Dalhoff, King faces stock problem

Press, 13 August 1980, Page 19

Dalhoff, King faces stock problem

The investment by Dalhoff and King Holdings, Ltd, in maintaining stocks of service parts and equipment is at present rising at an annual rate in excess of 20 per cent, according to the managing director (Mr K. G. King) in the annual report. Because of the high rate of both direct and indirect taxation it was a problem to continue generating sufficient earnings to keep abreast of rising costs, he said. ? “The export incentive

scheme extended to many industries provides them with financial benefits which, in many cases, are disproportionate to their real contribution to overseas earnin a s. “The Government should also recognise the contribution of the service support industries, and associated problems, which call for some measure of immediate relief,” Mr King said. The export, farming, and forestry industries must maintain their place in international markets, and should not be placed at a disadvantage by being forced to buy locally manufactured equipment, which is often expensive, out-moded, and in no way competitive with the technologically advanced equipment from overseas. “No New Zealand manufacturer has the financial resources to fund an on-going research and development programme for this type of capital equipment.”

It was opportune for the Government to review the effects of these restrictive policies, Mr King said. As reported, the total group net profit rose 21.9 per cent to $607,000 in the year to March 31, on sales 34.2 per cent higher at $43.1 million. Extraordinary prof i t s totalled $22,000 ($118,000). The tax provision rose $134,000 to $442,000 depreciation was up $7OOO to $213,000. A recommended final dividend of 4c a share increases the annual rate from 6c to 7c a share (14 per cent). The dividend requires $411,000 and is covered 1.5 times by the dividend. Shareholders’ funds rose $168,000 to $5,920,000, including the ordinary capital $3OOO higher to $2,934,000 after a staff share issue. Working capital rose $327,000 to $6,494,000, but the current ratio fell from 1.5 to 1.4 to one.