Odlins profit S2.0M for half-year

Press, 9 December 1976, Page 24

Odlins profit S2.0M for half-year

PA Wellington ' Odlins, Ltd, earned an I unaudited group net profit of S2.OM for the half-year to September 30, after allowing for an estimated $1,530,800 ■in tax. The profit for the previous corresponding period was SI.6M, but this year’s figure includes earnings of Zip Holdings, Ltd, for the first time. The Zip profit included was based on 51.5 per cent for the three months to June 30, which was the percentage of capital held in Zip after acquiring shares held by Consolidated Gold

i Fields of Australia, Ltd. For the three months to September 30 the total earnings of Zip were included. The directors describe the over-all result as satisfactory, and say that the profitability of Zip was better than expected. Odlins, has acquired 99 per cent of the share capital of Zip Holdings, and has taken steps to compulsorily acquire the remaining minority shareholding. Total group sales revenue of $50.0M was up 66.9 per: cent, but when Zip sales of $15.3M were deducted the increase was 16 per cent. “With the exception of housing and land developing, all divisions of the group achieved greater profitability,” the half-yearly report says. An unchanged interim ordinary dividend of 5 per cent (2.5 c a share) is payable on Febauty 28. The economic outlook for next year remains uncertain, but the directors are confident that providing there is no significant adverse change in trading conditions, group profit for the year to March 31 should be quite satisfactory, the report says. Many housing contracts for which permits are issued and recorded are being cancelled because of the financi problems being faced bv prospective home owners, says the chairman (Mr Huia Hill).

“. . . profits declined to some extend, and the period under review has been a difficult one,” he says. “Government policy played a large part in this, with its stated intention of limiting the number of housing starts to below 30,000 for the year to March 31, 1977. “Although there is still a substantial demand for homes, prospective buyers are unable to obtain sufficient finance without including second mortgages at high interest rates.

“This has caused a marked slowing-down in housing, as many first-time prospective home owners have insufficient funds themselves to finance the difference between the cost of the house and the Housing Corporation first mortgage maximum lending limit of $14,000. “Second mortgages at interest rates of up to 18 per cent are being resorted to in order to bridge the

gap. For many, however, this gap is just too large and this situation will worsen as inflation continues,” Mr Hill says. “The recent revision in Housing Corporation len- : ding policy could assist some young marrieds with young families, but even with increased income limits for low interest loans, and family benefit capitalisation, the majority of home seekers will still not qualify for the concessions. “While eligibility has been enlarged, individual amounts available to home seekers remain unrealistic. It is evident that the servicing of outgoings will in most cases require two incomes. “The loan limits should be relative to the value of the home (at least up to 85 per cent as stated in the National Party manifesto) with repayments spread over longer periods, based on table mortgages at low interest rates.

“This realistic approach would encourage people to acquire homes on reasonable repayment terms with no future refinancing problems,” Mr Hill says.