Profit Rise No Reflection Of Deanes’ Activity

Press, Volume CX, Issue 32322, 13 June 1970, Page 14

Profit Rise No Reflection Of Deanes’ Activity

Although the group net profit of Deanes Industries, Ltd, rose by 20.6 per cent to $141,350 in the year to January 31, the increase does not clearly reflect the level of the company’s activity, the chairman (Mr T. W. Perry) said in his annual report.

Continually rising costs prevented a proportionate increase in profit. The company has exercised great restraint in pricing, in order to help stop the wageprice spiral, but its products have a high labour content, iand the company cannot abjsorb these costs without a reduction of gross profit margins. The good result was achieved only after great efforts, Mr Perry said. The profit was struck after higher provisions for depreciation and taxation.

The earning rate on the slightly higher capital improved from 21.7 to 22.6 per cent.

As announced, the dividend is maintained at 9 per cent, with a tax-exempt final of 4} per cent.

Sales in the current year are showing an encouraging increase.

Mr Perry says that there are adequate facilities within the group to support a much greater volume of production with only marginal increases in fixed costs.

“However, intense competition for labour is forcing

many manufacturers into a relatively uneconomic decentralisation of manufacture in their search for staff, leaving existing factories operating below maximum capacity,” says the chairman. The balance-sheet shows shareholders’ funds at $1,260,963, against $1,228,475. last year. Minority interests

of $lOO,OOO have been eliminated. Working capital has improved from $1,158,535 to $1,284,228 with bank overdraft $170,124 (last year' $158,112) and stocks $1,264,936 ($1,169,283). Fixed assets have been increased from $448,474 to '5575,762.