Improved results needed for survival — W. Neill

Press, 15 July 1976, Page 20

Improved results needed for survival — W. Neill

PA Dunedin Improved results by companies are necessary for survival, says Mr J. A. Valentine, the chairman of Wilson. Neill. Ltd. wholesale, retail, and export group. “If wage and price levels increase, as they have done, by more than 30 per cent over the last two years, company profit levels must increase by at least the same percentage,” he said in the directors’ report for the year to March 31.

This was necessary for business to provide the expanding commercial and industrial framework, without which there would not be sufficient or continuing jobs for the increasing workforce.

“The maintenance of the present standard of living in New Zealand depends on achieving increased productivity.

“Too few people in all walks of life, seem to realise that the adverse movement in our terms of trade (export prices relative to import prices) means that we either work harder or have less. “There is no other answer, and strikes and stoppages, and protests cannot change what is an economic fact of life,” Mr Valentine says. Wilson Neill’s net profit for the year represented 1.9 c for each dollar of sales.

“This extremely low figure not only leaves no scope for a reduction m profit margins, but also means that very careful control of all operating costs is essential if the company is to continue earning profits at all.” he says.

The group’s net profit after providing for minority interests and including both equity accounting profits and | extraordinary items was $571,655. This was an increase of 56 per cent, compared with the 11975 result (adjusted on the [same basis) of $364,616.

The profit was achieved on [group external turnover, including commission sales of [the export division, of i526.2m; compared with $20.4m in 1975 it represented a monetary increase of 28 per cent. During the year export sales and commission sales increased by more than 60 per cent to $9.5m, and these sales contributed most towards the increased profit for the year. The profit before tax was 65 per cent higher at $903,787 and provision for tax was $359,880 ($194,609 in 1975), The profit represents 40.5 c a share on average issued capital, compared with 25.7 c previously, and 30.4 c in 1974. The return on average shareholders’ funds rose to 19.2 per cent compared with 13.6 per cent in 1975, and 15.7 percent in 1974. The board is recommending a steady , dividend of 13c, which under existing regula-

Itions is the maximum payable by the company. I The dividend requires [5183,218, and is covered more ‘than three times by available [profit. [ Commenting on the dividend. Mr Valentine says that it was quite inequitable that dividends paid to shareholders could not be in-

creased above that paid last year when most wage and salary payments had been increased over the same period by two general wage orders, and by annual award revis-i ions.

At the company's annual meeting in Dunedin onAugust 4 approval will be sought for the capita! changes! needed in connection with the [ company’s one-for-five nonrenounceable specified pre-j ference issue which willcarry an annual 12 per cent dividend. The specified preference: shares are to convert on a| one-for-one basis on March 31, 1982.