COMMERCIAL Successful year for J. Mercer

Press, Volume CXIV, Issue 33539, 21 May 1974, Page 18

COMMERCIAL Successful year for J. Mercer

The financial year to February 28 was a very successful one for J. Mercer Industries, Ltd, witli a 12.(1 per cent increase in group net profit, and a considerable expansion of activities which augurs well for the company’s future.

Shareholders’ funds increased $164,603 because of the addition to retained earnings and a capital profit of $87,690 on the sale of the Trentham property. Stocks rose more than $750,000 because of several large uncompleted contracts at balance date, and partly because of the arrival of several large shipments of stainless steel, the chairman (Mr J. Mercer) says in his report. The higher stocks are offset by substantial additions to creditors and bank overdraft; creditors rose $250,681 to $919,167, and the overdraft was $232,632 higher at $621,172. Sundry debtors declined from $961,431 to $834,221. Mr Mercer said that these items should gradually return to normal during the next few months. Working capital improved slightly, from $1,079,237 to $1,207,622; the current ratio is 1.7 to 1. The group net profit of $94,288 was after providing $7292 more for depreciation at $68,028, and $8583 more for tax at $72,233. Interest on fixed loans rose $6848 to $36,608. and payroll tax took an additional $18,497 The ordinary dividend is unchanged at 124 per cent, with the final of 61 per cent

.payable from realised capital profits. I The earning rate on averI age ordinary shareholders’ funds, allowing for the preference dividend, is 7.7 per cent. The ordinary dividend is 2.8 times covered by profit available to ordinary shareholders. During the year the company opened its Petone factory, completed a new factory in Rotorua, extended its Auckland factory by 50 per cent and doubled its leasehold premises in Mos-