Ajax GKN Directors Are Confident

Press, Volume CX, Issue 32323, 15 June 1970, Page 16

Ajax GKN Directors Are Confident

The directors of Ajax GKN, Ltd, have confidence in the steady growth and planned expansion of the company, in spite of concern at inflation and industrial unrest, the chairman (Mr L. J. Donaldson) says in his annual report.

The repoi-t confirms group net profit for the year to March 31 at $388,707, after higher charges and tax. As announced, the dividend is held at 8 per cent; it is covered 1.8 times and requires $216,000. The earning rate on unchanged capital improves from 9.3 to 14.4 per cent, and the rate on average shareholders’ funds goes up from 6.8 to 10.1 per cent. The improved trend of demand for the company’s product continued to gain strength, says Mr Donaldson. As a result of this, the budget estimates at the beginning of the year were achieved. “All sections of the company have traded profitably with improved results by comparison with those of the previous year,” he says. “Consolidated sales increased by 23 per cent,” notes Mr Donaldson. “Increased volume of production and

sales enabled absorption of fixed charges, which, together with export taxation rebate, lifted the tax paid results by 54 per cent.” Export Contribution “Export sales have steadily built up from the cautious entry which was made into this field two years ago. During the period under review, sales revenue from exports amounted to $157,300. “This figure only represents direct exports, since the company’s products in the form of components are also being •increasingly exported by other local manufacturers, and as such constitutes additional indirect export sales.” The chairman adds: “Subject to reasonable stability being maintained in the cost structure, the prospects for continued export business in greater volume are promising.” Concern At Unrest But, labour, particularly skilled labour, remains difficult to recruit and replace, he observes. “The industrial labour force is inadequate and when viewed together with rising costs of raw material and aids to manufacture the hazards of forecasting are somewhat intensified. “Indications of an upsurge in inflation and spreading industrial unrest are causing concern,” says Mr Donaldson, adding that directors nevertheless have confidence in the resources of Ajax GKN, steady growth being anticipated.