Neil directors confident

Press, 31 August 1977, Page 37

Neil directors confident

Trading in the housing industry is difficult because of the serious shortage of mortgage finance, but the subsidiary companies of Neil Holdings, Ltd, are continuing to trade successfully, the directors say in the annual report.

“The over-all strength of the group will ensure that it secures an adequate share of the available business in all areas of its activities,” they say.

The directors also add that they continue to view the future of the company with confidence. “All of the subsidiary companies made a contribution to profit.” The group felt the effects of continuing inflation and rising costs. This impact was greatest in the merchandising activities of Turnbull and Jones, Ltd, where, despite a 30 per cent rise in sales, the final result was disappointing because of increased costs.

Action to improve this situation is being taken, they say. As announced, group net profit fell 31.3 per cent to $2,300,710 in the year to March 31, on sales which decreased 26.2 per cent to $5.3M.

The profit was after providing $83,892 less for depreciation at $424,490, and $841,722 less for taxation at

$1,888,429. Interest payments rose $72,308 to $642,804. Shareholders’ funds rose $3,226,179 to $17,503,002, giving an equity ratio of 40.6 per cent. Paid-up capital was increased by a one-for-five cash issue of 50c shares giving $840,000, $872,319 more for capital reserves at $3.4M, and SI.SM more for revenue reserves at S9.OM. The earning rate on average shareholders’ funds fell from 27.3 per cent to 14.5 per cent, and on increased capital it fell from 79.7 per cent to 45.6 per cent.

Working capita! ose $2,782,251 to $20,981 but the current ratio fe om 2.6 to 2.3 to one. The recommende Inal dividend of 4.5 c a hare makes a steady 8c a hare (16 per cent) for the year. The dividend requirement is $747,600 and is covered 2.9 times by the profit. The shares last sold for 98c for a dividend yield of 8.2 per cent and an earnings yield of 23.8 per cent. The price-earnings ratio was 4.3, and the net asset backing a 50c share was 174 c.