Taking Stock 2 July 2026Chris Lee Writes:

The departure of Winton Land founder, Chris Meehan, from the public listed company he founded does not sound like a positive auger for the beleaguered investors in the company. No thought as to a return as chairman has surfaced; maybe soon, maybe never.

Meehan is undoubtedly arrogant, litigious and potty-mouthed, as we know in the costly employment case taken by his former personal assistant, where he pretty much described himself in this way.

But he is also ambitious, determined, and has been happy to be the public face of an NZX-listed retail property developer.

His specialty development near Arrowtown, and the suburb he built north of Wanaka, have been impressive examples of quality projects, essential evidence that Winton had a hope of being one of those very rare retail property developers that might survive cyclical downturns. I still believe it might survive. Perhaps Meehan will privatise his company again.

The investors who have held the shares in Winton, in the case of our clients against my advice, must believe that the company can be revived.

It listed on the NZX in 2021 at $3.88 per share, but in 2025 reached a 12-month high of $2.49, down by 36% from its listing price, an ignominious performance, in fairness not out of step with property development experiences in the last few years. Today it sits at $1.40 per share.

Meehan remains a significant shareholder and the key man, he and his wife Michaela owning 55% of Winton's shares. Meehan is Chairman, his wife is a director.

When last week, without him, his board was conducting a board employment process, Meehan announced his indefinite departure for health reasons. It is not possible to foretell the outcome of this surprise news.

The employment process was linked to staff complaints about behaviour that for some might compare with other property egotists, like the late Bob Jones, or American Donald Trump.

Loud, flamboyant, aggressive, but uncontrolled behaviour seems to be linked to an industry that soars and sinks in fairly predictable cycles. I guess occasional big profits can lead to a feeling of genius and invincibility.

The Williams group in Christchurch, another survivor, also has a colourful, highly opinionated young leader in Matthew Horncastle. He thinks he might one day become Prime Minister, he has told the media.

His company was founded in 2012 by Horncastle (in his 20s) and his childhood buddy, Blair Chappell. For several years it enjoyed the best part of the retail property cycle as it succeeded in attracting hundreds of millions of funding from bank debt and personal investors.

Williams has built hundreds of houses in Auckland, Wellington and, mostly, Christchurch, making tens of millions, enabling Horncastle to move from "a $20,000" home to a $6 million property. He withdrew enough to acquire a $6 million yacht. The property market turned under the last Labour Government, whose printing of money and heavy borrowing led, of course, to inflation and higher interest rates, and a turn of the property wheel.

Rising building costs, higher mortgage interest rates, job losses and falling disposable income break the spokes in the global cycle, destroying most leveraged property developers.

The likes of du Val in Auckland was a high-vis failure, its owners somehow leaving behind a nett deficit of hundreds of millions, mostly owed to moneylenders, unwise investors, and sub-contractors.

Williams, like Winton, has survived, neither displaying any concern about longevity. Both will be hoping the cycle is on the turn to a more comfortable level.

Property development is a business model that regularly fails, often the early signals being unpaid GST, unpaid employee PAYE and KiwiSaver taxes, unpaid suppliers and sub-contractors, often leading to more expensive debt to service or repay bank and investor debt.

It takes years of planning, cost, and effort to produce something that hopefully can be sold at a profit. Without margins and rapid sales, developers have short lives.

The last leg before failure usually is signalled by hurried trips to mysterious debt brokers who promise facilities at distressed costs imposed on distressed borrowers. Think 18% plus hefty fees.

Those who survive the worst of the cycle usually have either never milked the company in the golden years, building credible balance sheets, and never used their bonuses and dividends to buy assets that are unsaleable in distressed markets.

The same is true of the second and third tier moneylenders who reap wonderful margins as long as the borrower repays. These lenders thrive when the property developers are succeeding in selling at high margins. They fail when the developer fails, as we saw in 2008-2009.

A busted developer usually leaves behind wounded subcontractors, weeping suppliers, destroyed third tier moneylenders, and most inexplicably, our Inland Revenue Department, lamenting yet more uncollected taxes, thus wounding government budgets.

The latter is inexplicable to me.

Even the most modest of credit collectors armed with powers such as those held by IRD should move to protect their stakeholders long before the debt grows more noughts (before the decimal point).

Obviously du Val's owners, blinkered by love of trinkets, were singularly dependent on ever more debt to maintain their illusion of success. That would be true of most developers with illusions of infallibility.

Winton Land Company has a well-heeled owner in Meehan. We know that because he donates large sums in public.

Meehan also has, in theory, the ability to call on his wealth and that of his shareholders, should his banks ever want to see more capital behind the bank debt. A rights issue, discounted, might still attract an underwriter.

Williams' director Horncastle was wise to act quickly, selling his house and boat to inject several million into his company when tough times were on the horizon.

Loan facilities are much more achievable after an injection of shareholder cash, rather than the submission of a shareholder's statement of position, dressed up by a valuer's opinion on what a person's home and boat might be worth (in good times?).

Bob Jones, after a painful development experiment in Australia in the mid-1980s, withdrew from development proclaiming that "all property developers eventually go broke".

