Stakeholders with Vision
For two decades, TrustPower's business success and growth has been underlied by the tremendous loyalty of its capital providers being shareholders, bondholders and banks. In 2013, those partnerships are stronger than ever.
When it was incorporated in 1993, TrustPower was a provincial electricity company with a half share in the Kaimai hydro power scheme - and serving only the Western Bay of Plenty. Today, TrustPower provides customers with electricity, telecommunications and irrigation services and has nearly $3 billion of assets throughout New Zealand and Australia.
For 20 years, TrustPower and its investors have shared in this remarkable story of growth. At TrustPower, we place enormous value on the strong and stable relationships we have with all our investors, be they shareholders, bondholders, or banks. It is the tremendous loyalty of these investors that has enabled us to pursue our growth vision. Without their insight and support, TrustPower could have remained a small provincial electricity company.
Shareholders have enjoyed a highly-productive 20-year period. For a shareholder who invested $1,000 when TrustPower listed on the New Zealand Stock Exchange in 1994, those shares would be worth around $15,000 today. Further, over the same period, they would have received $7,500 in dividends. If that same investor had reinvested all their dividends in TrustPower shares, their $1,000 would now be a very impressive $38,000.
Our two largest shareholders, Infratil and TECT, have been with us right from the start. Working together with two longterm cornerstone shareholders has meant we have had industry expertise and local support to call on, whenever needed. This has been key to the success of our business.
Pleasingly, our investors have been well rewarded. Debt holders have enjoyed the comfort of investing in a strong company with stable cash flows. TrustPower began its retail bond programme in 2002 and since then has issued a total of $755 million of both senior and subordinated bonds. Many bondholders have invested with us since 2002, and continue to reinvest. This was confirmed by the success of our most recent subordinated bond offering in September 2012 when an existing issue matured. We gave existing bondholders priority to reinvest in a new 7 year subordinated bond, as a reward for their loyalty and 60% of them chose to take up the offer and continue their investment in TrustPower.
Equally, the support of our relationship banks has been critical to TrustPower's ability to grow. Most of our banks have been supporting TrustPower for a number of years, and they have seen the business grow and prosper over that time. When TrustPower wanted to invest in Snowtown Stage 2 Wind Farm, our largest ever project, our relationship banks were happy to help. Within a very short time we had flexible funding in place that allowed us to sign the project contracts and commence construction. It underlies the strength of our partnerships when you think we were borrowing to fund a large project (A$439 million) in Australia.
All of our investors - shareholders, bondholders and banks - tell us they are pleased to be investing in such a successful company. However what excites them the most is investing in a company with so much future potential.
TrustPower is just now starting to capitalise on some of the options that we have developed over the last decade - Snowtown Stage 2 being one example. The future for our investors looks good, with a number of other options in the development pipeline able to provide profitable growth at the appropriate time.