Commercial A.S.L. incurrs $5.6M loss; dividend reduced

Press, 7 August 1976, Page 17

Commercial A.S.L. incurrs $5.6M loss; dividend reduced

NZPA Sydney Associated Securities, Ltd, incurred a loss of sAusts.6M in the year to June 30, and the annual dividend has been reduced by 1c a share to 4c a share (8 per cent), the chairman (Mr W. L. Fesq) said in a preliminary report.

The loss stemmed from A.S.L.’s decision in January, to put aside SB.2M, as a foundation for placing the group on a more profitable basis.

To achieve this end, the directors decided that the group should concentrate on consumer finance, and reduce its involvement in property. They believe that traditional finance activities will lead to increased profitability for the group in the next few years. A.S.L. made a profit of SI.BM in the 1974-75 year. A.S.L.’s trading position improved in the final six months to June 30, with a profit of SI.4M compared with SI.2M in the six months to December 31.

The $2.6M trading profit for 1975-76, compares with $3.4M previously. Last year’s profit has been restated without tax-effect accounting, following a deci-

sion by two accounting bodies to restrict the use of future tax benefits arising from losses.

The trading profit for the latest year is reduced to an operating loss of $5.6M after providing for the SB.2M provision. A tax credit of $185,000 (SI.SM charged) and an extraordinary loss of $201,000 leaves A.S.L. with an over-all loss of $5.6M for the year. In a review of the group, Mr Feso said that results from finance activities, showed an improvement over the previous year. Substantial development and holding costs resulted in the development subsidiary incurring a loss for the last year despite a $5.3M increase in sales to SISM. A.S.L.’s return on investment in the motor vehicle, leisure and finance industries, had been satisfactory, he said. The Kay Car rental business yielded A.S.L. $730,000,

about $2OOO below the book value.

Looking at the year in retrospect, Mr Feso said 197576 was at times difficult, and the group had been appreciative of the confidence and support extended by its bankers. A final dividend of 2 cents a share (4 per cent) will be paid on October 1. At balance date, the net tangible asset backing of A.S.L.’s 50c shares stood at 100 cents, compared with 108 cents, at June 30 last year.