Mason's Recovery May Be Delayed

Press, Volume CVIII, Issue 31727, 10 July 1968, Page 17

Mason's Recovery May Be Delayed

(New Zealand Pres* Assocfatfon) AUCKLAND, July 9. The recovery of group earnings of Mason Bros, Ltd, Auckland engineer and merchant, will be delayed while the engineering units continue to operate well below capacity, the chairman (Mr J. G. Souness) says in the annual report.

As announced before, group net profit fell $73,825, or 56.3 per cent, to $57,343 in the year to March 31. The 2J per cent interim dividend was the only payment, compared with a total of 7 per cent the previous year.

The fall in work which had affected the engineering companies continued, particularly in Auckland, the chairman says. Marked improvement in earnings depended on a return to more buoyant trading. The Government was now paying attention to approaches from Industry directed at prevention of contracts within local industry's capacity being let overseas.

Group Turnover There were also signs of a slight Improvement in the economy. The major merchandising member of the group, Mesco Riddell, had adjusted to the more competitive conditions and continued improvement was also expected in Anderson’s, the Christchurch subsidiary. Group turnover fell $171,006 to $9,675,886, but was boosted by the final invoicing of a substantial bulk cement project by the Australian subsidiary. Mesco Riddell maintained turnover, but reduced margins and higher expenses caused profit to drop well below the previous year’s record. However, in view of the conditions the profit was considered satisfactory. The company experienced a substantial drop in the sale of capital equipment and much effort was necessary to offset this with locally-pro-duced lines. Reorganisation Hie range of local products was expanded, and sales of gas and welding materials inAnderson’s offset a 22 per cent fall in sales by reduced costs and made a profit, against a loss last year.

I Mason Bros* engineering ■ turnover dropped 20 per cent ■ This, coupled with a major i shipbuilding contract loss and i industrial troubles, resulted ■ in a substantial deficiency. Overheads had been re- ' duced and the company re- • organised, with changes in ■ most senior executive posii tions. The performance In some sections has improved but the serious shortage of traditional contract and shipping repair work remained such that the i current work load was insuffis cient to produce a profit. Orders for insulated truck

bodies and containers did not reach an economic level. Some export business was gained in Australia, Singapore, Malaysia and Thailand. The Australian branch produced a satisfactory profit. Group employment had decreased from 1111 to 920 and employment costs as a percentage of sales had been reduced by 5 per cent to 26.7 per cent. The profit was after providing $4601 less for depredation at $184,209 and $88,777 less for tax at $101,893 and after deducting $1928 more for minority interests at $2948.

The earning rate on average ordinary funds dropped from 4.2 to 1.6 per cent and on ordinary capital from 8.1 to 3.1 per cent