MyFarm track record

1990-2007

• During that time there were 22 farms bought, operated and sold including six dairy conversions.
• The farms represented $66 million of investment and $31 million (46%) of debt.
• Milksolids production increased from 998 kgMS/ha to1188 kgMS/ha under MyFarm management.
• $20.1 million was invested, which realised $54.7 million for investors.
• The average rate of return (measured as IRR)¹ was 23.7% p.a. with a range from 2.3% to 68.1%. During that same period the average rate of return for a NZ dairy farmer was 15.6% p.a.

2007-2010

• The investor model employed the same tenets of property quality, fiscal control and quality management, but added low levels of debt as part of the investment model.
• MyFarm has bought and manages 15 NZ farms purchased between 1 June 2006 and 1 August 2010. Total capital invested was $160 million with $59million (37%) of debt.
• Milksolids production has increased so far from 1065kgMS/ha to 1221 kgMS/ha under MyFarm management. The target is 1300 kgMS/ha.
• Taking an estimate of current farm and asset values,if they were to be liquidated today the investors would earn a total return of 10.2% p.a.² with a range from -0.9% to 19.2%. For the same period, an average NZ owner-operator earned 6.1%³.
• All of these farms are being farmed on and the majority still have production and profit potential.

2010 - TODAY

• MyFarm has bought 19 farms with a total asset base of $270 million, funded with $44.7 million (16%) debt.
• Their average EBITDA was 7.8% p.a. for the 2010/11 operational year with a range in performance from 3.4% for a newly purchased property undergoing development to 13.3%.
• The target is to increase milksolids production from 933 kgMS/ha to 1304 kgMS/ha.

OTHER FARMS

• Not included in this analysis are three NZ sheep and beef farms and three dairy farms from Australia. Also not included are two Tararua dairy farms, a Northland dairy farm and three Waikato dairy farms.
• These are farms where MyFarm has not retained the management contract for the operation of the property and we are not in a position to assess their value or performance. However, in general terms, the initial purchase price and several difficult seasons (summer droughts) have impacted on these dairy farms’ investment performance.
• We note that MyFarm has retained management of all South Island properties and provides management or other services to four properties in the North Island.

________________________________

¹ Measured as a ‘timeline IRR’ over the investment period.
² A simple average of individual farm IRR’s.
³ DairyNZ data