Commercial A. F. Co-op 1:8 bonus

Press, 19 August 1978, Page 18

Commercial A. F. Co-op 1:8 bonus

PA Auckland Allied Farmers Co-oper-ative, Ltd, increased net trading profit $324,000 or 27.8 per cent to a record $1,489,000 in the year to June 30. This being the company’s seventy-fifth anniversary, the directors have recommended a one-for-eight bonus issue. The profit rise came after a difficult first six months, in which earnings declined 2 V per cent to $323,000. The directors said at that time that a decline for the full year was expected. In his preliminary review, the chairman (Mr D. L. Hazard) describes the turnaround as ‘‘a sort of Alice in Wonderland situation — a kind of instant recovery created solely by Government action.” The amendment to the Moneylenders’ Act relieved the group of the burden of lending money to farmer clients at lower than the cost. Secondly, the stimulation of the economy brought a quick response in the same areas to the promise of increased farming incomes.

For the year, there were improved earnings in merchandise and most subsidiaries, and interest income, but lower earnings from livestock, motor divisions, and real estate. In addition to the trading profit, there were capital profits of $475,000. This comprised a profit of $335,000 on the sale of properties, and discount of $140,000 on the repayment of a debenture to Crown Consolidated, Ltd. The earning rate on average funds was up from 10.3 per cent to 11.3 per cent. Revenue rose $2,287,000, or 4.9 per cent, at $49.3M. Costs and expenses rose 4.9 per cent to $47.1M. Taxation was $247,000 lower at $653,000; this was helped by a stock rebate of $172,000, and export incentives. The annual dividend rate is being held at 14 per cent with a final of 8 per cent (8c a share). Mr Hazard says that there should be no difficulty in supporting the dividend at the present rate on capital increased by the bonus.

The meat export subsidiary, Farmers’ Meat Export, Ltd, handled a reduced number of cattle, killing space was not available, although the subsidiary serviced a bigger area. The group has recently bought a 42ha property in the Bay of Plenty. It intends to carry a stock of plantings for the developing fruit industry, and to do experimental work. Referring to the declined application for the Whangarei abattoir, Mr Hazard says all the efforts to develop export trade — particularly to the Gulf States — were frustrated by the inability to get livestock killed without unreasonable delay, and to the company’s requirements.

The ordinary dividend requirement was $lO,OOO extra higher at $427,000, because of an increase in ordinary capital of $27,000 to $3,048,515. Specified preference requirement was $55,000. Shareholders’ funds rose $2,776,000 to $14,761,000. Term liabilities were reduced $14,000 to $3,926,000.