Challenge profit 68.7% higher

Press, 24 February 1977, Page 18

Challenge profit 68.7% higher

[ The group net profit of •Challenge Corporation. Ltd,. I increased 68.7 per cent to i $5,979,000 in the six months j 'to December 31. the directors Isay in a detailed interim, i report. I Group turnover rose 46.5! per cent to $367M. j The profit was after pro-: viding $1,333,000 (52.7 per! (cent) more for taxation at! !$3,864.000. Minority interests I took $15,000 compared with i 517,000 last year, and the! group's share of net profits oft I associate companies increased ' ; $288,000 to $820,000. • Capital profits on disposal!. I of surplus assets was I 1 |51.121.000 compared with!. ; $978,000 in the same period ] last year, making total group:, [profit after taxation from all) j sources $7,100,000. Ij The figures are unaudited. I “The improvement in profit i I is mainly attributable to i buoyant trading by the rural < serving companies—in particular, Wrightson NMA, and,t an improved performance Ji from most other sectors,” the!' directors say. \ “Within the group, export ,f sales increased 95 per cent’ over the same period lastj I year, and considerable con-jt tinuing effort is being made! J to achieve the export targets;,

stated in the 1976 annual .report of the company. ■ “Although expenses increased, the rate was signiificantly less than the increase ,in sales. This reflected a determined effort to lessen it! impact of inflation by the .continuing reorganisation and I rationalisation within all [sectors. We cannot, however, j expect to continue expense savings at this level, and the: full impact of many cost iincreases are only now ret-' i fleeting in our figures. Wej Ibelieve that in the immediate future increased expenses .will be the most significant I factor affecting profits. Referring to the outlook,! the directors say: “In the’ last annual report, an over-, lai! immediate objective of a [I2J per cent increase in pro-! fits was disclosed; from the! i experience in the first half of! the financial year, we expect that the improvement should! exceed 20 per cent. “Consolidated Motor Dis-! tributors—the New Zealand importers and distributors ofi Toyota motor vehicles in: which we hold half the: equity, was restructured. , “CMD has acquired Campbell Industries, Ltd —the plant; at Thames assembling Toyota! Corollas—and the balance of the shares in Steels Motor Assemblies, Ltd, the plant atl Christchurch assembling: Toyota Coronas and Crowns. “The capital of CMD has! been increased, and Toyota ofi Japan has taken a 20 per cent! preference shareholding. CMD: is now posed for further real! growth with complete control! of its own assembly. “Toyota significantly im-| proved its unit sales in 1976; despite a smaller total' market. It was the leading! Japanese franchise, and! moved into fourth position! overall after only 10 years in! the New Zealand market,”! the directors say. They have declared an i ordinary interim dividend of|

15c a share (5 per cent), payable on March 23. ex dividend -•February 25. •| This dividend is at the ‘ same rate as last year, and t will be paid from realised i capital profits except to those L shareholders who have comipleted dividend election I,notices and requested divi- , dends from revenue (taxable ;l sources). Ji “The payment of the divi- : dend from capital profits will ■ give a significant tax benefit! i[to most individual New ZeaHand ordinary shareholders, ■ and therefore substantially . improves the net return from .their investment. It is the . board's policy to continue to fpay dividends from realised; capital profits for as long as I profits from this source are' .available. ■ j “Subject to approval from! • the Inland Revenue Depart-i ment, the available capital! profits after payment of the' ;dividend are $320,000, and; these will increase in the; second half of this year,” the! directors say.