Bunting passes final dividend but recovery underway

Press, 16 June 1979, Page 18

Bunting passes final dividend but recovery underway

Bunting and Company, Ltd. Christchurch-based brushware manufacturer, is passing its final dividend for the year ended February 28, but corrective measures taken indicate that profitability is recovering. As part of a major restructuring Bunting shareholders will be asked to approve a link with H. W. Smith, Ltd, the emerging newly-restructured Christchurch financier which is currently taking over New Zealand Pastoral Holdings. The Bunting directors will recommend to the annual meeting the issue of 500,000 50c shares to H. W. Smith, Ltd, at 65c a share for cash, and to appoint Mr B. R. Judge, the managing director of H. W. Smith, Ltd, to the Bunting board. Buntings recorded an audited group loss, after extraordinary items, of $123,257 for the year. The directors say in their preliminary report that the trading loss was $328,303. This was offset by an extraordinary profit of $392,569 to which had to be charged costs of $187,523. The extraordinary items arose from product rationalisation and factory relocation. Included in the costs were all necessary redundancy payments, special stock write-downs, and plant removal, they sav.

The directors will recommend to the annual meeting that the final dividend be passed. “The adverse result stems from the disruption initially brought about by the compulsory requisition of the Christchurch premises for motorway extensions, and in respect of which final claim for compensation is being negotiated with the appropriate authority,” the directors say. “Trading for the first quarter of the current year is much improved and' in line with budget, while the full benefit of rationalisation win be reflected in earnings and profit when surplus assets a r e sold.” The loss in the latest year comes after a sharp fall in profit the previous year, from $306,603 to $197,691. At the halfway-mark (to August 31 last year) the company announced a loss of $80,763 compared with a profit of $164,662 in the previous corresponding period. If the placement to H. W. Smith, Ltd, is approved, Buntings will receive a cash ! injection of $325,000. and its capital will be increased from $1,375,296 to $1,625,296 I — giving H. W. Smith, Ltd, a 15.4 per cent interest. Commenting on the move, the Bunting directors said that they would not only welcome the cash but above all the expertise which H. W. Smith, Ltd, has to offer. On his part Mr Judge said that his directors were convinced that Buntings would recover with the application of hard work, “and we are putting our money where our mouth is.” Bunting shares have been selling this year in a range of 60c to 65c; in the last few weeks they have risen from 62c to 65c. Mr Judge said that H. W. Smith, Ltd, had bought about 9000 Buntings shares on the open market.