control at NZL’s forestry estate in partnership with
our tenant New Zealand Forestry Leasing.
Release of NZL’s sustainability programme - “Enduring Land for Life”. Visit our website www.nzrlc.co.nz for further detail.
EnvironmentEconomic
Governance
Oversight and management of goals; skills and commitment to “Enduring Land for Life” vision. Strength and diversity.
SocialAnimal Welfare
✓ Soil Health
✓ Water Quality
✓ Biodiversity
✓ Emissions reduction per unit of
production
✓ Land Selection
✓ Partnering with tenants
✓ Creating a virtuous circle of growth,
investment, job creation, community
opportunities
✓ Care of people
✓ Health and safety
✓ Warm, safe living conditions
✓ Enabling career and personal growth
✓ Fair pay
✓ Five freedoms
✓ Prioritising animal wellbeing
✓ Nutrition and care
✓ Adequate shelter
Mana Whenua
✓ Prioritising relationships with mana
whenua / te ahi kaa
We know that the success of any strategy starts with the tone at the top, and we value strong and diverse governance. Having the right mix of skills
and commitment ensures NZL has the capability and vision needed to achieve our mission.
Enduring Land for life: The Framework
1
2
3
16
New Zealand Rural Land Company
FY24 SUSTAINABILITY HIGHLIGHTS
Native Forest Regeneration
In the first half of FY24, NZL completed two forestry land acquisitions, deploying a further $16.8m into 2,606 hectares of high quality forestry land in the
Manawatū-Whanganui region. These transactions serve to further diversify NZL’s rural land portfolio, and continue it’s contribution to the New Zealand
Governments international and domestic greenhouse gas emissions targets, and biodiversity initiatives.
NZL partners with its tenant New Zealand Forest Leasing which has a large nationwide carbon sequestration and native regeneration project underway. This
involves using pines as a “nurse crop” and using a variety of methods to ensure long-term native regeneration. The methodology of “Nurse Crop” coupled
with native regeneration has a two fold effect on sustainability. The Pinus Radiata nurse crop delivers unmatched early growth rates, sequestering atmospheric
greenhouses gases at high rates, which are the primary perpetrator in the global fight against climate change. Alongside exceptional carbon sequestration, the
fast growth rates create a forest canopy and starve out grass and weeds, creating an optimal micro-climate for shade tolerant native species to successfully
establish.
Particular active management initiatives to enable native regeneration include: Fire Management, Large Scale Intensive Pest Animal Control, Pest Plant Control
and Forest Health Monitoring.
The FY24 forestry transactions reaffirmed NZL’s partnership with New Zealand Forest Leasing (NZFL). NZFL are a best-in-class manager and execute the
native regeneration on NZL’s properties. Their team mimic the natural regeneration process with techniques such as enabling seed dispersal from existing
native stands, planting natives and thinning the nurse crop canopy. As regeneration progresses, native bird and insect species increase. These species are
protected by NZFL’s active pest management program which is the largest in New Zealand.
NZFL’s Active Forestry Management for Native Regeneration
17
New Zealand Rural Land Company
FY24 SUSTAINABILITY HIGHLIGHTS (CONT)
Enduring Land For Life
Green Loan
NZL has published the programme it uses to ensure land and
partnerships are enduring.
Commitments between NZL and tenants are developed and
refined jointly, incorporating industry best practice, latest
scientific research and learnings from leading tenants. Joint
commitments to preserve the land are made binding by our
leases and NZL incorporates regular audits to monitor this.
As part of its forestry acquisitions NZL established a green
loan programme. The green loan follows the Asia Pacific Loan
Market Association Green Loan Principles. Working within
these principles enables NZL to align itself with UN Sustainable
Development Goal 15 which aims to protect, restore and
promote sustainable use of terrestrial ecosystems, sustainably
manage forests, combat desertification, and halt and reverse
land degradation and halt biodiversity loss.
Other Initiatives
NZL has initiated work on several special projects across its
portfolio. These include a solar pump upgrade (from diesel),
improved effluent systems on some of our farms, native
regeneration and predator control at NZL’s forestry estate in
partnership with our tenant.
New Zealand Rural Land Company
181818
DIVIDEND AND OUTLOOK
SECTION 4
19
New Zealand Rural Land Company
New Zealand’s dairy sector is the backbone of the rural economy, and it’s financial
health directly impacts land leasing models like NZL’s. Insights from DairyNZ’s
economic tracker show what the average owner-operator experienced in the last
six seasons from FY19 to FY24 (it also includes a forecast for the current season,
FY25):
• Both breakeven milk price and the average payout received rose consistently,
with farms maintaining above the line profitability. FY25 is forecast to be the
most profitable in the last seven seasons.
• Profitable seasons allowed farmers to focus on improving financial stability,
with debt-to-asset ratios steadily declining.
These trends strengthen NZL’s business model by enhancing tenant financial
resilience and supporting stable lease payments. Additionally, improved
farm profitability increases long-term land values, further improving return to
shareholders.
SPOTLIGHT ON: THE FINANCIAL LANDSCAPE FOR NEW ZEALAND DAIRY FARMERS
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2018-192019-202020-212021-222022-232023-242024-25
(Forecast)
Value in NZD
Net drawingsTaxInterest and Rent
DepreciationFarm working expensesNet dairy cash income
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2018-192019-202020-212021-222022-232023-242024-25
(Forecast)
Value in NZD
ProfitBreakeven milk priceavg. Payout received
40%
42%
44%
46%
48%
50%
52%
54%
2018-192019-202020-212021-222022-232023-242024-25
(Forecast)
Debt to Asset %
Record Cash Profitability
Positive Bottom Line
Declining Debt Levels
Insights
20
New Zealand Rural Land Company
ROC PARTNERS TRANSACTION
Overview
On 19 January 2024 NZL announced it had entered into an agreement to sell
a 25% equity interest in its land portfolio to Roc Partners (Roc). This transaction
settled on 9 February 2024.
Roc acquired the equity interest for approximately $44.2m in cash.
NZL used the proceeds to repay the $11.8m owing on a convertible note it drew
down in April 2023 to partially fund its forestry acquisition. A further $26.2m of
the proceeds were used to fund orchard and forestry land acquisitions.
• Capital recycling at a premium - the transaction is highly value accretive to
shareholders given the value of the 25% sold versus the implied share price value
of the rural land portfolio.
• Improved financial position - the proceeds of the transaction enabled NZL
to repay its convertible note, and have the financial capacity to capitalise on
opportunities that are NAV and AFFO accretive.
• Strategic partner – Roc Partners has extensive experience in rural property
investment and conducted extensive due diligence as part of the transaction. NZL
and Roc have already co-invested (through the LP) in two acquisitions successfully
growing the portfolio.
Key Points
The strategic benefits of this transaction were as follows:
21
New Zealand Rural Land Company
DIVIDEND & SHARE BUYBACK PROGRAMME
Dividend
Share Buyback Programme
• NZL has resolved to pay a final dividend of 2.54 cps bringing the total
dividend for the year to 4.0 cps equivalent to ~80% of NZL’s FY24 AFFO*.
• NZL’s dividend policy targets a pay-out ratio of 60% - 90% of AFFO. The
pay-out range grants the company greater flexibility to deploy NZL’s cash
operating earnings in ways most beneficial to increasing shareholder
value.
• NZL maintains its dividend reinvestment plan which offers shareholders
the opportunity to reinvest the net proceeds of cash dividends payable on
some or all of their NZL shares into additional fully paid shares.
• NZL maintains a selective on-market buyback programme.
• During the period NZL repurchased a total of 88,804 shares at an average
price of $0.89 per share. A total of 710,131 shares have been repurchased
under this programme since buyback was initiated in June 2023.
* NZL’s AFFO after deducting Roc’s share of AFFO
22
New Zealand Rural Land Company
OUTLOOK & FY25 FORECAST
NZL’s leases incorporate regular, uncapped, CPI reviews. Accordingly, inflation will
result in rental growth. Furthermore, NZL is insulated from inflation-impacted (and all
other operational) on-farm costs by owning only the land.
NZL has seen the positive impact of inflation in 2024, with many of its leases having
successfully undergone CPI review. Further CPI linked lease reviews are due in
FY25. These include:
• 31% of NZL’s pastoral leases will be subject to review in 2025. CPI accumulated
since the leases began is expected to be ~+13.0%.
• 100% of NZL’s forestry assets will be subject to rent review in the first half
of 2025. CPI accumulated since the last rent review for these properties is
expected to be~+2.1%.
NZL forecasts FY25 AFFO of between $7.5m and $8.0m (Note: this excludes
earnings from properties with put/call arrangements in place). AFFO per share of
5.25 to 5.60 cents (Based on 142,953,801 shares on issue).
Dividend payout ratio in keeping with NZL’s new policy is 60-90% of AFFO.
23
New Zealand Rural Land Company
New Zealand’s carbon market is tightening, with emission unit availability set
to drop from 45 million to 21 million between 2025 and 2029, driving carbon
prices higher (announced 20 August 2024 - see chart below). Carbon prices
increased to c.$60 per ton in response to these changes. The government
has reversed some environmental policies, delaying agricultural emissions
pricing and lifting the oil and gas exploration ban. The Eurpean Union’s Carbon
Border Adjustment Mechanism will impact NZ exporters from 2026, requiring
compliance with new carbon levies. These shifts reflect a balancing act between
economic growth and climate commitments.
MARKET UPDATES
NZU Price Last 12 Months
2
CarbonDairy
In December 2024, Fonterra increased its forecast 2024/25 season
Farmgate Milk Price by $0.50, to a midpoint of $10.00 per kilogram of milk
solids (kgMS); with the forecast range moving to $9.50 - 10.50 per kgMS.
