Tolley confident

Press, 17 July 1980, Page 16

Tolley confident

The improvement in trading by Tolley Holdings, Ltd, is continuing, and the trading profit for the first six months of the current year, ended May 31, was $719,000 after-allowance for deferred taxation.

An extraordinary item of $350,000 takes the total profit to $1,067,000. Sales for the period rose 32 per cent to $14.0 million, including export sales which doubled to $2.3 million. “We confidently expect our total sales for the full year to be substantially greater than any previous year’s trading,” the directors say. “Many of our products are progressively increasing their market share. “Our export business is maintaining its momentum; products are being manufactured and despatched to the Middle East, Australia, Pacific Islands, and United States. "With a sound order book, and all divisions trading satisfactorily, we expect that the trading profit for the second half of the year will be similar to that for the first half,” they say.

The directors are introducing an interim dividend policy and 5c a share will be paid on September 9. It is expected that the final dividend will be Bc, making 13c for the year. For some time total shareholders’ funds have been too low a proportion of total funds employed in financing the business, affecting ability to borrow in times of rapid expansion like now, they say. Debt funding has been rearranged and Canada Wire, the overseas partner, will participate-in a new funding package which gives greater strength. This package requires that a return to a minimum acceptable ratio of equity to debt funds is achieved. Tolley proposes a one-for-

three cash issue of ordinary shares at par (100 c Canada Wire will take up its entitlement and the balance of the issue is underwritten. But to facilitate the cash issue an increase in authorised capital from $6 million to $l5 million will be sought at an extraordinary meeting on August 18. New shares resulting from the one-for-three rights issue will receive only one-third of the final dividend.

Referring to the future, the directors reiterate their confidence.

“In 1980, we have established outlets for the company in several overseas territories, and are thus not dependent on any one particular market. This enables us to maintain our export sales thrust. New opportunities continue to open up for us offshore. “All divisions are now selling overseas, so we are not wholly dependent on one particular product group. In New. Zealand we can expect an upturn in the next year or two,” they say.