Norvic faces a difficult year

Press, Volume CXV, Issue 33804, 29 March 1975, Page 19

Norvic faces a difficult year

Norvic Footwear, Ltd, is facing a more difficult year than last when it earned a record profit and raised the dividend rate.

Since the end of the financial year on January 19 costs had continued to rise, and savings achieved last year may not be repeated, "the chairman (Mr T. W. Perry) says in the annual report.

Delays in getting price increases approved are having a serious impact on profitability. The New Zealand superannuation scheme, and the third step towards equal pay for female employees will affect the current year’s trading, he says.

A drastic slowdown in debtors collections, the need to hold greater stocks of high-priced raw materials, the change to P.A.Y.E. company taxation are creating liquidity problems for the company.

At balance-date working capital was $540,353, and the current ratio was 2 to 1.

As reported the group net profit rose, $76,699 or 53.3 per cent to $220,794. This was after providing $4422 less for depreciation at $59,732, but $40,165 more for tax at $157,571.

The earning rate on the steady ordinary capital of $330,000 rose from 43.7 per cent to 66.9 per cent, providing a dividend cover of 4.8 per cent for the dividend which has been raised 1J per cent to 14 per cent (14c a share). A final dividend of 8c a share is payable April 14. The return on shareholders’ funds of $1,211,612 was 18.2 per cent.