Ceramco had record exports

Press, 28 July 1976, Page 18

Ceramco had record exports

PA Auckland! A record share of turn-' lover and profit was gen-ii ierated overseas by Ceramco, ; Ltd, in the year to March! ;31, the managing director j(Mr T. E. Clark) says in thej annual report. About 25 per cent of j group profits came from outside the country. Ceramco is now suf-jl ficiently diversified in activi-1 (ties, and markets to even' out performance fluctua-!, tions. “During the more difficult times that lie ahead, some divisions will improve their profit, while others will no doubt feel the consequences ’ [of any downturn in the < economy,” Mr Clark says. “The determination to i eliminate areas of weakness, and expand areas of profit- < strength continues to be a : (cornerstone of our management philosophy,” he says. ; ■ As reported, the record i profit of $2,083,366, was an 1 (improvement of 33.6 per .{cent. Sales revenue was 32j (‘per cent higher at $44.9M.. ' ’[ A final dividend of 7c al [(share (7 per cent), makes a; >; steady 12 per cent annual

(rate on increased capital. ,The final dividend is payable; out of the share premium] laccount on August 16. The chairman (Mr J. C. ! Fair) says that the dividend limitation regulations, (stopped the directors from! recommending a dividend in-: crease, but. their policy is progressively to increase dividends as profits and (liquidity permit.For as long as it is. advan-: jtageous to do so, the direct-! iors have decided to continue] to pay dividends from the! share premium account, sub-i ject to the requirement to! pay a minimum out of pro-1 fits of 5 per cent to protect;, the trustee investment status: of the company. During the year SI.9M ini registered debenture stock] was issued by private placements. a SUS3OO,OOO over-; seas loan was arranged] through the National Bank, ■ secured by bank stock! issued under the debenture; trust deed provisions, and paid-up ordinary capital was] [increased $2,136,570 by four! (issues of ordinary shares. ; After the annual meeting! ion August 18! an extra-] ordinary meeting will be;

held to obtain shareholders’;i {approval for an issue of I; (redeemable specified prefer-) ence shares up to an amount|i of about SI.IM. The issue is]’ ,to help finance fixed, and (working capital require- ii iments. i ! The tax provision by theji group for the latest year,, was lower than in 1974-751 i (as a result of increased; export incentive claims, and.' (the effects of future tax|| {benefits on deferred tax!; adjustments. ! Changes in accounting! (policies to comply with the i requirements of the > Society of Accountants in- s creased net profit $130,084. t i Trading for the three < [months to June 30 was at a < satisfactory level. Sales were i (about 15 per cent up on the J [corresponding period of i {1975, but downturns must be ;

'expected, particularly in the commercial building and (Construction industry. Export business will be (actively pursued and it is [expected that the years sales' {will be substantially in-; [creased especially since a reIcovery has begun in the (main world economies, Mr (Fair says. ! Mr Clark expressed con-; cern that the net earning rate’ lon gross assets employed and; [total sales are both lojv at! [5.39 and 4.8 per cent respec-j [tively, although they showed! improvements on the previous' year. An aggressive marketing! programme in 1975-76 resulted in improved sales of bricks, “which are continuing! to gain an increased share ofj a tight market,” but pros-! pects for this year depend to! a large extent on the housing] activity generated by the! Government. The supply and delivery of! earthenware sewer pipes has been improved by rationalisa- 1

ition of production at Ceramco [plants, which now include the; [Crum Brick, Tile and Pottery! [Company, Ltd, at New Lynn, [which was acquired during! the year. The pipe plant formierly owned by Austin Chalk; [Company, Ltd. was also acquired. and integrated with; A.B. Pipes. Ltd. tn Christ-] [church. I Tile-production at Wairoa, [was increased, and it is! (planned to increase capacity] !at the Carterton factory this] I year. Crown Lynn crockery sales in New Zealand have been, seriously reduced, Mr Clark says, through “over-importa-| tion,” but the effect of this on the company was offset to! some extent by export bust-; ness. Imports cost Crown! Lynn 25 per cent of the home-! market over the past two! years.

: On contracting and ser-] I vices, Mr Clark reports that buoyant demand has con-; tinued, but successful selling' ;iefforts have been counter-! >[balanced in some cases by! (inability to recover all in- ■ Icreases of costs on contracts, [ ilsome of which were priced' ■'two years ago. Marketing of a new modu-l -liar panelised housing system] ‘[is now under way. and attrac-! 1 ting great interest. An architect has been commissioned ito design a modular housing I system which would be packaged for export. Mr Clark gives with each ([division report a series of] (comparative figures. He says' 'lof building and construction- ; [material manufacture that’ 'i sales and transfers were (worth $11,868,425 in 1975-76: Jagainst $8,457,729 the previous year, while total assets dwere $8,106,511 compared [with $7,146,871. '[ Shareholders’ funds were! ,]519,357,082. A year ago they -'stood at $15,366,591