COMMERCIAL R. A. Brierley Group Suffers Loss

Press, Volume CVI, Issue 31330, 29 March 1967, Page 17

COMMERCIAL R. A. Brierley Group Suffers Loss

In a year of reorganisation and reconstruction, R. A. Brierly Investments, Ltd., Wellington investor, suffered a group loss of £13,208 in the year to June 30, against a group profit of £17,130 for the previous year.

The 7| per cent dividend has already been paid to shareholders in the holding and parent company, R. A. Brierley Investments, which earned a profit of £22,870 against a loss of £11,025 the previous year.

Losses by subsidiaries attributable to the holding company were made by Citizens’ and Graziers’ Life Assurance Company, Australia, £37,947 (last year £476 profit) and the local subsidiaries incorporating Barton Ginger and Company and South Wellington Pictures and Investment Company, £10,449 (£4426 loss). Profits were earned by Finance Corporation of New Zealand, £5841 (£12,451 profit), and Mamaku Forests, £22,790 (£27,138 profit). After deducting dividends to the holding company from subsidiaries of £9927, this leaves the group loss of £13,208. R. A. Brierley Investments, the holding company, has shareholders’ funds of £117,387 which include £lOO,OOO in issued capital. Investments in shares in public companies at cost and market valuation at June 30 of last year are £50,332 lower at £143,081. However, a note to the accounts says that this includes £90,662 which represents the cost of acquiring 43.197 per cent of the capital of Hawkesbury Development Company. An agreement entered into on December 1, 1966, whereby the majority shareholder is to purchase the shares for £75,110, will result in a loss of £15,552. No provision has been made for this loss in the present accounts but it will be brought to account in the current year. The auditors of the Citizens’ and Graziers’ Life Assurance

report that there was a technical deficiency of time in respect of the allotment of 158,500 ordinary shares on June 29, 1966, but the deficiency has been remedied. They report also that they are unable to form an opinion as to the value of the amount owing by R. A. Brierley Investments, Ltd. No consolidated accounts have been prepared because of the reorganisation during the year. The holding company’s accounts show that dividends received increased by £10,500 to £19,279 and there was a profit from capital reconstruction of subsidiary companies of £46,915.

Interest paid on fixed term loans rose £3866 to £44,892. The Finance Corporation of N.Z. had an increased volume of business but the net profit, which was for 15 months, was lower. This reduction was almost entirely attributable to an agreement to accept a lower rate of interest on advances made to the parent company. Because of the reorganisation, the parent company was unable to utilise its resources as before. Money market conditions are currently very difficult, directors say, and there is little indication of any significant easing in the credit squeeze. Long-term prospects are sound, they say. Mamaku Forests, in which Brierley has a 72 per cent interest, was assisted by substantial items of non-recur-

ring income, although this was not such a prominent factor as in the previous term, directors say. The company now has extensive trading interests and directors believe that the present satisfactory level of earnings will in future be maintained. Further large-scale expansion has already taken place in the current year. The loss for the local subsidiaries of Barton Ginger and South Wellington Pictures and Investment Company is not inconsistent with the current phase in the company’s development, directors say. A note to the accounts shows that the conversion of overseas currencies has been made on the basis of £N.Z.BB to £AIOO, compared with the official rate of £N.Z.BO to £AIOO, and £N.Z.IIO to £Stg.lOO, compared with the official rate of £N.Z.IOO to £Stg.lOO.