C.P.D. expects lower but satisfactory profit

Press, 31 August 1977, Page 37

C.P.D. expects lower but satisfactory profit

PA Wellington Cable Price Downer. Ltd, expects satisfactory results for the current year, but last vear's performance might not be matched, the chairman (Mr A. L. McLean) said at the annual meeting. “In general there is a satisfactory work-load in the short-term and immediate prospects for most areas of our business are good. “In his fight to reduce inflation, the Prime Minister’s fine tuning, as he likes to call it, includes a dampening of demand for capital goods, particularly those with a high import content. "The market has been slow to respond to this move, but there are increasing signs that it is beginning to take effect. The automotive industry has already experienced a reduction in demand on a nationwide basis, and there are indications that other sectors of commerce will follow suit in the not too distant future. “For our own part, we are fortunate in being associated in the automotive field with Mercedes-Benz, demand for

which remains satisfactory relative to supply, and Toyota, which is one of the [most popular marques in j New Zealand and which has [more than maintained its market share," Mr McLean said.

i “In other areas of merchandising there is an apparent downward movement but it has been very difficult to establish trends as a poor month in any particular area of operations has often been [followed by a much imi proved trading in the following month. 1 “In the contracting field, less work is being offered [for tender, and unless more ’ replacement work becomes [available the industry will be facing redundancy problems in the new year as current contracts reach completion. Our own contracting operations have adequate work in hand to maintain a steady work-flow during most of the current financial year, but the situation is obscure when current contracts come to an end.

“With the exception of Wellington where we are seiously understaffed, while the boilermaker issue remains unresolved, our engineering activities continue to experience a reasonable work-load if somewhat patchy in one or two areas. “Our manufacturing operations have full order books and expect to maintain a high level of activity,” Mr McLean said. By the year’s end, some slowing down in the general overfall tempo of activities, particularly merchandising, must be expected.

“However, we have commenced the year on a good note which will help us to produce a reasonable result for the full year. Our group accounts for the first quarter of the current financial year indicate that our activities have continued on a level commensurate with the latter portion of the last financial year.

“Group turnover for the three months to the end of June is 12 per cent ahead of the equivalent period last year, but expenses have continued to rise with inflation so that net profitability has not changed when comparing the two periods, “One bright spot which has appeared in the present gloomy economic outlook has been the hardening of the New Zealand dollar in relation to the United States dollar.

“In consequence, on the basis of the current rate of exchange, the amount required to repay the balance of our Euro-currency bor-

rowings is approximately $45,000 less than the amount we had already provided for this purpose in our accounts to March 31 last. “This situation could change considerably. of, course, before the loan is actually repaid, but when considering the exchange losses which we have already suffered, or anticipated, it is pleasing to be able to report a small improvement in this situation,” Mr McLean said.