Kinleith strike affects D.R.G.

Press, 30 August 1980, Page 18

Kinleith strike affects D.R.G.

The 13-week strike at N.Z. Forest Products’ mill at Kinleith, was one of the factors in the profit decline of D.R.G. (New Zealand), Ltd. in the six months to June 30, said the chairman (Sir John Marshall) in a half-yearly report. The strike disrupted the supply of paper to D.R.G.’s stationery division for 13 weeks, and coupled with the general downturn in the .economy, helped the unaudited group net profit to fall 20.7 per cent to $574,000. Fortunately the disruption caused by the strike was temporary, he said. “Even with these setbacks, the value of sales increased 16.1 per cent to $12,089,000. but an increase in profit was not achieved, partly because of a highly competitive market. and partly because the majority of the increased sales were from less profitable product lines.

“There had also been a reduced demand for D.R.G.’s major products because

regular customers were _ reducing stocks to achieve greater liquidity,” Sir John said.

At this stage it was not expected that the profit for the full financial year would exceed the 1979 result of $1,681,000, The pre-tax profit fell 22.5 per cent to $1,021,000, and the taxation provision was down $147,000 to $447,000. A steadv interim dividend of 2.75 c a share (5.5 per cent) has been declared payable on November 3, ex dividend on October 17. The dividend is covered 2.3 times by the profit.