“Money supply cutting building activity”

Press, Volume CXV, Issue 33814, 10 April 1975, Page 10

“Money supply cutting building activity”

(Xciv Zealand Press Association) WELLINGTON. “There was'no doubt that 1975 would be a difficult year, and that the Golden Bay Cement Company. Ltd, would feel effects of reductions in construction expenditure,’’ the chairman (Air I. T. Cook) says in his review with the annual' accounts.

“New Zealand’s internal money supply had been greatly reduced, and this would have its effect on building and construction,” Mr Cook says.

The company has changed the presentation of the accounts for the year to December 31. and they have been prepared for the first time on an equity-accounting basis.

“Changes in the presentation of accounts make comparisons in performance more difficult to assess. However, it is obvious that the group profit of $1,381,522 is disappointing when compared with the six months consolidated profit of $855,984 to December 31. 1973, particularly as the group sales increased from 698,119 tonnes in 1973 to (a record) 718,225 tonnes in 1974,” Mr Cook says. The comparisons given are for the six months only. The company changed its balancedate from June 30 to December 31 in the previous year. “The decrease in profit is attributable to the very substantial increases in operating costs incurred during the year.

“Because of price control, some of these increases had

! to be absorbed by the comtpany, and some could not be, j recovered in prices for a con-: ■siderable period after the! I actual increases had been in- : curred. “Although we are now fac-| jing another year of consider- • (able inflation in costs it now, iappears that, with the recent: price increases, both Wilsons: land Golden Bay are com-: imencing the New Year in a: I more favourable situation i than has prevailed over the past two years. i “With the recognition of the Price Tribunal that our ability to absorb further increased costs no longer exists, we look forward to prompt recoveries by the way of price increases, of proved increases in costs. “The profit performance of the group over the next year will depend on the general state of the economy and the ability of the group to re-

-: cover quickly any future increases in operating costs -(that may be incurred,” Mr > I Cook says. The directors have recoini mended a dividend of 5 per •(cent, amounting to $566,671 -ito be paid out of retained ’• profits. t( Thfe profit of the company s’and its wholly-owned sub--Isidiaries for the year to i December 31. 1974, was i(51,014,767 ($855,984 for the jlsix months to December 31, 1973). f This figure was struck r after providing depreciation r of $716,917 ($304,795) and r taxation of $549,400 ) ($425,000). 1 The equity net profit of the 1 group and associated companies was $1,381,522 f ($855,984) after adding r Golden Bay’s share of I retained tax-paid profits of > associated companies for the - year of $377,700 (nil).