An early focus and positioning in data centres and renewable energy by infrastructure investment company Infratil has led to inexorable growth in recent years.
“The beauty of Infratil is its long-term sustainable growth,” said chief executive Jason Boyes.
“We take a long run-up with investments, incubate them in the portfolio and make a call over whether they will be part of the central story. We have the ability to move from one long-term investment to the next as the world changes around us.”
In 2016 Infratil invested A$784 million for a 48% stake in CDC Data Centres and US$100m for a 37% shareholding in United States-based Longroad Energy. The independent valuation of Infratil’s CDC investment increased by A$287m between July and September this year because of increased customer demand and expanding facilities.
This meant Infratil’s 48% stake was valued between A$4.386 billion and A$5.248b.
CDC has 12 data centres, including those under development, in Australia and New Zealand, and is set to double its business by adding more than 400MW capacity by 2034.
Digital, including full ownership of One New Zealand (formerly Vodafone), now makes up 62% of Infratil’s portfolio.
“The move to cloud storage and the acceleration of artificial intelligence has certainly made data centres a red-hot sector — it’s a new asset class that didn’t exist eight years ago,” said Boyes.
“We think data centres still have legs to grow and we would like to have more international exposure.”
In 2021 Infratil invested a further US$100m in Longroad for utility-scale wind, solar and energy storage projects as it becomes a major player in US renewable energy.
“Thirteen years ago when I started here, half of the portfolio and most of the operating cash flow was centred on Manawa Energy (formerly Trustpower). It just shows how the portfolio can change — by focusing on the right one at the right time and moving on to the next thing,” said Boyes.
On top of its shareholdings in Manawa (it is under a takeover offer from Contact which Infratil supports) and Longroad, the utilities investor has stakes in further renewable energy companies — Galileo in Europe, Mint in Australia and Gurin based in Singapore.
Boyes said Gurin is on the cusp of meaningful development in Asia renewables that will be really attractive and accelerate that sector.
“After the long run-up (in renewable energy and data centres), we’ve got to the point where we are delivering,” he said. “Once the growth starts to arrive at pace, it’s hard for other people to enter the markets and disrupt momentum.
“It’s a complex environment accessing land and power and getting connected. We found our sites eight years ago and got set up.”
Infratil’s investment approach and sustained returns have been recognised by the judges as the winner of the Best Growth category at the Deloitte Top 200 awards.
The award comes in Infratil’s 30th year of operating and being listed on the NZ Stock Exchange. It is now the fourth biggest local company on NZX market capitalisation ($12.42b) and was recently added to the MSCI Global Large Cap Index at the expense of Spark, opening up the door to increased liquidity in its shares and attention from international investors.
The judges said Infratil has again exemplified outstanding growth in 2024, balancing its strong focus on the New Zealand market with strategic global expansion.
Domestically, Infratil reinforced its commitment to digital infrastructure by moving to full ownership of One NZ. Globally, its strategy to invest in renewable energy and data centres has been transformative, with a sharp rise in the company’s valuation driven by the surging demand for AI-driven data infrastructure.
Infratil’s strategy reflects bold decision-making and exceptional execution which have been a hallmark of the company’s success. Shareholder returns have been exceptional at a compound annual rate of 23% a year over the past five years.
“These accomplishments reinforce Infratil’s strategy in infrastructure investment, with a focus on driving innovation and sustainable growth around what the company describes as ‘the ideas that matter’,” said the judges.
For the six months ending September, Infratil’s proportionate operating earnings (ebitdaf) on its investments increased 25% to $506m. Its full-year guidance range was narrowed at the top end to $960m-$1b.
A digital transformation has enabled to keep its head above the challenging economic and business conditions.
NZME chief executive Michael Boggs said the digital landscape is crucial in today’s media environment “which is why our growth strategy focuses on enhancing our digital capabilities while maintaining the strength of our traditional platforms.
“We are focused on enhancing user experiences across all our platforms, using tools to leverage data insights to better serve our audiences and grow our competitive advantage.”
The digital investment includes launching OneRoof for all things property, iHeartRadio to listen to audio everywhere, and digital subscriptions to be informed with premium content.
Boggs said both digital and print channels play important complementary roles. “While digital continues to grow in importance, print remains a valued medium for our audiences and advertisers.