This is an improvement on Fonterra’s final 2023/24 season Farmgate Milk
Price of $7.83 kgMS. Fonterra believes the rebalancing domestic market
in Greater China and the continued demand from countries in Southeast
Asia is the driving force behind Farmgate Milk Price recovery. Milk supply in
the United States and Europe is still being impacted by local factors while
production in New Zealand has increased.
TO UPDATE WITH LATEST DATA
Farmgate Milk Price Last 5 Years
1
$ 7.5 Kg/MS
$ 9.3 Kg/MS
$ 8.2 Kg/MS
$ 7.8 Kg/MS
$ 10.0 Kg/MS
0.0
2.0
4.0
6.0
8.0
10.0
12.0
$ Kg/MS
FonteraWestlandSynlaitOceania Diary
20 -Aug-24
Government
Announcement
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
NZU Price $
1
Farmgate Milk Price callouts are for Fonterra.
2
NZU price is Volume Weighted Average Price (VWAP). This is the best measure of the NZU price for the day, as it reflects the weighted average price based on actual trading volume.
24
New Zealand Rural Land Company
0.30%
3.00%
3.70%
4.60%
4.90%
6.20%
6.30%
6.80%
14.20%
-10%
-5%
0%
5%
10%
15%
20%
LPV 1LPV 2LPV 3LPV 4
LPV 5LPV 6
LPV 7
LPV 8
NZL
Yield + Growth
Cash YieldAFFOps growth p.a to FY27Yield + Growth Sector Median (4.90%)Yield + Growth
LISTED PROPERTY VEHICLE COMPARISON
Yield & Forecast Growth Across NZX Listed Property Vehicles (LPV)
Source: Craigs Investment Partners, A Sign of Validation (22 January 2024).
New Zealand Rural Land Company
25
APPENDICES
26
New Zealand Rural Land Company
INVESTMENT SUMMARY
NZL PROVIDES INVESTORS WITH EXPOSURE TO:
1. This land is owned via an LP, 75% owned by NZL and 25% by Roc Partners
2. This NAV growth has been achieved alongside an expansion of capital base from 60,600,000 shares on issue at IPO to 142,953,801 on issue as at 31 December 2024.
3. Calculation assumes full participation in rights issues, plus dividend accumulated to 31 December 2024.
Favourable Industry
Dynamics
A Proven Value Add
Acquirer of Land
Attractive Total ReturnsHigh Quality Tenants
with Attractive WALT
A Significant Growth
Opportunity
Long term demand for key
commodities and food
vs declining availability
of productive land drives
land values. Productive
rural land is finite in supply
and its value is founded
on worldwide population
growth, growing food
demand, and yield-
boosting innovation.
Increasing scarcity of
productive land globally is
mirrored in New Zealand.
New Zealand is one of the
world’s lowest-cost and
lowest-carbon emitting
producers of protein, fibre
and timber in the world.
Successfully acquired
17,503 hectares of pastoral,
forestry and horticultural
land since listing on 21
December 2020
1
.
NAV per share increased
from $1.250 (21 December
2020) to $1.603 as at 31
December 2024
2
. This
represents total increase in
NAV per share of +28.2% .
NAV growth has been
achieved alongside an
expansion to capital base
from 60.6m shares on
issue at IPO to ~143.0m
shares on issue as at 31
December 2024
All tenants have significant
operating experience,
robust balance sheets and
governance frameworks.
12.5 year WALT (by value).
NZL provides unique
investment exposure as it
is currently the only pure-
play listed exposure to
New Zealand rural land.
NZL provides inflation
hedging and stable income
via CPI-linked leases
(uncapped).
NZL’s strategy is to
continue to grow its
portfolio, both in dairy
and other attractive
agricultural opportunities,
to ultimately provide scale
and diversified exposure to
high quality New Zealand
rural land.
NAV per share has grown
by +28.2% since NZL’s IPO.
NZL has paid/declared
a total of 5.64 cps in
dividends. Total company
returns have been +35.9%
3
.
Farmland does not
typically experience the
same volatility that mark
economic changes. It
usually experiences
peaks and plateaus
– appreciating at an
attractive rate when
times are positive but not
necessarily retreating when
conditions are tough, this
is driven by its increasing
scarcity.
27
New Zealand Rural Land Company
51%
10%
6%
33%
DairySupportApplesForestry
PORTFOLIO OVERVIEW - AS AT 31 DECEMBER 2024
1
25% owned by Roc. Numbers are rounded.
2
WALT is weighted by lease value.
Rural Asset Class
HorticultureForestryPastoralTotal
Land Area (ha)
1445,64911,71017,503
1
(align with website)
Regions
Hawke’s Bay and OtagoCentral North IslandCanterbury, Otago & SouthlandPastoral, Forestry & Horticulture
Current Use
Apples & PearsForestry & Carbon Dairy & Support
Dairy, Support, Forestry, Carbon,
Apples & Pears
WALT (years)
2
29.517.97. 412.5
# Tenants
2259
Occupancy
100%100%100%100%
Rural Sub-Sector Breakdown
28
New Zealand Rural Land Company
TENANT CONCENTRATION, LEASE PROFILE & LEASE OVERVIEW - AS AT 31 DECEMBER 2024
Tenant Concentration as % of Lease Value
NZL expects tenant diversification to increase as it continues to grow its asset base.
NZL’s Weighted Average Lease Term (WALT) is currently 12.5 years (100% occupancy).
NZL’s pastoral farm leases all have three, six and nine year CPI increases with tenant rights of renewal in years 10 or 11.
NZL’s forestry leases all have annual CPI increases.
NZL’s horticultural assets have annual rental increases of 2.5% or CPI whichever is greater.
All leases are triple net leases, tenants are responsible for all repair and maintenance costs.
Lease Expiry Profile by Value
29
New Zealand Rural Land Company
FOREIGN OWNERSHIP RULES & LEVELS
New Zealand
Buyer
NZL is highly advantaged
because it is a
New Zealand buyer
of rural land.
Current Listed
Company Foreign
Ownership Rules
Under the Overseas Investment
Amendment Act 2021, NZL can have
foreign domiciled shareholders of up
to 49.9% of its share register (subject
to certain share parcel restrictions).
Private companies in NZ are limited to
less than 25%.
Current NZL
Foreign
Ownership
As at 31 December 2024,
NZL had foreign domiciled
shareholders amounting to
~25.4% of its share register.
30
New Zealand Rural Land Company
KEY PEOPLE
ROB CAMPBELL
Independent Chair
Chancellor - AUT
Chair - Ara Ake
CHRISTOPHER SWASBROOK
Non-Independent Director & Founder
Managing Director – Elevation Capital
Board Member – Financial Markets Authority (FMA)
Director – Bethunes Investments Limited, McCashin’s
Brewery Limited and Swimtastic Limited
Previously a Partner of Goldman Sachs JBWere Pty
Limited & Co-Head of Institutional Equities at Goldman
Sachs JBWere (NZ) Limited
SARAH KENNEDY
Independent Director
CEO - Calocurb Limited
Previously CEO - Designer Textiles
International
Previously Vice President International
Farming - Fonterra
Previously CEO / Member of the Board
of Directors - Vitaco Health Limited
Previously CEO - Healtheries of New
Zealand Ltd
TIA GREENAWAY
Independent Director
Hailing from Ngāti Tūwharetoa and
Waikato-Tainui
CFO - Tupu Angitu
Various roles on Iwi and Ahu Whenua
Trusts and Committees
SHELLEY RUHA
Director
Director - Heartland Bank
Director - Allied Farmers
Director - Icehouse
Director - 9 Spokes
Previously - BNZ Senior Management Team and leader of BNZ
Partners
RICHARD MILSOM
Executive Director & Founder
Managing Director - Allied Farmers & New Zealand Rural Land
Management
Consultant – Bellevue Enterprises Limited – Bovine & Porcine
Genetic Improvement & Sustainable Pork Production Company
INFINZ Emerging Leader 2017
HAYDEN DILLON
Founder & Consultant
Managing Partner Findex (Waikato) & Head of Agribusiness New
Zealand for Findex.
Independent Director - Williams Holdings Limited
Independent Director - Aquila Sustainable Farms Limited and
associated Limited Partner Farms.
Chairman - Bioceta Limited
RURAL PROPERTY MANAGERS
Rural Property Managers
RURAL VALUERS
Independent Consultants
XAVIER LYNCH
General Manager - Corporate
Executive, Corporate Finance - Bancorp Merchant Bankers
Senior Analyst, Corporate Finance - Deloitte New Zealand
Analyst - Todd Property Group
Investment Analyst - Crown Irrigation Investments Limited
CHRISTOPHER SWASBROOK
Founder & Consultant
See above.
