Better year for City Realties

Press, 14 August 1980, Page 18

Better year for City Realties

City Realties, Ltd, an associate company of Brierley Investments, Ltd, performed much better than expected in the year to June 30, and the June 30 dividend is being raised. The directors announced that operating profits rose 50.5 per cent. The increase was largely attributable to the higher level of income received .on an increased property portfolio, they said. Further rent reviews were scheduled for the 1981 financial year. Operating profit rose from $92,491 to $139,164. In addition, the company made an extraordinary profit of $91,737, being the capital surplus on the sale of an interest in an associated company. Last year this associate provided an equity contribution of $2693.

(In late October it was revealed that Westerman and Company a joint venture between City Realties and Haywrights, had been sold to

Hawke’s Bay Farmers Co-op Association). The taxation provision was $28,593 ($24,359) and depreciation $3250 ($14,440). The decrease in the depreciation charge for the year follows the change in the company’s accounting policy rfelating to depreciation of investment properties.

Hie return on capital is 19.8 per cent, which covers the dividend 1.1 times. The directors are recommending a final dividend of nine per cent for the year, which, together with the interim payment of nine per sent, makes a total dividend of 18 per cent on an increased capital of $702,759.

The dividends will continue to be paid from share premium reserve and will be tax-free in the hands of those shareholders so electing. The company’s ability to continue to pay dividends from share premium reserve will continue for some years. The company, is expanding in the Christchurch area with a take-over bid for Sales Expanision (NZ)

Originally a finance company, Sales Expansion has in recent years placed its resources mainly in property. The company has a capital of 120,000 shares and the bid values the company at $409,200.

City Realties is offering eight of its own shares plus 16c cash for each Sales Expansion share, and in addition Sales Expansion shareholders are to receive an interim dividend of 45c per- share from capital reserves.

On a valtie of 35c for City Realties shares the bid, including the interim payment, values the Sales Expansion shares at 341 c. The directors of Sales Expansion are Messrs E. G. Stonestreet, L. W. Gazzard, A. W. Moyle, K. G. C. Smith and C. L. Sturge. They unanimously recommend acceptance

Capital value of the company’s land and buildings is $407,250. The company has no full-time employees.