COMMERCIAL J.B.L. reorganises for long-term gains

Press, Volume CXII, Issue 32879, 30 March 1972, Page 15

COMMERCIAL J.B.L. reorganises for long-term gains

GV.Z. Press Association) ■ AUCKLAND, March 29. The financial and administrative reorganisation of the J.B.L. group might cause a short-term L pause in the rate of profit growth, Mr J. E. Jeffs, the chairman of J.B.L. Consolidated, Ltd,] an unlisted Auckland Lcompany, says in an) interim report to share-, ! holders.

In his report, which precedes the delayed group accounts for the year to October last, Mr Jeffs says the group is: Considering applying for listing of J.B.L. shares on the New Zealand Stock Exchange. Negotiating to sell up to 25 per cent of the equity in its Australian property companies; Scaling down insufficiently profitable operations, including a large-scale reduction in New Zealand clothing interests to release funds for more profitable activities;

Setting up a nine-man board of directors, including five new members, of J.B.L. executives, for J.B.L. Consolidated, with a five-man New Zealand “Board of Consultants,” including four nonemployee members of the previous J.B.L. Consolidated board.

Mr Jeffs says the reorganisation will enhance the group’s strength and its ability to achieve increased profits.

Property values J.B.L.’s overseas companies would remain subsidiaries of the New Zealand parent company. The report says the month’s delay in presenting the group’s annual accounts has left shareholders somewhat uninformed on the group activities. “Finalising the consolidated accounts for the year to October 1 has proved extremely frustrating,” it says. The group now deals with 12 firms of auditors in different countries, and it has proved time-consuming to achieve desirable accounting consistency. “After consideration of all factors, including professional opinion, your directors have decided to adopt internationally what they consider to be the most equitable and practical method of valuing properties. “This method takes into account the trading nature of the company’s property activities, requirements of shareholders in respect of equity valuation, and the accounting convention of matching costs with revenue.”

In future the directors intend to recommend appointment of an international firm of auditors to act in all countries.

Mr Jeffs, announcing a complete administrative re-

organisation, says rapid i growth and geographic diversification has made it necessary to restructure, to recognise the policy and administrative needs of a diversified and multi-national group of companies. A board of consultants and a board of executives is being formed in each country to co-ordinate policy internationally, and to [administer day-to-day operations in their areas. Extensive group financial restructuring is being carried out, says the report. The negotiations which will probably result in the sale of up to 25 per cent of the equity in J.B.L.’s Australian property companies are at an advanced stage. The expected sale price will show a substantial capital profit to J.B.L. Consolidated. With the introduction of local Australian equity capital, further avenues of borrowing, at present restricted by the Australian Reserve Bank “guidelines” policy, will be available. Areas of operations, particularly in New Zealand, which are either not contributing sufficiently to group profitability nor expected to contribute in the future, will be scaled down or phased out. The substantial amount of funds released .will enable greater emphasis to be placed on more profitable activities. A large scale reduction in the group’s clothing interests is already under way and this will provide additional funds for New Zealand property, fishing and cosmetics operations.