AGRICULTURAL ENVIRONMENTAL SPECIALISTS
Independent Consultants
FARM CONSULTANTS
Independent Consultants
New Zealand Rural Land Co
The Rural Land Investors
JOSH JENKINS
Investment Associate
Consultant - True Range - Kenya
Analyst - Airponix Limited - United Kingdom
Livestock Specialist - HHC & Glenthorne Station - NZ
New Zealand Rural Land Management
31
New Zealand Rural Land Company
INDEX INCLUSIONS AND BROKER RESEARCH COVERAGE
FTSE Global Micro Cap IndexS&P / NZX All Real Estate Index
Broker Research Coverage
Nicholas Hill
nicholas.hill@craigsip.com
Kieran Carling
kieran.carling@craigsip.com
Arie Dekker
arie.dekker@jarden.co.nz
Vishhal Bhula
vishal.bhula@jarden.co.nz
Index Inclusions
MSCI World Micro Cap Index
S&P / NZX Micro Cap Index
32
New Zealand Rural Land Company
INVESTOR RELATIONS CONTACTS
Richard Milsom
richard@nzrlm.co.nz
+64 21 274 2476
Level 1
85 Fort Street
Auckland Central
Auckland 1010
New Zealand
Xavier Lynch
xavier@nzrlm.co.nz
+64 27 282 8046
Level 1
85 Fort Street
Auckland Central
Auckland 1010
New Zealand
33
New Zealand Rural Land Company
LISTED ON:
Rural Land Co
New Zealand
The Rural Land Investors
New Zealand Rural Land Company
Level 1, 85 Fort Street
Auckland Central
Auckland 1010
New Zealand
+64 9 217 2905
info@nzrlc.co.nz
www.nzrlc.co.nz
nzrlc
nzrlc
---
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer New Zealand Rural Land Company Limited
Reporting Period 12 Months to 31 December 2024
Previous Reporting Period 12 Months to 31 December 2023
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$22,419 +30.1%
Total Revenue $22,419 +30.1%
Net profit/(loss) from
continuing operations
$23,079 +112.6%
Total net profit/(loss) $23,079 +112.6%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.0254
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date 24/03/2025
Dividend Payment Date 22/04/2025
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.6127 $1.5910
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
See attached unaudited financial statements for the 12 months
ended 31 December 2024
Authority for this announcement
Name of person
authorised
to make this announcement
Richard Milsom
Contact person for this
announcement
Richard Milsom
Contact phone number 021 274 2476
Contact email address richard@nzrlm.co.nz
Date of release through MAP
28/02/2025
Unaudited financial statements accompany this announcement.
---
Template
Distribution Notice
Updated as at June 2023
Please note: all cash amounts in this form should be provided to 8 decimal places, including zeros (ie 0.01001000)
Section 1: Issuer information
Name of issuer New Zealand Rural Land Company Limited
Financial product name/description Ordinary Shares
NZX ticker code NZL
ISIN (If unknown, check on NZX
website)
NZNZLE0001S2
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies X
Record date 24/03/2025
Ex-Date (one business day before the
Record Date)
23/03/2025
Payment date (and allotment date for
DRP)
22/04/2025
Total monies associated with the
distribution
1
$3,631,027
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.02540000
Gross taxable amount
3
$0.00000000
Total cash distribution
4
$0.02540000
Excluded amount (applicable to listed
PIEs)
$0.02540000
Supplementary distribution amount $0.00000000
Section 3: Imputation credits and Resident Withholding Tax
5
Is the distribution imputed Fully imputed
1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.
Partial imputation
No imputation
If fully or partially imputed, please
state imputation rate as % applied
6
%N/A
Imputation tax credits per financial
product
$N/A
Resident Withholding Tax per
financial product
$N/A
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
2.5%
Start date and end date for
determining market price for DRP
13/02/2025 27/02/2025
Date strike price to be announced (if
not available at this time)
N/A
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
New Issue
DRP strike price per financial product
$0.89
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
25/03/2025
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Richard Milsom
Contact person for this
announcement
Richard Milsom
Contact phone number 021 274 2476
Contact email address r
ichard
@nzrlm.co.nz
Date of release through MAP
28/02/2025
6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.
---
New Zealand Rural Land Company Limited and its subsidiaries
For the year ended 31 December 2024
Consolidated Financial Statements
New Zealand Rural Land Company Limited and its subsidiaries
Directors' responsibility statement
Sarah Kennedy
DirectorDirector
The directors are pleased to present the financial statements of New Zealand Rural Land Company Limited and its subsidiaries for the
financial year ended 31 December 2024.
The Board of Directors of New Zealand Rural Land Company Limited authorised the financial statements for issue on 28 February 2025
2
For and on behalf of the Board
Rob Campbell
New Zealand Rural Land Company Limited and its subsidiaries
For the year ended 31 December 2024
20242023
Notes
$'000 $'000
Rental income8
19,869 15,350
Total rental income
19,869 15,350
Less overhead costs
Directors fees23.2
(227)(227)
Insurance
(87)(85)
Shareholder registry and communications
(74)(95)
Management fees23.1
(1,407)(1,039)
Repairs and maintenance
(396)(117)
Professional, consulting and listing fees
(686)(380)
Performance fee23.1
(660)(901)
Settlement of convertible loan
(160) -
Other
(38)(14)
Total overhead costs
(3,735)(2,858)
Profit before net finance expense, other income and income tax
16,134 12,492
Finance income
2,550 1,879
Finance expense
(10,808)(11,388)
Net finance expense9
(8,258)(9,509)
Profit before other income and income tax
7,876 2,983
Other income
Change in fair value of investment properties6
23,859 7,388
Movement in redeemable Limited Partnership units18
(7,724) -
Other
47 -
Total other income
16,182 7,388
Profit before tax
24,058 10,371
Income tax (expense) / benefit10.1
(979) 483
Net profit
23,079 10,854
Other comprehensive income
- -
Total comprehensive income for the period
23,079 10,854
Cents Cents
Basic and diluted earnings per share28
16.47 8.06
Consolidated statement of comprehensive income
These financial statements are to be read in conjunction with the accompanying notes3
New Zealand Rural Land Company Limited and its subsidiaries
Consolidated statement of financial position
As at 31 December 2024
20242023
Notes
$'000 $'000
Current assets
Cash and cash equivalents11
5,520 1,258
Derivative assets14
151 -
Trade and other receivables12
1,769 378
Current tax receivable
- 7
Assets held for sale 7
11,355 -
Total current assets
18,795 1,643
Non-current assets
Investment properties6
400,448 346,281
Loan receivable13
21,685 20,363
Deferred tax assets10.2
552 1,398
Derivative assets14
352 71
Other non-current assets
101 75
Total non-current assets
423,138 368,188
Total assets
441,933 369,831
Current liabilities
Trade and other payables15
3,157 1,090
Borrowings16
47,101 29,500
Convertible loan17
- 11,980
Derivative liabilities14
129 -
Other current liabilities
169 169
Total current liabilities
50,556 42,739
Non-current liabilities
Borrowings16
84,106 104,000
Derivative liabilities14
2,342 -
Redeemable Limited Partnership units18
75,797 -
Total non-current liabilities
162,245 104,000
Total liabilities
212,801 146,739
Net assets
229,132 223,092
Share capital19
161,068 157,419
Share based payment reserve21
660 901
Retained earnings
67,404 64,772
Total equity
229,132 223,092
$ $
Net Assets Value (NAV) per share25.2
1.6028 1.6016
Net Tangible Assets (NTA) per share25.2
1.6127 1.5910
These financial statements are to be read in conjunction with the accompanying notes4
New Zealand Rural Land Company Limited and its subsidiaries
Consolidated statement of changes in equity
For the year ended 31 December 2024
Notes
$'000 $'000 $'000 $'000
Balance at 1 January 2023 134,180 495 56,264 190,939
Comprehensive income
Total comprehensive income for the period- - 10,854 10,854
Total comprehensive income- - 10,854 10,854
Transactions with shareholders
Capital raised19 22,744 - - 22,744
Performance fee issued in ordinary shares19495 (495)- -
Performance fee payable in ordinary shares21- 901- 901
Dividends paid20- -(2,346)(2,346)
Balance at 31 December 2023 157,419 901 64,772 223,092
Comprehensive income
Total comprehensive income for the period- - 23,079 23,079
Total comprehensive income- - 23,079 23,079
Transactions with shareholders
Capital raised191,897 - - 1,897
Performance fee issued in ordinary shares19901 (901)- -
Performance fee payable in ordinary shares21- 660- 660
Dividends paid20- -(2,041)(2,041)
Dividend reinvestment plan issues20851 - - 851
Transaction costs (Land Trust)5- - (4,291)(4,291)
Adjustment on recognition of redeemable LP units5- - (14,115)(14,115)
Balance at 31 December 2024 161,068 660 67,404 229,132
Share capital
Retained
earnings
Total
Share based
payment
reserve
These financial statements are to be read in conjunction with the accompanying notes5
New Zealand Rural Land Company Limited and its subsidiaries
Consolidated statement of cash flows
For the year ended 31 December 2024
20242023
Notes
$'000 $'000
Cash flows from operating activities
Lease income received
19,314 15,939
Payments to suppliers
(1,167)(885)
Management fees paid
(1,331)(1,026)
Income taxes received
7 6
Interest paid
(9,039)(8,698)
Interest received
1,234 653
Net cash generated by operating activities299,018 5,989
Cash flows from investing activities
Payments for investment properties
(38,723)(65,441)
Proceeds from disposals of assets- 29
Net cash used in investing activities(38,723)(65,412)
Cash flows from financing activities
Proceeds from issue of ordinary shares
5 23,346
Payments for share buy-backs
(77)-
Payment of Land Trust transaction costs
(4,292)-
Payment of transaction costs on issue of ordinary shares
(23)(593)
Dividends paid (net of reinvestments)
(1,190)(2,346)
Proceeds from borrowings
26,902 30,500
Repayment of borrowings(29,195)(3,968)
Proceeds from redeemable Limited Partnership units53,825 -
Proceeds from convertible loan
-12,000
Repayment of convertible loan(11,989)(200)
Net cash generated by financing activities33,967 58,739
Net increase / (decrease) in cash and cash equivalents4,262 (684)
Cash and cash equivalents beginning of the period1,258 1,942
Cash and cash equivalents at the end of the period115,520 1,258
These financial statements are to be read in conjunction with the accompanying notes6
Notes to the consolidated financial statements
For the year ended 31 December 2024
1Reporting entity
2Material accounting policy information
2.1Statement of compliance and reporting framework
2.2
Functional and presentation currency
2.3Basis of preparation and measurement
Revenue, expenses, assets and liabilities are recognised net of the amount of goods and services tax (GST) except:
•
•
2.4Basis of consolidation
•has power over the investee;
•is exposed, or has rights, to variable returns from its involvement with the investee; and
•has the ability to use its power to affect its returns.
