COMMERCIAL Hay’s Confident Of Future

Press, Volume CVII, Issue 31497, 11 October 1967, Page 20

COMMERCIAL Hay’s Confident Of Future

As long as the public’s purchasing power remains stable, Hay’s, Ltd, die Christchurch-based retailer, should enjoy satisfactory progress says the retiring chairman (Sir James Hay) in his annual report.

The latest year was satisfactory, he says.

Sties rose 8318,000, or 32 per eent, to $10,124,000 in the year to July 31. The year began quite encouragingly but because of the deterioration In the country’s economy the latter months were not easy for the retail trade and sales tended to level off.

As announced, the profit rose 84074, or 1.7 percent. to $242,816 after providing 82674 in preference dividends to outside shareholders.

The unchanged 10 per cent ordinary dividend requires a steady 8161,000 which is covered 1.4 times by the profit The earning rate on average ordinary shareholders’ funds eases slightly from 8.8

to 8.4 pep cent while the rate on ordinary capital is up from 13.9 to 14.2 per cent. The new store at Northlands cannot expect to be immediately profitable because of the high initial depreciation charges but the long term prospects at Papanui are inherently bright, says Sir James Hay. More than $415,000 was spent on capital items in the latest year. There , were four major projects: the development of the new Northlands store: the gourmet bar and delicatessen in the city store: a major building extension at Ashburton: and new cash registers and accounting machine because of the Decimal Currency change-over. Store Expenses Only part of the capital cost involved in the new store had been met at the end of the financial year so that the accounts do not reflect the full extent of such major items as the air conditioning plant and fixtures. The cost of the D.C. changeover was considerable but the decision the previous year to make some financial provision against these costs helped to reduce their impact on the latest year’s profit. The latest profit is after providing $26,674 more for depreciation at $160,258 but $17,736 less for tax at $238,034. Shareholders’ Funds Shareholders* funds are 8101,382 higher at $2,954,654 and include ordinary capital of 81,610,000 and preference capital of $300,000, both unchanged. Fixed assets are $351,847 higher at $3,004,791 and term liabilities are $38,582 lower at $2,206,804. Working capital is $289,057 lower at $2,216,057 with current assets $53,848 higher at $3,849,430 and current liabilities $342,895 higher at $1,633,363. The ratio of current assets to current liabilities is 2.4:1. There is an estimated contingent liability of $430,000 for capital contracts.