COMMERCIAL Buntings doing well in export field

Press, Volume CXIII, Issue 33254, 18 June 1973, Page 18

COMMERCIAL Buntings doing well in export field

Export sales of Bunting and Company, Ltd, advanced from 8108,000 to 8150,000 in the year to February 28, the chairman (Mr W. G. V. Fernie) says in the directors’ report with the accounts.

The increase in exports was achieved mainy in sales of brushware to the Pacific Islands, and through sales of brushware components to the company's subsidiary in Australia.

Buntings Windsor, Ltd, the subsidiary formed by the merger of Phenolite Plastic Products, Ltd, with Windsor Products, Ltd, after the takeover of Windsor earlier this jyear, also has export sales substantially running ahead ■of the same period last year.

The exports division contributed substantially to the profit increase, Mr Fernie says, and export prospects this year again look excellent; a trial shipment of wooden brushware components to America has been made in the current year. Referring to trading conditions generally, the chairman says that brushware sales in New Zealand were slow in the first half of the financial year, but that a substantial improvement

occurred in the latter part jof the year which resulted in ■ sales being ahead of the . previous year, The trend has continued in the first three months of the present financial year, Mr

Femie says, “Inflation continues to be a problem, but increased efficiency has helped substantially to offset increased costs,” he says. Commenting on the subsidiaries, Mr Fernie says that the loss in Buntings (Plastics), Ltd, last year has been converted into a satisfactory profit in line with the prediction made last year. I The expected increase in profit from T. Pollock and ■Sons Pty, Ltd, was realised and was most satisfactory. In line with the forecast, Bunting and Company (Fiji), Ltd, made a loss, because of a lack of com production. In the meantime an indirect ■ grant from the Fiji Govrnment is helping to offset fixed (Costs associated with the ■shut-down period. Phenolite Plastic Products, Ltd, made a small contribution to over-all profit; since balance date a major customer has been lost to a "back yarder.” For that reason Phenolite took over and merged with Windsor. Buntings Windsor now make wooden rulers, coat hangers and sundry domestic wooden appliances. During the year Buntings’ Christchurch property was sold to the Ministry of Works, by proclamation for the purposes of the Christchurch Northern Motorway. Date of possession is February 1, 1976. The sale price so far agreed is substantially above book value and cost, but this does not include an amount for disturbance, professional fees, and heating, ventilation and electrical equipment installed in the buildings; the amount due for these is to be determined on February 1, 1976. Since balance date the company’s Ellerslie property has been sold, again at a substantial capital profit. As announced, profit rose by 40.6 per cent to a record $237,941.

The result was after providing $2670 more for depreciation at $92,515, $39,474 more for tax at $191,641, and $22,944 more for interest charges at $40,748: minority shareholders interests took $6843, ! compared with $837 the year before. The dividend has been raised from 10 to 11 per cent; it takes $126,571 and is covered 1.9 times by the profit.

The earning rate on paidup capital improves from 14.8 to 20.8 per cent, while the rate on average shareholders’ funds rises from 9.5 to 11.9 per cent.

Working capital improved from $689,449 to $804,708; the current ratio is 1.7 to 1. Profit retained in the business rose from $54,717 to $111,370, while goodwill of $95,760 was written off in the profit and loss appropriation account.

Of shareholders’ funds of $2,000,043, capital is $1,144,142, and reserves amount to $855,901. Proprietorship is 62.2 per cent.

The 50c shares last sold at 107 c; at that price they yield 5.1 per cent from dividend, and 9.7 per cent from earnings. The price-earnings ratio is 10.3, and the net asset backing a share 87.4 c. The accounts are presented in an attractive form — not elaborate, but concise and informative. Noteworthy are the crisp way in which the profit essentials are set out; another feature is the statement of movements in reserves and undistributed profits. A funds flow statement would make the report even more acceptable.