Sping has sprung!
In it I made the observation that in a report on a recent survey, instead of saying 31% of businesses expected a deterioration in general economic conditions over the coming months, should have said 69% didn’t expect a deterioration - which my logic says is the mathematical result. But maybe that’s just me.
Don't stop, thinking about tomorrow,
Don't stop, it'll soon be here,
It'll be, better than before,
Yesterday's gone, yesterday's gone.
Fleetwood Mac - Roumers
It’s now been a few months since I sent out my last Newsletter – Procrastination is a thief of time.
In it I made the observation that in a report on a recent survey,
instead of saying 31% of businesses expected a deterioration in general
economic conditions over the coming months, should have said 69% didn’t
expect a deterioration - which my logic says is the mathematical result.
But maybe that’s just me.
One matter that’s been concerning me though, is that after two years in
government, Jacinda Ardern has made a marvelous entry into politics and
received international recognition. But I’ve never really heard about
what the government, or anyone else in the government, is doing. Other
than Winston Peters of course, but even he’s been pretty quiet.
Well my hope of looking at some of the positive things the government is
there to do for us has now been answered. Only last week, Finance
Minister, the Hon Grant Robertson, in a release on the topic “trends and opportunities for the New Zealand economy”, made the comment “Today
I want to voice my own perspective on this subject – namely that the
New Zealand economy is in good shape. We have a lot to be positive
about, and we should be careful not to talk ourselves into a downturn.”
He claims his view is supported by a comment made in an earlier Herald article by Liam Dann who wrote, “Cheer
up. New Zealand's economy is not sliding into recession [...]. Over the
next several months it looks like we'll see stabilisation. Increased
government spending, monetary policy stimulus and a pretty healthy trade
balance will battle with global uncertainty and the fallout from low
business and consumer confidence.”
Robertson goes on to say the statistics support his claim that “the
New Zealand economy is in a good place right now. Growth in the June
quarter was 0.5% and 2.4% in the year. We are growing faster than
Australia, Canada, the UK, Japan, the Eurozone, and the OECD average.
Unemployment of 3.9% is at its lowest rate in over decade.”
This is a good read - especially the eight key shifts mentioned in it - and the policy actions related to each. I recommend it.
Renewed interest in investment
With interest rates at a record low this not only encourages investment in property and business but also discourages having “money in the bank”.
We’ve got a few clients out there seeking capital and have recently
received renewed interest in the offers they have. Some of these are
show on our website and Information Memorandums have been updated where required.
So here’s a quick summary of some of them.
Retirement village – long term profitable & tax effective investment
This is an update of the recent Offer
that went out to our Opportunities newsletter list last month. The
License to Occupy village will be built in Amberley just out of
Christchurch, and is the third this developer has under various stages
of construction. The resource consent process for the development is
under way. The local council is supportive of the project and is about
to appoint a special project team to fast track the consent process.
The business is seeking to raise $5 million equity in the form of a
special partnership. Loan finance has been arranged and the purchase of
the land was completed last week. It will be some weeks before
earthworks and civils can commence.
In the meantime the Offer to invest is still open. These developments
are highly profitable. According to the development budget, for a
$100,000 investment, on completion of the Village, there is a budgeted
$166,000 profit to valuation.
And this profit is tax free, as for LTO retirement villages there is no
tax on development profit. These Government incentives flow could
through to investors on a personal basis as they are members of a
limited partnership. This could also provide long term tax benefits on
other taxable investment were they all say in a family trust.
By the time the village is completed, it is predicted to be generating
an annual income to investors - from the resale of the LTO units - of
$70,000 each year. And this should increase over time. At the time all
the LTOs are filled the estimated value of an investor’s asset, which
cost $100,000, could be up to $700,000.
For a copy of the Information Memorandum reply to this email or give me a call.
