NZTS total profit rose 34 per cent

Press, 4 July 1978, Page 20

NZTS total profit rose 34 per cent

NZTS Holdings, Ltd, has reported an increase of 34.0 per cent in total net profit of $2,199,730 for the year to March 31.

Sales, including those of recent acquisitions, rose 31 per cent. The group's net trading profit rose 13.2 per cent to $1,877,977. Substantial capital profits of $321,753 were realised, compared with a loss on capital items of $12,791 in the previous year. The capital profits were earned mainly from the sale of the Wellington land and buildings after the merger of the NZTS services and Victoria Laundry in the modernised Petone premises. Capital profits were also made from sales of shares in other companies, properties, and other miscellaneous items. The net profit for the year was after the provision for current and deferred tax of $1,246,270 (last year

$1,361,698), which includes a tax-saving arising from a trading stock valuation adjustment of $96,000. Depreciation for the year amounted to $1,013,707 compared with $788,753 in the previous year.

The accounts include, for the first time the new acquisitions —Snowhite Laundries, Ltd, and Victoria Laundry, Ltd—which produced only modest contributions. These businesses have now been integrated with the NZTS branches, and the combined facilities modernised to include the group’s standard production, and handling systems. This rationalisation included the sale of the former Snowhite businesses at Queenstown, and Alexandra. The consolidation of the new acquisitions will ensure satisfactory future contribution to group results, the report says. Although earnings a share fell to 24c, compared with

25.2 c last year, the reduction is more than accounted for by the one-for-six bonus issue made during the year. Shareholders funds increased to $12,269,362 from $9,775,789, mainly because of the increased retained earnings, and revaluation of properties. The return on shareholders funds fell to 17.1 per cent from 17.9 per cent last year. Shareholders equity remains strong at 61.9 per cent. The range of services provided by the group to a broad base of industry and commerce, including the tourist industry, and involving many thousands of customers, provides a buffer against major fluctuations in the country’s internal economy, the directors say. Recently, the group has been strengthened by expansion and diversification in Workwear, Ltd (textile manufacturing and safety apparel division), NZTS Services, Ltd (leasing linen, garments, towels, and DST control division), and Automatic Beverage Machines (NZ), Ltd (importing, vending, and beverage wholesaling division). The directors recommend a final dividend of 5c a share (10 per cent) of which 2c a share (4 per cent) will be paid from realised capital profits, and thus be tax-free in shareholders’ hands. This, along with the interim dividend of 4c a share makes a steady total dividend of 9c a share (18 per cent) for the year.

This year’s dividend is effectively a 16.6 per cent increase on the pre-bonus issue capital. The total dividend required is $703,439, and is covered by earnings 2.7 times.

The final dividend will be paid on August 26.