Eastbourne. Dairy Farm Limited. Preview Summary - May 2014

Transcription

1 Eastbourne Dairy Farm Limited Preview Summary - May 2014

2 Eastbourne Dairy Farm - Map Eastbourne Dairy Farm And Dairy Runoff Locality Map Eastbourne Dairy Farm PAULINS BUSH ROAD BUSH ROAD ISLA BANK FLINTS KM 1:500, LIMESTONE PLAINS ROAD EASTBOURNE PARK ROAD Legend Roads Eastbourne Dairy Railway FRASER ROAD FRASER ROAD Rivers / Streams Lakes / Ponds Eastbourne Runoff THORNBURY WAIMATUKU ROAD HALL ROAD E :11,000 M Co - Ordinate System is NZTM Geo Datum 2000 Legal Boundary Sourced from LINZ - CRS. Boundary Approximate Only This map may contain proprietary information from LINZ CROWN COPYRIGHT RESERVED Detail mapped from GE Imagery flown 4/5/2013 Accuracy: +/- 10m Disclaimer: This map is distributed as-is, without warranties of any kind, either expressed or implied. This map is intented for use only at the published scale. This map was compiled using data believed to be correct, however a degree of error is inherent in all maps. Map Printed: 31/03/2014 RKB Demand for milk products has been predicted to rise by 29% in the next ten years! (Source: International Farm Comparision Network (IFCN) Dairy Report 2013)

3 The Investment Opportunity An opportunity exists to invest in Eastbourne Dairy Farm Limited which will own and operate a hectare dairy farm and adjacent grazing run off located in the Thornbury district of Southland, 25 km northwest of Invercargill. The farm is a quality, high producing dairy farm, in a climatically safe area. Eastbourne will use a pasture based farming system, relying on minimum input from off farm supplements. Special features of this farm are: Thornbury is a well known and proven dairy area in Southland with a reliable climate and good soils. The property has been well farmed. No new capital expenditure is required other than normal annual repairs and maintenance. There are three houses on the property. Eastbourne Dairy Farm Limited is contracted to purchase a high quality 520 cow herd capable of meeting the farms production targets. Production is forecast to increase with no significant changes to farm operating expenses. Eastbourne is flat to gentle contour, with good permanent electric fencing and regular fertiliser history. The project will have no debt which allows dividends to be paid to investors from year one. Freehold ownership of land, cows, plant and equipment. The investment will be structured as a Limited Liability Company.

4 Production Eastbourne Dairy Farm is forecast to produce 217,500 kg/ms (milk solids) in year one, rising to 240,000 kg/ms by year six. The vendor is on track to produce 230,000 kg/ms this season and production over the last four years has averaged 220,000 kg/ms. Returns Shareholders returns will come from the annual dividend and any growth in the capital value of the farm. Using the five year average payout of $6.80 kg/ms, the average pre tax dairy return over ten years to an investor is 5.09% per annum. At the present seasons forecast price, $8.40 kg/ms, the average pre tax dairy return would be 8.48%. (Source: FarmWise feasibility study) The average price for dairy land sales in New Zealand per ha rose from $8,701 in 1987 to $32,311 in 2012/13, an average inflation adjusted increase over 25 years of 5.4% per annum. (Source: Quotable Value New Zealand Rural Property Sale Statistics, Real Estate Institute of New Zealand REINZ) The DairyNZ Economic Survey identifies the total return on assets for Otago/ Southland dairy farms as 12.3%. This is comprised of 4.7% operating return and 7.6% increase in value of the capital assets on average for the season. The operating return is consistent with the forecast return for Eastbourne Dairy Farm Limited. With the world population projected to be 8 billon by 2030, world food shortages and price rises are inevitable. New Zealand is ideally placed to meet the increased demand for animal products with our low cost grass based farming systems. The UNFAO projects a 4 billion litre shortfall in the world s milk supply between 2013 and 2017 (Source: UNFAO)

5 Management and Operation of Eastbourne Dairy Farm Roger Dickie Management Limited, will organise day to day administration and financial control of the property. Roger Dickie (N.Z.) Limited operates its own 2,100 cow dairy farm in Taranaki and currently manages two 800 plus cow dairy farms in Southland. Eastbourne Dairy Farm Limited will employ a variable order sharemilker (VOSM) to run the property. The VOSM will operate the dairy farm and employ farm staff. An independent and experienced Southland farm consultant will be used to oversee and guide the VOSM in the operation of the dairy farm. Dairy Company Eastbourne Dairy Farm Limited will supply milk to Open Country Dairy Limited, the largest independent dairy company in New Zealand. Two of our existing farms already supply the company. There is no requirement to purchase shares in order to supply milk to Open Country Dairy Limited.

6 The New Zealand Dairy Industry New Zealand is unique in that it exports 95 percent of the 19 million tonnes of milk it produces each year. This equates to more than one third of all international dairy trade. With world population expected to be 8 billion by 2030 (currently 7.1 billion), an increase in demand for milk products is likely to continue. The developing middle classes of Asia and Africa in particular are moving from grain to protein based diets. In a recent international report by IFCN Dairy, demand for milk products has been predicted to rise by 29% in the next ten years. New Zealand is a world leader when it comes to on farm efficiency. Our farmers receive no subsidies and this has encouraged focus on low cost, high productivity, grass based farming methods. New Zealand is blessed with ideal climatic conditions and fertile soils that allow us to grow grass year round. The ability to rely on grass rather than grain for animal feeding means our production costs are far lower than the rest of the world. If you are looking for a real asset, in an industry that is the backbone of New Zealand, then an investment in a dairy farm has never looked better.

7 Expressions of Interest Order your copy of the Eastbourne Dairy Farm Limited investment statement and prospectus now. us at: To view the document go to: eastbournedocuments or for personal service contact: Richard Bourne Roger Dickie (N.Z.) Limited P O Box 43 Waverley 4544 New Zealand Telephone: Disclaimer: Roger Dickie (N.Z.) Limited is promoting an offer of shares in a company called Eastbourne Dairy Farm Limited to enable the company to purchase Eastbourne Dairy Farm. While every care has been taken to ensure the accuracy of the information presented here, it is not intended to, nor does it contain, all the information that a purchaser of securities may require, nor is it intended to provide the basis for any investment decision or to be considered a recommendation by Roger Dickie (N.Z.) Limited or by any person referred to. No indication of interest will involve an obligation or commitment of any kind. No money is currently being sought and no applications for securities will be accepted unless the prospective investor uses the application forms accompanying an investment statement. NB: All figures in this summary are preliminary draft figures and are subject to review and verification by independent consultants. 5

8 Roger Dickie (N.Z.) Limited P O Box 43 Waverley 4544 New Zealand Telephone invest@rogerdickie.co.nz