Shareholder Update - Murray Irrigation Business Review

In September 2022, the Murray Irrigation Board of Directors and Management team embarked on a bottom-up business review. We are in the final stages of this review process and are now in a position to share some of our findings with shareholders. 

Business review findings: 

Murray Irrigation (MIL) has been operating at a significant deficit for many years. 

Investment fund 

Based on our assets and the size of our footprint, MIL needs a fund of around $400 million to adequately support future investment in the infrastructure, expertise and technology that services our customers now and for generations to come. 

Capital expenditure 

MIL needs to make provisions for $12.8 million of CAPEX each year to maintain our company’s $1 billion asset base. However, for the past five years, we have only spent $6.9 million annually, excluding PIIOP. 

Operating expenditure 

MIL has been underinvesting in our operations by around $4 million per annum. This has created system reliability issues and impacted our ability to service customers. 

Our Board and Management are committed to rectifying this situation. Our priority is always to ensure customers get water when they need it, and at the lowest possible price. 

As part of our business review process, we have been investigating various scenarios to reset our revenue model and ensure we can invest in infrastructure and technology that lowers the risk of equipment failure and enhances the security of future water delivery for future generations. 

On the back of many months of hard work, we are close to completing a proposed plan that we believe will achieve this, and successfully position our business for a strong future. The Board and Management will engage with shareholders around the options and our recommendations in August. Shareholders will then get to make the final decision on our proposed business modernisation strategy in a vote at the end of August. 

In the meantime, a landing page has been developed on our company website outlining the above findings. 

Please take the time to look at the material on our website here.   

While this is a challenging time for Murray Irrigation, it is also an exciting time, because it is offering us the chance to set our business up to support efficient and sustainable water delivery into the footprint for future generations.   

If you have any questions, or would like further information, please email review@murrayirrigation.com.au or call the customer support team on 1300 138 265. 

We look forward to sharing further details about the way forward in August. 

Ron McCalman 

CEO