Reata Limited

Family ties in rural Wairarapa

  • Wairarapa-CP-The-Johnston-family_web

    The Johnston family (l to r) Sam, Sarah, Thomas, Lorina, Marcus, Olivia, Sue, Tim and Anna with Katie the foxy.

Good things take time, and for the Johnstons, that’s meant spending years working through a succession plan that now sits comfortably and fairly with all members of the family.

The Johnstons have been farming in Wairarapa since the early 1970s when Tim and Sue Johnston purchased Reata, a 217 hectare sheep and beef farm located 35km east of Masterton. Over the following two decades, further land purchases took the total operation to 400 hectares. The land was owned by the Tim Johnston Trust, and the plant and stock owned by Tim and Sue’s partnership. Tim and Sue’s three children, Marcus, Anna and Sam, were all “born and bred” on Reata.

In 2008, a new company, Reata Ltd was established with Tim, Sue, Marcus and Sam equal shareholders. “Dad was in his mid-sixties and wanted to step back,” Sam explains.

“So Reata Ltd bought the stock and plant from mum and dad’s partnership and leased the land from the Trust. Marcus and I were employed to carry out the day to day running of the farm. It was a way that mum and dad would be looked after and still have an income from the land.” From then on the Johnstons kept looking for opportunities to expand and develop the business.

In 2009, a land purchase increased the farm to 545 effective hectares with around 5,300 stock units; 80 percent sheep and 20 percent cattle.

Over the next few years Marcus and Sam continued to develop Reata. Anna continued to work in the rural sector in Masterton while Tim and Sue leased a portion of the recent land purchase and renovated the homestead that came with it. Sue continued to work full time in the wider Wellington region.

In 2012, Marcus indicated that he was keen to explore other career options. The Johnstons discussed this as a family and agreed on their succession plan: Marcus would leave Reata to pursue a career at rural retailer Farmlands; Sam would become sole shareholder of Reata Ltd; Tim and Sue would continue to live off the lease and Sue would reduce her working hours to part time; some capital would be released immediately to Marcus and Anna, with their remaining portions and non-farm assets being handed over to them in time.

Creating a succession plan that suited every family member was no mean feat, and the Johnstons haven’t rushed things. “We’ve taken years to get to this point. And by taking our time, we’ve arrived at a place where everyone is happy with the outcome. We’ve achieved our succession plan objectives: for Tim and Sue to be well looked after; as much certainty as possible for all parties; and for Reata to have a viable future within the family.”

Working through the succession process with the Johnstons is Moore Stephens Markhams director Alistair McLennan. Alistair had been Tim and Sue’s accountant “for years” when the conversations around succession began in 2005. “Alistair has been giving us sound advice for a long time. He’s very involved in our business and we are open with him about everything. He will always be a part of what we are doing.”

Published Spring 2013.

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