CHAS. BEGG SETBACK

Press, Volume CVI, Issue 31249, 22 December 1966, Page 16

CHAS. BEGG SETBACK

Retail Losses Offset Profit

(N.Z. Press Association)

DUNEDIN, Dec. 21

Aggregate profits earned by all manufacturing and distributing divisions of Chas. Begg and Company. Dunedin, would be largely offset by an apparent trading loss in the retail section.

This apparent loss was due to the conservative manner in which the company had always treated hire purchase, and the adverse effect this had on profit during the initial part of any substantially increased hire purchase sales period. In addition, reorganisation involved a higher than normal level of deferred maintenance and other nonrecurring expense items. Major items were the debenture issue costs, shop renovations and re-organisa-tions.

Hire Purchase Reserves Additional hire purchase reserves and non-recurring items would be met from trading income and could be up to £250,000. As announced, directors intend to keep dividend steady, to be paid from the Dividend Equalisation Reserve.

The board is confident that the value of recent diversification and acquisitions, more effective group co-ordination, improvement of retail trading profitability, and an inflow into profit of an increasing amount of the deferred hire purchase reserves will ensure a satisfactory level of profit stability and growth in future years, says the report.