‘The Press’ confident of maintaining business

Press, 26 May 1977, Page 18

‘The Press’ confident of maintaining business

Commercial

The outlook for advertising is clouded, but the directors of The Christchurch Press Company, Ltd, were cautiously confident I that the levels of business i could be maintained, says [the chairman (Mr A. A. [.Macfarlane) in his report on the year to March 31. I The net profit for the year ’rose $73,000, or 23.4 per [cent, to $384,765, after providing $34,127 more at [5123,177 for depreciation, and $51,027 more at $313,824 for tax, including deferred tax of $11,560. The volume of classified advertising increased 18 per cent and display advertising 6 per cent during the year. I "Equally a cause for satisfaction, the company mainI tained its volume of national advertising at a time when i the newspaper industry is meeting intense competition from other media,” Mr Macfarlane says.

Circulation revenue rose 18.5 per cent, mainly because of an increase in the price of daily newspapers 'from 8c to 10c in December, 1975 For the second successive year the company had a daily circulation of more than 74,500 copies. Costs continued to rise; wages, salaries and associated costs rose 18 per cent, [and newsprint 32 per cent. [These two items accounted for 60.6 c of each dollar : earned — wages and salaries [alone took 41.5 c. Total income was 24.6 per cent higher at $7.3M, but total expenses rose 25.0 per cent to $6.6M.

Supplies of newsprint from the Tasman Pulp and Paper Company, Ltd, have been satisfactory and the company has built up a good reserve of stocks, Mr Macfarlane says.

However, there is no end in sight to the steep rise in the cost of newsprint. Since the beginning of 1974, the price has risen from $149.90

to $228.63 a tonne; and after negotiations between Tasman and the newspaper industry the latter has agreed to a further $25 a tonne increase.

The company has continued to study overseas developments in photo-type- i setting technology, and the directors think that the company’s eventual — and inevitable — commitment to the heavy capital investment involved must be made with due deliberation. The company has instituted a staff share purchase scheme, under which interest-free loans are to be made available to staff members wtih more than two years service to enable them to purchase shares in the company. In March. 1977, “The Press” produced a colour pictorial book called “Royal Progress” to commemorate the Queen’s Jubilee and recent visit to New Zealand. This book went on sale within hours of the end of the tour, and more than 28,000 copies have been sold. Mr A. A. Macfarlane, Mr H. C. Greenwood, and Mr A. R. Cant retire from the board of directors by rotation, and being eligible, offer themselves for re-election. The profit for the year [represented an earning rate [of 13.6 per cent on average

shareholders’ funds, compared with 13.4 per cent previously. However, the funds were increased $616,500 by a revaluation of land.

The total increase in shareholders’ funds was $861,266, to $3,268,11(1. A final dividend of 9 per cent is recommended, making a steady annual rate of 14 per cent (14c a share), requiring- $140,000, which was covered 2.8 times by the trading profit. Th'- directors had intended to increase the dividend this year. However, they were not permitted to do so under The Companies’ (Limitation of Distributions) Regulations, 1976, which were extended to August 14. i Net current assets increased $113,889 to ' SI.2M, but the current ratio fell from 3.0 to 2.4 to one. Term liabilities were reduced $11,066 during the year to $91,658, all deferred taxation. Shareholders’ equity in the assets of the company remained high at 97.3 per cent. The net asset-backing per I share rose from 241 c to '327c. [ At 218 c the ordinary [shares had a dividend yield [of-6.4 per cent, and an earniings yield of 17.7 per cent. (The price-earnings ratio was