New Zealand Rural Land Company Limited and its subsidiaries
The Company is incorporated in New Zealand and registered under the Companies Act 1993. The Company is an FMC reporting entity for the
purposes of the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013. The Company was incorporated on 11 September 2020
and is domiciled in New Zealand. The Company is listed on the New Zealand Stock Exchange (NZX Limited) with ordinary shares listed on the NZX
Main Board. The address of the Company's registered office is 50 Customhouse Quay, Wellington Central, Wellington, New Zealand.
These consolidated financial statements are for New Zealand Rural Land Company Limited (the "Company" or "Parent") and its subsidiaries
(together the "Group"). The Group's principal activity is investment in New Zealand rural farmland and forestry land.
These financial statements are for the financial year ended 31 December 2024. The comparative period is the financial year ended 31 December
2023.
The financial statements have been prepared on the historical cost basis except for derivative financial instruments and investment properties
which are measured at fair value.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the
three elements of control listed above.
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its
subsidiaries. Control is achieved when the Company:
The material accounting policies applied in the preparation of these consolidated financial statements are set out in note 2 or in the
accompanying notes. These policies have ben consistently applied to all the years presented, unless otherwise stated.
When necessary, adjustments are made to the financial statements of a subsidiary to bring their accounting policies into line with the Group's
accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are
eliminated in full on consolidation.
The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice ("NZ GAAP") and the
Financial Markets Conduct Act 2013. They comply with New Zealand equivalents to International Financial Reporting Standards ("NZ IFRS") and
other applicable Financial Reporting Standards, as appropriate. These financial statements comply with International Financial Reporting
Standards ("IFRS") as published by the International Accounting Standards Board. For the purposes of complying with NZ GAAP, the Group is a for-
profit entity. These financial statements have been prepared in accordance with the requirements of the Companies Act 1993 and on a going
concern basis.
These financial statements are presented in New Zealand dollars, which is the Group's functional currency. All amounts have been rounded to the
nearest thousand ($'000), unless otherwise stated.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the
subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of
comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
where the amount of GST incurred is not recovered from the taxation authority, it is recognised as part of the cost of acquisition of an
asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST (the net amount of GST recoverable from or payable to the taxation
authority is included as part of receivables or payables).
7
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
2.5Financial instruments
Financial assets - Derecognition of financial assets
Financial assets - Impairment of financial assets
Financial liabilities - Amortised cost
Financial liabilities - Derecognition of financial liabilities
3
Critical accounting estimates and judgements
•
•
Fair valuation of investment properties (note 6)
•
Determination that land and forest should be classified and measured as investment property (note 6)
•
Deferred tax on investment properties (note 10.2)
•
Recognition of loan receivable (note 13)
Limited Partnership establishment and associated transactions (notes 5 and 18)
The preparation of these financial statements requires management to make estimates and assumptions. These affect the amounts of reported
revenue and expense and the measurement of assets and liabilities. Actual results could differ from these estimates. The principal areas of
judgement and estimation in these financial statements are:
Financial liabilities at amortised cost (including borrowings, related party payables and trade and other payables) are initially recognised at fair
value and subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or
received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of
the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instruments.
The Group’s financial assets consist of cash, trade receivables, derivatives and loan receivable.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial
asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially
all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and
an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred
financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Impairment of financial assets are recorded through a loss allowance account (bad debt provision). The amount of the loss allowance is based on
the simplified Expected Credit Loss (ECL) approach which involves the Group estimating the lifetime ECL at each balance date. The lifetime ECL is
calculated using a provision matrix based on historical credit loss experience and adjusted for forward looking factors specific to the debtors and
the economic environment.
Financial instruments are classified into the following specified categories: ‘fair value through profit or loss' (FVTPL), and 'at amortised cost'. The
classification depends on the business model and nature of the cash flows of the financial instrument and is determined at the time of initial
recognition.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to
or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or
loss.
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference
between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
8
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
3.1
Fair value estimation
•
•
•
4
Segment information
5
Significant transaction - Limited Partnership establishment and associated transactions
Level 3 inputs are unobservable inputs for the asset or liability.
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly; and
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date;
Derivative financial instruments are measured using level 2 valuation techniques, which is based on inputs other than quoted prices in an active
market that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). This valuation
technique maximises the use of observable market data where it is available and relies as little as possible on entity specific estimates.
The carrying value of all other financial assets and liabilities held at amortised cost reasonably approximates the fair value due to the short term
nature of the financial instruments.
In January 2024, the Company entered into an agreement to sell a 25% stake in its rural land portfolio to a group of investors in a Land Trust
("Land Trust") for cash proceeds of $44.2 million.
The Company used $11.8 million of the proceeds to repay the convertible loan that it drew down in April 2023 to partially fund a forestry
acquisition (refer to note 18). The balance of the funds have been used for land acquisitions or is held for future opportunities.
The investment was mechanised through the establishment of a limited partnership, th e New Zealand Rural Land Limited Partnership (the “LP”).
The portfolio of rural land assets and associated debt was transferred to the LP prior to Land Trust's investment. The Company's investment
mandate continues in the LP with the same active strategy and manager (New Zealand Rural Land Management Limited Partnership).
The Company holds 75% of the partnership units and economic interest with Land Trust holding the other 25%. The LP is directed by New Zealand
Rural Land Investment GP Limited (the “GP”) with the Company and the Land Trust holding shares in the GP at th e sam e proportion as their LP
units.
Included in the Group's total gross finance income, excluding gains on the fair value of derivative instruments, more than 10% was received as
interest income from two significant customers. The total gross interest income derived in the year ended 31 December 2024 from these
customers was $0.692 million and $1.334 million respectively (2023: $0.629 million and $1.238 million respectively). No other single customer
contributed 10% or more of the Group's total finance income (2023: nil).
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs
used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair value measurement. For financial reporting purposes, fair value
measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and
the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the
fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those
characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes
in these financial statements is determined on such a basis.
The Group’s assets and liabilities that are measured at fair value are investment properties and derivative financial instruments. Investment
property is measured using level 3 valuation techniques as further detailed in note 6.
The Group operates in one business segment being New Zealand rural land.
Included in the Group's total rental income, more than 10% was received from three significant customers, Performance Dairy Limited, WHL
Capital Limited, and New Zealand Forest Leasing (No.2) Limited. The total rental income derived in the year ended 31 December 2024 from these
customers was $2.427 million, $3.648 million, and $5.130 million respectively (2023: $3.113 million, $3.648 million, and $3.558 million
respectively). No other single customer contributed 10% or more of the Group's total rental income (2023: nil).
9
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
5
Significant transaction - Limited Partnership establishment and associated transactions (continued)
Land area
Opening
balanceAdditions¹
Reclassificati
ons²
Lease fee
amortisation
Capitalised
lease
incentive
3
Revaluation
(loss) / gain
Carrying
value
Location
Hectares$'000$'000$'000$'000$'000$'000$'000
Canterbury5,912 133,116 51 (11,355)(8)(177)6,317 127,944
Otago
4,03979,298
6,134
- (4)- 372 85,800
Southland1,386 44,166
58
- (9)(26)(889)43,300
Manawatū-Whanganui4,76889,701
14,356
- (6)- 9,949 114,000
Hawke's Bay
97-
18,417
- -- 5,884 24,301
South Taranaki
686-
2,318
- -- 1,794 4,112
Rangitikei Districts
195-
559
- -- 432 991
Fair value 346,281 41,893 (11,355)(27)(203)23,859 400,448
2024
$'000$'000$'000
Total
31,400 261,400 292,800
²
$11.4 million of investment properties in Canterbury have been reclassified as assets held for sale (refer to note 7).
The fair value of dairies and orchards is represented by the freehold values and the lessors interest.
Lessors
interest
Freehold
property
value
¹ Includes directly attributable acquisition costs and is reduced by partial disposals.
Total value
Valuations
3
Net of amortisation.
The Company’s directors represent the majority of the GP (75%) and can unilaterally direct disposals and subsequent acquisitions of properties
for land individually up to $5 million. Furthermore, th e Company has the ability to make some changes to lease agreements. The Company has
concluded this provides it with sufficient control to direct the relevant activities of the LP and accordingly has concluded that it controls and will
consolidate the LP.
Transaction costs of $4.3 million were incurred in respect of this transaction and recorded as a reduction in retained earnings of the Group.
The LP units held by the Land Trust are redeemable (refer to note 18). The Group has elected to reflect this transaction as 2 back-to-back
transactions, (1) a recognition by the Group of a non-controlling interest for the LP units held by Land Trust, then (2) an immediate de-recognition
of that non-controlling interest with recognition of a liability to redeem the Land Trust's unit. The discount to NAV of the sale proceeds, and the
share of the Land Trust’s net assets in the LP ($58.4 million on transaction date), is reflected as a reduction in equity of $14.1 million, refer to the
Statement of Changes in Equity.
6
Investment properties
Investment property is property held either to earn rental income, for capital appreciation or for both.
Investment properties are initially measured at cost and subsequently measured at fair value with any change recognised in profit or loss. Any
gain or loss arising from a change in fair value is recognised in profit or loss.
Initial direct costs incurred in negotiating and arranging operating leases and lease incentives granted are added to the carrying amount of the
leased asset.
Property valuations of the freehold value for the farms and orchards are carried out at least annually by independent registered valuers. The
lessor interest has been determined by KPMG.
Valuations performed on the forestry estates are made and evaluated through discounted cash flows, with independent market inputs from
independent valuers.
