"Ballins looks to future with confidence”

Press, Volume CXIV, Issue 33611, 13 August 1974, Page 16

"Ballins looks to future with confidence”

Trading results of Ballins Industries, Ltd, for the quarter to June 30 were most satisfactory, the chairman (Mr B. J. Wilks) told the annual meeting yesterday.

This continued improvement was being achieved by a combination of increased turnover — 23 per cent higher — and additional efficiencies in production and distribution, Mr Wilks said. “While it must be acknowledged that economic conditions generally, both here and overseas are creating many problems for all sections of the business community, mainly because of the tight liquidity situation and inflationary pressures, I firmly believe that as a result of our forward planning over recent years our group of companies will continue to develop,” said Mr Wilks.

Referring to the company’s new share issue, Mr Wilks said that in mid-June when the board decided to issue the 50c shares at a premium of 40c, the company’s shares were selling on the stock exchange at 143 c.

“While we expected that under normal conditions our share price would ease slightly, no-one could foresee the over-all drop in the New Zealand share market. “A number of major com-

panies seeking new capital have found themselves in the embarrassing position that there is now very little additional benefit for shareholders as the current share price is very close to their new issue prices.” "From time to time one hears the issue raised — why issue shares at a premium and not just at par? Mr Wilks said. "You will appreciate that the issuing of shares at par would result in almost a double number of shares having to be issued to raise the funds required for our planned development programme. “This could be to the detriment of the company as it should be borne in mind that in order to pay a dividend of 12| per cent to shareholders the company must earn a profit before taxation of 35 per cent on issued share capital in order to preserve what the board believes to be a prudent balance between profits paid as dividends and those retained for the company’s continued prosperity.” In a price growth survey of 176 companies carried out by a leading firm of share-

I brokers, Ballins ranked 42nd i and was the leading company in its particular industry, Mr Wilks said. Price regulations were a 1 very contentious issue at the ' moment, Mr Wilks said. The recent statement by ' the Minister of Trade and ( Industry (Mr Freer) that applications for price increases must be processed within 28 days was welcomed by all [ sectors of the business community, he said. ; “1 am aware that there , must be difficulties in draft- ■ ing price-control regulations . which can be readily interpreted by industry and I am . also equally sure that com- ; mercial people generally [ make every effort to con- . form by supplying the rele- ( vant information.” ’ “If the Minister displays ! the same co-operative and i practical attitude in relation ■ to the implementation of the 1 new regulations as he has in ■ trying to eliminate delays, i then I am sure that a numI ber of the very real diffiI culties foreseen by such people as the president of ’ the Manufacturers Feder- : ation (Mr J. D. Bull) can be • overcome.”