Rheem optimistic

Press, 20 January 1981, Page 18

Rheem optimistic

The directors ot Rheem New Zealand, Ltd, announced yesterday that they are planning to pay a maiden interim dividend of 3.5 c a share (7 per cent). “The directors consider it appropriate to pay both an interim and final dividend as is the practice with the majority of larger New Zealanu_companies,” they said, i “ror purposes of com-! parison it should be noted' that the dividend paid in the full year to May 31, 1980 was 6.5 c a share.”

The unaudited group net profit, after extraordinary items, rose 29.5 per cent to $501,000 in the six months to November 30. There were no extraordinary items in the latest six months, but there was a $lO,OOO profit in the previous corresponding period. Sales rose 18 per cent to $10,889,000, and the pre-tax profit was ahead 43 per cent to $822,000. The total profit was after providing $124,000 more for tax at $321,000. “During the first half of the year the company has achieved satisfactory growth, with turnover increases in all operating divisions.

“Direct export sales have increased and the demand for containers for the export of New Zealand products continues to grow. “This export led demand has had an important impact

tin steel containers and the j demand from the food inIdustry is above previous levels’.” Because of the recent heavy capital expenditure in this area the ompany had been able to meet the extra seasonal demand the directors said.

“A depressed building inidustry has resulted in a low level of demand for the 'products from the water heater division. “Despite the market decline, sales are above last year’s levels but competition for sales in the market place has reduced margins.” The directors were confident that the quality and service that had been estab.

lished would stand the products in good stead within the buoyant building market which has been forecast for the new year. “Demand in the engineered products division, which incorporates Rowe Engineering, is showing encouraging signs and orders on hand arc at the highest levels for some time. Further growth is expected in this area in the second halfyear.”

L.P.G. cylinder production had continued, albeit at a slow rate, hindered by the ah. ity v. .iquiu pet-

roleum gas. “In view of recent Gove r n m e n 1 announcements, indicating gas supply problems continuing into 1982, it

• is unlikely that the returns ■ from this activity will meet; , previous expectations for .he current financial year,” the directors said. "Rheempak, the plastics i manufacturing division, now i relocated and fully operational in new premises, is continuing to expand production capacity, and the growth rate experienced in the half-year just completed, is expected to continue. “Although the second half year usually contributes less to profits than the first half year, the directors are confident that the improvement shown to November 30, will be reflected in the annual result for the year to May

The interim dividend is payable on February 18, ex dividend on January 28.