COMMERCIAL Inflation makes Alcan profit inadequate

Press, Volume CXVI, Issue 34130, 17 April 1976, Page 19

COMMERCIAL Inflation makes Alcan profit inadequate

Although the gr marginally in the year t return on the capital c realistic prolit must be J. R. Clarkson) in the an As announced the group net profit rose 2 per cent to $1,036,006 in the rear to December 31. During the year under review new borrowings totalled $591,000. In addition bank term loan totalling $235,000 were taken over when Alcan purchased the entire hareholding of Alcan Frrlong and Maisey, Ltd. ano vers, in which it previously heH a 50 per cent, interest Because of increased bor-

roup net profit of Alcan to December 31, this repre: employed in times of hig considered in real terms, mual report . > overdrafts, interest charges! >jrose $192,000 to $582,000. I ■ The devaluation of the | New Zealand dollar added $990,000 to the amount re-i jquired to repay overseas! i'loans, says Mr Clarkson. ;i Large loan repayments! 'commence ; 1976. and these • total sl.3m at curre.t rates! ;of exchange. Alcan Anodisers, Ltd (for-! merly Alcan l-orlong and iMaisey Ltd), is producing! substantial tonnages of ano-1 •1 k and anotone, and the, company has reached a profitable position. Despite the downturn in ■ the building industry, the affiliate window co.apanies had a successful year. Alcan Cory Met Is. after a difficult first six months because of high stocks and cash prob 1 sms, achieved an improved result for the year as a whole. Although output fell with the reduction in demand from 1974 levels, productivity increased 10 per cent, partially because of the in-] troduction of an incentive! bonus theme, Mr Clarkson says. I “A satisfactory reduction: jin in. ntoiy levels was! ; achieved with the over-all •tonnage of Juminium at the (Wiri plant falling nearly 30 ! per cent from peak levels.” i > Under present economic j j conditions the completion of! I the expanded remelt was delayed, although the new furnace will be working in 1976. “At present business is continuing at the same level as the second-half of 1975 with the shortage of labour again giving cause for concern. “It is hoped that the Government’s new policies may bring about improvements in the economy, particularly in the building industry. However, the directors believe! that there will be no upturn! in the market for the com-! pany's product until towards! the end of the year,” Mr| Clarkson says. The profit was after pro-'

New Zealand. Ltd, rose ' ■sented a very inadequate ( rh inflation, when to be I . says the chairman (Mr ■ I viding $31,919 more for ! depreciation at $568,939, and ($67,164 more for tax at ! $740,219. The provision for : deferred income tax fell I $80.84'7 to $8964. | Shareholders funds rose (from $7,860,886 toi >58,350,698, capital remained; isteadv at $3,034,298. The re-| (turn on average shareholders! 'funds was 12.4 per cent.' : compared with 13.3 per cent! . previously. I Current , assets fell ,$1,097,980 to $7,706,539, but! ' current liabilities rose! ($144,706 to $4,417,975.1 iWor k i n g capital fell [ 1 $1,242,680 to $3,288,564, and! the current ratio from 2.1 to 1.7 to one. As announced a final 5c a share (10 per cent) dividend has been recommended, of which 2.5 c a share will be tax free. The dividend makes a steady annual rate of 9c a share (18 per cent). Shareholders’ equity is 47.7 per cent: the funds comprise s3.om capital. s2.om capital reserves, and ’s3.3m revenue reserves. ! The shares last sold at I : 120 c, fo: a dividend yield of! j 7.5 per cent, and an earnings! ! yield cf 14.2 per cent. The! I price-earnings ratio is 7.0,' and net tangible assets back-i ling 137 c a 50c share.