COMMERCIAL Challenge profit almost halved

Press, Volume CXV, Issue 33933, 28 August 1975, Page 18

COMMERCIAL Challenge profit almost halved

The group net trading profit of Challenge Corporation, Ltd, was almost halved in the year to June 30, but capital profits on the sale of redundant properties raised the profit to a figure 31.5 per cent below’ that of last year.

After adjusting for minority interests but including capital profits the figure for , the latest year was I $6,393,000. The chairman (Mr R. R. ;Trotter) says in the preliminary report that this profit represents earnings of 23c a I share.

The net tax-paid profit for the group on the year’s trading operation was, subject to audit. $4,654,000 — which compares with the result for the previous year of $9,003,000.

Increased sales of proper-1 ties rendered surplus by the merger in 1972 were achieved, and have resulted in capital profits of $1,796,000 — compared with $976,000 last year. Taxation for the year amounts to $3,692,000 compared with $6,922,000 last year. An unchanged final ordinary dividend of 7| per cent has been recommended, and will be payable from share premium reserve and realised capital profits. It will be tax-free in the hands of most individual New Zealand resident shareholders, thus significantly increasing the effective yield on their investment. Those ordinary shareholders who have so elected will be paid their final ordinary dividends from revenue profits, and these dividends 'will be taxable. This final ordinary dividend, together with the interim dividend, makes a total distribution for the year of 12J per cent. Although the rate of dividend is unchanged from last year, the proportion paid from capital reserves has been significantly increased. Sales turnover in the New Zealand non-rural sector was a record, and results were close to last year. The lower net eamings of WrightsonNMA, Ltd. in New Zealand, and Wright Stephenson and

Company (Aust.) Pty, Ltd, in Australia, reflect the difficulties of the farming industry — and were almost entirely responsible for the 31 per cent drop in profit from last year’s record level of $9,333,000. “The result reflects a generally excellent performance of the corporation’s manufacturing and retail subsidiaries,’’ says Mr Trotter. “Some

involvement in the rural sector can be expected this year as a result of devaluation and the announced floor prices for meat and wool.” Final dividends will be payable on October 29, and will absorb $3,690,000, of which $1,208,736 will be paid from share premium reserve and an as yet unascertained amount from capital profits, Mr Trotter says.