Good result from Rattrays

Press, 3 April 1980, Page 8

Good result from Rattrays

J. Rattray and Son, Ltd, the well-performed Christchurch wholesale ■ distributor of groceries, softgoods, hardware, pharmaceutical, and veterinary supplies, had an excellent half year to January 31 and increased profitability about 40 per cent. The unaudited group trading profit before tax rose from $734,000 to $1,022,000, the estimated provision for tax at $433,000 was $119,000 higher, and net profit increased from $420,000' to $589,000. In addition there were extraordinary items of

$263,000 before tax, relating to recent acquisitions, the directors say, “and as such were not derived from normal trading operations, and are unlikely to be repeated.” “Subject to. confirmation bv the Inland Revenue Department a proportion of this amount may be available for tax-free distribution to shareholders,” they say. . The interim ordinary dividend for the six months has been increased to 7c a share (last year 6c) requiring $137,074 arid will be payable on April 28; 4c an ordinary share will be payable from realised capital profits and .thus tax-free in shareholders’ hands, with the balance of 3c a share from revenue sources.

External group sales were $43,611,000 — an increase of 28.6 per cent over the corresponding period last year. “Sales of some of the branches of the parent com-

pany, J. Rattray and Son, Ltd, have been affected by the additional business resulting from the purchase last June of the Wilson Neill, Ltd, grocery division; however, further significant gains were made at all locations.” The sales increase for the six mqnths of the parent company was 26.3 per cent. Excluding the Wilson Neill grocery division this would be 16 per cent on a like-for-like basis. The pre-tax trading profit increased 30.4 per cent over last y’ear.

The major subsidiary, Fairbairn Wright, Ltd, has continued to show good growth, and recorded a turnover increase of $1,678,000, or 36.9 per cent. “Despite large cost increases, parti-jlarly salaries and wages and all interest charges, additional _ gross earnings were sufficient to cover these, and to produce

improved results in all areas of trading,” the directors say. “The escalation in interest and other costs relating to the maintenance of a sufficient level of working capital in these times of high inflation continues to be a cause of major concern, and every effort is being made to minimise their effects by increasing efficiency in the holding and distribution of goods. "A trading profit similar to the six months result is expected for the full year,” they say.