Print. Pack, keeps ahead of trends

Press, 15 November 1977, Page 24

Print. Pack, keeps ahead of trends

It was apparent that because of improvements in technology and the changing 'demands of many customers, it would be necessary to ensure that the productive facilities of Printing and Packaging Corporation, Ltd, were continuously updated and modernised, says the chairman (Mr I. D. Reid) in the annual report. This entails the introduction of new methods, new equipment, training of specialist workers and the use of new materials, he says. “The executive staff is aware of the need to ensure ! that the product range is iof the highest quality I that can be produced at I competitive cost. “This will involve the introduction of high capacity plant and possibly some rationalisation of present facilities. Indeed, some major items

of plant have been installed during the year, Mr Reid says. In particular, the continuous stationery division has been considerably expanded and the b book-printing facilities have new' printing and typesetting equipment. “These changing trends, both of technology and consumer requirement, impose the need to be updated on overseas trends and several executives were overseas during the year on technical missions. “It has also been company policy to train the maximum number of apprentices legally possible, but not all manufacturers have accepted this responsibility. I “To ensure a reasonable availability of technically trained staff the Government could w’ell consider some sort of incentive scheme under which tax advantages would be available in respect of apprentices under training,” Mr Reid says. At an extraordinary meeting on August 3, the capital of the holding company was increased by 5M 100 c additional shares, made of 1.9 M specified preference shares and 3.1 M ordinary shares. The specified preferenc issue was over-subscribed, and 50,000 of the shares were taken up by members of the staff.

“I am sure that shareholders will agree that greater participation by staff should continue to be encouraged. “The purpose of the issue was to provide funds for capital growth and to meet requirements of working capital.

“The board is aware of the increasing difficulty of protecting liquidity as inflation continues at a dangerously high level. “This is aggravated by the continuing failure of the Government, in its pricing and taxation policies, to recognise the effects of inflation on profitability and working capital requirements,” Mr Reid says.

During the year several n o n-trading subsidiaries were liquidated and their assets transferred to the holding company. As far as equity accounting is concerned, the board thinks that it is pointless, and perhaps misleading, to: bring into the accounts items over which it has no control. For this reason, only dividends received or receivable at balance date, 'are included as revenue.

The annual report, of course, does include the results of all companies, in which Printing and Packaging holds an interest greater than 50 per cent. It is difficult to be qptiimistic about the immediate outlook.

Special efforts must be made to effect the economies required to protect liquidity and maintain reasonable profits in the face of rising costs, without corresponding rises in revenue, he says. As announced, group net profit rose 11.2 per cent to $1,685,123, after providing $95,969 more for depreciation at $1,197,989, $300,861 more for interest at $786,169, and $19,202 less for taxation at $1,184,798. Group sales increased 11.9 per cent to $53.8M. The earning rate on average shareholders’ funds increased from 7.6 to 7.9 per cent.

The dividend of 13.5 c a share is covered 2.2 times by the profit.

Net current assets decreased from $12.4M to SLI.6M; the current ratio is 2.1:1. Shareholders’ equity decreased from 54.5 to 51.1 per cent: the funds, at $21.3M, are comprised of SS.BM capital, $5.9M capital reserves, and $9.7M revenue reserves.

The 100 c shares last sold at 152 c, for a dividend yield of 8.9 per cent and an earnings yield of 19.3 per cent. The price-earnings ratio is 5.2 and the net asset backing 370 c a share.