Satisfactory year for N.Z. Farmers’

Press, Volume CXI, Issue 32706, 8 September 1971, Page 20

Satisfactory year for N.Z. Farmers’

The group net profit of New Zealand Farmers’ Co-operative Association of Canterbury, Ltd, declined by 12.8 per cent to $360,590 in the year to July 31, the directors announced yesterday in a preliminary report.

In the previous year profit had risen from $388,670 to $413,835; the latest result is the third best in the company’s history. Substantial cost increases, problems in the farming industry, and payroll-tax of $42,000 were the main reasons for the profit fall, the directors said.

A final dividend of 6 per cent will be recommended, making an unchanged total of 10 per cent, payable on October 20, ex September 29. The dividend is covered 1.6 times. Of the final dividend, 2 per cent will be paid from realised capital profits, and will be free of tax.

Because of the heavy inflationary trend in the economy over the last year there had been pressure on working capital, but the ratio of current assets to current liabilities had been sustained at a figure in excess of two-to-one, and bank overdraft was at the same level as in the previous year; the report said.

“Apart from the payroll tax impost of $42,000 which is non-deductible for taxation purposes and also non-recov-erable, the decrease in net profit arose primarily from a markdown in seed stocks at balance date dictated by the portents of a heavy United Kingdom and Continental seed harvest. “This harvest did not eventuate to the extent forecast and our export trading has resumed at a profitable level. “Increased trading revenue in our motor division and retail activities more than offset the substantial increases in operating costs in these departments.

“However, this did not apply in respect to our com-mission-earning departments where revenue has been comparatively static. Commission rates over the whole of New Zealand have been increased for the ensuing season,” the report said. General reserve receives $250,000 and carry-forward is $493,824.