N.Z. Farm Fertiliser to borrow $14M

Press, 31 August 1977, Page 36

N.Z. Farm Fertiliser to borrow $14M

Commercial

PA Auckland. ' The NZ Farmers’ Fertiliser Co, Ltd, expects to be able to obtain the debt finance necessary for its major capital development programme, the chairman, (Mr P, C. Irwin Crookes) says in the annual' review.

It would be necessary for the company to raise up to SI4M by way of loans. About S2M was raised by the recent specified preference share issue and an estimated SSM yield from the sale of the group’s Auckland assets. Late last year the company said it was planning to spend S33M over the next six years in a major development programme. Included in this programme was a $22.5M redevelopment in the Auckland area. A new fertiliser and chemical plant would be built at Runciman, and both the existing Auckland works closed.

I I In the latest year the com- . pany transferred $3,608,143 , to general reserves, compared , w-ith the previous year’s $700,000 transfer, making the total general reserve $7.5M. Shareholders’ funds rose from $20,959,706 to | $25,221,161, helped by the

specified preference issue. ( As announced, the profit in I the year to May 31 rose i 5667,413 or 23,6 per cent to $3,490,941, after tax $154,173 | lower at $2,128,008 reflecting i the investment allowance ! applicable to the new Morjrinsville acid plant. : The profit was the highest I ever earned by the group, and I the demand for chemicals and acids had continued to expand. The group profit was note- ! w'orthy considering that the trading loss of Chrome and Chemicals (NZ) Ltd, which wrote off $107,316 in technical aid. However, it is estimated that this company will have a turnover of "more than $1,750,000 in the current year, which should yield a very good after-tax return. Inflation continued to have a disturbing influence on expenses which rose 25.7 per cent for the year. The most [disturbing increases in total .expenses continued to occur lat the two old Auckland works. : Steps w ere taken to reduce I stocks but a potash shipment, i in transit at balance-date,

meant that the reduction ini stock-value predicted last I year has not been realised. I There have been some en-j couraging signs of an in-1 creased demand for copper: sulphate. In addition, some! export business in agricultural chemicals was generated during the year and there are good possibilities of this improving, the report says.

The provision for depreciation in the latest year was $209,929 higher at $1,483,032. The steady 12 per cent (12c a share) dividend required $1,169,877.

The earning rate on ordinary capital unchanged at $9,748,972, rose from 29 per cent to 35.2 per cent and that on shareholders’ funds improved from 14.2 per cent to 15.5 per cent.