Conditions ‘Worst Since 1954’

Press, Volume CVIII, Issue 31581, 19 January 1968, Page 13

Conditions ‘Worst Since 1954’

Trading conditions overseas were in many ways the worst since 1954, says the chairman of the Gear Meat Company, Ltd, Wellington (Mr G. M. Pottinger) in the annual accounts.

The profit is confirmed at $124,765 against $143,222 for the previous 11 months—a fall of 20.1 per cent on an annual basis. The profit earned is further proof that efforts since 1961 to insulate the company against extreme speculative risks are proving successful, says Mr Pottinger. Heavy Losses Low market realisations, together with what appeared to be unduly optimistic buying schedules, resulted in substantial losses on lamb trading for the major part of the trading year. A shipping strike, coming at the end bf the financial year, also added to exporters’ costs. A more cheerful feature of the export marketing has been the stable prices received for beef from the United States. The problem in this market is the threat of quotas, as! well as the stringent hygiene requirements. These latter are required within a very limited time period which makes the planning of economic operations very difficult, Mr Pottinger adds.

The steady total dividend of 6 2-3 per cent again requires $77,280 on unchanged capital of $1,159,200. The amount is covered 1.6 times by profit The earning rate on average shareholders’ funds is down from 6.3 to 5.3 per cent while the rate oh capital is down from 13.5 to 10.8 per cent, on >an adjusted annual basis. Shareholders’ funds are $49,142 higher at $2,389,676.