Further profit fall for Tooths

Press, Volume CXIV, Issue 33694, 18 November 1974, Page 21

Further profit fall for Tooths

(Neio Zealand Press Association-Copyright) SYDNEY. Tooth and Company, Ltd, earned 22.9 per cent less in the September half-year, despite increasing its sales 10.3 per cent. But the largest of the two N.S.W. brewers is hoping that its trading result in the second half will enable a recovery to last year’s profit level.

Announcing the fall in halfyear profit from s4.Bm to $3.7m, the directors said there was a “regrettable but simple explanation” for the decrease.

“During the period the company has had to absorb increases in wages, salaries, materials and services withlout having the approval to recoup these costs,” they I said. Work on the brewers’ first submission to the Prices Justification Tribunal, for a rise in the wholesale price of beer, began in February, and the application was lodged in July.

The hearing was set down for September and an increase of 4.3 per cent, against the 5.5 per cent rise applied for, was granted from November 1.

This was the first increase jin the wholesale price of ibeer, except for an adjustment for excise duty granted lin April, 1974, since November, 1972. I Tooth’s general manager I (Mr W. J. Campbell) said a

further price increase would be sought in the very near future. Work on the application was almost complete. Asked to comment on the profit outlook for the full year, Mr Campbell said: “We are hopeful that the increases we have been granted, and hope to be granted, will enable us to keep an even keel this year.”

It would be natural to expect a distinct improvement in the second half’s earnings, as this period covers the festive season when sales are more buoyant, and the brewer will be receiving a higher price for its product. The dividend for the first half is being maintained at 5 per cent and will absorb $3.25m, or 88 per cent of the net profit for the period.

The shares issued in the recent one-for-12 rights issue will not participate in this interim dividend but will rank for the year’s final dividend. The downturn in the group’s interim profit follows a 7 per cent slip in net earning for the 1973-74 year. This decline was the first fall in earnings in 23 years.