R. McCabe profit rose on lower sales

Press, Volume CXIII, Issue 33384, 16 November 1973, Page 14

R. McCabe profit rose on lower sales

(New Zealand Press Association) WELLINGTON, November 15. Although sales were below those of the previous period, through more efficient marketing Richardson McCabe and Company, Ltd, achieved an increase in net profit of $17,542 or 23.2 per cent to $93,361 in the year to June 30.

The increase in total operating expenses was held to 5 per cent above the previous year’s figures and this was a major contribution to increased net profit—the chairman (Mr K. Christie), said in his review accompanying the accounts. The profit was after providing $1978 more at $45,086 for depreciation and $6562 more at $75,873 for taxation. A final ordinary dividend of 7J per cent will be paid, restoring the annual rate to 10 per cent, covered twice by die net profit. This represents a dividend yield of 6.6 per cent, based on the highest price paid during the year for company stock, Mr Christie said. Shareholders’ funds have increased from $932,394 to $977,028. There. is a longterm debt of $302,000 ($202,000). The earning rate on shareholders’ funds was 10 per cent for the latest year compared with 8.5 per cent in 1972 and 11.7 per cent in 1971. Earnings per ordinary (50c) stock unit were 10c (8c in 1972). The current ratio rose from 1.4 to 1.7 to 1. Working capital rose $141,134 to $747,116. The ordinary shares had a inet asset backing of 103 c at (balance date (9.98 c It is difficult to generate sufficient funds v/ithin the company to meet today’s high rates of inflation and before long it will be necessary to seek further funds to preserve liquidity. “The situation is aggra-l I vated by the change to ' P.A.Y.E. taxation,” Mr 'Christie said. In order to improve liquidity, the A.N.Z. Banking Group, Ltd, made a loan in March of $lOO,OOO to the I company repayable over seven years. As security the company entered into a I.E.L. makes offer Australian Continental Resources, Ltd, says it has received an offer for all of its shares at 50 cents a share from Industrial Equity, Ltd. | LEX. said it held 495,000' shares, or about four per] cent of the issued capital.' The Australian Continental! board has not yet met to! discuss the offer but at this! stage, directors strongly advise shareholders not to sell I their holdings.

mortgage debenture over all its undertakings. “In view of the buoyancy of the market and our budget for the current year, I am hopeful that the year to June 30, 1974, will bring better results. However, we are still in the throes of high inflation which is forcing the Government to impose controls on prices and remuneration. “Deliveries from around the world are lengthening, and yet in some aspects our particular market is far more competitive than at any time in the immediate past,” Mr Christie said.