Clyde emphasises diversification

Press, 30 November 1978, Page 20

Clyde emphasises diversification

PA Wellington! | The importance of diversification and the need to < I contain costs are emphasised 1 I in the annual report of 1 Clyde Engineering. ltd. machinery importers and , distributors. The company's earthniov- : . ing equipment business I show-ed a net loss with sales of new and used equipment , at an unforeseeably low 'level, the chairman (Mr E.|i C. Marris) says, but some of the other subsidiaries made up some of the setback. The importance of diver- I Isification is underlined by the fact that the group i activities outside the earth- i moving equipment business ■ accounted tor more than bU i per cent of the turnover. ' “Costs in all areas con- , tinued to rise showing an ; iover-all increase of 36 per s cent. The wages and salary 1 'bill for the period amounted '

|to 52.3 M. which represented a rise of 39 5 per cent, and other expenses were 33.3 per cent higher.’’ says Mr Marrts. “Because of the na’ure of ■ our business the majority of ■our costs are fixed and ■ without severely reducing staff, many of whom are specialists, there is little opportunity to make headway against the inecitab'e escalai tion of costs. However, the i need to contain costs by i every possible means is recognised. and efforts in this direction are unremitting,’’ he says. The slowdown in Government work and housing development, the curtailment of spending bv local bodies, the introduction of sales tax ■on machinery and spare parts, and road user charges all led to a hesitancy and lack of confidence in the sector on which the company depends. Mr Marris says. . However, the New Year

opened on a better note, and I the directors are looking forward to an improved performance in the current year. "Much attention has been

given to al) aspects of rationla'ising to enable the group to cope with the rapidlj I changing market conditions I and the spiralling costs of labour, transport and com-

munications. [ “The balance and age of I our inventories have received close attention. With Ithe recent sales improve Iment. and the phasing out of certain product lines, total inventories are now 7 in better shape,” he says. Group sales for the 16 i months to August 1 (the I company changed its balance [ date from March 31) were I $27.3M compared with $20.0M for the previous 12 I months.