Commercial C.T.P. confident of future

Press, 10 July 1979, Page 25

Commercial C.T.P. confident of future

Canterbury Timber Products, Ltd, continues to experience a strong demand on the domestic market for all its products as well as increasing demand from overseas. says the chairman (Dr O. F. Haylock) in the annual report. With the Government continuing to recognise the importance of exports as the lifeblood of the country, the company with its strong export inquiries and developing trade is in a fortunate position which should enable it to weather any storms in the New Zealand economy, he says.

“Combined, all factors lead the directors to forecast a continuation of the trading and profit pattern which has developed in the last six months of the financial year under review.”

Contrary to expectations the forests damaged by the windstorm on August 1, 1975,

have continued to supply roundwood suitable for processing, and it is expected one more year’s supply can be expected from this source. “The benefits of the improvements and innovations in manufacturing techniques developed by C.T.P. became clear during the year when production levels well in excess of the designed capacity, were required in order to produce adequate amounts of board to meet the demand of customers,” he says. “This increased production rate has placed a strain on the wood and chip handling facilities. To increase the rate of chip production, a larger motor was fitted to the chipper and additional chip storage was authorised. “This will facilitate further increases in production rates.” “Customwood” is now regarded world-wide as the reference standard board, against which the products from other mills are compared, Dr Haylpck says.

The Furniture Industries Association of Great Britain (F.1.R.A.), and independent advisory body, tested a series of samples supplied from world-wide sources, and rated “Customwood” as the best medium density fibreboard overall.

C.T.P.*s standing in the field of medium density fibreboard technology was also recognised by the invitation of the technical manager (Mr K. Chapman) to present a paper to the 13th Particleboard Symposium at the Washington State University in April, 1979. “The demand for ‘Custom-

wood’ continued to strengthen throughout the year in contrast to that experienced by other wood-based panel products.

“Local sales of ‘Customwood’ and ‘Customfloor 600’ for the year totalled $8,490,000, an increase of $3,880,000, or 84 per cent, on the previous year. “This is after a similar percentage increase recorded in the previous year.” However, Dr Haylock says that because the plant is now working continually seven days a week, further percentage increases in sales value are expected to be somewhat lower than this. “Customfloor 600” continues to sell in reasonable volumes, which considering the depressed state of the building industry must be considered satisfactory. Inquiries from overseas for “Customwood,” and to a lesser extent, “Customfloor 600,” continued on a strong note during the year, a feature being both the amount of repeat orders and of orders from new customers, he says.

“In addition to areas serviced previously, a major market has been developed in Japan.” Export sales totalled SI.6M, an increase of SI.IM, or 229 per cent up on the previous year’s figures. At this level export sales equal-

lea 19 per cent of domestic sales. “During the year the majority of export sales were made through a recognised export house. This accounts for the low level of export incentives obtained by the company.” As reported, the company earned a group net profit of $1,568,212 in the year to March 31, on sales and incentives up 60.7 per cent to SII.IM. A maiden annual dividend of 10c a share (10 per cent) is recommended, requiring $504,057. The dividend is covered 3.1 times by the profit.

The profit was after providing $98,202 more for depreciation at $1,060,296. No taxation was payable because of previous losses. Shareholders’ funds rose $1,571,561 to $8,815,795, including steady capital of $5,050,000. The earning rate on average shareholders’ funds was 19.5 per cent. Net current assets rose from a deficit of $515,938 to a surplus of $718,875. The current ratio increased from 0.8 to 1.3 to one. The shares last sold for 195 c for a dividend yield of 5.1 per cent, and an earnings yield of 15.8 per cent. The price-earnings ratio was 6.3, and the net asset backing a 100 c share was 175 c.