Dalgety Expects Lower Profits

Press, Volume CVII, Issue 31560, 23 December 1967, Page 18

Dalgety Expects Lower Profits

(New Zealand Press Association)

WELLINGTON, December 22. A forecast that the general economic deterioration in New Zealand will mean that Dalgety and New Zealand Loan, Ltd, will earn lower profits this year than last was made by the chairman (Lieutenant-Colonel C. P. Dawnay) at the annual meeting of the group in London.

Lieutenant-Colonel Dawnay said that New Zealand’s devaluation would reduce profits earned in New Zealand dollars on conversion to sterling by 7 per cent Devaluation would improve the outlook for the New Zealand farmer and thus for the company, provided costs were not allowed to rise too rapidly. Discussing the general situation, he said that since his annual review had been written, sterling had been devalued by 14.3 per cent and the New Zealand dollar by 19.45 per cent and these moves had been accompanied by an increase in the United

Kingdom corporation tax rate from 40 per cent to 42J per cent

On the capital account, he said there was a notional exchange gain for the group as a whole in terms of sterling, but this was not likely to have any immediate effect on the group’s profits. In Australia, he said, no great change in local earnings was to be expected as a direct result of currency changes, but there would be a gain on conversion to sterling. However, parts of Australia were still affected by severe drought which must affect the company’s results in the current year.