COMMERCIAL Capital expenditure by Ajax G.K.N. high

Press, Volume CXV, Issue 33873, 19 June 1975, Page 20

COMMERCIAL Capital expenditure by Ajax G.K.N. high

r.Vew Zealand Presi Association; WELLINGTON. The capital-intensiveness of Ajax G.K.N., Ltd, is illustrated in the annual report, which shows that machinery to produce I inch diameter bolts at the rate of 185 a minute, cost $304,000.

Last year capital ex-| penditure. which covered various items of plant ordered from overseas as far back' as 18 months to two years ago. amounted to 51.095.00 l — $653,000 in the bolt and nut division at Lower Hutt, and $442,000 in the screw division at Otahuhu. Capital expenditure in the next 12 months is expected to be $636,000, the chairman (Mr J. P. Kincaid) says. Dividend rate As reported the group net profit tor the year to March 31 rose 13.6 per cent to $788,766 or 27.7 c a share. The dividend rate was raised 1c a share to 11c a share (11 per cent) which is covered 2.5 times. Provision is made to pay the dividend from realised capital profits, making it tax-free in shareholders' hands. The principal shareholder.

Ajax G.K.N. Holdings. Ltd (Guest Keen and Nettlefolds of Britain, and McPhersons, Ltd, of Melbourne) has agreed to have its dividend from tax-paid profit, because there are insufficient funds in the reserve account to I meet the full dividend pay-1 ment. The earning rate on share-, holders' funds improved 0.6 > per cent to 11.8 per cent. It is expected that the company will experience a' downturn in the ensuing! year, because of reduced consumer demand. But experience has shown the need for a forward-look-ing capital expenditure programme. which is geared to, I the requirements of the con-| sumer market. Further investment is es-l sential to enable the com-1 pany to take advantage of| the recovery which we arel confident will follow the I

present conditions. Mr Kincaid says. The profit was after providing $68,028 more at $321,028 for a depreciation, but $7780 less at $509,237 for taxation. Shareholders' funds increased from $6,205,861 to $6,681,127. Term liabilities , totalled $407,311 ($282,313) , and deferred taxes $237,392 | ($296,740). Fixed assets were inI creased from $3,758,083 to $4,532,001, and investments I rose from $143,927 to !$171,624.

Working capital

Working capital fell $270,702 to $2.6m and the current ratio slumped from 4.0 to 1.8 to 1.

I Stocks and work in progress rose sl.Bm to s4.lm. Current liabilities included itwo new items, bank overi draft $953,839, and bills payable $1,189,403. The asset value of the 1100 c shares was 234 c cpmI pared with 218 c. The annual meeting is on July 31. The dividend is payable on August 1.