John Edmond seeks more funds

Press, 30 July 1980, Page 13

John Edmond seeks more funds

PA Dunedin: John Edmond Holdings. Ltd, the Dunedin-based hardi ware merchandiser, plans to ■ ■ make a 5500.000 debenture i issue in September, the [chairman (Mr P. W. Fels); [told shareholders at the an-; [nual meeting. The move coincides with) the maturing of 5317,600 of existing stock, the balance to be fresh funding. “We should like the great-’ est part of this offer to be taken up for a three-year term, thus helping the spread of our debenture maturities, but of course, a number of options will be offered,” he said. [ The interest rate and options will not be decided

until much nearer the date. “On completion of this fund raising, debenture moneys will total $1,098,000.” Mr Fels said. On the basis of the March; balance sheet shareholder’s’

3 funds will total $7.527,000,] and remaining-liabilities and . minority interests will move ■ up to $4,969,000. “Shareholder's equity will ! still be therefore more’ than ; 60 per cent after the new borrowing.” [ i The meeting approved the ’director’s recommendation to. [pay the 9 per cent final ■ dividend from realised capi-’ tai profits, making the total for the year 16 per cent. [ i Mr Fels observed that a! shareholder paying an effec-l tive tax rate o’f 40 per cent would be getting a final dividend equivalent to 26.7 per cent taxable, with increased benefits if tax was payable at a higher rate. ‘ He said that it would be possible to pay dividends from the tax-free source at

the present rate of 16 per cent'for ail of 1981 and part of 1982. This calculation included the 1 for 10 bonus issue, iwhich was also approved. Looking ahead. Mr Fel

,| said that the future was 11 clouded,- considering the : building industry's performance. li “The silver lining on the i clouds in the past year was 'lto be found in rural con[struction and additions and ; alterations to existing homes,” he said. “The latter are of most ’interest to us. the number of permits in the year -to Janui ary, 1980, having increased 6 per cent. i “The key to the state of the building industry is probably to be found in the statistic that, in the six month period to December, 1979, the average price for an existing house was just under $32,000. but a new house plus section cost $43,000.”

Despite the gloomy prognosis, .Mr Fels said the company was in good financial shape, and poised to take advantage of every opportunity which came along.