His public company ultimately went broke not because of its unwise property development but because of unintelligent acquisitions, many underwritten by Jones' personal company which guaranteed the future share price of his public company; stupidity squared, no sign of business management skills in that decision, nor signs of wisdom or experience.

There were other reasons for its demise, largely linked to his incompetence and inexperience, but property development was not one of those reasons.

Wisely, Jones left the public arena and later succeeded financially, thanks largely to his smart move in employing competent managers who acted away from the retail market without flamboyance and chose to be excellent landlords rather than omniscient public entertainers. 

His success came from his barred access to retail investors, and thus his submission to banking supervision.

Winton may have lost, at least for a while, its visionary but vulgar leader, but its board will be striving to right-size the company, focusing only on those activities that can quickly turn into sales, cash and less debt. Land banking may be an activity that Winton quits. Its board does have at least two useful directors who will surely see that land banking with borrowed money produces negative cash flow.

Williams, not listed, was materially helped by Horncastle's 2024 recognition that the company needed cash injections from its owners, not requests for bank debt backed by valuer's estimates of the value of private assets, like boats.

It would be an impressive survival story if Williams can meet its obligations in a tough market and be there to thrive when buyer confidence recovers, banks again lending to developers. The company may be able to list, as it has indicated. I would not be a shareholder or supplier of debt, but I would applaud Horncastle and his team if the company thrives in the future.

At times like these the property developers with minimal debt, operating at an affordable scale, stand out from those who have not constrained their hunger to feed their dreams of rapid wealth.

Investors unable to join these dots should refer back to the (uninsightful) Rich Lists of 2007 to see how much thin air is in valuers' estimates of uncompleted or over-indebted property displayed in balance sheets!

Media stories describing people as "rich listers" means very little if bills are not being paid, or debt not serviced, or IRD not being paid on time. The compilers of rich lists can never moderate their estimates with this sort of inside knowledge. For that reason, I disrespect estimates of wealth based on valuations of indebted assets.

Retail property development remains a high-risk activity, rewarding those who use profits to strengthen balance sheets, and who understand that wealth based on some incentivised valuer's opinion, is wealth that is rather different from wealth that has not been pledged to moneylenders.

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THE Santana gold mining project continues to provide click-bait opportunities to the country's worst newspaper reporters.

Last week Santana paused the consenting process, rightly interpreting the value to its consenting application of some more data that might reassure the Fast-track panel, and bring perspective to some of the headline-chasing opinions of uncommercial academics and activists.

The panel had spent a fortnight listening to different opinions on matters like water and lizard species.

Neither the panel nor Santana want to leave gaps through which activists could seek unhelpful delays, caused by appeals largely driven by hysteria.

If the panel can demonstrate it has weighed all useful data and offered every critic its minute on the six o'clock news, then an appeal would be easily denied.

At least one strident (but irrelevant) group continues its quest for visibility, refusing to cooperate with the Fast-track panel, which wants all parties to discuss what conditions should be attached to a consent. That it wants Santana to fund its mission speaks loudly to its credibility.

Activists are unemployable in the real world if they ever seek to hide under the respected description of "environmental consultant".

Regional councils, councils and companies gain nothing useful from engaging zealots or those motivated by self-promotion. They should cleanse their councils by simply sidestepping from such people, and engaging with balanced, wise, mature consultants. I hope all councils are reading this paragraph.

The media which rely on zealots are hardly fit to describe their output as "journalism". Such reporting is lazy, one-sided, unhelpful and to me looks like a request to be made redundant.

The Santana request to stall the consenting process was entirely logical.

If it means weeks of delay but reduces the opportunity for opponents to appeal a consent, the short recess would have been wise.

As Santana has not yet requested a resumption date, the new date announcing the panel's decision is unknown.

What is known is that none of the serious political parties intend to appeal the Fast-track panel's decision, whenever it is announced.

Media attempts to spook investors with claims that the delay would lead to the next coalition government reversing a consent decision are simply a quest for more clickbait.

The worst of the media, The Otago Daily Times, must lack leadership capable of linking childish clickbait with falling circulation figures. Its circulation has lost 5000 sales, a fairly decent percentage for a paper with just tens of thousands of sales each day.

Why do the owners not intervene?

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OUR first seminar for two years will be held at Southwards Theatre, Paraparaumu at 10.30 am on Tuesday, July 7, the theatre opposite Southward's impressive vintage car display (well worth a visit).

After I have compared signals on the market that might be recognised by experienced investors, our Chairman (James Lee) will discuss global market oddities, and discuss risk tolerance and asset allocation, after which our CEO (Edward Lee) will discuss the green shoots provided by new initiatives in some sectors.

The meeting will conclude for those who choose to stay on with my update to Santana investors, as the consent process enters its final stages. There will be no time for questions but I will be on site outside the theatre to meet investors.

The theatre holds around 470 people. There are still available seats.

Please contact our office if you wish to attend.

Dates for our Auckland and Christchurch seminars will be published as soon as we can find dates that suit the three speakers. They are likely to be in late September or October.

Chris Lee & Partners