City Realities to pay 12%

Press, 14 September 1976, Page 24

City Realities to pay 12%

Commercial

PA , Wellington The directors of Wellington-based property investor. City Realties. Ltd, intend to recommend a dividend of 12 per cent for the year to June 30, 1977. although the company’s dividend has been restricted to 5 per cent for the, latest year.

In the annual report for the year to June 30. the chairman (Mr S. J. Cushing) says that the directors intended to pay a dividend of 10 per cent' for the year, which would have absorbed $19,166 and been covered three times. However, the limitation of distributions j regulations restricted the!

one for the company,” saysi Mr Cushing. The company is to update its articles of association and after the annual meeting on October 4 wiil hold an extraordinary general meeting for this purpose. Among the changes will be the right for the National Insurance Company to appoint a'| director to the board (pro-l vided they hold 20 per cent! jof the issued capital), and jthe reallocation of $lOO,OOO i of share premium reserve to enable tax free distributions to be made to shareholders.

dividend to 5 per cent, and an application to pay the indicated 10 per cent was declined. As already reported, net profit was $57,592 for the year. But the chairman points out that although this !is substantial increase on last year’s figure of $9442. because of the alteration of the company’s capital structure in February, and the consequent expansion ofj business activity, a simplei comparison of the two! years’ results is quite illusory.

;end shareholders’ funds was! 11.3 per cent. • The 5 per cent dividend! takes $9583 and is covered; six times by the profit. Working capital is in! deficit, with the current! assets of $20,405 outstripped; 2.3 times by the current! liabilities of $46,662. ! Shareholders’ equity is; 129.4 per cent: the funds of; ! $512.301 are comprised of! .$350,000 capital, $232,837 capital reserve, $9420 re-i tained earnings in associate 1 company, minus $79,956 ac-l cumulated group deficit.

The report features the company’s activities at the fast expanding Hastings suburb of Flaxmere. The company has been promoting the development of the shopping centre. Mr Cushing says the Colonial Mutual Life Assurance Society has agreed to purchase this development, “In addition to undertaking the initial development a management contract has been concluded whereby City Realties (Developments), Ltd, has a continuing responsibility for the tenanting of the shopping complex. j This secures the opportunity for its participation in further commercial development of the remainder of the land. “Flaxmere village is the first of such ventures and should be a profitable!

The 10c shares last sold ati 32c, for a dividend yield of 1.6 per cent and an earnings yield of 9.4 per cent. The price-earnings ratio is 10.6. and the net asset backing 14.6 c a 10c share.

I The profit was after providing $445 more for depreciation at $6050, and $8549 more for taxation at $9099. Interest payments, at $45,637, were $31,765 higher than the previous year. The earning rate on year-