Key Business Partners

Monday Message 27th May 2024

kbpadmin — Sun, 26 May 2024 20:02:50 +0000

Much was made last week of the review of Kainga Ora “KO” – the NZ Government social housing agency formed 5 years ago in 2019 to supersede Housing Corporation. KO is now NZ’s largest landlord and its 3,305 staff manage 72,000 homes housing approximately 4% of the population – almost 200,000 people.

The enormous challenges of being a residential property landlord are well illustrated by its financial performance or lack thereof. In 2022/23 KO spent $2500M for an operating deficit of ($520M). This deficit was funded by debt; which increased to $12.3bn – equating to an average “mortgage” of $170k per house. This performance has been deemed “unsustainable”.

In sharp contrast, in the same time period, the land resource based contractor Fulton Hogan reported approximately the same turnover in NZ (ie excluding Australia etc) as KO; while deploying 50% more NZ staff than KO. Generating a strongly positive bottom line. And most significantly with net debt only 1/100 (1%) that of KO.

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Monday Message 20th May 2024

kbpadmin — Sun, 19 May 2024 20:05:56 +0000

“Leadership is how you show up for your people”

– Auckland Airport CEO Carrie Hurihanganui – originally from the small city of Rockford Illinois, later set foot in NZ as an 18 year old….with wisdom gained in the intervening years shared at Institute of Directors Conference last week.

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Monday Message 13th May 2024

kbpadmin — Sun, 12 May 2024 22:28:02 +0000

“People say look how bad banks are when they make money. You know, I can tell you its a lot worse when a bank is not making any money, its actually losing money. I think my first loss pre-tax was about GBP7bn. It feels pretty terrible.”

– recently retired National Australia Bank (and BNZ) CEO Ross McEwan, who repeated his turnaround of loss making Royal Bank of Scotland with back-to-basics leadership success at NAB, following the Hayne royal commission of inquiry in 2019

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Monday Message 8th January 2024

kbpadmin — Sun, 07 Jan 2024 19:53:37 +0000

Welcome to 2024! Trust you had a good break and are returning refreshed and enthusiastic, as I am.
By far the best book I read over the break was “The End of the World is just the Beginning” by Peter Zeihan (thanks AKF for the tip). This author combines my favourite subjects of geography, history, people and business strategy to reflect on the world order since 1945 (in particular) and how globalisation is going to play out (not very well). I’d read Zeihan’s geopolitical work previously, but not realised that he was in part educated at Otago University (postgraduate diploma in Asian studies 1997). So there are some interesting NZ perspectives (good and bad).

The book text was finalised in February 2022 and subsequent events play out uncomfortably close to his predictions:

“Too much of the Australian debate on supporting the Red Sea effort has had a parochial focus on our fealty to the US alliance, not on the fundamental economic principles. Freedom of navigation is a foundation of the modern global economy.” (Australian Financial Review last week). Ironically the Red Sea situation should see USA and China working together – while logical, a highly moot point.

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