Costs Affected L. D. Nathan

Press, Volume CVIII, Issue 31831, 8 November 1968, Page 14

Costs Affected L. D. Nathan

The previously announced 6.8 per cent decline in group earnings for L. D. Nathan and Company, Ltd, Auckland merchant and manufacturer with hotel and brewery interests, results mainly from sharp increases in tax and depreciation charges. As disclosed in the preliminary report, group net profit fell $40,877 to $563,942. However, the full accounts reveal that this is reached after providing $129,909 more for tax at $815,033 and lifting the depreciation vote by $94,699 to $631,072. The result excludes minority interests, up $29,106 at $233,700. The main change to the accounts during the year is the bringing in of Innes Tartan, Ltd, as a subsidiary by purchasing one share from the 50 per cent partner, Schweppes N.Z., Ltd.

The chairman (Mr L. D. Nathan) says that the change is largely one of accounting, but it does affect tax, assets and other items in the accounts.

The steady 10 per cent dividend requires $19,032 more at $347,478. The company has provided $50,000 for computer installation costs and $150,000 (previously $152,500) to general reserve leaving a carryforward of $775,242 ($758,047). As the result of shareholders' funds rising sharply by $755,241 at $7,029,839, the earning rate falls from 9.6 per cent to 8 per cent

Mr Nathan says that the reduction 'in profit is -attributable largely to higher operational costs over many segments of group activities, and reduced profit margins, particularly in the merchandise distribution field.