Donaghys sees good prospects

Press, 4 August 1977, Page 20

Donaghys sees good prospects

Prospects for the enlarged Donaghys Industries, Ltd, are encouraging, providing there is no bi" economic deterioration, the chairman. (Mr R. W. M. Greenslade) savs in the annual report. At the end of the financial year the company acquired a major bag and synthetic cloth manufacturing group, Nixon Industries. Ltd and its subsidiary. Polypropylene Products, Ltd. Nixon Industries is New Zealand’s largest maker of hessian, stockinette, calico and polypropylene bags. The integration of this company’s production processes. technical and marketing skills, provides an exciting opportunity for the group to further develop local and export markets, Mr Greenslade says. The demand for rope and

cordage products remains buoyant, and the present growth potential for the company’s specialty food range is excellent. Diversification into synthetic cloth weaving and bag manufacture should provide a substantial contribution to earnings, as well as providing opportunities for further expansion, Mr Greenslade says. The introduction of a 200mile fishing zone would provide the local fishing industry with the necessary stimulant for substantial growth. This could present major opportunities for the company in the manufacture of fishing rope and cordage requirements. Studies are being made to ensure the company’s productive capacity is fully equipped to meet the chal-

lenge of this market potential. he says. As announced, net profit in the vear to March 31, rose $152,710 or 20.1 per cent, to $913,071. The company received approval to make its deferred one-for-three bonus issue and is also planning a one-for-four issue of specified preference shares on capital increased by the bonus. The bonus shares qualify for the recommended 8.5 per cent final dividend. The dividend for the year of 13.5 c a share (13.5 per cent) requires $283,341, compared with $205,710 previously. On pre-bonus capita! the annual dividend equals an 18.3 per cent rate. The balance sheet shows shareholders’ funds up from $5,984,977 to $7,567,741 with issued capital unchanged at

$1,546,000. After the bonus, issued capital will stand around $2,061,000.

Term liabilities were down from $2,334,370 to $1,762,520. Manufacturing problems prevented the food division from taking full advantage of its promotional success in the United Kingdom. However, with rhe installation of new specialised canning equipment these problems have been overcome and production increased. The profit was after tax $93,599 higher at $617,861 and depreciation $38,529 higher at $259,774. The earning rate on capital rose from 49.9 per cent to 59.1 per cent and that on shareholders’ funds rose from 12.8 per cent (aftei adjustment for a $543,253 property revaluation) to 13.5 per cent.