Rising Costs Cut Heath’s Profit

Press, Volume CVII, Issue 31521, 8 November 1967, Page 29

Rising Costs Cut Heath’s Profit

Although sales by Beath and Company, Ltd, the Christchurch-based retailer, in the latest year were almost steady on the previous year’s record level, profit margins were not sufficient to keep pace with rising costs, says the chairman (Mr T. W. Perry) in the annual accounts.

As announced, profit fell 56.7 per cent, or $46,325, to $35,423 in the year to July 19. The ordinary dividend, reduced from 10 to 7 per cent, requires $14,250 less at $33,250 and was just covered by the profit The preference charge was unchanged at $llOO. It is apparent that quieter trading conditions will apply for some time until the accumulated stocks of wool are satisfactorily disposed, says Mr Perry. In the meantime, directors have taken steps which they believe will substantially correct the company’s position. The earning rate on average ordinary shareholders’ funds is down from 8.8 to 3.6 per cent while the rate on ordinary capital is down from 17.0 to 7.2 per cent Generally, the branches did not experience the same recession in sales as the main city store. Three of the branches showed increases while the other two were very close to maintaining the previous year’s figures. The latest profit is after providing $1407 more for depreciation at $45,917 and $46,907 less for tax at $30,§81. Shareholders’ funds are

$1074 higher at'5955.034 and incly.de steady ordinary capital of $475,000 and unchanged preference capital at $20,000. Working capital is $9BlB less at $370,524. Since the balance-date ordinary capital has been increased by $28,850 by the issue of shares in part consideration for Tonee Travel, Ltd. There was a premium of 20c on each of the 57,700 shares of 50c each.

T.A.T. Board Divided

(N.Z. Press Association) INVERCARGILL, Nov. 7. The directors of New Zealand Tourist Air Travel, Ltd, have declined, because of a split in their ranks, to make any recommendation to shareholders on a take-over offer by the Mount Cook and Southern Lakes Tourist Company, Ltd. In a circular letter to shareholders posted tonight, the chairman of directors (Mr C. O. Marshall) reveals that five of the seven directors of T.A.T. favour acceptance of the Mount Cook offer.