GROUP RENTALS N.Z.

Press, Volume CVII, Issue 31543, 4 December 1967, Page 17

GROUP RENTALS N.Z.

The profitability of' Group Rentals New Zealand, Ltd, Wellington, was prejudiced by the loss in the subsidiary, Group .Communications New Zealand, Ltd, says the chairman (Mr K. V. Coe) in his annual report. When the group entered the television rental field delayed profitability was expected but the estimates of The communications market were based on a larger proportion of sales to rentals than were experienced, he adds. As a result, the group was faced with immediate merchandising costs which can only be recovered over the period of the rental contracts. Profit Down As announced, the group profit fell from $35,298 to $12,109, a fall of 65.7 per cent The steady 7 per cent dividend requirement of $12,600 is no fully recovered by the profit. Mr Coe says that a loss in the subsidiary is expected in the current year, although at a reduced level. The earning rate on average shareholders’ funds is down from 17.2 to 5,6 per cent while the rate on capital

is down from 19.6 to 6.7 per cent Saturation Point Television licensing statistics show a rapid move towards saturation and industry expectations of sales and rentals for next year appear to be about 40,000 receivers, says Mr Coe.

Shareholders funds are down $509 to $216,211 and include ordinary capital unchanged at $lBO,OOO.