Will Burrett: Landcorp Chief Operating Officer on the Government zeroing in on the company's performance

Simeon Brown has told various Government-owned companies they must explain why they are failing to deliver their cost of equity and how they will improve their returns.

The Minister for State Owned Enterprises told several of the SOEs - including NZ Post and Landcorp - that they've been underperforming over the last few years.

Landcorp was also singled out because its CEO's pay climbed from $760,000 in 2021/22 to $927,000 in 2023/24, but company’s profit nearly halved to $36.3 million dollars during that time.

Landcorp's Chief Operating Officer Will Burrett says the company's had to go back to basics - and they're not the only agricultural entity that's had to scale back. 

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Now the government zeroing in on Land Corp as an

(00:02):
example of state owned enterprises that are underperforming. Its singled
out a number of SOEs that it says has performed poorly.
This is Treasury over the last five years and the
worst performers are New Zealand Post met Service, Cordier and
Land Corp. LANDCRP was also criticized for the big pay
package of its chief executive. The CE couldn't come on
the show tonight, but we have Will Burrett, the Chief

(00:24):
operating Officer of Land Corp.

Speaker 2 (00:26):
Hi, Will good right here, Thanks for having me.

Speaker 1 (00:29):
Thank you. Do you think that CEO pay or CE
pay should go up when profits fall as dramatically as
your profit has?

Speaker 2 (00:38):
I look, I'm not here to talk about my boss
as a salary, But what do we talk about it?

Speaker 1 (00:43):
Just hypothetically, let's say, any old, any old soe. Should
the performance of the CE be tied to the performance
of the of the SOE?

Speaker 2 (00:52):
Well, look, I think that's that's for a matter of
the board to work with a CE. I'm here to
talk about our performance and where we're heading moving forward.

Speaker 1 (01:00):
Tell me about your performance, good or bad.

Speaker 2 (01:03):
Look, we've been on the journey to be honest either,
and that's pretty cliche, but you know, I'm really proud
of the last eight en months and where the business
has just laser focused on on core business principles of
you know, animals, pasture, wastage and and internal optimizations. So
you know, we've we've we've come a long way. We've
focused on our structure, on our systems and the performance

(01:26):
culture that I think we're a ready starting to embed
some really good things.

Speaker 1 (01:29):
And if you focused on doing your business properly, what
have you got rid of?

Speaker 3 (01:34):
There wasn't part of that, I think just noise, you know,
I think we have Well, look, we've we've gone back
to basics. If I'm honest, you know that we're not
the only agricultural entity over the last wee while it's
had to reset itself, focused capital allocation back to the core,
strip away some noise from the business and well look

(01:57):
it's it's actually just focusing on the core principles of farming.
So going back to basics.

Speaker 1 (02:02):
Making sure where have you stripped away?

Speaker 2 (02:06):
Well, look, we've focused on putting capital back into the business.
Heather and not.

Speaker 1 (02:10):
Told you has somebody told you not to give specifics?

Speaker 2 (02:14):
No, not at all?

Speaker 1 (02:15):
Do you not know what?

Speaker 2 (02:18):
Yeah, we have stripped away noise, so and what is I'm.

Speaker 1 (02:21):
Just going to try one more time and then I'm
going to give up. What is that noise?

Speaker 2 (02:25):
But we've we've focused capital back into behind farm gate
rather than post farm gate, so we've we've reduced you know,
palming food, that's that's been consolidated down and where we
are driving you know, the other areas of those post
post farm gate investments harder. But then behind farm gate,
which is the bulk of the investment in the asset

(02:46):
across the two billion assets were focused on driving physical
performance which we can control and we can control costs.

Speaker 1 (02:53):
Do you still milk deer?

Speaker 3 (02:56):
Yes? We do?

Speaker 1 (02:58):
Is that a good idea?

Speaker 2 (03:01):
I'll look, that's something that you know, you ask around
the purpose of PAMU and we are here to try
and challenge some things.

Speaker 1 (03:07):
See the problem though, isn't it will because a normal
father farmer is not going to faff around milking deer,
are they They're just going to get on with doing
sheep and beef and dairy. And do you think maybe
is that part of the problem that what we think
you are is the government's farmers? But what you think
you are is experimenting.

Speaker 2 (03:27):
We've got to put a percentage of the asset that
we've got into things that are going to trial and
test system designs and potentially new horizons. Are you forced that?

Speaker 1 (03:35):
Are you forced through through legislation to do that?

Speaker 2 (03:40):
We are forced to make sure that we're driving a return,
and that's what we're focusing on.

Speaker 1 (03:44):
No, no, no, no, Well, are you forced through legislation or
through regulation, or through any kind of rule to put
a percentage of what you are doing into you know, experimenting?

Speaker 2 (03:55):
I'd say, we are trying to help the industry and
seeking you. Okay, that's these things, So you're.

Speaker 1 (04:02):
Just doing that wacky stuff of your own. Bat Now,
we had we had Grant McCallum on who you'll be
aware of as a farmer himself but also National Party MP.
So let's be honest, right, he's got some skin in
the game here. They're obviously lining you people up to
sell you down, so he's doing he's doing the government's
job here, but he reckons that you guys should be
providing a net operating profit of maybe minimum one hundred

(04:24):
milli but you know, closer to two hundred million and
it's only twenty mil So how how do you explain that?

Speaker 2 (04:31):
Well, we've we've positioned a record profit coming out this
financial year of between forty one and fifty one million.
That'll be firmed up and later later of August, I
think late August will be confirming that. And then we've
we've got an sci that we were or a statement
of corporate intent which is effectively our budget hither over
the next three years that we'll be landing with the
Minister later on this month, so that paint paints the pathway,

(04:57):
and that pathway speaks directly to focus back on the
core business. So you know, I'll probably let those numbers
speak for themselves when they come out.

Speaker 1 (05:06):
Okay, Well, thank you, appreciate your time. That's Will Burrett,
the chief operating officer of Land Corp. For more from
Hither Duplessy Allen Drive, listen live to news talks. It'd
be from four pm weekdays, or follow the podcast on iHeartRadio.