Recovery by Spedding

Press, 25 September 1980, Page 22

Recovery by Spedding

PA Auckland The liquidity of Spedding Consolidated. Ltd. has improved considerably since its June 30 balance date, the chairman (Mr F. H. Reynolds) says in his annual review.

As announced in late June, the company passed final dividend payment — a move that followed the passing of its interim. In 1979 the company paid a 20 per cent dividend.

Mr Reynolds says that al-

though all companies within the group traded profitably (total profit was 35.1 per cent down at $162,895). o v e r-all trading was affected by the marine division.

Trading in other sectors also proved difficult, with the result that budgeted sales levels were not achieved. This situation resulted in a substantial increase in stocks and this placed considerable stress on liquidity.

A complete restructuring of activities had taken place and this should restore the company’s profitability to more satisfactory levels and the resumption of dividends. The chief executive (Mr G. C. M. Jenkins) says in his review that the marine division, hit by the energy crisis and sales tax, seemed unlikely to match its past contributions.

Group sales for the year were 3.9 per cent, or $ 5 5,7 68, ahead at i

$13,577,309. The result was after a tax credit of $7943 (previously a charge of $85,513) and depreciation $5235 lower at $100,219. The earning rate on capital fell from 19.6 per cent to 10.7 per cent and the return on shareholders’ funds dropped from 7.6 per cent to 4.1 per cent. Total shareholders’ funds are $116,551 higher, at $3,171,025. Term liabilities are $38,926 down at Si 18,214.