Transport seems to be ‘whipping boy’

Press, 22 October 1980, Page 24

Transport seems to be ‘whipping boy’

Over the years, transport seems to have become the “whipping boy” for many of New Zealand’s economic ills, according to the chairman of Freightway Holdings, Ltd, (Mr J. A. Valentine) in the annual report. A periodic review of any enterprise was both desirable and necessary, but piecemeal tampering without getting down to fundamentals generally caused more problems than it solved, he said. “The maintenance of a stable and effective transport industry is of national importance and wholesale upheaval, merely to satisfy a few vocal interests and benefiting a minority, will achieve nothing in the national interests.” Progressive moves on changes to transport licensing would allow -all sectors of the industry to absorb them with a minimum of disruption and economic hardship. "While liberalisation may give. the user a greater choice and provide more

flexibility, it may ultimately prove to be an expensive proposition,” Mr Valentine said.

The decline in the volume of goods transported during ;the last quarter to June 30 had continued during the present financial year, and would have some effect on the activities of the forwarding and road divisions in the immediate future. "However, the group is now sufficiently diversified for a downturn in freightforwarding and general transport to have less effect on over-all results. "It is the intention of the directors to diversify further as opportunities arise so that the group operates from a wider base and is thus more readily able to cushion the effects of any downturn in particular sectors of the economy,” he said. As reported, the total group net profit rose 29.8 per cent to $6,207,000 in the year to June 30, on gross revenue 26 per cent higher at $136,651,000. The group net profit before equity

items was up 26.5 per cent to $5,553,000. Equity profits rose $184,000 to $486,000 and extraordinary profits totalled $170,000 ($139,000 previously). The profit was after providing $1,415,000 more for tax at $4,445,000, and $334,000 more for depreciation at $3,441,000.

A recommended final dividend of 5c a share (3c a share tax-free) is payable on a proposed one-for-six bonus issue. This effectively raises the pre-bonus dividend rate from 10c to 10.8 c a share (21.6 per cent). Also included in the dividend is the one-for-four cash issue made last year. The dividend rate requires $1,840,000, and is covered 3.2 times after allowing for the preference dividend.

Shareholders’ funds rose $11,704,000 to $29,514,000, including ordinary capital up $2,117,000 to $8,982,000.

Working capital returned from a deficit of $446,000 to a healthy $4,161,000. The current ratio is 1.3 to one.