A. and B. keeps looking for efficiency

Press, 24 October 1980, Page 17

A. and B. keeps looking for efficiency

/ . Andrews and Beaven,'T.td.> i Christchurch-based manufac- : i tuting engineer, sees good.; iareas of expansion- during l ,: ithe development of thep imajor resource projects j: I planned for New Zealand byi the mid 19SOs says the man--aging director (Mr W. B.j Bea ven). > In his review with the: company’s annual accounts; for the year ended June 30.' Mr Beaven says that this I growth will benefit a wide; ‘section of the engineering! i industry, bur particularly! 1 those ’companies manufaccuring and distributing inter-nationally-known qualityproducts. In the years leading up to these developments the main thrust of. the group will lie in increasing its efficiency, and in promoting products for export-related industries. The marked profit improvement in the year under review, in which profit doubled to $2,015,778 when the economy showed little growth, was largely the result of improved efficiency. Exports increased, but did not reach the budgeted figure of $750,000. Price rises in a number of products. especially fork lifts, meant that orders were more difficult to obtain. Sales of wood processing machines to Australia were not as buoyant as originally! projected. Good sales were made oni a number of smaller lines. 1 an excellent progress was made by Don Agencies — the friction material subsidiary, in the Islands and Australia.

“Prospects for exports ini the coming year, unfortu-l nately al this stage ’do not I appear to be quite-, . good compared to 12 months ago"; says Mr Beaven. “Two . new projects are currently being developed. I We will record in this com-i ling year our first major; |export of diesel- generating; equipment to the Pacific Is-. | lands. Much capital expenditure ;was incurred in ’ a year ini ] which the company was try--1 ins to consolidate its activities. ' * I Additional land was pur-; chased in Christchurch, Te' Rapa, Tauranga, and Ro-: torua, and additions were made to buildings in Te Rapa and Rotorua. More of the latest machine tools were purchased for the Christchurch factory and Don Agencies, and Buchanans was remodelled and improved. In addition to the trading profit of S2M, extraordinary items contributed $456,235 compared with $177,274 the year before. The provision for tax increased from! $748,413 to $1,293,448. andminority interests took > $68,560 (last year $23,552). The share of earnings of I associate companies rose; from $4793 to $27,343. As announced, the ordi-j Inarv dividend was increased I from 12 to 14 per cent; it is] |covered twice. The earning rate on shareholder;’ funds rose from 5.8 to 10.3 per ■ cent. The current assets/liabilities ratio dropped from 1.76 to 1.55;

| net asset backing for each I 100 c share improved from 1265 c to 302 c. At the market lvalue of 120 c the shares |have a dividend yield of 11.7 per cent and a P.E, ratio of 4.3. Referring to trading in the i latest year. Mr Beaven says : that nearly all divisions and J subsidiary companies improved their results, “some quite markedly by improved efficiencies.” i The manufacturing, agricultural. construction macliinery. and material handling divisions particularly had n good year, and the industrial I power division made a good ; come-back. The chairman (Mr W. B. Barnes) says in the directors’ report that for a number of years the group has been investing heavily in new computer equipment, programmes, and systems “and some of . this investment is now showing a , worth-while return.” But Mr Barnes expresses ! concern over rises in costs, which “in many cases exi ceed the rate of inflation.” land stock levels —■ which II rose because of factors outside the company’s control. . Stocks will be reduced pro- ! gressively this year, he says, land the' management will ‘keep tight control, and will ■‘continue to improve efficienllcy.