COMMERCIAL P. Impey profit higher than first thought

Press, Volume CXIV, Issue 33700, 25 November 1974, Page 20

COMMERCIAL P. Impey profit higher than first thought

(New Zealand Press Association, AUCKLAND. The net profit of Phillipps and Impey, Ltd, Auckland glass, paint, and hardware merchant, rose by 21.8 per cent to $618,529 in the year to August 31 — about $16,000 more than announced in the preliminary report.

In addition, $68,006 was ■ recovered in the sale of the I Hamilton property, which| also yielded a $175,513 capi-i tai profit. | The dividend has been; [ raised from 12) per cent to; 15 per cent equivalent to 18 iper cent on capital before (the one-for-five bonus issue. A further issue of debentures is being made, seeking up to $500,000, and offering (interest of 10 per cent for i four and five-year term.;. At

November 15, $90,000 had Ibeen received. i In his review with the! lannual accounts, the manag-i ing director (Mr S. C.[ i Browning) says that sub-1 stantial cost increases, particularly in wages and sala-i ries, were experienced during the year. Nevertheless, buoyant .trading conditions prevailed, and sales were expanded 18 per cent. All operating divisions contributed to the profit increase. Hardware and glass both benefitted from the high level of building activity, and wallpaper trading showed a substantial improvement. The demand for Samson paint products continued to grow, and production was up substantially. While the over-all result was satisfactory, “the contribution from this subsidiary was les>s than the increased volume throughput should have provided.” Substantial increases in raw material and solvent: prices were experienced and,: as the industry has been; under price control, it was not possible to increase ■ prices quickly enough, or to a degree sufficient to recov-. er additional costs in full. After a static price structure for more than two years, the; company was able to apply : price increases in March and June this year. Recent addi-, tional raw material price in-1 creases would make it essential for prices to be adjusted again soon. Tfie property in Victoria

Street, Hamilton, has been sold and land had been bought for development of a warehouse, but leasing of the old premises would continue for the next two years.

While the climate for ! business activity was ex- : pected to worsen over the next few months, the current level of turnover was satisfactory, and the company expected that a reasonable demand for its goods and services would continue. The result w?.s after depreciation, $15,436 higher! at $127,637, and tax up! $99,015 at $481,877. The> 15 per cent dividend required a total of $244,634. The earning rate on capital improved from 30.3 per cent to 37.9 per cent, and on, average shareholders’ funds, j from 12.5 per cent to 13.5; per cent. Shareholders’ funds werei $538,315 higher at $4,850,077, including capital raised by $271,815 to $1,630,891 by the bonus; I issue. Term liabilities were ! $289,006 higher at I $1,197,006.