Investment properties are derecognised when they have been disposed of and any gains or losses incurred on disposal are recognised in profit or
loss in the year of derecognition.
Fair value of rural and forestry land investment properties:
2024
10
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
6
2023
$'000$'000$'000
Total
19,760 236,820 256,580
2023
Land areaOpening balanceAdditions ¹
Lease fee
amortisation
Capitalised
lease
incentive ²
Revaluation
(loss) / gain
Carrying
value
Location
Hectares$'000$'000$'000$'000$'000$'000
Canterbury 5,765 140,887 277 (6) (176) (7,866) 133,116
Otago 3,500 80,786 - (3)- (1,485) 79,298
Southland 1,386 45,687 9 (19)(120) (1,391) 44,166
Manawatū-Whanganui 3,137 - 71,573 (2)- 18,130 89,701
Fair value 267,360 71,859 (30) (296) 7,388 346,281
6.1Fair value measurement, valuation techniques and inputs
Investment properties (continued)
External, independent valuers, having appropriate recognised professional qualifications and recent experience in the location and category of
the property being valued, value the Group’s properties at least every 12 months. The fair values are based on market values, being the estimated
amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length
transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. Valuations performed
on the forestry estates are made and evaluated by the company using discounted cash flows, with independent market inputs from independent
valuers.
The Group's investment properties were valued by Colliers International and KPMG with values applicable as at 31 December 2024.
During the year, the LP acquired a 126 hectare apple orchard land for a total of $13.2 million, of which, $4.9 million (47 hectares) was settled in
November 2024. Part of this purchase price was settled through the issue of 2,215,190 shares in the Company (refer to note 18). This initial
settlement has an annualised year one income of $635,000. The remaining $5.7 million (79 hectares) is due to be settled in September 2025, with
a deposit of $2.6m having been paid in advance in November 2024. The apple orchard will be leased to SI Orchards for 30 years, generating total
lease income of $1.13 million in year one of the lease agreement.
At the end of the 30 year lease period, ownership of the trees (orchard) will be transferred to the Group.
Lessors
interest
Freehold
property
value
Total value
Valuations
In June 2024, the LP acquired a 1,500 hectare forestry estate for $7.3 million.
In February 2024, the LP acquired apple and forestry land for a total of $31.6 million. The apple orchard land, excluding trees and buildings was
approximately 97 hectares has been leased to Kiwi Crunch for 30 years generating $1.4 million of income in year one of the lease agreement. The
LP also acquired forestry land of approximately 1,119 hectares and has leased the land to New Zealand Forest Leasing Limited for a period of 16
years, generating $760k of income in year one of the lease agreement.
Fair value of rural and forestry land investment properties:
The investment properties (except for forestry assets) have been assessed on a fair value basis utilising the income approach for the Group's
interest as lessor and a market approach to assess the reversionary value of the assets at the expiry of the current lease terms. The valuation
includes the consideration made by the valuer for the applicable climate risks.
The net present value of the income provided under the lease agreements have been assessed to be above prevailing market leases for similar
assets. This results in the Group's interest assessment in the leases being greater than the current fair value for the asset on the basis of the
Comparable Sales Approach.
² Net of amortisation.
¹ Includes directly attributable acquisition costs and is reduced by partial disposals.
During the year there were no transfers of investment property between levels of the fair value hierarchy. The valuation techniques used in
measuring the fair value of investment property, as well as the significant unobservable inputs used are as follows:
Investment properties are classified as level 3 (inputs are unobservable for the asset or liability) under the fair value hierarchy on the basis that
adjustments must be made to observable data of similar properties to determine the fair value of an individual property.
11
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
6.1Fair value measurement, valuation techniques and inputs (continued)
Key inputs used to measure fair value of pastoral:
20242023
CPI forecast (2026 onwards)
2.00%2.00%
Discount rate
7.20%7.35%
Key inputs used to measure fair value of orchard assets:
20242023*
CPI forecast (2026 onwards)
2.00%
N/A
Discount rate
8.10%
N/A
For the forestry assets, a market approach has been used to assess the reversionary value.
The values adopted in these financial statements for the Forestry assets are summarised as ($000):
LeasePost-leaseTotal
2024
$'000 $'000 $'000
Block One60,900 12,200 73,100
Block Two5,000 12,200 17,200
Block Three5,800 11,900 17,700
Block Four6,200 5,000 11,200
77,900 41,300 119,200
LeasePost-leaseTotal
2023
$'000 $'000 $'000
Block One57,130 13,370 70,500
Block Two5,001 14,200 19,201
62,131 27,570 89,701
The post lease valuation of the forestry assets has the following key inputs used to measure fair value:
2024
Discount rate (lease period) - Block One8.00%
Discount rate (lease period) - Blocks Two-Four7.20%
Discount rate (post-lease)9.90%
NZU market price 2039*$203
NZU market price 2040*$207
NZU market price 2043*
$220
NZU market price 2046*
$233
Long term NZU price growth rate from 2031
2.00%
2023
Discount rate9.60%
NZU market price January 2039*$234
NZU market price April 2043*$255
NZU's per-hectare at lease end 51,500
Long term NZU price growth rate from 20312.10%
The fair value gain recognised in relation to forestry assets was $12.2 million (2023: $18.1 million).
*Represents NZU market price at different end dates of leases. NZU pricing has been forecast and the mid-point is adopted for these purposes.
Two forestry assets were acquired during the period ended 31 December 2024. The first asset was acquired as bare land with planting to be
completed in 2024, and is leased to a third party until 2040. The second acquisition is an established forestry asset with areas still to be planted,
leased to a third party with expiry in 2046.
The valuation of the forestry assets has been assessed utilising the income approach for the Group's interest as a lessor and discounted post-lease
cashflows. The value of the post lease period is based on estimated carbon production and carbon unit pricing.
The tenants of both sites have leased the land to derive income from either carbon or timber. It is assumed based on the current pricing and
outlook that carbon will be the most likely income source, it is therefore assumed that the forests will not be harvested and will slowly revert to
native forest.
*The Group purchased their first orchard during the year ended 31 December 2024.
12
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
6.1Fair value measurement, valuation techniques and inputs (continued)
6.2Valuation methodology
Key valuation inputDescription
CPIIncreaseDecrease
Discount rateDecreaseIncrease
IncreaseDecrease
IncreaseDecrease
The key two subjective inputs into the post-lease valuation are:
1.Discount rate of 9.90%.
2.The prices of NZU’s at lease termination
2024
Low Mid High
Estimates for 2039$98$203$308
Estimates for 2040$100$207$314
Estimates for 2043$106$220$333
Estimates for 2046$113$233$354
2023
Low Mid High
Estimates for 2039$134$234$335
Estimates for 2043$146$255$364
During 2024, NZU experienced volatility in their prices, and the range of potential future outcomes is significant.
Revised
ValuationImpact
$'000 $'000
Low price path 79,973 (39,200)
High price path 154,436 35,200
The Group engaged an independent third party expert (KPMG) to provide guidance on the expected future price path of NZU’s over the next 40
years. They provided three scenarios and estimated values as follows:
Management adopted the Mid scenario in the valuations as a mid-point between two price paths deemed to be optimistic and pessimistic.
The valuation of the forestry assets is sensitive to changes in the estimated future prices. The valuation of $119.2 million at 31 December 2024
would be impacted as follows if different price path assumptions had been applied:
Increase in
input
The expected inflation increase applied to the lease income. Used in the
income approach.
The valuer's assessment of the annual net market income per hectare
attributable to the property. Used in the income approach.
Value adopted by management based on advice from KPMG.
The discount rate of 9.90% has been determined by utilising the Capital Asset Pricing Model (CAPM) to determine WACC for this type of asset by
external experts (KPMG).
Measurement sensitivity
Forecast NZU prices
The rate applied to discount future cashflows, it reflects transactional
evidence from similar types of property assets. Used in the income
approach.
Market rental assessment
Decrease in
input
The current value is also driven by the volumes of estimated carbon sequestration over the life of the forest which has been modelled by external
experts based on comparable properties and the I300 method which is used to express the productivity of a site in terms of volume growth for
Pinus radiata. It is the mean annual volume increment in cubic metres per hectare of a 300 stem per hectare Radiata pine stand at age 30 years.
As a measure of productivity used in modelling and forecasting tree growth and stand yield, it is relevant even where crops are not intended to be
thinned to a stocking as low as 300 stems per hectare or grown to age 30.
13
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
7
20242023
$'000$'000
Rural land properties held for sale 11,355 -
11,355 -
•
•
•
•
8Rental income
20242023
$'000$'000
Gross lease receipts
20,285 15,938
Straight line rental adjustments(22)(120)
Revenue received in advance adjustments(218)(292)
Amortisation of capitalised lease incentives(176)(176)
Rental income19,869 15,350
8.1Lessor contractual operating lease income
20242023
Future minimum rental receivables under non-cancellable operating leases are as follows:
$'000$'000
Within 1 year
34,044 16,954
After 1 year but not more than 5 years
136,177 67,817
More than 5 years
112,322 116,633
Total property operating lease income
282,543 201,404
9Finance income and expense
Assets held for sale
Acquisition of land from the tenant for approximately $15.5 million. As consideration, the Group will transfer property held for sale and
cash to the tenant. The Group will then lease the acquired land to the tenant.
The Group working with another unrelated tenant has agreed to transfer several leases to the tenant. The leases have a combined
annual payment of $3.4 million (2024 financial year). The transfer will be mechanised through the legal surrender of the old lease
agreements with the Group then entering into a new lease agreement with the tenant under substantially the same terms.
