Council Controlled Organisation

Far North Holdings Limited

At a Glance

Primary Services

Council established Far North Holdings Limited (FNHL) to act as a vehicle for delivery of Council's commercial activities. The reason for establishing a holding company is to create a structure that delivers services in the most efficient and cost effective manner. The establishment of a separate commercial entity provides advantages to Council in:

• Providing efficient corporate governance and commercial direction.
• Rationalising operating activities and cost structures;
• Maximising commercial skills.
• Providing the right tax structures for operations; and
• Providing better communications between share-holders and operating subsidiaries.

Why We Do It

The main purpose of FNHL is to invest in, develop, operate and where appropriate divest strategic businesses, being businesses / assets that create high priority infrastructure needed by the Far North district, which are not being created in any substantial way by the private sector, and which deliver value to FNHL's shareholder (and therefore ratepayers) in the form of either new or improved facilities.

Priorities For 2011/12	What We Have / Haven't Achieved
FHNL will continue to focus on managing resources and activities efficiently to provide income for Council plus the ability for further reinvestment in commercial opportunities that may arise	FNHL continued with its development of tenanted properties, and a purchase of a commercial jetty, It also invested in the upgrade of its facilities at Ashby's boat yard to improve environmental performance, and invested in a new approach light system at Kerikeri airport. FNHL traded profitably, resulting in a dividend to Council of $256,302 for the year, and increased shareholders funds by a further $0.58miliion.
FNHL will continue to pursue options for the redevelopment of various under utilised commercial / maritime facilities and economic development opportunities for the district	FNHL continued its investigations into improving its return from Kerikeri airport, both in terms of the airport operation, and the investment that is held in the land holdings. Work has also continued with further investigation into the development of Stage II of the Opua marina.
FNHL plans to return its non strategic and community assets to Far North District Council and become an investor in only strategic and commercial assets, with a view to maximising its dividend to the community	During the financial year, the company completed the necessary documentation and processes to transfer the $5.2 million of special dividend assets back to Council, as recorded in the June 2011 accounts. No further assets were transferred back in the financial year 2011/12.

Future Issues / Challenges

Implications

It is anticipated that demands on the Kerikeri airport infrastructure will continue and the company will work with Council to explore options for meeting these with appropriate developments. There is further work required at Kaitaia airport to sustain and enhance the facility and position for continued growth in activity. FNHL will continue to negotiate with the Crown for security of tenure of the airport lease to ensure investments are retained.

FNHL worked with both the Council and other local and government agencies to try and obtain essential funding to meet the capital requirements of Kerikeri airport, and these are ongoing. Without this funding the ability to carry out longer term maintenance issues will be of serious concern. For Kaitaia airport we await the outcome of the ongoing negotiations with the Crown and their Waitangi Treaty settlements.

Community outcomes

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