Revertex Importing Doubles Profits

Press, Volume CVIII, Issue 31730, 13 July 1968, Page 18

Revertex Importing Doubles Profits

(New Zealand Press Association)

AUCKLAND, July 12.

Revertex Industries (N.Z.), Ltd, Auckland manufacturer of industrial synthetic resins, architectural coatings, rubber compounds and floor tiles, more than doubled its group net profit in the year to March 31.

> Earnings cover the divi- - dend, raised from 9} to 12 t per cent, almost three times. r The dominant factor in achieving the record figures - was the successful introduc- ■ tion of the company’s synI thetic resin emulsions on ■ world markets, the managingdirector (Mr W. R. Campbell) says In the annual report The profit jumped $50,207, or 110.8 per cent to $95,509. This result was after providing $15,835 more for depreciation at $35,091 and $21,643 more for tax at $59,843. The dividend requires $33,216. Earning Rates The earning rate on average shareholders’ funds jumped from 9.8 to 19.4 per cent and on capital from 21.0 to 34.5 per cent. Mr Campbell says that early last year it became apparent that if the company was to maintain its rate of growth under import control, it would have to secure substantial export business to support internal production. Using advantages offered by marginal costing, a consistent and steady growth in exports to Australia and Fiji was attained. Toward the end of 1967 the 1 company obtained the largest ' order in its history—s2so,ooo worth of acrylic paint binder for the West Indies. This is . possibly the largest shipment , of New Zealand-made chemi- i cals, he says. Although profits on exports i were in unit terms, consider- >. ably less than normal inter- j nal margins, substantial benefits had accrued by means of : tax incentives and bonus im- < port licences. 1 Reviewing the internal mar- I ket, Mr Campbell says that all ■ divisions returned satisfactory 1 profits. ’

Increasing acceptance of the company's basic products and further diversification made expansion of production facilities inevitable. The company had, therefore, bought 1} acres adjoining its premises. The release from import control of a major section of raw materials used presented new opportunities to expand product lino and market share.