B. Harris sees recovery

Press, 1 May 1981, Page 8

B. Harris sees recovery

PA • Wellington Bing Harris and Company, Ltd, is expected to make a substantial recovery in the 1981 financial year, particularly during the second half according to the managing director, Mr C. J. A. Harris, in the annual report. As reported, the company made a trading profit of $699,000 ($658,000), but extraordinary items from restructuring caused a loss of $2,958,000 compared with .$1,224,000 in 1979. The strong position of Onehunga Woollen Mills for 1981 also showed the group would make progress after four years of reconstruction, Mr Harris said.

The changes would lead to a significant reduction in borrowing during 1981, especially from June onwards. Lower stocks, debtors, and the disposal of surplus buildings would produce benefits for shareholders, including increasing tax-free dividend reserves, and making available funds for new projects. Problem companies would be left behind, he said.

The board was looking at new investment avenues aimed at growth and profitability. Forward sales were good. The group expected to market $4O million of products

this year, primarily to local markets

The 1981 plan was to reduce short-term funding to consolidate the direct marketing of manufacturing units. Unwanted properties would be sold, and it was not intended to expand in the apparel sector. Discussing the reconstruction, Mr Harris said staff were reduced from 345 in January to 180 by the end of the year. Discarding of apparel took place in a period of depression and lower prices were received than expected. In the reconstruction phase Bing Harris Sargood incurred costs of more than S2M. These were split between redundancy, markdowns, and trading loss. In 1980 B.H.S. had sales per employee of $65,000 and in 1981 these were expected to total $lOO,OOO reflecting improved productivity. On C.C.A. terms, the balance sheet shows the company made a tax paid loss of $3,753,000, compared with $416,000 last year.

The chairman, Mr G. W. Valentine said the directors' believed that the restructuring would ensure B.H.S. was in a sound trading position. But it would be unrealistic to expect a significant contribution to profits in 1981.