Montana assured of growth

Press, 2 October 1979, Page 20

Montana assured of growth

With favourable growing and market conditions. Montana Wines Ltd. should show further pre-tax profit growth in the coming year, the chairman (Sir Geoffrey Roberts) says in his annual review. However. as indicated earlier, tax will be payable for the first time, and this is likely to result in a steady net profit of about 53.561.488. In the latest year to June 30 no tax was payable by the company, and the company would continue to benefit from tax incentives relating to the establishment and development of vineyards; a standard-value basis of pricing stocks of maturing wine; investment allowances; export performance, and market development schemes; and energy conservation measures. The balance of tax losses (subject to Inland Revenue department confirmation!) at June 30 last is expected to exceed S2M. However, the directors anticipate that the losses carried forward together with continuing incentives will not be sufficient to avoid tax for the current year. The chairman described last year’s SI.7M (12.4 per

g cent) increase in turnover as i- a modest increase, but said v it should be noted that the h previous year’s sales ine eluded those of Petone i- Wines, Ales and Spirits, Ltd, which had now been sold. A significant factor in the d increase of 76.5 per cent in e net profit was the greater s quantities of high quality y varietal table wines now it being marketed. The profit rise also ree fleets greater efficiencies in y asset use. :• The total demand for o white table wines continues s to grow dramatically, with t demand for the company’s - Montana, and Ormond prods ucts exceeding its ability to - supply. The red table wine sales stabilised after declining in t quantity for some years, be- - cause of the imported quality of red wine, and the ins troduction of the light red e styles. t In the coming year the’ o directors and management e would treat exports as the s company’s number-one prior- - RyThe 1979 vintage in Blen- - heim was again of excellent e quality, and the quantity of grapes harvested was more d than double that harvested r in the previous year.

Weather conditions at both the Mangatangi. and Gisborne vineyards caused problems. The present methods, and machinery could cope with expected increases in wine production for at least a. further three years, but there had been significant improvements in packaging technology, and these were now being evaluated. The year’s trading profit, which was $1,543,876 higher at $3,561,448. was after providing $15,848 more for depreciation at $422,578. An exchange loss of $72,033 (previously a profit of $368,845) was incurred along with a loss of $59,424 (profit of $63,570) on the sale of assets. ’: The dividend, which is being raised from 7.5 per cent to 12.5 per cent requires $300,000 more at $750,000. The return on average i shareholders’ funds had improved from 19.3 per cent to 27.8 per cent. The balance sheet showed shareholders’ funds $2,678,991 up at $14,156,318. Term liabilities had been reduced from $5,199,830 to $3,641,353, in part by the repayment of a SUSIM loan in June.