ICI markets show promise

Press, 30 December 1978, Page 18

ICI markets show promise

Commercial

1 New outlets for ICI New I Zealand, Ltd, in North i America, Europe, and SouthI East Asia have been explorled, and with continued GovI eminent support are show- ! ing promise, says the chairma:i (Mr E. W.” N. Jackson) in the annual report. I Markets for industrial ex- [ plosives, plastic pipe, and | sporting ammunition were developed or expanded, and | established exports of animal vaccines, agricultural chemicals, feed supplements, ! slide fasteners, and paint continued to show worthwhile growth, he says. “The difficult trading which developed in 1977, persisted throughout most of “Although the Government acted during the year to stimulate the economy it continued at a low level of activity until the later months when there was some evidence of improvement. “Farm incomes were reduced by rising costs and lower volumes and consumer demand was sluggish. “Consequently, volume of I the sales of the group’s products to the farming, (building, motor-vehicle i i assembly, white goods and; the textile industries was ■ (below that of the previous! (year," Mr Jackson says. The chemicals group, I formed in 1977 by the merg-i ing of the chemicals division I 'and the plastics and colours*

\division, made a profit well i above estimates, while the - market share of the group • was improved and expenses . contained. The depressed state of the building industry directly i affected sales of the formal-dehyde-based adhesives of| the resins division for par- ! tide board, fibreboard, ply-1 wood, and laminated tim--1 bers. This reduced require-; ment was only partly offset! by increased exports of fibreboard and plywood. j Demand for explosive! products was weak throughout the year, because ; of the reduced activity in , the building and contracting ’ industries. Market surveys conducted throughout thg Pacific Is- ■ lands indicated the potential for explosives, and sig- • nificant quantities of product were exported, Mr Jack- ; son says. “Trading by Slide Fasteners division and the Avon Manufacturing Company, Ltd, was depressed during 1 the first-half because of poor retail sales of garments and the loss of export markets through the imposition ;by Australia of import i quotas on made-up garments. I “In the second-half de;mand improved as garment manufacturers' sought new I export markets and the local [markets for denim jeans and j ladies fashion boots recovered”

The volume of sales by ; the wallpaper division was! lower than in 1977 because of the reduction in building activity and consumer spending, and de-stocking by I wholesalers and retailers, s For most of the year the 3 demand for the products of s ICI Tasman, Ltd, remained depressed, but an improvee ment occurred in the latter r part of the year, reflecting - some return of confidence in f the rural sector after the •! Budget. - As reported, group net -jprofit on an equity basis, -(rose 12.6 per cent to ti $5,154,000 in the year to f! September 30, on sales 1.1 iper cent lower at ; I $117,250,000. The profit was after pro- ; viding $60,000 more for i depreciation at $2,397,000, ’ but $1,758,000 less for tax at $1,954,000. I A recommended final divi- ■ dend of 9c a share raises the 1 annual rate from 13c a share ■ to 14c a share (14 per cent). ■ The dividend requirement is - $2,455,000, and it is covered 2.1 times by the profit. Shareholders’ funds rose i $2,919,000 to $40,395,000, in- , eluding steady share capital ; at $17,356,000. The earning! : rate on the funds fell from; > 14.1 per cent to 13.4 per! ■ cent, but improved on capi-! . tai from 29 per cent to 29.4 : per cent. Working capital fell ! $436,000 to $31,585,000, and ■ the current ratio fell from ■ . 2.4 to 2.2 to one. i The shares last sold for I 150 c for a dividend yield of 1 9.3 per cent and an earnings ■ yield of 19.5 per cent. The price-earnings ratio was 5.1.