Commercial Boost too late for Airwork

Press, 6 August 1976, Page 14

Commercial Boost too late for Airwork

The recent improved outlook for aerial topdressing did not come early enough to prevent a fall in net profit of Airwork (New Zealand), Ltd. in the year to March 31. says the chairman (Mr J. B. Brazier) in the company’s annual report.

i creasing demand, Mr Brazier says. j Sales declined only ■slightly, from $3,006,377 to ! $2,930,530, but expenses — I although well held, and actually $28,614 lower — I amounted to $2,920,854. After adding $12,961 in tax-, [able insurance recoveries,; [and deducting $8312 for taxation, the net profit of [514,325 was left. Last year $38,406 was recovered on insurance, and $34,509 provided for tax. j The provision for depreciation this year was $3439 more at $63,008. i The earning rate on average shareholders’ funds' is ' 12.1 per cent. ; The dividend is unchanged jat 10 per cent: it takes ■ ; $20,304 — covered 0.7 times [ by the profit. • Net current assets im- ' proved slightlv from $472,060 to $472,744; the, current ratio is 1.6 to 1. j Shareholders’ equity is ■ 38.8 per cent; the funds — j $78,322 higher at $717,200 —are of $203,040 capital, $68,000 preference capital, < $47,560 capital reserves, and • ($398,600 revenue reserves. ; The shares last sold at 98c ■

issued in New Zealand fori the general aviation industry'’ I restricts the efforts of the: aircraft sales division. Al-1 though representations have; been ade to the Government; lon an industry basis, no al-| iteration has ’ been agreed.; The volume of sales does not quite allow this division; ■to be profitable. Since bal-i ance date, however, the; interest shown by prospec-j itive purchasers is encour-j agmg. The general engineering division faced a downturn in I the demand for farm and; avia'ion-loading equipment, during most of the year, and; [this division did not contrib-; jute to profit. Management;, has been reorganised, and!’ with the improved sales; enquiries this division souldi regain profitability this year. I Five aerial topdressing p loaders are being manufac-l cured for export to the; Middle East, for example. The facilities and build- 1 ings at Christchurch Airport are now nearing completion and the expected occupation in September will allow ■ many administrative advantages and a greatly enlarged engine overhaul shop toil icope with the continually in-1

Nevertheless, the profit of $14,325 was a ‘‘reasonable recovery” from the position) at the half year — a loss of; about $14,000. The aircraft engineering division performed credi-j tably. the additional businessj obtained from the overhaul of helicopters was welcome,' and is exhibiting increasing potential. The facilities at Levels Airport, Timaru have been enlarged to cope, Mr Brazier says. The materials division's sales were slightly down ini dollar terms but with contin-[ ually increasing prices the! unit volume might show a significant decrease. The recent boost in aerial i topdressing did not start early enough in the year to allow the agricultural division to reach profitability, but the continuance of the fertiliser subsidy and application bounty is maintaining a strong demand. The removal of either of these farm assistance programmes would in Mr Brazier’s opinion be disastrous to the industry and, in the longer term, to New Zealand's farming productivity. He says the system by, which import licences are!

for a dividend yield of 5.1 per cent, and an earnings yield of 3.6 per cent. The price-earnings ratio is 27.6 and the net asset backing (after allowing for the preference shares) 160 c a 50c [share.