Holding yearlings costs Ra Ora

Press, 2 April 1985, Page 34

Holding yearlings costs Ra Ora

Ra Ora Stud, Ltd, the Auckland-based thoroughbred stud company, earned a net profit of only $7454 in the six months to December 31, and has announced a one-for-four cash issue. The result compares with $315,765 previously, but the directors say that the holding back of yearlings for stud affected the result. Ra Ora said its halfyearly result did not include any revaluation of bloodstock, as it was the company’s policy to review bloodstock annually. Having regard to the general rising of bloodstock values — the national sales at Trentham showed an average increase on the previous year of 45 per cent — it was evident that there would be a substantial revaluation surplus at the end of the financial year. Ra Ora said the lower half-yearly result had been expected by the board because a decision had been made to retain some top yearlings to build up breeding stock. The prime sources of income for the stud were service fees and income from yearling sales, and as these figures were known, the directors could confirm the statement made at the annual meeting that profit in the current year would be abnormally low. Since incorporation of the company and the acquisition of the original bloodstock from the estate of Sir Woolf Fisher, the company had invested more than $7.5M in additional bloodstock, including 23 broodmares, 12 highly bred fillies, and two stallions, and shares had been acquired in other top stallions standing at other major studs. In addition, the company had retained 14 valuable fillies bred by Ra Ora.

Based on current market values it was probable that the fillies retained would have a current value of about S2M. The board intended to continue its aggressive acquisition pro-

gramme to ensure that Ra Ora would become the predominant Australasian stud. The increasing number of broodmares had resulted in the stud now having 39 weanlings, the largest number in its history. For this reason the 198586 year would see the benefits of having a large draft for the Trentham sales next January. The combination of the extra income from stallion fees in the 1985 season together with what should be an outstanding draft of yearlings, should ensure a big profit for the 1985-86 year. The new stallion Sackford was an exciting prospect and recently Ra Ora bought another stallion, Famous Star, by the top American sire, Sharpen Up. Sackford would stand at $15,000 and Famous Star at $6OOO and early indications

were that both stallions would have a full book. The fee for Imposing had increased from $25,000 to $40,000 and Ra Ora was again embarrassed in having to turn down many top mares for next season, they said. To enable the company to continue upgrading its bloodstock and because of current high interest rates, the board had decided to raise further capital by a cash issue rather than rely-, ing on expensive outside funding. The cash issue would raise $4.5M and the success of the issue was ensured through the major shareholder, the estate of Sir Woolf Fisher, having indicated it would take up its full entitlement of shares. The issue would be underwritten. Books close on April 17.