Andrews, Beaven Profit Halved To $219,858

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

Andrews, Beaven Profit Halved To $219,858

A substantial drop in sales, especially in the second half of the year, resulted in group profit of Andrews and Beaven, Ltd, Christchurch-based engineer, falling $218,620, or 49.9 per cent, to $219,858 in the year to June 30.

As announced, the ordinary dividend has been reduced from 10 to 8 per cent The resulting profit was disappointing, says the chairman (Mr R. C. Neville). The company was affected in two ways by the dampening down of the economy by the Government.

First, the group suffered further cuts in the value of basis import licences and sec-

ond, the sales of capital equipment were seriously affected by the depressed conditions in the building and contracting industries. Sales Worsened

As the year progressed, sales became progressively worse until in the end they practically stopped. As well, a major manufacturing scheme for earth-mov-ing plant had to be postponed, although the company war heavily committed in development costs. On the other hand, the market remained buoyant throughout the year for goods of relatively low value and some of the trading divisions returned impressive figures. Liquidity Measures

Directors have taken prudent steps to protect the company for what could well be a difficult trading situation for the current year, says Mr Neville. Strong measures have also been taken to reduce expenses and to improve liquidity. It is hoped that the measures taken to reduce expenditure, together with wider use of engineering facilities, will be adequate to recover the profit potential of the company, he adds. The reduced dividend requires $30,405 less at $121,625 and is covered 15

times by profit. The preference charge is $l5BO higher at $23,574. The earning rate on average ordinary funds is 4.9 per cent. Because of the integration of John Chambers, a rate on average ordinary funds the previous year is not comparable, but the rate on ordinary funds at the end of the 1966 year was 10.4 per cent. The rate on average ordinary capital is down from 27.4 to 12.9 per cent.

The latest profit is after providing $24,028 more for depreciation at $162,312 and $230,518 less for tax at $220,442. Shareholders’ funds are $224,400 higher at $4,568,268. Ordinary capital is steady at $1,520,300 and preference capital unchanged at $410,000. Working capital improves $456,061 to $3,108,569 to give a ratio of 1.9:1.