Rapid expansion

Press, 18 August 1978, Page 7

Rapid expansion

PA ‘ Wellington A. S. Paterson and Co., Ltd, Flourmiller, Baker, and Textile group, will have trebled its size within three years the chairman (Mr G. P. Shirtcliffe) said at the annual meeting. At the end of this financial year group assets will exceed S3SM, supporting a turnover of about S6OM, and 1600 staff, he said. “This expansion has been achieved with rising earn-ings-a-share and dividendpayment capacity, and the board is determined to maintain these precendents when considering proposals for further growth. “Naturally there will be periods of consolidation — all businesses have these, but we know there are good opportunities for expansion, and we will be seeking early benefits for shareholders from them,” Mr Shirtcliffe said.

Acceptances for the company’s take-over offer for Bonds NZ Ltd, to date, added to the existing 49 per cent holding by the A. S. Paterson group, totalled 84

per cent, and were still coming in. “We have now received the consent of the Examiner of Commercial Practices, and will shortly be advising Bonds shareholders of this,” he said. The company was bud' geting for a “useful” increase in pre-tax group profit, excluding • any profits from the Bonds take-over. “Results for the first quarter to June 30 were a little ahead at budget,” he said. The expected improvement related mainly to the milling division, which contributed only modestly last year. “On the debit side, the costs running the business are rising faster than we can recover them and Bonds profits to date are down on the same period of last year. In addition the company's tax rate for the year was an unknown quantity, and the group was also absorbing the annual holding cost of the investment in Food Holdings, Ltd. “Taking all these factors into account, and with the usual proviso relating to unforeseen circumstances, we

■expect group tax-paid profit Tor the year to exceed last, year’s figure,” Mr Shirtcliffe said. A shareholder. asked i about Food Holdings’ involvement in the troubled; Christchurch group. A. B.' ; Consolidated, Ltd in which A. S. Paterson held a 50 per cent interest with Brierley Investments, Ltd. Answer;-— “The directors are satis-! fied that the investment in Food Holdings Ltd, is not' less than book value. When; profits accrue from Food! Holdings it will cease to be! a depressant on our own' profits. Obviously there are! problems, but I must teas-! sure shareholders that we I can cope with them,” he said. A. S. Paterson would’ again be able to pay its final! dividend in the current year! from tax-free Origins.' *T| can’t spell out when we will I have to terminate that ar-i rangement, although we do not have in sight many years when we can continue ” that dividend policy.” Mr Shirtcliffe told another' shareholder, that the group’s; tax benefit from the tax re-| lief on stock value scheme was $66,030 in the past year, and that the increase of 42 per cent in stocks was ■ partly because of the purI chase ai the Elastrator Co, i Ltd, which had different trading patterns to the rest of the group.