A call option will be granted by the Group to the tenant such that it can purchase the land of the transferred leases for approximately
their current value (as of 31 December 2024). The option can be exercised on or before May 2027. This call option relates to properties
that have an accumulated value of $60 million (investment properties). Management do not believe that it is highly probable that the
call option will be exercised within the next 12 months and therefore have not treated the properties as held for sale.
The Group has committed to capital projects of $2 million on land leased to the tenant. The completion of these projects will result in a
corresponding uplift in the lease payments.
The Group has entered into investment property leases (as lessor) which have remaining non-cancellable lease terms of between 10 and 20 years.
The commitments above are calculated based on the contract rates using the term certain expiry dates of lease contracts. Actual rental amounts
in future may differ due to CPI adjustments within the lease agreements.
The Group has entered into a conditional agreement with a tenant which involves the following:
Finance income includes interest income derived from financial assets and any gain on fair value of derivative instruments. Interest income from a
financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured
reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is
the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount
on initial recognition.
Rental income from investment properties leased to clients under operating leases is recognised in the consolidated statement of comprehensive
income on a straight-line basis over the term of the lease, taking into account rent free periods. Where lease incentives are provided to
customers, the cost of incentives are recognised over the lease term on a straight-line basis as a reduction to rental income.
Finance expense includes interest expense incurred on borrowings and any loss on fair value of derivative instruments. Interest expense is
recognised using the effective interest method.
14
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
9Finance income and expense (continued)
20242023
$'000$'000
Finance income
Interest income
2,550 1,879
Finance expense
Interest expense(8,810)(8,876)
Loss on fair value of derivative instruments(1,998)(2,512)
Net finance expense(8,258)(9,509)
10Income taxes
10.1Income tax recognised in statement of comprehensive income
20242023
$'000$'000
Current tax expense
- -
Deferred tax expense / (benefit)
979 (483)
Income tax expense / (benefit)
979 (483)
Reconciliation of income tax expense to prima facie tax payable:
Profit before tax
24,058 10,371
Income tax expense calculated at 28% (2023: 28%)
6,736 2,904
Effect of expenses that are not deductible in determining taxable profit
96 8
Effect of income that is not assessable in determining taxable profit
(4,518)(2,069)
Tax depreciation
(1,007)(1,333)
Portion of taxable profits attributable to the Land Trust
(328)-
Prior period adjustment
- 7
Income tax expense / (benefit)
979 (483)
10.2Deferred tax assets
Income tax expense represents the sum of the tax currently payable and deferred tax.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset
realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary
differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable
profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill.
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or
directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity
respectively.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the consolidated
statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never
taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the
reporting period.
It is assumed that the tax book value of tax depreciable assets reflects their market values. This assumes there would be no depreciation
recovered if disposed of for market value.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
15
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
10.2Deferred tax assets (continued)
2024
$'000 $'000 $'000 $'000
Lease fees / Lease incentives
(544)
133
20 (391)
Tax losses
1,941 - (989) 952
Carbon credits
- - (5) (5)
Disposal of assets
- - (4) (4)
Other
1 - (1)-
Total deferred tax asset / (liability)
1,398 133 (979)552
2023
$'000 $'000 $'000
Lease fees / Lease incentives
(618) 74 (544)
Tax losses
1,531 410 1,941
Other
2 (1)1
Total deferred tax asset / (liability)915 483 1,398
Key Judgement
11Cash and cash equivalents
20242023
$'000$'000
Cash at bank
5,520 1,258
Total cash and cash equivalents
5,520 1,258
12Trade and other receivables
Trade receivables are non-derivative financial assets and measured at amortised cost less impairment.
20242023
$'000$'000
Trade receivables 1,127 41
Prepayments 642 332
Other receivables - 5
Total trade and other receivables1,769 378
The Group considers that any future gain on sale of investment properties will not be assessable for income tax purposes as the sale of a capital
asset.
The Group has chosen not to rebut the presumption in NZ IAS 12 Income taxes that the carrying value of investment properties will be recovered
through sale.
Recognised in
equity
Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the
statement of financial position as follows:
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Recognised in
profit or loss
Recognised in
profit or loss
Closing
balance
Closing
balance
Opening
balance
Opening
balance
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short‑term, highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value, and bank overdrafts.
16
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
13Loan receivable
20242023
$'000$'000
Non-current:
McNaughtons home block
7,632 6,943
Makikihi Farm
14,053 13,420
Total loan receivable
21,685 20,363
14Derivatives
20242023
$'000$'000
Derivative assets
Current:
Net settled milk price forwards
151 -
Non-current:
Interest rate swaps
352 71
Total derivative assets 503 71
Derivative liabilities
Current:
Net settled milk price forwards
108 -
Interest rate swaps
21 -
Non-current:
Interest rate swaps
2,342 -
Total derivative liabilities
2,471 -
On 1 June 2021, the Group acquired land at 30 Cooneys Road, Morven (McNaughtons home block) for $5.4 million and simultaneously entered
into a lease and a put and call agreement with Performance Dairy Limited (PDL), a related entity to the vendor. Under the call agreement, PDL can
acquire the land on 31 May in any year (providing a minimum 90 days notice has been provided) from the Group for $5.4 million plus 10% interest
compounding annually. Under the put agreement, from 1 June 2023 the Group can require PDL to acquire the land on 31 May any year under the
same pricing mechanism and notice requirements. The put and call option has a 99 year life.
Derivative financial instruments are comprised of interest rate swaps and net settled milk price forwards. They are initially classified and
subsequently measured as fair value through profit or loss ("FVTPL"). Interest is imputed in the interest rate swap and reflected in finance income
and expense.
Key Judgement
The loan receivable balances have been considered and determined no impairment is required at reporting date.
The loans are secured by a General Security Deed and cross guarantee from certain Van Leeuwen Group entities.
The Group has determined that these arrangements have the substance of loans with 10% market interest rates per annum (2023: 10%).
On 2 August 2021, the Group acquired land at a North Canterbury Dairy Farm (Makikihi Farm) for $12 million and simultaneously entered into a
lease and a put and call agreement with Makikihi Robotic Dairy Limited (MRDL), a related entity to the vendor. Under the call agreement, MRDL
can acquire the land on 31 May in any year (providing a minimum 90 days notice has been provided) from the Group for 12 million plus 4.66%
interest compounding annually. Under the put agreement, from 1 August 2023 the Group can require MRDL to acquire the land on 31 May any
year under the same pricing mechanism and notice requirements. The put and call option has a 99 year life.
Classification of interest rate swaps as current or non-current on the face of the consolidated statement of financial position is based on the final
contractual settlement date.
17
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
15Trade and other payables
20242023
$'000$'000
Trade payables and accruals
961 569
Revenue in advance
511 292
GST payable
287 229
Retention payable
1,265 -
Related party payables
133 -
Total trade and other payables3,157 1,090
16Borrowings
The terms of the borrowings includes the following covenants that the Group must ensure at all times:
•
Interest coverage ratio is greater than 1.6;
•
Loan to valuation ratio does not exceed 40%; and
•
Capital expenditure in each financial year shall not exceed 120% of the budgeted forecast capital expenditure.
20242023
$'000$'000
Current borrowings:
Rabobank facility
31,761 29,500
Bank of China facility
15,340 -
Non-current borrowings:
Rabobank facility
57,272 104,000
Bank of China facility
26,834 -
Total borrowings
131,207 133,500
Expiry dateTotal
Undrawn
facility
Drawn
amount
2024
$'000$'000$'000
Bank facility A*1 Jun 2025 46,000 - 46,000
Bank facility B20 Dec 2027 36,000 8,793 27,207
Bank facility C1 Jun 2026 29,500 - 29,500
Bank facility D14 Apr 2026 28,500 - 28,500
140,000 8,793 131,207
*As part of the Group's debt management, bank facility A is forecasted to be rolled in the months prior to its expiry.
There is a general security deed over all of the assets of the Group as security of the borrowings.
The Group has complied with the financial covenants of its borrowing facilities during the year ended 31 December 2024.
The Group's interest cover ratio covenant is 1.6 for the period from 30 June 2023 to 31 December 2024, 1.75 from 1 January 2025 to 31 March
2025 and 2.00 from 31 March 2025 onwards.
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The
amounts are unsecured and are usually paid within 30 days from recognition. Trade payables are recognised initially at fair value and
subsequently measured at amortised cost.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of
comprehensive income over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities
unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
During the period, the Group replaced existing facilities with a syndicated loan facility agreement with Coöperatieve RaboBank U.A. New Zealand
Branch ("Rabobank") and Bank of China (New Zealand) Limited ("Bank of China"). The facility agreement has a limit of $140,000,000 with floating
interest rates ranging over the four tranches with different maturities with interest payable monthly.
18
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
16Borrowings (continued)
Expiry dateTotal
Undrawn
facility
Drawn
amount
2023
$'000$'000$'000
Bank facility A1 Jun 2025 46,000 - 46,000
Bank facility B1 Jun 2024 29,500 - 29,500
Bank facility C1 Jun 2026 29,500 - 29,500
Bank facility D14 Apr 2026 28,500 - 28,500
133,500 - 133,500
The effective interest rate on borrowings ranges from 5.82% to 6.55% (2023: 7.46% to 7.76%).
17
18
Reconciliation of redeemable Limited Partnership units
2024
$'000
Balance as at 1 Jan 2024
-
Initial recognition of financial liability at fair value*
58,442
Contributions received from Land Trust
10,905
Distribution to Land Trust
(1,275)
Revaluation movement
7,724
Balance as at 31 Dec 2024
75,797
The potential sale obligation for the LP to redeem Land Trust's units means the Group has classified Land Trust's interest in the LP as a financial
liability as redeemable limited partnership units in the statement of financial position and not by recording a minority interest. The Group has
initially and subsequently measured that liability based on the reporting date fair value, i.e. as if the redemption occurred at the reporting date.
