NZ MetService Takes Stake in the UK Weather Forecasting Market

Monday 10 March 2008, 4:11PM

By Metservice


New Zealand’s public weather forecaster, MetService, has taken a 50% stake in a private UK forecasting company Weather Commerce with a view to a complete buy-out in three years.

This is the first time MetService has taken an equity position in a foreign forecaster although trading under its international brand, Metra, it has a number of high profile customers in the UK, Europe, North America and the Middle East.

“This is a logical step for us,” says MetService chief executive Paul Reid.

“We already have significant customer contracts in the UK with customers like BBC and E-ON Energy and we have a small team based in Reading to service this business.

The purchase of Weather Commerce, founded in 1998 and which has 13 staff, complements our own local staff of five, strengthening our presence not only in the UK but also in Europe. Both organisations will be stronger for the association and we want customers in Europe to know that we have a growing presence with a forecasting bench and a competitive offering in their market,” says Reid.

“MetService and Weather Commerce have worked in partnership to provide new services to customers over the last 12 months so for MetService to take an equity position in Weather Commerce is the logical next step in the relationship.” says Chris Blowes joint shareholder Weather Commerce.

Weather Commerce specializes in forecasting for the retail, shipping and aviation sectors in which it has a strong market share with retail customers like Marks & Spencer. It has shown steady growth over six years and projections based on forward contracts are excellent. Retailers who operate ‘just-in-time’ inventory control, use weather information, particularly temperature, to forecast sales, make buying and marketing decisions and assess any potential weather-related distribution issues. Though undeveloped here in New Zealand, retail is a significant forecasting market in a country the size of Britain and across Europe.

Dominic Morrey Commercial Director Foods, Marks & Spencer Plc. says "Weather Commerce provide us with accurate and timely weather forecasts designed to meet our exact needs. We look forward to Weather Commerce's new venture with MetService and wish them every success."

“This is a market where we want a foothold which we will achieve with this purchase. Our objective in Europe is to gradually grow our presence in media, retail and energy,” says Reid.

Internationally MetService currently provides weather graphic software to television stations in Australia, United Arab Emirates, United Kingdom, Finland and Singapore. This is the same software used by TVNZ and TV3 in New Zealand.

MetService also provides weather forecasting information to energy customers in Australia, United Kingdom, Switzerland, and several US customers are currently trialing a number of MetService products.

“Our ability to compete in these markets is driven by the accuracy of our forecasts and this is accomplished by using the tools and techniques that we have developed when forecasting the often variable New Zealand weather conditions” says Reid

Besides improving revenue and prospects in the UK and Europe through this acquisition, there are considerable benefits to New Zealand.

“Much of the technical work for our offshore contracts is done out of our base in Wellington. This acquisition will strengthen our capability to market and sell products that are developed in New Zealand, effectively allowing us to export more of our Intellectual Property.

It will also enhance our talent pool. A larger organisation provides more opportunities and when some of our younger and promising New Zealand-based staff want to do their OE, we may be able to retain them in the organisation in the UK,” says Reid.