Paper Mills Prospects

Press, Volume CII, Issue 30179, 10 July 1963, Page 19

Paper Mills Prospects

(N.Z. Press Association) 'DUNEDIN, July 9. It would be rash to forecast when dividends would be resumed, the ehairman of directors of New Zealand Paper Mills. Ltd, Mr J. G. Dykes, told the company’s annual meeting today.

With a loss ot £54,826 for the March 31 year the company did not pay an interim dividend in November or a final dividend recently. “It was a matter of deep regret that the board felt constrained to pass the interim dividend in November," said Mr Dykes. “At that time the position was obscure and our cash position by no means as liquid as we would require for such a purpose. “That position has hot become any easier so that the time to resume the payment of dividends has not yet arrived, and indeed will not arrive until the amount of current liabilities (up from £251,072 in 1962 to £425,083 this year) is substantially reduced.

“It is, however, reasonable to assume that this easing should commence within a reasonable period as output increases, though the degree of progress may not be swift because of the cost of general tidying up still to be done. “We have paused in order to build up. the financial strength of the company and in due course dividends will be resumed, and we trust other benefits will accrue to shareholders.” Output Up Mr Dykes said the key to prosperity was primarily in the company’s ability to increase output.

“In the year under review output increased by 5.85 per cent, which in the state of disorganisation that existed as a consequence of stoppage for reconstruction, must be considered satisfactory. Teething troubles continued longer than anticipated, but in May we began to feel for the first time the benefit of the reconstruction programme when a good increase in production was recorded."

The overall increase in production for the quarter to the end of June was 15.4 per cent, and from July 1 ail machines had been placed on a four-shift basis.

12.M8 Tons Of Paper The managing director, Mr M. L. Hobday, explained that this was equivalent to an annual production of 12,000 tons of paper.

Referring to repairs, renewals and maintenance, Mr

Dykes said these had increased to an unexpected extent as the reconstruction programme had progressed. These bad cost £33,300 in 1961. £lll,BOO in 1902, and £ 180,439 for the year to March, 1963. “It will be appreciated that during a time of reconstruction there are opportunities of doing repairs and effecting renewals, which it is wise to take and thus avoid a succession of stoppages of plant in the future." The increase in depreciation in the last- three years had been substantial and in the coming year would probably increase by a further £60,000 to £160,000 after which, it could be expected to slowly recede. Another director, Sir James Fletcher, said this question of depreciation was a problem for all concerns which had been involved in spending big sums on plant. He hoped that the present government would bring down legislation which would enable developing companies to spread their depreciation over a number of years.

NEW SERVICE BY EXCHANGE

The .Sydney Stock Exchange will begin a probate and power of attorney noting service next month according to the general secretary. Mr D. M. Butcher. It would assist beneficiaries of estates by simplifying the legal technicalities involved in the disposal of investments, he said.