COMMERCIAL Aust. Chemical profit slumps 53.9 p.c.

Press, Volume CXVI, Issue 34045, 8 January 1976, Page 11

COMMERCIAL Aust. Chemical profit slumps 53.9 p.c.

The group net profit of Australian Chemical Holdings, Ltd. fell per cent to sAust.l.Zm in the year to September 30, says the chairman (Mr J. W. Sadler) in a preliminary report.

Group activities were affected by the continuing; problems of an inflated econcm;. high interest costs and a ick of consumer demand throughout the year, Mr Sadler says. "Most A.CH. subsidiaries report a downturn in profits compared with the previous ' ear and although the value of group sales match those of 1974. the total volume

turnover was considerably r reduced." i The New Zealand subsi-; diaries were also subjected : to severe economic condi- J tions, which have limited i: sales turnover and affected; profitability. However, an• i improvement in profits was noted during the last quarter to September 30. The Australian chemical‘l division was the worst] affected, because of a lack] of consumer demand, aggra-' vated by many customers; reducing excessive in-; ventones after the 1974 buoyant period. But, order; levels improved during Aug-i ust and September. Mr Sad-’ ler says. The engineering division did not reflect the same; downturn for the period! under review, but incurred; serious disruptions during; the second half of the year! when the Metal Trades In-; dustries’ wage negotiations! were before the Arbitration! Commission. A large factory was pur-> chased in October to consol- h idate certain manufacturing: and store activities of the! engineering division. This re- 1 location will improve pro-); duction and distribution efficiency for the wide range; of metal fasteners and hard-i;

ware which the division makes, he says. The extraordinary loss of 5322.000 was mainly caused' by the devaluation of the; (New Zealand dollar, partly) ) offset by profit on the sale ! ! of property. Since the close of the] financial year, sales and esti-j , mated profits have improved. \ [both on budget and last) | year, despite the lack of; business confidence, Mr Sad'ler says. Any impetus to the pri- 1 ivate sector initiated by the] recently elected governments; ) should add to an improving] ] position, but the rate of re-; ) covery is difficult to fore-; cast. i Sales fell $512,01)0 to J )555.1m in the latest financial I year. ) The profit was after pro-; ividing Sl.2m less for tax-) iation at 5886.000, but; ; $104,000 more for deprecia-) tion at sl.2m. j The percentage of net) ; profit to total capital and re-; j serves fell from 10.2 per) (cent to 4.8 per cent. A final ordinary' dividend; of 7c a share (7 per cent); )has been recommended,! •making a steady annual rate! of 13.5 c a share .(13.5 per : cent). The dividend is • pay- j [able on February 27.