Skellerup Expects Improved Trading

Press, Volume CVIII, Issue 31828, 5 November 1968, Page 22

Skellerup Expects Improved Trading

Skellerup Industries Ltd, the Christchurch-based plastic and rubber manufacturer, expects some improvement in trading conditions, says the chairman and joint managing director (Mr V. R. Skellerup) in the annual report.

If all projects envisaged during the current year are brought to fulfilment, then the group should have its most rapid period of expansion for some time, he says.

The group profit for the year to March 31 rose 3 per cent, or $23,199, to $787,871 after providing $29,401 more for depreciation at $336,681, but $63,644 less for tax at $711,054. During the year, one of the subsidiaries recovered taxfree losses’ incurred in previous years. All subsidiaries made a profit. Dividend Cover The steady total dividend ' of 15 per cent again requires $159,476, and after the $20,000 preference charge is covered 4.8 times by profit. The earning rate on average ordinary shareholders’ funds is down from 13.6 to l 12.6 per cent while the rate ’ on ordinary capital is up from i 70 to 72.2 per cent ' The group is well equipped 1 to take full advantage of the 1 opportunities that may occur and should benefit consider- ■ ably in the future from the ' current programme of de- ’ velopment says Mr Skellerup. ! The latest year’s results ’ have been achieved in a period in which trading conditions have been quite difficult. ] Export sales continue to i improve, especially under the i impetus given by devaluation. I

In the latest year, export sales doubled. The manufacturing divisions had a more difficult year because of increases in wages and the price of raw materials. Results, however, proved better than appeared likely at an early date, and the factories are poised for considerable future growth. Dominion Salt, Ltd, in which Skellerup has a third interest, should pay a dividend during the current year. This will be the first financial return to Skellerup from a project it began in 1941. Shareholders' Funds Shareholders’ funds are $636,676 higher at $6,756,965 with ordinary capital steady at $1,063,167 and preference capital unchanged at $400,000. Capital reserves are $23,461 higher at $980,989. Fixed assets are $213,993 higher at $3,339,261, while investments and advances are $1376 lower at $539,914. Term liabilities are $34,016 lower at $454,522. Working Capital Working capital is $616,125 higher at $2,943,230 with the ratio being 2.2:1. Current assets are $320,579 higher at $5,395,809, and current lia-

bilities down $295,546 at $2,452,579. Inventories are up $337,764 to $3,948,236, while debtors are down $41,576 to $1,373,920. Bank overdraft is down $265,218 to $667,682, while creditors are up $33,316 to $904,367.