LV PASTORAL PTY LTD THE LEVINSON & VEALE FAMILIES JOINT VENTURE - PowerPoint PPT Presentation

LV PASTORAL PTY LTD THE LEVINSON & VEALE FAMILIES JOINT VENTURE Mark & Julie Veale

Overview  Background – Levinsons & Veales  Timeline  Who makes up LV Pastoral Pty Ltd and what does it do  What went well  What could have been better  What we would do differently next time  The future

Background – Veales  Mark & Julie with 2 boys ; Lachlan, 11 & Braden 8.  Property – Glen Eynord and Glen Eynord West – 13km SW of Lake Bolac Vic 1154 ha  Mark’s Parents semi retired still drawing from the business in return for use of their land.  Highly geared, low equity  Leasing some land, (lease land was highly sort after in district)  Previous experience employing people

 Passions:  Family  Water skiing  Camping/travelling  Community  Agriculture particularly cropping ( an odd thing to be passionate about isn’t it) (THEN)  Sheep (now)  Underlying Needs – Leverage our skills in a larger business for greater financial reward and ability to have more family time.

Background – Levinsons  Jeremy & Iona with 3 girls: Phoebe 15, Hattie 14, Willow 11.  At time they sailed away were Phoebe 9, Hattie 8, & Willow 5.  Property – Reedy Creek – 13km W of Lake Bolac Vic 1380 ha  Passions:  Family  Sailing  Underlying Need – Change of pace, while their asset was being cared for.

Timeline ……………………….. 2010 Jeremy & Iona have a plan to sail off into sunset (they looked at various options to manage their farm asset, and decided on a JV) 2011 Jan – Jeremy & Mark discuss the JV idea over a beer 2011 Feb – In principle agreement to work on JV, Andrew Beattie steps in to facilitate 2011 April – work on business plan, and practicalities 2011 July 1 – LV Pastoral commenced trading, 3 year agreement in place, Beatt’s Chairs. 2011 October – Jeremy & Iona and girls sailed off into sunset – Jim stepped onto the board in their place 2015 October – Jeremy & Iona returned to resume their place on the board. LV Pastoral JV enters another 3 year term. Jeremy & Iona settle into life in Adelaide Hills. 2015 November – new Chair – Lachlan Polkinghorne 2017 Still going today, current arrangement expires March 2018, however we are hoping to continue for another 3 years.

R C GE

Soil types and characteristics  Glen Eynord :- Remanent Redgum country with swamp chains some salty  Predominantly CC soils  Some sand and gravel banks and clay swamps  Reedy Creek :- Hilly with small creeks  Predominantly gutless sandy loam over clay  High sodium sub soils  OC from 1.5 to 3.5  CEC from 10 to 18  Ph from 4 to 5.5

LV Pastoral Pty Ltd  A 50 : 50 joint venture between the Veale and Levinson families  Established due to changing family circumstances and mutual benefits  It is an operational business owning no land, only stock and plant.  Business pays lease/dividend to landowners.  Finance via stock mortgage and directors guarantees  Turns over approx. 2 million at present with 75% of this coming in over a 10 week period.  Additional land leased off third party (no position on board).

LV PASTORAL – Principle Activities  Over 2500 hectares land managed  Farms geographically separated by around 30kms by road.  800 to 1000 hectares dry land crops – Wheat, Barley, Canola & Oats  6000 approx. breeding ewes, plus 2000 ewe lambs  3800 Dohne/Merino Ewes  2200 1 st X/Composite Ewes  On track for 7800 lambs this year (110% inc ewe lambs)  Moving towards 5200 Dohne ewes and 3200 1x/composite Ewes and 11000 lambs.  Agistment cattle when required  Hay cut when excess grass

Benefits of the Joint venture  Scale  Diversity of land  Risk Management  Owners ability to take leave/better lifestyle  Asset being maintained and improved vs leasing  Equipment fully utilized  Accountability  Reduced OH’s  Labour efficiency  Land owners still have exposure to production business

LV Pastoral Board  Board  Lachlan Polkinghorne (Chair)  Jeremy & Iona Levinson  Mark and Julie Veale  4 meetings per year.

Org Chart LV Pastoral PL Board Mark and Julie Jeremy & Iona Levinson Veale J&I Levinson, M&J Reedy Creek Veale & Chair Glen Eynord (currently L Polkinghorne) Production business – owns livestock & plant Mark Veale- Managing Director Julie Veale – Nicholas Economou – Phillip Britten – Sarah Muir – Casual Neil Elrick – Crop Admin/Accounts/ Stock Overseer Casual Truck (Stock – Glen Overseer (Reedy Creek) Driver/Maintenance Eynord) Spak Filler

The ups…….

Our Agricultural JV experience  WWW  Independent Facilitator ( Beatt’s ) through merger – exit plan first  Similar philosophy of each party to agriculture  Similar size properties & proportion of crop/grazing/plantations/laneways  Clear and open communication via board meetings  Complete transparency is critical for success  Trust – for Levinsons to be able to leave their asset in our hands  Jim Cuming - Levinsons proxy on board – was a great communicator  Manager – has ‘skin in the game’.  Allows Mark and Julie annual leave – 2014 we had 4 weeks off to visit USA, in a husband/wife operation this is a lot harder to achieve  Ongoing relationship with Proadvice

Our family holiday to USA in 2014

& the downs…….

Our Agricultural JV experience  WCBB  Mistake # 1 - 3 big picture people constructing a new business  LV was way under capitalised at beginning – started with $0 cash, $1m worth of stock, and around $100k worth of plant.  More ground rules for capital projects  Absentee directors with no financial power of attorney appointed or non exec director with no decision making authorisation  Better understanding of each properties production capacities  Valuations and area determined at start up  Set up overly optimistic lease figure 5%, now a comfortable 2-3% of land value.  Communicating the reality of a bad first year (financially)

Our Agricultural JV experience  What we (Mark and Julie) would do different next time….  We really only had 3 months to get JV organised, allow more time to do more due diligence.  Valuations & Property appraisals & mapping done before JV commences –  to what is fair & equitable in terms of lease  what challenges may lay ahead, with respect to production and infrastructure  Start with a greater capital base

The Future for us (Mark & Julie)… Investigate further expansion opportunities for LV Pastoral   Lease land  Increase livestock efficiency  Increase Stocking rate  Focus on kg meat per Ha  More Compost applications  People  Helping others to learn/ Coaching  Sharing our knowledge & skills  Pecuniary  Provide enough income for living expenses from passive investments at age 60. Off farm investments – farms and houses  Educating our boys  Spend more time with family and friends by the water AND 3 months next year traveling around Australia.

 Questions ??????