Movements in the liability are reported in other income in the statement of comprehensive income as movement in redeemable LP units.
The GP shareholder agreement requires profits (based on Adjusted Funds from Operations (AFFO)) to be distributed to the LP unit holders.
Accordingly, Land Trust's share of the profits has been allocated to the redeemable units liability which is subsequently reduced as and when
distributions are made.
Convertible loan
In February 2030, the Land Trust has the option to offer to sell its units in the LP to the Company. If there has been a significant financial
deterioration in the LP then that option can be exercised 2 years earlier. If the Company does not acquire the units, then Land Trust can sell those
units to a third party. After a subsequent 6-month period if no third party has purchased the units for at least 98% of the value (determined based
on independent asset valuations less associated debt) then Land Trust can require the LP to redeem the units. The Company and Land Trust will
then agree which LP assets are to be sold to fund the redemption. No assets can be sold resulting in proceeds for less than 90% of their net asset
value (determined using the most recent independent valuation reports).
* This represents Land Trust’s share of the Limited Partnership’s net assets at date of initial investment.
On 14 April 2023, the Group entered into a convertible loan agreement with New Zealand Forest Leasing Limited. The convertible loan was for the
face value of $12.360 million and was expected to be repaid within eighteen months from the date of the note being issued. The agreement
required the Group to make quarterly interest payments based on the current outstanding principal amount, at 8% per annum.
In February 2024, the Company repaid the convertible loan using funds received from Land Trust (note 5). The convertible note was repaid in cash
and did not convert to shares.
The financial results of the LP for the year ended 31 December 2024 and position at 31 December 2024 have been consolidated into the Group.
The redeemable LP units also includes $0.887 million received in advance for future purchases.
During the period, a total distribution of $1.275 million was declared and paid from the LP to the Land Trust.
The difference between the liability recorded at fair value on initial recognition and the consideration received from the Land Trust for its
investment in the LP has been recognised in equity within retained earnings as an adjustment on recognition of redeemable LP units.
19
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
19Share capital
Note
Authorised and issued
Balance at 1 January 2023
134,180115,601,570
Rights issue to existing shareholders
23,285 23,375,984
595 628,929
(530)(611,327)
Performance fee issued in ordinary shares
495 299,844
Transaction costs arising on issue of shares
(606)-
Balance at 31 December 2023
157,419 139,295,000
Issue of shares for apple orchard acquisition
2,038 2,215,190
Share buy-back
(77) (88,084)
Dividend reinvestment
851 967,556
Performance fee issued in ordinary shares
901 564,139
Transaction costs arising on issue of shares
(23)-
Other
(41)-
Balance at 31 December 2024
161,068 142,953,801
20Dividends
21Share based payment reserve
20242023
$'000$'000
Arising on share-based payments (performance fee)
660 901
Balance at end of the period
660 901
During the period, dividends totalling $2.041 million were declared (2023: $2.346 million). An ordinary dividend of $0.0146 per share with no
supplementary dividend, issued by the Parent in October 2024. No imputation credits were attached to the dividend.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity
instruments issued are recognised at the proceeds received, net of direct issue costs.
The December 2023 performance fee was settled with 0.6 million shares being issued in March 2024 at an equivalent of $1.598 per share (internal
NAV measurement).
No. of
ordinary
shares
The share based payment reserve relates to the Manager's performance fee that is settled through the issue of shares. More details on
performance fees are provided in note 23.1.
Other share issues
$'000
The dividend issued by the Parent included a dividend reinvestment plan option to under which holders of ordinary shares could elect to have all
or part of their dividend entitlements satisfied by the issue of new ordinary shares rather than by being paid in cash. Shares were issued under
the plan at a strike price of $0.88, with no discount to the market price at the time of the dividend. Under this reinvestment plan, 967,556 shares
were issued for a total value of $851,445. This reduced the overall cash paid for dividends to $1.190 million.
All shares have equal voting rights, participate equally in any dividend distribution or any surplus on the winding up of the Company. The shares
have no par value.
Repurchase of the Group's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on
the purchase, sale, issue or cancellation of the Group's own equity instruments.
Share buy-back
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services
received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments
granted, measured at the date the entity obtains the goods or the counterparty renders the service.
20
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
22Remuneration of auditors
20242023
Assurance and other services
$'000$'000
Statutory audit services
115 64
115 64
20242023
Assurance and other services
$'000$'000
Statutory audit services
-
23
- 23
23Related parties
23.1Remuneration of the Manager
•
Providing administrative and general services;
•
Sourcing and securing potential investors and communicating with investors;
•
Sourcing opportunities for the sale and purchase of land, and operators for lease agreements in respect of land;
•
Overseeing due diligence for and executing transactions for the sale and purchase, and leasing, of land;
•
Managing the Group’s property, including land owned by the Group;
•
Arranging regular valuations and audits of the Group; and
•
Administering the payment of dividends and distributions in respect of the Group.
The Manager is remunerated via management fees, transaction fees and performance fees.
Fees paid and owing to the Manager:
$'000$'000$'000$'000
Basic management services fee
1,407 116 1,039 89
Transaction fees1,242 - 878 -
Leasing fees
150 - 60 -
Performance fee
660 660 901 901
Other
7 - - -
Total 3,466 776 2,878 990
Management fee
Transaction fee
•
•
•
For each lease agreement entered into, a fee of $30,000; and
For each purchase or sale of land, a fee equal to 1.25% of the acquisition or divestment cost of the land and improvements;
20232024
As at 31 December 2024, $133,245 (GST inclusive) is owed to the Manager and this is included in trade and other payables (refer to note 15).
In the prior year, the following fees were paid for services provided by PricewaterhouseCoopers New Zealand as the former auditor of the Group:
A fee is payable for the following transactions:
The Group has appointed an external manager, New Zealand Rural Land Management Limited Partnership through a signed management
agreement. The Manager is responsible for all management functions of the Group, including:
A monthly management fee is payable equal to 0.5% per annum of the Group's Net Asset Value, calculated on a monthly basis. The total
management fees for the period ended 31 December 2024 were $1.407 million (2023: $1.039 million).
Owing at 31
Dec
The following fees were paid or payable for services provided by William Buck Audit (NZ) Limited as the auditor of the Group:
Owing at 31
Dec
Fees chargedFees charged
A fee of $869,000 was paid in respect of the divestment of assets into the Limited Partnership (refer to note 5).
The purchase fee is included in the initial carrying amount of the acquired investment property. The leasing fee has been added to the carrying
value of the leased asset (being investment properties) as part of the initial direct costs of arranging the lease.
21
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
23.1Remuneration of the Manager (continued)
Performance fee
23.2Key management personnel compensation
24Subsidiaries
20242023
Name of entity
Country
incorporated
Equity
holding
Equity
holding
NZRLC Dairy Holdings LimitedNew Zealand
100%100%
SSP NI LimitedNew Zealand
100%100%
New Zealand Rural Land Investments GP LimitedNew Zealand
75%100%
New Zealand Rural Land Investments Limited Partnership
New Zealand
75%100%
25Non-GAAP measures
25.1Reconciliation of net profit after tax to adjusted funds from operations (AFFO)
A performance fee is payable to the Manager when the Group's net asset value ('NAV') per share exceeds the Group's NAV per share in the
immediately preceding financial year. This annual performance fee is calculated as 10% of the increase in NAV per share and is settled through
the issue of ordinary shares based on the NAV per share at that date. NAV per share is adjusted for the impact of capital reconstructions (such as
a rights issue at a premium or discount), with the intention of the calculation being neither prejudicial nor advantageous to the Company or the
Manager. Half of the ordinary shares issued are held in escrow and cannot be sold for 5 years. The value of the performance fee in the year ended
31 December 2024 was $0.660 million (2023: $0.901 million). The shares will be issued to the Manager subsequent to balance date.
The following subsidiaries have been consolidated in the financial statements of the Group:
Rural land investment
The consolidated financial statements incorporate the assets, liabilities and results of the subsidiaries in accordance with the accounting policy
described in note 2.4.
In addition to remuneration of the Manager outlined above, the Group paid directors fees during the period of $0.227 million (2023: $0.227
million) in cash. There was no other compensation of key management personnel during the period.
Funds from operations ('FFO') is a non-GAAP financial measure that shows the Group's underlying and recurring earnings from its operations and
is considered industry best practice for a property fund to enable investors to see the cash generating ability of the business. This is determined
by adjusting statutory net profit (under NZ IFRS) for certain non-cash and other items. FFO has been determined based on guidelines established
by the Property Council of Australia and is intended as a supplementary measure of operating performance. The Manager uses and considers
Adjusted Funds From Operations ('AFFO') as a measure of operating cash flow generated from the business, after providing for all operating
capital requirements including maintenance capital expenditure, tenant improvement works, incentives and leasing costs.
Rural land investment
General partner
Rural land investment
Non-GAAP measures do not have a standard meaning prescribed by GAAP and therefore may not be comparable to information presented by
other entities. These measures should not be viewed in isolation, nor considered as a substitute for measures reported in accordance with NZ
IFRS.
