COMMERCIAL Dunlop N.Z. Prepares For Expansion

Press, Volume CIX, Issue 32253, 23 March 1970, Page 19

COMMERCIAL Dunlop N.Z. Prepares For Expansion

(New Zealand Press Association) WELLINGTON, March 21. To maintain Dunlop New Zealand, Ltd’s, Share of existing markets and to provide for further expansion, the company is planning to make significant further investments in plant in the next few years.

The buoyant conditions in 1969 have enabled it to strengthen its financial resources with this in view, says the managing director (Mr J. E. S. Hammond) in the annual report.

“The economy has in recentj months been very buoyant and it may be that some measure of restriction is necessary in 1970,” says Mr Hammond.

“If this materialises it will be more difficult to achieve the same level of sales in 1970 as we reached in 1969, particularity as 1970 will see the return, after the initial impact of the new tyre regulations, to a more normal level of demand for vehicle tyres. “On the other hand we shall

seek, with continuing emphasis on productivity, improvements to offset the impact of rising costs which may be expected during 1970.” The buoyant economic conditions of 1969 provided good trading opportunities for every division of the company, Mr Hammond says.

Total sales, Which included for the first time those of the Slazenger subsidiary company, were 27 per cent higher than in 1968.

As announced, group net profit increased to $713,647, an improvement of 34 per cent over the previous year’s profit, and return on ordinary shareholders’ funds increased from 11.1 per cent to 12.3 per cent. Throughout the year the Upper Hutt plant worked hard to meet the increased demand for vehicle tyres which followed the introduction of tread depth regulations. Increased production costs, including a 40 per cent increase in the cost of natural rubber, were only partially offset by the higher level of production of new tyres and retreads and profit margins were narrower than in 1968. The accounts show that the result was reached after providing $2167 more for depreciation at $770,654, and $294,166 more for tax at $1,040,919. The 4j per cent preference dividend takes $45,000 (unchanged) and the steady 10 per cent dividend on or-

dinary capital, increased by the one-for-five bonus issue, takes $324,800 ($256,667). The profit covers the dividend 2.1 times. In the consolidated balance sheet paid capital is unchanged at $3.9 million, of which $2.9 million is ordinary: capital reserves are unchanged at $591,413 and revenue reserves rose from $1,757,667 to $2,103,275. Shareholders’ funds are $6,595,000 ($6,249,000).. Fixed asset! are $4,805,518 ($4,753,788), long-term liabilities $1,573,600 ($1,537,977) current liabilities $4,596,602 ($3,482,198), current assets $7,027,426 ($5,983,050), invest ments $96,258 ($71,549) and goodwill $835,688 ($460,868). Sales turnover was $3,737,000 higher at $17,605,000.