Borthwick (A’sia) has small profit lift

Press, Volume CXI, Issue 32542, 27 February 1971, Page 19

Borthwick (A’sia) has small profit lift

The Australian and New Zealand subsidiary of Thomas Borthwick and Sons, Ltd, had a small increase in profit for the year to September 30, despite several serious problems in the meat industry, said the general manager of Thomas Borthwick and Sons (Australasia), Ltd (Mr D. S. A. McFarlane), in Melbourne yesterday.

The latest accounts received by "The Press” are the third set which has been 'available to the public. Since publication became compulsory, the company each year has voluntarily given more information: this year, the results of the Australian and New Zealand divisions have 'been separated. I The chairman (Mr A. M. Borthwick) says that the figures are of necessity somewhat arbitrary, as the two divisions are part of one company, and some figures, such as for reserves and headoffice expenses, had to be divided between the two divisions. However, this does not affect the totals. The accounts disclose that the New Zealand division made a gross trading profit of $1,478,000, of which $1,360,000 was deducted for | depreciation, leaving a profit before tax of $llB,OOO. The tax payable was $72,000 (about 61 per cent), and the net profit for this division “ was therefore $46,000. I For the Australian division, these figures were $3,018,000 Iminus depreciation $932,000 is I pre-tax $2,086,000 minus tax '5250,000 leaving a net profit of $1,836,000. I In any case, the net profit lof Thomas Borthwick dnd Sons (Australasia), Ltd, was $1,882,000. Small decline i As the United Kingdom companies incurred combined tosses of $220,000, and the I United States activities were conducted at the loss of $26,000, the profit of the group fell to $1,636,000, compared with $1,784,000 the year ’ before. Referring to New Zealand trading, Mr Borthwick said that beef exports were profitable, but that New Zealand results were dominated by the realisations of lamb in the United Kingdom, which were reasonably satisfactory but did not come fully up to expectations.

The company had spent about $1 million in alterations to the works, made necessary by the new inspection requirements needed for exporting meat to the United States.

This capital expenditure was financed from the cash flow from Australian operations, and included the loss of export business incurred because of the forced shutdown of some of the company’s works. In this connection, Mr McFarlane said that this would affect next year’s profit margins but that he hoped and thought it possible that the company would show a profit next year. Meat shipments to the

United Kingdom had been the highest for some years, he said, but the company was actively looking for more profitable markets. The company’s main target in this search was Japan, where Mr McFarlane envisaged healthy growth prospects at good price levels. Mr McFarlane said that the loss of the United States and Canadian markets last year had resulted in a drop of 50 per cent in the company’s mutton sales.