McKenzies Reaps Benefit From Early Planning

Press, Volume CX, Issue 32359, 27 July 1970, Page 18

McKenzies Reaps Benefit From Early Planning

(New Zealand Press Association) WELLINGTON, July 26. A sales increase of 9.5 per cent was among the reasons for the substantial profit rise for McKenzies (N.Z.), Ltd.

In his annual report, the chairman (Mr W. R. Day) says another factor in the 70 per cent rise in profit was a drop of nearly 1.5 per cent in expenses ratio to sales. Group net profit for the year to March 31, subject to taxation, was $1,496,889, compared with $851,103 for the previous year. Expenses for the year were slightly less than the 1969 period, Mr Day says. This was largely because of a planned economic programme commenced two years ago. Overdevelopment of shop-I ping services throughout New Zealand has in no way abated, j he says. It is also considered by < many that the New Zealand; economy is overheated and cooling measures to maintain stability shoulibe prudent. "The recently announced Budget by Mr Muldoon —in particular the 2 per cent pay

roll, tax—will erode the tax paid profit of the company; very considerably,” Mr Day says.

This in turn would affect forward thinking on company expansion. The full impact of this unwelcome Government decision had not yet been determined fully, but tax will affect eight months of the next financial period, he says. “The possibility of Britain's entry into the E.E.C. and the effect on our overseas exports, particularly dairy produce has given the board food for thought, bearing in mind its probable effect on consumer spending power.” Both McKenzies manufacturing units, Roydon Textiles, Ltd. and Manukau Knitting Mills, Ltd, again registered;

satisfactory results, being well ahead of last year. Largely because staff shortages, Roydon's Levin planl has been closed. Part of the operations were transferred to Taihape and the remainder to Taumarunui. Mr Day says he forecasts a reasonably good year fot 1970-71 “in spite of the hazards and difficulties which undoubtedly we will have to face."

Permewan Wright Permewan- Wright, Ltd, general grocery and produce merchants, lifted net profit by $435,415 to $1,678,105 in the year to March 31. This reverses the trend for the first half of the year (the interim

profit was down by $125,675). j