COMMERCIAL Sharland had unique year, chairman says

Press, Volume CXII, Issue 33093, 7 December 1972, Page 20

COMMERCIAL Sharland had unique year, chairman says

The latest year was unique in that most goods manufactured are controlled by the price justification scheme but wages, raw materials, freights and other costs are still moving against us at a high rate, the chairman of Sharland and Company, Ltd (Mr B. T. O’Connell), says in his annual report.

“We operate in a strictly price-controlled and highly competitive area and are unable to recover the full cost increases. “In practically all areas we have increased sales, but profit margins have been eroded, and have to be carefully watched to ensure that all sections remain economic. “Profitability is being overtaken and in some instances we are finding it necessary to discontinue the manufacture of marginal, slow-selling and loss lines which were once good sellers. This means that replacements have to be found and this is under constant survey with new products being continually developed and market tested,” Mr O’Connell says. Reduced production “After going to considerable expense to set up a plant to can pelagic fish, imports of which had previously been controlled, we suddenly found substantial supplies of the same type of fish from the U.S.S.R., Japan and South Africa were released from import licensing,” Mr O’Connell says. “A considerable amount of fish fingers as well was imported from Northern Europe and this is frustrating when Mill in New Guinea The Fletcher Timber Company, Ltd, has extended its activities to New Guinea with the purchase, for an undisclosed sum, of a 51 per cent holding in Wewak Timbers Proprietary, Ltd, on the northern New Guinea coast Fletcher plans to build a sawmill at Madang to mill tropical hardwood, and expects an anual output of 10m board feet.

the New Zealand fishing industry over-all is capable of producing adequate supplies. In this sensitive industry, the policy of moving away from import selection not only had the effect of reducing the potential production but the processing staff had to be reduced accordingly. Group net lower "It is hoped that now the fisheries sections has come under the administration of the Agriculture Department there may be some prospects of greater support for die fishing industry as a whole. No industry in New Zealand has greater potential for growth and development,” he says. The group net profit of the Wellington-based merchant was $4471 or 1.5 per cent lower at $305,127 in the year to August 31. With a final dividend of 6c a share payable on December 21, a steady dividend for the year of 12 per cent is being paid, but it is entirely out of capital reserves and taxfree in shareholders’ hands. It will require $223,211. The profit was reached after providing $7624 more at $148,601 for depreciation, but $64,110 less at $101,569 for taxation. The reserves of

$3,586,946 are double the amount of the capital of $1,864,092. Shareholders’ funds increased by $111,360 to $5,451,038; the earning rate on average funds eased from 5.7 to 5.6 per cent. Working capital rose by $60,798 to $2,609,646; the current ratio showed a slight drop — from 2.4 to 2.3:1. Shareholders’ equity in the business is 67.9 per cent. The shares last sold at 200 c cum dividend; on the basis of 194 c ex dividend the dividend yield would be 6.2 per cent, and the earnings yield 8.3 per cent. The priceearnings ratio is 12, and the net asset backing for each ordinary share is 300 c.