Extensive modernisation plan by Firestone

Press, 3 February 1981, Page 20

Extensive modernisation plan by Firestone

Firestone N.Z., Ltd, will pay “meanwhile” a dividend rate lower than previously forecast because of a factory modernisation programme at Papanui,. the chairman (Mr R. L. Deal) announced in the annual report. Mr Deal does not sayi what the dividend rate is: likely to be, but he said that an extensive plan, costing several million dollars had commenced, and would take several years’ work. “The major projects will require retaining a large portion of the earned profits to finance this expenditure,” he said; “The factory modernisation will have long term benefits in cost reductions, achieving higher quality

standards and enabling Firestone N.Z. to adopt up-to date tyre designs and construction available from overseas.” t x The local market was; somewhat depressed in the i second-half of the year, : under review, but increased; export sales more than off-; ! s et the lack of domestic de-j • mand. “Exnorts continue to he a

i reports CUlllliluc IV M | growing source of revenue, and Firestone will continue promoting its products in overseas markets.” Firestone N.Z.; was con cerned at the rising number of imported tyres coming on the local market during 1980, Mr Deal said. -. Many of the tyres of the sizes and types that Firestone manufactured in New Zealand appeared- on the market from overseas. Representations were made to the Department of Trade and Industry, and the company

• had been assured that these imports will cease. As reported, the group net i profit rose 41 per cent to $3,809,900 in the year to 3l, on sales 18.6 per ; cent higher at $53.3 million. The profit was after proLviding $87,954 more for i depreciation $1,332,515 and •i $554,161 more for tax at ! $2,631,040. The pre-tax profit was up 34.7 per cent to

** 111 vvao up t>i $6,440,940. e i A recommended final divinidend of 8c a share gives a I steady, annual rate of 15c a 11 share (15 per cent). The r ! dividend requires $1,521,712 n ;and is covered 2.5 times by the profit. „i Shareholders’ funds rose Zi $2,288,188 to $16,268,725. inpi eluding steadv ordinary capital of $10,144,750. -I Working capital increased 31 $277,390 to $4,661,303, but Lthe current ratio fell from jril.4 to 1.3 to one.