Cautious view from Abcal

Press, 4 May 1978, Page 13

Cautious view from Abcal

Sales of Associated British Cables, Ltd, for the first four months of the current year have shown a decline — as forecast in the annual report, the chairman, (Mr A. S. Don) told the annual meeting yesterday.

This was so particularly for building wires and those items used by the appliance, electronic, and automotive industries. With this slackening in demand, production has been reduced and a policy of non-replacement of factory staff at Christchurch and Auckland has been maintained. However, the demand for heavy underground cabling remains firm, and the mains cable plant is working at a satisfactory level, Mr Don said.

The slackening of demand was one of the reasons why the directors thought it prudent to retain 64 per cent of earnings, he said. Even so, the pay-out to shareholders had increased 40 per

cent — from $375,000 to $525,000.

“The prospects for the future are not encouraging but recent indicators suggest we can expect an improvement in our order intake in the second half of the year. Activity in the building industry continues at a depressed level and it is certain there will be no significant upward movement unless the Government is prepared to take positive steps in this year’s Budget to inject confidence into the economy, to lighten the taxation burden for both the individual and for companies in order to encourage investment and increased productivity.

•‘ln these circumstances, careful attention to cash management continues, and the company’s liquidity position remains sound. "However, as the recovery of the economic situation will be slow, investment in further plant and buildings has been deferred until next year,” Mr Dow said.