Changes aid profit of Slater Walker

Press, Volume CXIII, Issue 33189, 31 March 1973, Page 13

Changes aid profit of Slater Walker

(N.Z. Press Association—Copyright) SYDNEY, March 30. Slater Walker Australia, Ltd, has confirmed the market’s expectation by announcing an unaudited group net profit for the year to December 31, of s4.om. This eclipses the former record of s3.Bm earned in 1969, and is double the net profit for last year. Provisions for taxation and depreciation were much loxver than last year because of changes in the group’s structure.

The record profit was after a substantially lower tax provision which resulted from the reorganisation during 1971, which enabled past losses to be offset against profits, and the incidence of overseas divided income which had already been taxed in the country of origin. The net effect of these two factors reduced tax provision to 23 per cent of pre-tax profit compared with 43 per cent in 1971. The directors expect these factors to continue "for some time ahead” with a similar effect on tax provision. A final dividend of 4 pei cent has been recommended making total distribution for the year 7 per cent compared with the forecast of 6 pei I cent. In 1971 the interim dividend was passed and a final dividend of 3 per cent was paid. The total dividend for the last year will absorb $2,256,151. The final dividend is payable on June 1 and books close on May 11 Net tangible assets, at. market or independent values, rose 53 per cent to $52.3m. At book values the increase in net tangible assets is more conservative, rising from $29.9m to $31.8m. The group’s chief executive (Mr G. E. Mapp) says the substantial increase in net tangible assets was principally because of appreciation in the value of investments in Australia and overseas. The profit was after providing $344,000 less for tax of $1,206,000 and $782,000 less for depreciation of $936,000, and minority share holders losses of $lO,OOO (profit of $60,000). The significant reduction in the depreciation provision reflects the fact that St James Properties, Ltd,

ceased to be a subsidiary during the year and its accounts are not consolidated in the results. In 1971 the depreciation provision included $745,082 for St James Properties. As a result of shares issued by St James during the year Slater Walker’s holding has dropped to below 50 per cent. A capital profit of $193,000 resulted from changes in rates of exchange between the Australian dollar and certain foreign currencies. The amounts repayable on overseas loans decreased by about sl.sm. Mr Mapp said that the switch in emphasis to financial activities continued with ncreasing profits being ■arned from corporate lending, import and export finance, industrial leasing md investment banking. In the half-yearly report the directors mentioned that the profits of the industrial subsidiaries had been adversely affected by industrial mrest and the general slackness in the economy. Mr Mapp says that in most areas this situation improved in the second half of the year, but over-all profits were still below expectations. The profits of D.H.A. Pharmaceuticals. Ltd, were severely eroded by trading conditions in the industry. Referring to the group’s mining interest Mr Mapp says that Coalex Pty, Ltd, continued work on the large coal exploration areas which it holds in the western coalfields district of New South Wales. Interest was shown in the coal deposits by prospective overseas customers. Slater Walker has a direct 23 per cent interest in Coalex, with the balance being held by St James. Accounts will be posted at the end of April.