Gear trading loss

Press, 3 June 1981, Page 24

Gear trading loss

The unaudited results of Gear Meat Company. Ltd. for the six months to April 1 show a trading loss of $125,297, the directors announce. In addition provision has been made for the specified preference dividend payment for the period, $55,000. Capital profits amounting to $195,000 have been realised from the sale of farm land. This gives a total positive movement in shareholders’ funds for the six months of $14,703, they say. They do not intend to pay an interim dividend for the year, and say that comparative figures for the previous year are not relevant. In explanation, the directors say that the Chalet Foods subsidiary (34 retail and wholesale meat shops) operated . quite successfully for parts of the period but suffered a severe set-back through the nationwide strike by shop butchers in November, which is usually the peak month for meat retailing. Also, the public image of the Gear Retail shops was prejudicially affected by association (wrongfully) with

the prolonged industrial dispute at the Gear Meat Processing Company Petone works. The Southern Hawkes Bay Abattoir also operated at a loss. These factors, along with some outstanding contingent items relating to past international meat trading, culminated in the six months trading loss. The extraordinary gain was derived from the sale of the Pauatahanu farm property which was surplus to the requirements of Chalet Foods. Events since April 1 are equally important to shareholders. the directors say. On April 24 the Wellington area retail and wholesale shops were sold to R. and W. Hellaby, ltd. on terms satisfactory to Gear Meat. The funds received from this transaction were applied to repay the groups borrowings. After the sale of the Wellington shops, the asset backing per share (fully diluted) is estimated to be 45c a share. This compares with the 32.8 c a share as disclosed

in last year's balance sheet. The board intends to cqnti-. nue disposing of minor company operations that are not contributing to profitability. In particular the board is negotiating the sale of the Dannevirke abattoir and byproducts operations. These have not been a contributor of profitability. The abattoir is a verv Smail operation and the sale of the business will not realise funds of any significance, and in fact will show a book loss on realisation. It is the board's intention to continue to build back up the shareholders’ funds so that the proprietorship ratio once again reaches an acceptable level in relation to the total assets of the company. The .company is applying for a change in balance date to June 30. This will result in the 1981 accounts being for a nine month financial period. The previous balance date, October 1, related to ah export meat killing season, and this aspect no longer is relevant to the company. For ease of administration it is proposed to change it.