Shareholders, DFC bail out Porter Heights ski-field

Press, 8 May 1985, Page 45

Shareholders, DFC bail out Porter Heights ski-field

By

NEILL BIRSS

The Development Finance Corporation and Porter Heights ski enthusiasts have put their hands in their pockets to help the ski-field up after last year’s disastrous season.

The company has been carried through to the 1985 season by the issue of 200,000 redeemable, convertible, preference shares. Of these, 150,000 have been taken up by the Development Finance Corporation and the rest by other shareholders in the company. The interest on these shares is 14 per cent. The DFC has also helped with further loans of about $310,000 in the year, during which another $400,000 was spent on fixed assets. At balance date, DFC loans outstanding to the ski-field totalled nearly half a million dollars. The accounts of the Porter Heights Development Company, Ltd, tabled at the company’s annual meeting in Christchurch last evening, showed that the net loss for the year to December 31 was $250,199 on revenue of $115,960. The directors say the new share issue has enabled the company, since balance date, to pay outstanding

debts, loans, and interest “and, with bank accommodation of $85,000, we will be starting the season with considerably less in the way of creditors than in past years.” The directors emphasise that the assets of the company might be out of its reach if it were starting out again today. The shareholders’ funds, even with an issue of new shares, are down from $335,251 to $246,132. The company has about 400 shareholders, all “ski-ing people” (apart from the DFC).

A dramatic indication of the effects of the snow season are that 1984 revenue was less than half that of the previous year.

The directors say that, given a better snow season this year, the prospects for the field are bright. But they say that a 25 per cent rise in ski-field admission is needed soon.

In their report, the directors tell shareholders that the big loss was almost entirely because of the poor snow season last year: the field was open only 39 days compared with an average of 70 days.

Much of the snow in the lower part of the field was

at a minimal depth, leading to an extraordinarily short season in the learner areas.

Operating expenses for 1987 were $149,586. Expenditure on vehicle, grader, groomer, and bulldozer ($33,426), wages and salaries ($46,378) and interest ($85,242) were the main items.

The net operating loss was $194,748. This was before depreciation of $64,135.

As with the Mount Hutt Ski and Alpine Tourist Company, Porter Heights Development, Ltd, has safeguards against take-over in its articles. This is a limit of 2000 votes a shareholder. The DFC, however, appears to have one vote for each of its shares. The chairman of the company, Mr James Allison, said yesterday that the bad 1984 season came after Porter Heights had been hit by the price freeze. Three times, the company had been denied permission to raise its prices. Improvements to the field this year include improvements to the learners’ area and a track to the back basin to allow the snow groomer access. The old lodge has been converted into a campervan park, with showers and lavatory facilities for 12 van groups.