Smith and Jones in hotel purchase

Press, 9 August 1980, Page 19

Smith and Jones in hotel purchase

H. W. Smith, Ltd, and R.t E. Jones, two of New Zea-: land’s most colourful in-j vestors have each bought) 41,000 shares in the Dune-j din-based Southern Cross. Hotel, Ltd. i Speculation about the fut-i ure of the Southern Crossj has been prompted by the! sale of two large .parcels of) shares recently. First Lion Breweries sold--24.9 per cent of its holding) to the Government Life Commissioner.

Then Sinclair Investments, the holding company for a prominent Dunedin family, disposed of its 82,000 shares, which represents 20,9 per cent of the company to the then unnamed buyers. “We are looking at a way to get a quick cash flow into the company” the chairman (Mr K. R. Greenslade) said. A proposal from the new shareholders involves; both hotel and property development and may not necessarily be confined to Dunedin, he said. The latest Southern Cross annual report shows that working capital is down to a mere $4676 compared with $40,657 in 1979. It is also had to dig out $14,364 from retained profits to pay the steady dividend of 9 per cent which amounted to $35,274. The tax-paid profit of $20,910 compared with $53,298 the year before, j To help its cash position

the hotel drew 560.000 of its ibank deposit of $130,000 on iApril 30. j The company secretary | (Mr J. A. Valentine) agrees I that working capital is low .but says that being a cash i business it is in a better (position than one which has ! to wait for monthly iaccounts to be paid. I Costs rose 17.2 per cent in • 1980 but revenue increased a more modest 12.1 per cent. I Southern Cross has land valued at $360,000 and proI perty worth $1.2 million.