Huge cost increases for B. Pavements

Press, Volume CX, Issue 32461, 23 November 1970, Page 20

Huge cost increases for B. Pavements

British Pavements (Canterbury), Ltd, will have to cope with wage increases averaging from 15 to 20 per cent this financial year, in addition to the 12 per cent wage increase aborbed last year, the chairman (Mr P. D. Paterson) says ip his annual review.

The extent of the increases in labour, materfeils and plant in such a shorit time is greater than ever experienced, he says, and it is continuing. “In a competitive industry these costs will be difficult to off-set. “In addition we shall have the payroll tax for the whole of next year. The estimated amount for this wfll equal the amount needed' for a 3 per cent dividend on ontfinary shares,” Mr Paterson says. The earlier anhotlnced unaudited profit of 1f65,969 is confirmed by the full accounts; it represents a decline of 11.2 per cent on last year's profit. The return on average shareholders' funds declined from 7.6 to 6.3 per cent, and the rate on capital—increased to $420,360 _ by the 1:5 bonus issue—Ml from 24.3 to 17.8 per cent, allowing for the preference dividends. Tax-free dividend The result was achieved after providing $18,500 more for depreciation at $J85,000, and $3841 less for tax at $69,121. The n*ximwn amount of ordinary and special depreciation allowed by the Inland Revenue Department has been written off. As announced, the dividend is maintained at 6| per cent the final 3) per cent is tax. free in shareholders* hands—as was the interim payment of 3 per cent The net profit covers the dividend 217 times. Working capital declined' from $223,603 to $175,097. As the capital expenditure—s62,ooo higher at $286,000 exceeded depreciation and sales by $BB,OOO, the cash position became tighter. This was accentuated by the high level of debtors and work m progress. However, the

planned sale of some property would improve the position, Mr Paterson said. The proprietary ratio is, 75.8 per cent; the shareholders’ funds of $1,068,057 consist of capital of $420,360, and reserves of $647,697.

The Timaru subsidiary, G. E. Tregensa, Ltd, had a very good year, Mr Peterson says, and continues to expand its activities.