Rangatira profit slips 39% on ‘lumpy’ work at Contract Resources

$10 million paid for a cornerstone stake in Rainbow's End

Rangatira, the Wellington-based investor that is adding the Rainbow's End theme park to its portfolio, reports a 39% decline in first-half earnings, reflecting the 'lumpy' timing of work at its half-owned Contract Resources.

Profit fell to $3 million in the six months ended September 30, from $4.4 million a year earlier, the company says in a statement. It kept the interim dividend payment unchanged at 18 cents a share.

It says full-year operating earnings would rise between 10% and 20%.

"The slower first half largely reflected phasing of project work in one of our major investments, Contract Resources," chairman Murray Gough says.

Contract Resources is a specialised engineering maintenance and industrial cleaning company for refineries, petrochemical plants and mining processing plants and counts Caltex, Shell, Exxon Mobil and NZ Refining Co among its customers.

Its returns tend to jump around, depending on the timing of work, Mr Gough says.

Rangatira has more than $150 million of assets in its portfolio and some $20 million of funds earmarked for further investments. Last week its bid of $10 million for a cornerstone 74.86% stake in NZ Experience, owner of Rainbow's End, was accepted.

Other recent investments include a 15% stake in Konnect Net, which provides business process management systems for the insurance and health industries, and increased its holding in insurer Partners Life to about 9%.

Other holdings include 50% of smallgoods manufacturer Hellers and 100%of Auckland Packaging Co.

"It is our intention to make additional unlisted New Zealand investments and we are actively looking to invest in up to two mid-sized companies that have good growth opportunities and require additional capital to take them to the next stage," chief executive Ian Frame sxays.

Rangatira has two classes of shares that trade on the Unlisted platform, with 67%held as class A shares and 33% held in class B shares to differentiate between charitable and non-charitable shareholders. Both last traded at $6.

(BusinessDesk)

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