Activities
22
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
25.1Reconciliation of net profit after tax to adjusted funds from operations (AFFO) (continued)
20242023
Notes
$'000$'000
Net profit after tax23,079 10,854
Adjustments
Unrealised net gain in value of investment properties6 (23,859) (7,388)
18 7,724 -
Performance fee payable in shares21660 901
Unrealised net loss on derivatives9 1,998 2,512
Deferred tax expense / (benefit)10.2 979 (483)
Amortisation of rent free incentives8176 176
Amortisation of lease fee and amendment 34 30
Disposal of surplus assets (21) -
Loan interest rolled into new syndication facility 234 -
Initial recognition and unrealised net gain of carbon credits (26) -
Capitalised interest loan receivable (1,316) -
Funds from operations ('FFO')9,662 6,602
2,367 -
7,295 6,602
Company FFO per share (cents)5.10 4.74
Adjustments
Incentives and leasing costs 23 120
Future maintenance capital expenditure¹(336)(663)
Adjusted funds from operations ('AFFO')9,348 6,059
2,286 -
7,062 6,059
Company AFFO per share (cents)4.94 4.35
25.2Net assets per share and net tangible assets per share
20242023
Notes
$'000$'000
Total assets 441,933 369,831
(Less): Total liabilities (212,801) (146,739)
Net assets229,132 223,092
(Less): Deferred tax assets10.2 (552) (1,398)
Add: Derivative liabilities10.2 2,471 -
(Less): Derivative assets14 (503) (71)
Net tangible assets230,548 221,623
Number of shares issued ('000) 142,954 139,295
Net assets per share ($) 1.6028 1.6016
Net tangible assets per share ($) 1.6127 1.5910
¹ Represents amounts set aside each financial period for future expected maintenance capital expenditure as considered prudent by the Manager.
These amounts do not qualify for recognition as liabilities on the balance sheet under NZ GAAP.
Unrealised movement in redeemable Limited Partnership units
FFO attributable to the Company (cents)
The Group presents net assets per share and net tangible assets per share in these financial statements. The Group believes that these non-GAAP
measures provide useful additional information to readers. Net tangible assets per share is a required disclosure under the NZX Listing Rules and
net assets per share is a measure monitored by management and required for calculating the Manager's performance fee. The calculation of the
Group's net assets per share, net tangible assets per share, and its reconciliation to the consolidated statement of financial position is presented
below:
2
In the prior year, FFO and AFFO were entirely attributed to the Company as the Land Trust did not become part of the Group until February 2024
(refer to note 5).
FFO attributable to the Land Trust (cents)
2
AFFO attributable to the Company (cents)
AFFO attributable to the Land Trust (cents)
2
23
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
26Financial instruments
Categories of financial instruments:
2024
Assets
$'000 $'000 $'000 $'000
Cash and cash equivalents- 5,520 - 5,520
Trade and other receivables- 1,127 - 1,127
Loan receivable- 21,685 - 21,685
Derivative assets 503 - - 503
503 28,332 - 28,835
Liabilities
Trade and other payables- - 2,359 2,359
Borrowings- - 131,207 131,207
Redeemable Limited Partnership units75,797 - - 75,797
Derivative liabilities2,471 - - 2,471
78,268 - 133,566 211,834
2023
Assets
$'000 $'000 $'000 $'000
Cash and cash equivalents- 1,258 - 1,942
Trade and other receivables- 46 - 41
Loan receivable- 20,363 - 19,144
Derivative assets71 - - 2,506
71 21,667 - 23,633
Liabilities
Trade and other payables- - 569 569
- - 11,980 11,980
Borrowings- - 133,500 133,500
- - 146,049 146,049
27Financial risk management
27.1Interest rate risk
20242023
$'000$'000
Financial assets
Cash at bank5,520 1,258
Financial liabilities
Bank borrowings (net of economic impact of interest rate swaps)45,707 48,000
Interest rate applicable at balance date
Cash at bank<1%<1%
Bank borrowings (net of economic impact of interest rate swaps)6.23%7.60%
Financial
assets at
amortised
cost
Interest rate risk is the risk that fluctuations in interest rates impact the Group's financial performance, future cash flows or the fair value of its
financial instruments.
The Group's policy is to manage its interest rates using a mix of fixed and variable rate debt. To manage this mix, the Group enters into interest
rate swaps, in which the Group agrees to exchange, at specified intervals, the difference between fixed and variable rates for interest calculated
by reference to an agreed-upon notional principal amount. These swaps are designed to economically hedge underlying debt obligations.
The Group's exposure to variable interest rate risk and the weighted average interest rate for interest bearing financial assets and liabilities as at
31 December 2024 was as follows:
Total
Convertible loan
Financial
liabilities at
amortised
cost
Financial
assets/
liabilities at
FVTPL
24
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
27.1Interest rate risk (continued)
Interest rate
decrease of
2%
Interest rate
increase of
2%
Interest rate
decrease of
2%
Interest rate
increase of
2%
$'000$'000$'000$'000
Increase / (decrease) in interest expense
(914)914 (960)960
There is no interest rate risk on the loan receivable (note 13) as they accrue interest at a fixed rate.
27.2Credit risk
27.3Liquidity risk
The following table outlines the Groups' liquidity profile, as at 31 December 2024, based on contractual non-discounted cash flows:
Total0-1 year1-2 years2-5 years>5 years
2024
$'000$'000$'000$'000$'000
Trade and other payables
3,157 3,157 - - -
Borrowings ¹
142,114 53,432 59,823 28,859 -
Total147,742 59,060 59,823 28,859 -
Total0-1 year1-2 years2-5 years>5 years
2023
$'000$'000$'000$'000$'000
Trade and other payables
1,090 1,090 - - -
11,980 11,980 - - -
Borrowings ¹
149,927 38,402 51,945 59,580 -
Total
162,997 51,472 51,945 59,580 -
Liquidity risk is the risk that the Group may encounter difficulty in meeting its obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. Liquidity risk mainly arises from the Group’s obligations in respect of long term borrowings, derivatives
and trade and other payables.
The Group monitors and evaluates liquidity requirements on an ongoing basis and generates sufficient cash flows from its operating activities to
meet its obligations arising from its financial liabilities and has bank facilities available to cover potential shortfalls. The Group’s approach to
managing liquidity risk is to ensure it will always have sufficient liquidity to meet its obligations when they fall due under both normal and stress
conditions.
¹ Includes contractual interest payments based on drawn down amounts at reporting date and assuming no repayments of principal prior to
expiry date.
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and cause the Group to incur a
financial loss. Financial instruments which are subject to credit risk principally consist of cash, debtors and loans receivable. The Group’s exposure
to credit risk is equal to the carrying value of the financial instruments.
The Group conducts credit assessments of tenants to determine credit worthiness prior to entering into lease agreements. This includes requiring
tenants to have equity at least six times their annual lease obligations or provide other suitable security arrangements. Where appropriate, the
Group will include guarantees and/or security from tenants within lease agreements to support rental payments. In addition, debtor balances are
monitored on an ongoing basis with the result that exposure to bad debts is not significant.
The risk from financial institutions is managed by placing cash and cash equivalents with high credit quality financial institutions only. The Group
has placed its cash and cash equivalents with Westpac New Zealand Limited, who is AA- rated (Standard & Poor's).
The Group intends to further mitigate this risk in the future by expanding into other primary sectors in New Zealand, such as horticulture,
viticulture, sheep and beef.
The following sensitivity analysis represents the change in interest expense if the floating interest rates on bank borrowings (net of economic
impact from interest rate swaps) had been 2% higher or lower, with other variables remaining constant:
Convertible loan
20232024
25
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
27.3Capital risk management
28Earnings per share
20242023
Profit after income tax ($'000) 23,079 10,854
Weighted average number of shares for the purpose of basic and diluted EPS ('000) 140,170 134,646
Basic and diluted earnings per share (cents) 16.47 8.06
29Reconciliation of profit after income tax to net cash flows from operating activities
20242023
$'000 $'000
Profit and total comprehensive income for the period
23,079 10,854
Add/(less) non-cash items:
Change in fair value of derivatives
2,039 2,435
Change in fair value of investment properties
(23,859)(7,388)
Movement in redeemable Limited Partnership units
7,724 -
Performance fee payable in shares
660 901
Interest income accrual
(1,316)(1,226)
Deferred tax
846 (483)
Derecognition of deferred tax
132 -
Lease incentives - rent free period
198 297
Interest expense accrual
(144)47
Lease fee amortisation
34 37
Other
(46)-
Convertible loan amortisation
- 180
Movements in working capital items:
(Increase) in other current assets
(1,224)(31)
Decrease in income tax receivable
7 6
Increase in trade and other payables
669 68
Increase in income in advance
219 292
Net cash generated by operating activities9,018 5,989
When managing capital risk, the Manager's objective is to ensure the Group continues as a going concern as well as to maintain optimal returns to
shareholders and benefits for other creditors.
The Group meets its objectives for managing capital through its investment decisions on the acquisition and disposal of assets, dividend policy,
and issuance of new shares. This includes restricting debt to 40% of total assets and debt will generally be sought on interest-only repayment
terms, subject to maintaining the 40% debt limit. The Group will also seek debt with mortgage security over the rural land acquired to secure the
borrowings.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax
effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of ordinary
shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. The Company has no dilutive factors.
Basic and diluted earnings per share amounts are calculated by dividing profit after income tax attributable to shareholders by the weighted
average number of shares on issue.
26
Notes to the consolidated financial statements
For the year ended 31 December 2024
New Zealand Rural Land Company Limited and its subsidiaries
30Contingent liabilities and contingent assets
31Investment property purchase commitments
32Subsequent events
Forestry land sale
Umbrella Agreement
On 28 February 2025, the agreement with the tenant and associated parties (refer to note 7) became unconditional with settlement expected to
occur in March 2025.
The Group has committed to purchasing $9.925 million of investment properties as at 31 December 2024 (2023: nil).
There are no contingent liabilities or assets as at 31 December 2024 (2023: nil).
On 28 January 2025, a 10% deposit of $52,500 was received in relation to the sale of forestry land in Taihape. The balance is expected to be
settled on 12 February 2025.
27
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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