C.T.P. expects further loss

Press, 27 August 1977, Page 18

C.T.P. expects further loss

Commercial

Canterbury Timber Products Ltd, expects a further loss in the six months to September 30, says the chairman (Mr O. F. Haylock) in the annual report. This prediction is based

-[On the sales to date, but Mr rjHaylock adds that a small ilincrease in the present level Lof trading would see the I company running profitably. C.T.P. incurred a trading 1 1 loss of $699,947 in the year to March 31. “Much of the period cov-1 ,ered was essentially a time! of market establishment dur-j ing which production was at low levels he says. “Since the beginning of [ ithe current financial year,: sales although increasing! 'steadily, have not quite) i reached profit break-even: i levels.” Mr Haylock says that) iforecasts of future prospects I [must, be made with the ) knowledge that Government: action could affect mat-) erially any prediction. 1 “However, given only a[ [reasonable level of commercial activity, the results of the past year would indicate that a satisfactory result for the current year (should be achieved." I The quality of logs extraicted has been good, despite : the long period which has I elapsed since the storm on 1 (August 1, 1975. A close 'watch has been kept for I deterioration which is expected to become noticeable! next spring and summer. Development of new tech-i tuques, enabled C.T.P. tol [produce fibreboard of a) [quality which found a ready: acceptance by a wide range! of users. ! “Further improvements re-I 'suited in the production of 1 board of improved appear-, ance. This change in method also resulted in a marked increase in production from 100 tonnes a day to 135 tonnes a day. Production exceeded market orders during February

and March, and weekly proI duction was reduced from a I six day three-shift cycle out: of eight days, to four days (of three shifts a day. ( “However, to cope with the increased demand, as 'from August 1, production,: (including a maintenance' shift will be increased to j five days of three shifts a (day,” Mr Haylock says. The success of “Custom-i ■ wood” has been important) ito C.T.P. ) “The wood-like nature of; |the solid edge of the board) (has generated a widespread) ■ range of applications for its) use in furniture. Also, the' ability of ‘Customwood’ I (edges to be stained to be : virtually indistinguishable from natural woods, such as mahogany, opens up new horizons for the manufacturer,” says Mr Haylock. “In a year when all markets are suffering because of the general economic downturn, “Customwood” has been launched successfully. It is continuing to gain an increasing share of a market which has lacked buoyancy,”' he says. Net trading profits for the! year to March 31 were $711,125. compared with a' loss of $179,291 last year. ( The provision for depre-j ciation rose from $4223 to; $735,000; realised tax-) deductible exchange losses!

were $9686 compared with [5100,897 last year. I The charge on interest on fixed term borrowings doubled from $33,355 to $674,526; interest capitalised I as cost of commissioning and : preproduction — deductible ' — was $88,974. The net trading loss for the year therefore was $699,947 against $308,609 the i year before. To this figure I $66,633 should be added, for the estimated unrealised loss on overseas borrowing for the current year. The net loss to be carried forward is $766,580, compared with a loss of $308,609 last year. Total losses carried forward are now $1,319,126. The balance sheet shows that fixed costs increased from $9.7M to $13.8M because of the increase in buildings and plant. Intangible assets, mostly in the nature of preliminary expenses. rose from $846,862 to $1,084,848. Current assets exceed current liabilities by $95,891; the big changes are inventories on the one hand — which stand at more than SIM, and accounts payable at SI.2M. Shareholders’ equity is 51.9 per cent; the funds, at SB.IM. are comprised of SS.IM capital, $4.4M capital reserves, minus SI.3M losses to date.