Motor Specs. Lifts Profit 3 p.c.

Press, Volume CVII, Issue 31500, 14 October 1967, Page 18

Motor Specs. Lifts Profit 3 p.c.

(New Zealand Trett Auociation) AUCKLAND, October 13. In spite of higher depreciation and the absorption of tne full cost of the recent debenture issue, the consolidated net profit of Motor Specialties, Ltd, Auckland, edged up by $12,890, or 3 per cent, to $448,102 in the year to June 30. The gross profit from trading was up $512,166, or 13J per cent, to $4,294,292.

While the group’s sales were at record levels for the greater part of the year,* there was some reduction in the final quarter to sales on a par with those of the last period in the 1966 year, the chairman (Mr J. F. Johnston) says in the annual report.

Apart from the $32,034 expenses of the debenture issue the accounts also included the costs relating to the reallocation of the plant and offices of Engine Rebores, Ltd, and Watson Steele and Ganley, Ltd, and those associated with the installation of data

The reduction of sale* in the final quarter resulted in a stock increase, but steps had since been taken to make adjustments to the inventory. Since balance day sales had improved and were ahead of the same level last year. Unless economic conditions deteriorated the directors consider that a satisfactory result would be achieved in the current year. _ _

The debenture issue of $BOO,OOO made during the year was fully subscribed, which has enabled the company to rearrange other term loans and building programmes in Wellington and Auckland. Together with Repco Ltd, Melbourne, the company had substantially increased its shareholding in Glacier Bearings N.Z., Ltd, to extend the manufacturing capacity of that company and to extend the manufacturing activities of Associated Engineering NZ, Ltd.

The investment will add to profits from this source. The latest profit was after depreciation up $40,176 at $190,316 and tax higher by $8026 at $443,592. , The steady dividend of 11 per cent took $22,686 more at $299,460. The preference dividend again required $lO,OOO. The earning rate on average shareholders’ funds declined from 12.3 to 10.3 per cent and on capital eased from 22.6 to 21 per cent Balance Sheet The balance sheet showed shareholders’ funds increased by $445,932, to $4,675,528, including ordinary capital, up $71,500 to $2,047,000. Term liabilities were

$493,458 higher at $1,622,690. Fixed assets were up $233,490, to $2,424,290. Investments showed a rise of $87,964 to $283,878 and working capital improved $617,836 to $3,590,050. Creditors were down $56,490 to $2,470,798 and bank overdraft up $15,350 to $132,934. Stocks were $620,462 up at $4,485,762 and debtors higher by $3950 at $2,306,528.