COMMERCIAL Wattie profit rose 21 p.c.; sales 31 p.c. higher

Press, Volume CXIV, Issue 33514, 20 April 1974, Page 17

COMMERCIAL Wattie profit rose 21 p.c.; sales 31 p.c. higher

New Zealand Press Association)

HASTINGS. The unaudited group net profit of Wattie Industries, Ltd. for the six months to January .‘ll rose 20.7 per cent after an increase in turnover of 30.6 per cent, the directors say in the half-yearly report.

The turnover for the latest j .six months was $89.3m and the net profit was $4,239,000. \ Shareholders’ funds at; $60.9m were up 19,8 per cent.! The return of 6.9 per cent on shareholders’ funds for the! half-year was up 0.7 per cent. The return of 4.7 per cent! ion sales is down 7.6 per cent compared with the same period of last year. It was hoped that the re--turn shown for the first half of the year could be main-: tained, but the pressures on costs and labour supply will intensify rather than; diminish during the second! half of the year, the directors: say. “Until Government policy! and world supply situations can be more clearly assessed, the board is adopting a cautious approach to its investment policy in the shorter term, but it can see many opportunities for development in the longer term,” the report says. Sales were about 10 per cent ahead of forecasts for the period. Although, over all, this increase assisted in overcoming rising costs, the Wattie Canneries division fell behind in achieving an adequate return on funds employed after a significant drop in the profit margin on its sales of grocery lines, the chairman (Sir .James Wattie): says. The feed-milling section of Cropper NRM faced a serious shortage of grains! and protein meal and had to !

| cope with the problem of re-i ! covering the rapidly rising i costs of these materials, and with financing bulk purchases where they could be negotiated. . The division had a strong ■ demand for its products and this would continue for the balance of the year, but supplies would be a problem.' j The General Foods Cor-! poration’s plans to meet the rapid growth in demand for' table chicken was proceed-: ing according to time-table,! and the short supply in the last few months would be! overtaken in the latter part! lof the year. It was expected! that modern equipment now: being installed would help : [offset rising costs, which had' been particularly severe in poultry feeds. Production in the J. Wattie I Canneries division had been: satisfactory, but it was! affected by a shortage oflabour. Because of this the division was unlikely to have the level of stocks hoped for, and might have difficulty in meeting all export targets. The profits for the six months were reduced by substantial increases in costs.: The group hoped to widen the range of frozen products for the Japanese market.

. A supply contract with: Green Giant International,! Inc., for exports of canned sweetcorn to Australia had been implemented for this year, and discussions for a longer-term association for the supply of processed ■vegetables would continue. Negotiations for a small in- | vestment coupled with technical aid were being completed with an Indonesian ice-cream company. The benefits of rationalisa-i tion and a more stable, market in Australia continued to be reflected in the current results for Wattiej Pict, Ltd. The company’s! cropping areas were not affected by the widespread flooding, Sir James Wattie says.