By Lynda Kiernan-Stone, Global AgInvesting Media
Australia’s Gunn Agri Partners, an agricultural asset management company operated by co-founders Bill Gunn, Alan Hoppe, Daniel Hough, and Bradley Wheaton, announced the final close of the Gunn Agri Cattle Fund in April 2018.
And as the fund goes from strength-to-strength, Gunn Agri has released the fund’s unaudited results for the financial year ending June 30, 2021, noting an EBITDA profit of A$18.34 million (US$13.3 million).
Since inception, the fund’s property portfolio has posted compounded annual growth of 13.8 percent, after accounting for purchase price and post-acquisition CAPEX – and today, manages gross assets of A$290 million (US$210.3 million) – up A$64.7 million (US$46.9 million) over last year.
This growth demonstrates a significant outperformance of the market – effectively double the market rate of Northern pastoral properties during this time period – due to Gunn Agri’s execution of a strategy involving the active transformation of its portfolio assets, by investing in infrastructure that enhances productivity such as watering points, grazing development, or fencing that enables better stocking density management.
Bradley Wheaton, managing partner with Gunn Agri, told GAI News of these intended improvements in an interview in November 2018, saying, “We are focused on executing our asset improvement and operating plans. This includes completion of productivity enhancements, such as the addition of new solar-powered watering points, fencing to open underutilized areas, pasture renovation, and operating infrastructure improvements. This enables us to increase cash returns over the life of our investments and reach our asset value growth targets.”
“These outstanding results have been a culmination of the right strategy implemented at an appropriate stage of the cycle and diligent execution by the entire team,” said Bill Gunn, chairman, of Cunningham Cattle Co., the fund’s operating company.
Geographically, the portfolio spans 1,500 kilometers stretching from north Queensland to the border of New South Wales including 1.056 million hectares (2.6 million acres) with 990,000 hectares (2.45 million acres) of grazing land, 6,375 hectares (15,753 acres) of cropping land, and another 67,300 hectares (166,301 acres) of grazing land that is leased or agisted.
Across these holdings, Cunningham Cattle Co. records a current herd of 63,800 head with a value of A$87 million (US$63 million) at year end, reflecting a year-on-year increase of 28 percent.
The cattle indicator EYCI (Eastern Young Cattle Indicator) ended Gunn Agri’s financial year at 942c/kg (cents per kilogram), with the indicator breaking 1,000c/kg in August, and the fund’s operating results were boosted by sale proceeds of A$17.9 million (US$12.98 million), while costs remained in-budget.
However, the fund also achieved its impressive growth through the transformation of pasture land on its Goodar property near Goondiwindi into cropping land, resulting in that property posting a CAGR of 14.5 percent (after purchase price and CAPEX) since its acquisition in 2016.
Portfolio-wide, Gunn Agri, which is the first Australian cattle business to implement Global GAP, the worldwide standard for good agricultural practices, achieves these results while maintaining its focus on sustainability.
Brad Wheaton explained to GAI News in a prior interview, “It is inescapable that as managers of land assets you are managers of the environment, and we adopt practices that align improved financial performance with positive environmental outcomes such as carbon sequestration, biodiversity conservation, and renewable energy use. We are doing this right now because we can make it accretive to our financial returns and because of the importance of ESG to our investors.”
And investors are reaping the benefits. These results, driven by a focus on operating assets at scale, optimized productivity, and operating land at its highest value, have enabled investor distributions of 3 percent on total investor contributions in FY2021 with a distribution forecast for Q2 FY2022 of 8 percent on total investor contributions.
“The strong wet season, coupled with record prices and a dedicated and hard working team has delivered excellent results for our owners,” said Alan Hoppe, CEO, Gunn Agri. “We have been investing into the long-term productivity of our farms and our people and that is paying off. The focus on maintaining a low cost per kg of beef produced will continue to drive profitability into the future.”
– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@