Colonial Mtr profit improved

Press, Volume CXVI, Issue 34146, 6 May 1976, Page 21

Colonial Mtr profit improved

(New Zealand Press Association) WELLINGTON. The Colonial Motor Company, Ltd, increased trading profits in the six months to November 30, by improved efficiency, and control of costs, the chairman (Mr G. B. Gibbons) says in the half-yearly report.

Group sales revenue terms showed a slight increase on the previous comparative period. “The motor industry continues to be the butt of restrictive controls. “The effect of recent economic measures is uncertain, but with the continuation of efficient techniques adopted, and with the wide range of Ford products—including the new Ford Escort 11 available to our subsidiary companies, it is expected that a satisfactory result for the 12 months will be achieved,” Mr Gibbons says. Financial budgeting for a period during which costs increase has been perplexing, and the high rise of the re-

placement value of inventories, coupled with higher interest rates, has resulted in greater costs. With an average stock of j about slo.om, each 10 per cent of inflation means the firm must provide an extra sl.om finance to enable it to carry the same amount of stock. The distortions arising from historical accounting methods are becoming more apparent, particularly in taxation payments based on reported results. Erosion of the true capital value of companies, resultant upon such tax practices, is more grave than is .generally appreciated. The board has made provision for funds to be available to meet current trading conditions, the report says. A steady interim dividend of 4c a share has been declared, payable May 25, ex dividend May 10.