J. Rattray raised sales 8.3p.c. but profit lags

Press, Volume CX, Issue 32450, 10 November 1970, Page 25

J. Rattray raised sales 8.3p.c. but profit lags

The profit rose $39 on increased group sales of $20,245,020.

J. Rattray and Son, Ltd, the Dunedin-based grocery wholesaler, raised net profit marginally to $255,310 after an 8.3 per cent increase in sales for the year to July 31.

A decline in gross profit margins because of highly competitive trading conditions, together with an increase of 31 per cent in operating costs absorbed the additional profits from the higher turnover, the chairman (Mr

P. O. Smellie) says in the report. The subsidiary companies, St G. Atkinson and Company Ltd, and R. A. Wilkie and Company, Ltd, showed results very much in line with the parent company with increased turnover, but slightly reduced net profits. The groups results “underline the comment made a year ago that the wholesale grocery trade is faced with the problem of coping with the steep increases in costs from higher wages, and now the added burden of the payroll tax,” Mr Smellie says. The profit was struck after provision for tax $17,349 lower at $218,003 and depreciation $2lO lower at $49,719. The tea department was sold in September, 1969. The earning rate on capital, increased $270,338 by the 1 for 4 bonus issue, declined from 21.6 per cent to 17.6 per cent.

Shareholders funds rose $249,538 to $3,235,545 and the earning rate oh funds declined from 8.5 per cent to 7.9 per cent. The liquidity ratio declined slightly from 2.31. to 2.25.

A final dividend of 6 per cent is recommended, making a steady 10 per cent for the year.