STH OTAGO FREEZING

Press, Volume CVII, Issue 31502, 17 October 1967, Page 22

STH OTAGO FREEZING

New Chain To Cost $L6m

South Otago Freezing Company Ltd, Balclutha, is investigating a modified scheme involving one new chain which will cost sl.6m, the chairman (Mr J. D. Cochrane) says in his annual report.

The cost of establishing two further mutton dressing chains at the Finegand works would be more than ssm and thus beyond the resources of the company. The profit for the year to August 31 fell $10,846, or 8.7 per cent, to $114,412. This was after providing $51,566 less for depreciation at $225,477 and $15,050 less for tax at $112,950. Dividend Cover

The steady 7J per cent dividend again requires $67,000 which is covered 1.7 times by profit. The earning rate on average shareholders’ funds is down from 5.1 to 4.6 per cent while the rate on capital is down from 13.9 to 12.7 per cent.

The company did not reach its target in the lamb diversification scheme, says Mr Cochrane. It sought to sell at prices comparable with the United Kingdom market but was undercut by other sellers by as much as 3d per lb below U.K. parity. Shareholders’ funds are $38,289 lower at $2,435,833 because investigation costs of $85,201 on the proposed works expansion were charged against the revaluation reserve. '