Stocks, Holdings ahead but cautious

Press, Volume CXV, Issue 33790, 12 March 1975, Page 22

Stocks, Holdings ahead but cautious

(New Zealand Press Association—Copyright) Stocks and Holdings, Ltd, Australian property developer, increased group net profit 3.6 per cent to $2,159,300 for the six months to December 31.

But the board is very cautious in its assessment of the outlook for the home building industry. “The reversal of the Government’s economic policy has, in the past few months, begun to show' signs of general improvement in sales. “However, despite the current availability of finance, the market will not return to normal until home purchasers’ borrowing rates are: reduced to a level in keeping with their ability to pay.

“The substantial reduction in housing commencements generally will lead to a new housing shortage. “Excessive interest rates

only transfer demand for housing from the private sector to the welfare sector, which has at no time been capable of meeting the requirements of the really needy,” the directors said. The half-year result reflected increased revenue from commercial investments, but total turnover declined by 4 per cent. An unchanged . interim : dividend of’ 5c a share, is I payable on April 30. It will; (absorb only 19 per cent of I . the net profit. ; The profit was struck ; after providing $227,800 less ■for tax of $1,703,200, but {528,550 more for depreciation lof $159,992. An additional capital surplus of $103,747 was realised. and the unrealised currency fluctuation reserve was reduced by $471,468 to $573,540 after the devaluation of the Australian dollar in September. The board said that the high cost of some short-term borrov.'ings, and the necessity to carry increased housing and developed land stocks, had adversely affected the result. “Most of these stocks; were sold, but because of; the lack of end finance for our customers, and the inability of many of them to meet the substantially increased borrowing costs, the normal period between a sale, and receipt of the proceeds was more than doubled,” it said.