Gerry Harvey's NZ Thoroughbred unit extends losses to build line-up of stallions

Tuesday 6th January 2015

NZ Thoroughbred Holdings, Australian retailing billionaire Gerry Harvey's local bloodstock business, posted a wider full-year loss as the owner of Westbury Stud builds its line-up of stallions.

The net loss widened to $4.9 million in the 12 months ended June 30, 2014, from $3.97 million a year earlier, according to the company’s annual report.

Revenue rose 1.6 percent to $4.39 million and other income fell 15 percent to $2.8 million, for a total gain in income of 0.7 percent to $7.2 million. Expenses rose 8.8 percent to $12.2 million including a 55 percent jump in agistment, or pasture fees, to $2.6 million.

The results amount to small beer for Harvey, whose bloodstock interests include Australia's thoroughbred auction house Magic Millions, which has one of that country's richest competitions in the Magic Millions Race Series. Harvey's A$1.55 billion fortune, built up via the Harvey Norman retail chain, ranked him 21st in the 2014 BRW Rich List.

NZ Thoroughbred's assets include the upscale Westbury Stud, which runs stallions and yearlings at a 212 acre property at Karaka south of Auckland and a 300 acre property near Matamata that houses more than 180 mares, according to its website. Harvey took control of Westbury, which was established by businessman Eric Watson, in 2009 when he bought out property developer Michael Tololi.

NZ Thoroughbred's auditor again included an emphasis of matter in its report, noting that the company's ability to be a going concern depended on the continued financial support of Harvey's GH Westbury Trust. In notes to the annual report, the company says that with a pledge of continued support from the shareholder, it is confident that it can manage current market conditions and continue to operate for at least 12 months.

As at June 30 last year, the company owned shares in eight stallions, up from seven a year earlier. Westbury now lists seven stallions on its website, led by Makfi, whose yearlings sold for up to A$200,000 in Sydney last year and up to $200,000 at the Karaka Premier sales in New Zealand. The other stallions are Reliable Man, Redwood, Red Giant, Swiss Ace, Captain Rio and Postponed.

Makfi's stud fees run to $17,500 plus GST. His first Southern Hemisphere winner was Marky Mark, which took the $70,000 Group 3 Eclipse Stakes over 1200m at Ellerslie on New Year's Day. Westbury has 93 entries in its yearling draft for the Karaka sales at the end of the month.

"This is a long-term game and that's Gerry's approach," said Westbury general manager Russell Warwick. "It is a five to six year cycle of investment Gerry is putting into New Zealand, based on building a stallion line-up and getting results. The last six months are telling us we're well on track."

The Jeep Magic Millions Gold Coast Raceday is held at the Gold Coast Turf Club on Jan. 10. From 2016, it will become Australia’s richest race day with A$10 million in prize money over nine races.

BusinessDesk.co.nz

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