Cyclone Sees Higher Costs

Press, Volume CVIII, Issue 31868, 21 December 1968, Page 20

Cyclone Sees Higher Costs

Although results by Cyclone Industries (N.Z.), Ltd, Christchurch, for the six months to September 30 were satisfactory, several factors will have an adverse effect later, says the chairman (Mr C. S. Peate) in his interim report to shareholders.

A gradual and general rise! in cost* is being felt through-, out the industry as devalua-i tion and award increases take full effect. Also, higher raw material and labour costs will j not be fully recovered immediately because of com-) petitive pressures. It is expected that overall! sales will remain low until)

late in the financial year because although prices for wool and meat, if maintained, will restore some confidence to the traditional farm market, the effect of this is unlikely to become apparent until the fencing season develops from March through to August.

Next Year's Effect Thus, while it is possible to expect increased sales during 1969 these, if realised, will have more effect on the next financial year than on the present one, says Mr Peate. This will result in increased profitability only to the extent that the company is able to contain rising costs. As announced, the interim dividend was maintained at 3 per cent. The total dividend last year was 8 per cent.