J. Rattray sales rose to $25.6m

Press, Volume CXII, Issue 33067, 7 November 1972, Page 33

J. Rattray sales rose to $25.6m

Sales by J. Rattray and Son, Ltd, wholesale grocery merchant, in the year to July 31, rose by s2.lm or 9.4 per cent to 525.6 m the chairman (Mr P. 0. Smellie) says in the annual report.

It is estimated that inflation represents about 3 per cent of the increased turnover, Mr Srriellie says. The company was able to increase its share of the business offering, he says. Group net profit rose by $9748 or 3.8 per cent to $269,013 —a little more than the preliminary report indicated.

The steady ordinary dividend of 10 per cent and 6 and 5| per cent preference take a total of $140,719, with all dividends paid from tax-free capital reserves. The ordinary diivdend was covered twice by the profit after allowing for the preference dividends.

Mr Smellie says that of the remaining capital reserves, more than $lOO,OOO is not available for tax-free distribution and freedom to give shareholders a similar benefit in the future is now,very limited.

He says that the company has now disposed of all the properties made redundant by the programme of rebuilding and redesigning its offices and warehouses.

The company is constantly on the look-out to deploy its resources into more profitable avenues. During the year it investigated a number of propositions, but nothing of a major nature measured up to requirements. However, some smaller developments show promise, Mr Smellie says. The profit was struck after providing $3900 more at $56,940 for depreciation, but $41,846 less at $226,538 for taxation.

The gross profit on trading was $116,351 or 7.8 per cent higher, but selling and administration expenses rose $150,881 or 15.1 per cent. The pre-tax profit was $113,097 or 6.8 per cent higher. Shareholders funds were $164,545 higher at $3,565,060 with paid capital steady at $1,451,690. The earning rate on average funds was steady at 7.6 per cent.

Working capital was $88,579 higher at $2.5m, but the current ratio was steady at 2.2 to 1.

Proprietorship rose from 55 per cent to 56 per cent. The shares last sold at 158 c; on that basis they yield 6.5 per cent from dividend, and 12.6 per cent from earnings; the price-earnings ratio is almost 8.