“Our integrated approach sees us leverage the strengths of both digital and print to provide the best possible offering to our diverse audiences across the country,” he said
“Having won Most Improved Performance a couple of years ago, being named as a finalist for this (Best Growth) award makes me extremely proud. Not only does it demonstrate the hard work of our dedicated team of 1200, but it also highlights our strong strategic direction that will allow us to continue innovating and growing,” Boggs said.
The judges said that in a fiercely competitive landscape, NZME holds its ground, exemplifying resilience and innovation. Its success shows that with ambition and a proactive approach, it’s possible to thrive — even in tough times.
NZME has also led the charge in standing up to global digital giants, like Google, advocating for fair industry practices, they said.
For the six months ending June, NZME increased revenue 3% to $171.25m and net profit was down 4.3% to $1.89m. Operating earnings (ebitda) were $21.4m compared with $21.3m in the previous corresponding period.
Digital revenue increased $5.9m to $50.1m with OneRoof’s climbing 47% and leading to NZME’s profit for the first half of the 2024 financial year. Digital now contributes nearly a third of NZMEs total revenue.
OneRoof listings inquiries increased 29% and digital listings revenue grew 63%. The audience gap between OneRoof and the No. 1 property platform in the market has reduced to 10%.
Digital audio revenue increased 33% year on year with podcast downloads hitting 48m, up 12% and podcast revenue growing 68% for the half. Streaming radio revenue increased 16%.
NZME’s digital publishing business delivered an increase in profitability in the half, with digital subscription revenue up 13% and digital subscriptions up 11%.
Boggs said NZME has a very clear three-year strategy. The business will continue to introduce market-leading innovative products, accelerate the delivery of new customer experiences, streamline business processes, and improve productivity and efficiency.
“In areas like audio, we continue to outperform the market with total share of revenue outperforming its share of audience,” he said.
NZME told the market in early November that given the delayed economic recovery, advertising revenue was weaker than expected in September, resulting in the third quarter’s being 1% lower than the same period last year.
NZME recently lowered its full-year ebitda guidance to $53m-$55m, from $57m- $61m.
The fourth quarter started more positively and full-year advertising revenue is expected to grow by around 5%, said NZME.
well-preparedand electricity distributor Vector is getting well prepared for the energy transition by developing a data-driven and more resilient network.
Vector, which added 160,000 new electricity connections this year, is well into its Symphony strategy designed to transform the traditional poles and wires into an intelligent energy system that gives consumers in Auckland more choice and control.
Chief executive Simon Mackenzie said at Vector’s annual meeting that Symphony “encompasses our approach to navigating the energy transition by creating infrastructure alongside digital solutions equipped to manage the complex demands of the future.
“It includes a strong focus on data, customers, and our own people as enablers.
“It’s about creating a system that delivers safe, cleaner, more reliable and affordable energy solutions.”
Mackenzie said if large, flexible loads such as electric vehicle charging are unmanaged, “we expect peak congestion to increase accordingly and Vector’s network capacity would need to more than double to accommodate that increase in peak load.”
Mackenzie said over the past year Vector has continued to engage with experts from New Zealand and around the world to further “our understanding and develop strategies around network resilience challenges, using data and advanced climate modelling.”
Vector has worked closely with NIWA and Fire and Emergency NZ to model extreme dry year risk and contacted United States-based electricity network businesses to learn from their significant experiences in managing wildfire risk.
Vector has mapped the potential impact on customers.
It has engaged external specialists to develop detailed flood modelling at its zone substations, enabling Vector to forecast the location and depth of the inundation.
Through its smart meter data programme, Vector has established EV tracker which monitors where electric vehicles are appearing in suburbs and helps Vector plan for network growth.
“Through this tracker, we’ve identified that it’s not just single electric vehicles we need to look out for, there are now more than 150 households around Auckland with two electric vehicles,” said Mackenzie.
“The charging requirements can significantly impact demand on the local low voltage network, making this sort of analysis even more important so we can see the potential for constraints before they happen.”
Vector has also collaborated with Amazon Web Services and Google on the next generations of network management. The new tools include GridAware, which uses new technology including drones, machine learning and modern AI processes to survey and guide the maintenance of the network.
For the year to June, Vector increased revenue 5.4% to $1.14 billion and net profit was down 21.8% to $79.91m.
Operating earnings (market-leading) was up 14% to $365.2m. At the end of September Vector had 626,636 electricity connections, up 1.6% on the same period last year, and 120,556 gas network connections, up 0.6%.
Plus: Auckland Airport and Spark are back in favour with analysts at Morningstar.