Hard time for N.Z.L.L.

Press, 8 March 1978, Page 14

Hard time for N.Z.L.L.

It was proving difficult for New Zealand Light Leathers. Ltd. to achieve the same profitability as in the last year to September 30, said the chairman (Mr L. C. Ryan) at the annual meeting in Christchurch yesterday. The volatility of new material costs, and the diverse markets the company served precluded an accurate forecast of results for the 15 months to December 31, he said.

Pelt prices were remaining

firm, but last year's substan- ; tial increase had not recurred, and profits to date did not reflect the gain from opening stocks which the company enjoyed last year. I “Additionally, high in-i terest rates on increased working-capital have added significantly to the group’s running costs. “There has been a further increase in the level of pro-i duction, but the market wasi sluggish in the three months to December 31. “It was not until after Christmas that demand showed any real strength and, although sales to date are ahead of the corresponding period of last year, they are still short of target,” Mr Ryan said. ’“The growth of the tanning industry in developing; countries, and the level of their exports of finished products, is having a marked effect in the established markets which have been traditional buyers of New Zealand lamb skins. “In turn, the tanners in these markets are aiming for more sophisticated products of a higher quality, and against this background, it has been necessary for N.Z.L.L. to be constantly; alert, and innovative in the

; development of new tannages. I “The interest shown in the new products introduced last year has encouraged the (company to put them into regular production and further developments are currently being initiated,” said Mr Ryan. Mr Ryan and Mr T. C. B. Cooper were re-elected to the board, and Mr J. A. G. 'Fulton, director of The Canterbury Frozen Meat Company, Ltd, was elected unopposed on the retirement of Mr H. H. Elworthy, who also recently retired as chairman of C.F.M. No dividend was recommended to the meeting, but in the annual report Mr Ryan ■said that if the present profit trend was maintained a .dividend might be possible in the present financial year to December 31.