Rising Cost Pressures Trouble LC.I.N.Z.

Press, Volume CX, Issue 32210, 31 January 1970, Page 14

Rising Cost Pressures Trouble LC.I.N.Z.

' (New Zealond. Pre« Aaapciation.) WELLINGTON, Januaiy 30. "Although the ptobtem of rising cost pressures was contained in 1969, it is qlfiar that it Was far from overcome,” the managing director of Imperial. Chemical Industries (N.Z.), Ltd (Mr A. Gordon Robb), said today in his report with the accounts.

“As buoyant conditions continued during the year there was increasingly keen competition throughout industry for trained staff and Work-people over a wide range of qualifications," he said.

“If this intensifies, as appears likely, it could lead to coot increases serious enough to blunt the current thrust for export markets and lead to inflation of domestic prices.” Mr Robb said that after the post-devaluation jump in 1968, the group’s selling price index had risen only 2.8 per cent in 1969, While the New Zealand wholesale price index rose about 5.3 per cent “It is interesting to note that the group index, after absorbing the impact of devaluation, now stands only , 7.3 per cent higher than in

1963, while the New Zealand index is 24.7 per cent higher,” he said.

The group’s external sales exceeded'those’of 1968; by $4.5m, or 13.9 per cent, and reached a total of $37.1m. ADEQUATE CONTROL In order to exploit the new opportunities appearing in the market, Mr Robb said, additional costs were incurred, but there was adequate control and improved efficiency was maintained. “The new business has amply justified the increased costs,” Mr Robb said. These factors are reflected in the 1969 consolidated profit, which reached sl.9m after taxation and elimination of minority interest. “This represents an im- ■ provement of 12.6 per cent over 1968 figure and is

equivalent to an earning rate of 18.3 per cent on Ordinary paid-up capital.” As already announced, consolidated net profit for the year to September 30 was 31,904,299 ($1,690,471), and the annual dividend has been raised from 9 to 10 per cent The consolidated balancesheet shows shareholders’ funds at $13,468,526, compared with $12,599,430 in the previous year. Capital and reserves of minority shareholders in subsidiary companies was slightly higher at $1,747,174. The current ratio was almost steady at 1.57, and working capital rose to $5.7m. Formal Notice Maple Furnishing Com- ; panies, Ltd, advised the New Zealand Stock Exchanges yesterday that formal notice of a take-over scheme, pursuant to the Companies Amendment Act, 1963, had been received from Smith and Brown Holdings, Ltd. Both companies are Auckland-based retail chains.