D.I.C. holds lure of 11 years tax-free

Press, 26 November 1980, Page 26

D.I.C. holds lure of 11 years tax-free

!PA Dunedin | The D.1.C., Ltd, has the? 'ability to pay tax-free divi-ji idends of the present size forj. 'the next 11 years, sharehol-j ders were told at the annual!l i The chairman (Mr P. W. < Fels) said that this had been made possible by the crea- i tion of D.I.C. Properties, Ltd. a subsidiary which i would control the parent’s . property-owning and leasing operations. J “An agreement for sale.l and purchase between then D.1.C., Ltd, and D.I.C. Prop- t erties has been completed/ and transfers are being pro- 1 cessed,” he said. < “These are currently sub- t ject to the scrutiny of the [ stamp duties section of the Inland Revenue Depart- i merit.” 11 The capital profit realised |[ by the move would enableji the D.I.C. to pay the equiva-l lent of the current year’s 16lt per cent dividend of!!$687,000 tax-free for 11 j years. |1 After the meeting. Mr Fels I ‘ said similar action had beenlt

I taken by several other com-; ipanies. including HallensteinBros, Steel and Tube, and! John Edmond Holdings. { Mr Fels said that trading; for the first 31 months of, the year was up 16.9 per! cent. If there was no further! deterioration in the economy, sales of more than S5O; million were expected, with! an improvement in profit. I The company expected a! lot from the extensive refur-! bishing of its Lambton Quay! store in Wellington, which: reopened last week, and th Lower Hutt shop, which had been open for three months and should produce at least three times the profit of its predecessor. Mr Fels said that despite major construction work at Lambton Quay, sales rose 6 per cent. The company-wide increase was 17 per cent. Capital expenditure on the two stores was more than $3.3 million. Mr Fels said that the company’s shares were at an “absurdly low price” and that any holder wishing to

[sell should hold out for a [much higher price than now ! offering. During the year the price had varied between 140 c and 170 c, yet each ordinaryshare represented an asset value of 400 c. ! “I am aware that in ■ making these remarks I lay jmyself opn to the accusaition that we are not making adequate use of the assets we own, but 1 invite you to consider carefully the remarks I have just made concerning expenditures !which should shortly become productive,” he said.