C.F.M. does well

Press, 29 November 1979, Page 21

C.F.M. does well

Total tax savings of $2,009,721 turned the net profit of Canterbun' Frozen Meat Company from what: might have been a modest figure to a record. Because the company had the lowest kill for eight; years gross revenue fell 53.4 M to 5111.6 M, but expenses were well held, and tne bottom line showed a r.et of $3,361,574 which was increased to $3,845,462 because of a tax cash credit of $493,502. Last year net profit was; $2,927,629 but the company: paid $1,781,064 tax. The severe autumn' drought and poor lambing in! 1978 were mainly responsible for a reduction in the' lamb and sheep kill by 18.2' per cent to 3,411.000; and: the cattle kill was 24.6 per: cent lower at 101,000. The result was after pro-; viding $537,000 more for; depreciation at $2,543,101; i fixed interest charges were 1 $8 2 0.0 00 higher at $1,620,273. As reported, the ordinary dividend has been increased; to 14.5 per cent and with' the specified preference pay-; ment takes a total of: $1,173,000. The ordinary dividend is covered 3.3 times.

The earning rate on ordi-b nary capital was 48c a i share, and on shareholders’ i funds 11.72 per cent. ( The balance sheet shows a ( strong improvement, in spite , of heavy borrowings the ■ company is qui,te liquid, and: ( shareholders’ equity in- . creased. The current ratio of; 2.0 to 1 is the best for; years, shareholders’ equity; of 59.8 per cent is also the). ■ highest for years, and work-1 ing capital rose almost S6M. • The chairman (Mr I. E. O. > 'McKellar) says in his review I that C.F.M. had to raise ! SIBM during the course of eight years to finance hygiene expenditure. Capital expenditure in the ; ;: last five years amounted to ’ S2BM; $5.5M was spent in lithe latest year alone. ! ; In the last two years : $1,860,000 was issued in 1 ; specified preierence shares, 1 land an offshore loan of 1 iSUSIM was raised. 11 An additional SBM was • raised in debentures to meet on-going expenditure and to i repay S2M loan debt falling i Ijdue. i This financial package will : ! satisfy C.F.M.’s needs for 1 I the next few vears, says Mr .McKellar. i The company’s total inter- Il est bill of $2.2M compares'!

with interest on fixed loans in 1971 of $190,160. Mr McKellar says that one of the company’s basic objectives is the additional processing of meat beyond ' the carcase stage where it is ’economically possible to do so. C.F.M. is working closely with Borthwicks on this, and I more than 630,000 carcases ;— about 20 per cent of the ) company’s sheep and iamb Skill — were cut or boned i last season. I In the Air Foods subsidiary’ substantial hygiene work and improvements to product flows were completed in time for the new season. Development work carried out in conjunction with Borthwicks resulted in a large contract for lamb cuts to West Germany, and another for the regular supply of diced salted beef to Japan. A long-term contract to supply portion control steaks to Sweden was also obtained — a major breakthrough in a fastidious market. Throughput at Air Foods rose by 700 tonnes in iamb, .84 tonnes in mutton, and 50 'tonnes in beef.