Liquidstrip – new updated IM available
Much has taken place since the original Information Memorandum for this Offer was produced. LiquidStrip
has a patented effluent management system that converts liquid waste
streams into clean water and solids. It uses a multi-stage process
combining their proprietary chemical flocculation stage with mechanical
filtration.
Since the Resource Management Act came into force in 1991, the compliance requirements associated with industries like dairy;
concrete; meat processing; aquaculture; dredging; and mining, have
already resulted in immediate applications for LiquidStrip in the dairy,
concrete and trade-waste sectors.
The original applications for which the process was invented - cleaning
cowsheds and concrete trucks – has attracted local bodies and councils
without any pressure (so far) from the public. But more recently the
largescale problem of storm water runoff
- especially in our major cities - has resulted in central government,
regional councils and territorial authorities enforcing compliance with
an increasingly robust and pervasive framework of controls.
An update newsletter
was sent to those on our Opportunities newsletter list earlier this
month and a new updated Information Memorandum reflecting the renewed
interest in LiquidStrip’s solution is now available. For a copy reply to
this email or give me a call.
DryNZ – capital raise for expansion
Here’s another business that TBK Capital’s been involved with for some
time now. It produces a range of dried fruit and medicinal products from
New Zealand growers for local and export markets.
The business now needs to upgrade its facilities to increase production
and meet the increasing demand for its products. The key equipment
involved, and the major use of funds raised, is to purchase a Bucher Dryer,
which is far more modern than the existing equipment and has about 5
times the capacity. The use of the funds raised includes other new and
equipment and a factory upgrade, which will contribute to increase their
drying capacity.
An updated newsletter
was sent to those on our Opportunities newsletter list earlier this
month and a new Information Memorandum is available. For a copy reply to
this email or give me a call.
Other Offers
FirstBuild
Here’s a business that’s designed a proprietary system to build the
components of modular homes in a factory for assembly on site. It’s a
proven system in the U.S., Europe and Asia. Their plan is to partner
with noteworthy developers to produce houses in volume in a shorter
time. It’s now raising capital to support demonstration homes. The
original Information Memorandum is available on request.
Manuka Oil Plantation
Our client has a lease of 800 Ha of Crown land in Northland with fully
grown Manuka and Kanuka. He has the sole right to harvest and produce
Manuka and Kanuka Oils. A relatively small amount of capital is needed
to update existing equipment and streamline the harvesting. This would
be a precursor to expand the business to provide the Oils to
distributors awaiting supply to sell it internationally. Contact me for
more information.
Bestmate Petcare
Established in conjunction with Massey University’s Veterinary and Nutrition department, Bestmate Petcare
is developing a range of pet foods and beverages. The first innovative
beverage, Bestmate K9H2O, provides hydration and overall wellbeing for
dogs and contains natural ingredients including vitamins. It is now
raising capital to assist in launching an international market for its
products. Contact me for more information.
Want to Know More?
If you’d like comment on this newsletter, or to know more about any of
the Offers above, email or call me on +64 21 902 901.
.............................................................................................................................................................................................................
Any reference above to investment is not an offer of financial
products that requires disclosure under the Financial Markets Conduct
Act 2013 (Act) and is available only to wholesale investors as defined
by that Act. It is intended for distribution only to selected people to
whom, under the relevant laws, it can be lawfully distributed. It cannot
be distributed in any other jurisdiction, or to any other people. It is
not an offer or solicitations in any jurisdiction in which such offers
or solicitations are not authorised, or in which the person making such
offers or solicitations are not qualified to do so, or to any person to
whom it is unlawful to make such offers or solicitations. Any
representation to the contrary would be unlawful. No action has been
taken by any person that would permit a public offering in any
jurisdiction where action for that purpose would be required.
Cheers
John Paine B.Sc., Dip BIA
TBK Capital Limited
Level 10, 120 Albert Street
Auckland 1010, New Zealand
Phone +64 9 307 3257
Mobile +64 21 902 901
Email john.paine@tbkcapital.co.nz