COMMERCIAL Mason hopes to gain from higher demand

Press, Volume CXII, Issue 32972, 19 July 1972, Page 25

COMMERCIAL Mason hopes to gain from higher demand

(New Zealand Press Association)

AUCKLAND, July 18. A marked decline in the sales of capital equipment made the year to March 31 a difficult one for Mason Industries, Ltd, but there were now signs of renewed buoyancy in the economy and a return of business confidence, the chairman (Mr J. C. Souness) says in the annual report.

The company was well placed to take advantage of improving conditions, given reasonable stability of costs and labour relations, he says. The net profit, as indicated earlier, fell $127,802, or 43.3 per cent, to $167,115 despite a 6.8 per cent increase in turnover to $11.7m. Apart from the decline, in the capital equipment market, the set-back was also caused by difficulties in the engineering company, which suffered a loss of $140,000. The Mount Wellington boilershop was closed. The foundry and engineering sections of this subsidiary were profitable. Referring to the strike over redundancy payments after reduction of boilermaking activities at Pakenham Street, Mr Souness says that it was evident from the terms of the settlement that the strike was unnecessary and clearly being used as a test case with implications far beyond any one company’s control. He deplored

that for so long neither the Government nor the Federation of Labour were willing to involve themselves in a constructive way. The merchant subsidiary slightly increased its sales, but because of higher costs earned less. Record sales of packaged boilers were made by Mason Anderson, Ltd, Christchurch. The oxygen and acetylene plant installed in 1964 had become fully loaded and new equipment had been ordered for which buildings were under construction. The enlarged facilities were to become operative at the end of October. Mason Anderson achieved a breakthrough in the Australian market with the installation of one of its boilers in a Sydney confectionery factory. Australian National Industries, Ltd, will market the company’s boilers in Australia and it might manufacture units under licence. The Christchurch foundry was being expanded to give it

the capacity needed to meet the casting requirements of the automotive and allied industries. It had begun to cast brake discs, front hubs and clutch housings for Ford’s new Win factory—a contract expected to be worth more than $750,000 over three years. Anderson was also expanding its packaging machinery activities. Activities of Mesco, Wellington, will be centralised at Petone. Rising costs and increased competition in the company’s specialist lines had made it harder to win export contracts. Exports were below the previous year’s record, but boilers continued to sell well in the main market in SouthEast Asia.

Safeguard Supplies (50 per cent owned) and Weldwell (33 per cent owned) increased sales and profits. The result was after providing $18,233 more for depreciation of $196,743 payroll tax of $60,598, and $134,912 less for income tax of $130,375. Minorities of $2097 were down $554. The earning rate on shareholders’ funds dropped from 8.8 per cent to 4.3 per cent and on capital from 15.9 per cent (adjusted for the note conversion) to 8.3 per cent. The steady 8 per cent dividend took $147,067 and the preference dividend $14,000. Shareholders’ funds rose $443,011 to $3,995,138, including preference capital of $250,000 and ordinary capital raised by $400,000 in the note conversion to $1,838,339.