Spedding 'at crossroads’

Press, 20 October 1980, Page 26

Spedding ' at crossroads’

PA - Auckland Spedding Consolidated. Ltd, shareholders wre treated to an expansive description of how the company intended to return to more profitable times. However, comments passed by shareholders during the annual meeting left the board in no doubt that, in the future, more informative communication between the two groups was Wanted. One shareholder told the meeting he would like to see more use being made of the skills of the shareholders not on the board.. There "must be a tremendous waste of talent !■. . skill that has not- been tapped” by the company, he said. He added that' there was so much that went on that shareholders' knew nothing about, and urged the board to consider bringing more shareholders into the administration of the company. His remarks were supported by another who said shareholders wanted, more

than just a newspaper report saying dividend was being passed. • • The company had. for a long time, a poor public relations record with the shareholders, he said. The chairman (Mr F. H. Reynolds-) ■ said that the board would consider points raised at the meeting. Earlier in the meeting, the managing director (Mr G-- C. M. Jenkins) told the meeting -why the’ tax-paid profit slumped from $250,298 to $162,895 in the March 31 year, and how the company intended to reverse it.

. He told the well-attended meeting that the company had too broad a base, and lacked specialisation in any area. I n previous years, the company had been highly successful dealwith a lot of agencies to take advantage . of substantial. import licences. However, many of those agencies no longer retained their value and had not made the necessary changes to adapt to the market. The decision made by the company some years ago to involve itself more deeply as a wholesaler of a vast array of lines had put great stress on the company liquidity in the latest year. “What then of the future?” he said. “The company is now at the crossroads and

decisions must be taken as to which direction it is to follow if it is to remain viable.”

Mr Jenkins said greater specialisation of activity is one of the keys to. the recovery of the company. “The base has to be narrowed and strengthened — we must do fewer things, and do them well.”

The first priority was to establish a sound financial base — something that was totally necessary before any major forward steps could be taken. He said that there was a temptation to increase borrowings further and acquire some • enterprise which would yield good profits in the short term. “But few ventures show immediate returns which are satisfactory in terms of profit, therefore the increased borrowings only place a further burden on already scarce resources.”

In surfimary, ■ Mr Jenkins said: "We must concentrate our scarce resources on the greatest opportunities which will show the company an acceptable level of result, and simply do a few right things and do them with excellence.”

The meeting approved a motion that no dividend be paid, and was told that “the timing of a return to the payment of an ordinary dividend is not- yet predictable.”