A. Ellis loss $784,000

Press, 6 May 1980, Page 35

A. Ellis loss $784,000

an nf hur ? Ilis Holdings, Ltd, sroun an unaudited fnr ?u net • loss of $784,000 Dcrmk Sl \ raonths en ded ,last “ J? expected that the reported loss will be reduced about $151,000 dollars * r ?? 1 export incentives. wo interim dividend would X, Payable on ordinary ♦ J a ? year 5c was paid), the directors said. w iOctnnn SaJes were *“03>000 compared with $4’782,000 in the same period 1 , P f evious year. Although the total value in-i creased 10 per cent therel was a decrease of unit sales ln some product areas, and a consequent inability to recover increasing costs. Another factor affecting margins was the delayed arrival of goods from overseas, because of protracted shipping schedules, the5 r said. Because of a continually depreciating exchange rate, these goods incurred everincreasing land charges which, along with mounting

internal costs, the company was unable to recover on forward pricing in the highly competitive markets in which it operates. In spite of the severe competition exports continued to increase, but the rapid escalation of costs was such that it became difficult to service the full market range on a profitable basis, they say.

“The magnitude of the loss has called for drastic action to reverse the trend, and a complete-reappraisal of operations has been undertaken. Satisfactory arrangements have now been made to cover current market demands in certain products, and these will greatly assist our continuing export programme, and should lead to a return to profitability. “The management structure has been reorganised to give more effective control at all levels. In addition product rationalisation should reduce high transport and distribution costs.

“There is already a rever-

sal of the previous trend, and under present market conditions, we expect a return to improved trading during the remainder of the financial year,” the directors said.

“Negotiations are currently well advanced for an international company, Northern Feather International, Ltd, Denmark, to take a substantial equity holding in the company. The group concerned has been our main supplier of raw feathers and down, and we have enjoyed an amicable association over a period of 45 years. It has manufacturing operations in Scandinavia, Europe, the United States and the Far East, trades in natural and synthetic fibres, raw feathers and down, and is engaged in the spinning, weaving, and printing of textiles, and the manufacture of bedding and leisure products. “The proposed move will increase access to markets and technical know-how, strengthen the financial base, and assist in the upgrading

of management skills, all of which will aid our return to profitability. Shareholders will be asked to approve an allotment of shares when negotiations reach finality. “The directors do not underestimate the problems the company faces under current economic conditions, and the pressure on industry to restructure in order to remain viable and competitive in world markets. “Nevertheless, they’ are confident that with the expected overseas support, and the internal changes currently being made, the present adversity will be overcome, and profitability restored within a reasonable time,” they said.

Mr I. R. Salmond, who has retired as chaimm of Salmond Industries, Ltd, but who will remain a director of the company. Mr Salmond had been chairman since the company was first listed in 1965, and previously was chairman of Salmond and Spraggon, Ltd. Mr G. W. Salmond has been elected chairman of the company and will continue as managing director. Mr J. B. Steel, a senior partner of Cox Arcus and Company, chartered accountants, has been elected deputy chairman. Mr G. E. Pearce has accepted an invitation to join the Salmond Industries board. Mr Pearce, who has just retired as managing director of Feltex New Zealand, Ltd, is a director of Broadlands Finance, Ltd, Cadbury Schweppes Hudson, Ltd, Challenge Corporation, Ltd, Feltex, Lion Breweries, Ltd, and Smith and Brown Maple, Ltd.